SC: Confirmation of an Auction Sale Does Not Bar Judicial Scrutiny of Reserve Price Valuation  ||  Supreme Court Sets Aside Conviction of Four Men in a 1998 Gang Rape Case  ||  Supreme Court: Privy Purse Privileges of Princely Rulers are Not Enforceable Legal Rights  ||  Delhi HC: Repeated Court Summons May Distress and Re-Traumatize Child Sexual Assault Victims  ||  Jammu and Kashmir High Court: Labeling Someone as a Terrorist Associate Amounts to Defamation  ||  Delhi HC: Setting Aside or Altering a Judge’s Order by a Higher Court Doesn’t Affect Their Integrity  ||  Delhi High Court: Accused Cannot be Faulted For Smart Replies; Interrogator Must be Sharper  ||  Supreme Court: Belated Jurisdictional Challenge Impermissible After Participation in Arbitration  ||  Supreme Court: Failure to Prove Specific Overt Acts of Each Unlawful Assembly Member Not Fatal  ||  Supreme Court: Parental Salary Alone Cannot Determine OBC Creamy Layer Status    

AMD Industries Limited (Earlier known as Ashoka Metal Decor Pvt. Ltd.) vs. Commissioner of Trade Tax, Lucknow and Ors. - (Supreme Court) (09 Jan 2023)

Exemption provisions are to be read as they are and to be construed literally and should be given a literal meaning

MANU/SC/0017/2023

Other Taxes

The manufacturer – original revisionist has preferred the present appeal feeling aggrieved with the impugned judgment and order passed by the High Court by which the High Court has confirmed the order passed by the Trade Tax Tribunal, and the Assessing Officer holding that for the goods manufactured, the Appellant is not entitled to the exemption under Section 4-A (5) of the U.P. Trade Tax Act,

In the case of “expansion or modernization”, the exemption shall be available, if there is an additional production as a result of such modernization or expansion. In the present case, present Court is concerned with the case of “diversification”. Therefore, the goods manufactured after diversification must be different goods from the goods manufactured before such diversification. As per the settled position of law, in case of an exemption notification/exemption provision, the same is required to be construed literally and the person claiming the exemption must satisfy all the conditions of exemption provision.

In the present case, the Appellant was manufacturing / producing “Spun Line Crown Cork” used for sealing the glass bottles. With the use of modern technologies, now the Appellant is manufacturing “Double Lip Dry Blend Crowns”, which is also used for sealing the glass bottles. The earlier product being manufactured by the Appellant was used for sealing glass bottles and subsequently the additional product produced with the use of modern technology is also being used for the same purpose namely, “sealing glass bottles”. Therefore, the same cannot be said to be manufacturing of goods different from being manufactured before such diversification.

As per the settled proposition of law, the exemption provisions are to be read as they are and to be construed literally and should be given a literal meaning. Giving the literal meaning to the exemption provision namely, Section 4-A, it cannot be said that the Appellant is entitled to the exemption as claimed.

When the provisions of the Act unequivocally provides that the “diversification” can be considered only in a case where “goods of different nature” are produced, and only then the exemption shall be available. The goods manufactured on “diversification” must be a “different”, “distinct” and a “separate” good in nature. In the present case, the goods manufactured on use of advance and/or modern technology cannot be said to be a different commercial activity. The High Court has not committed any error in refusing to grant exemption to the appellant. Appeal dismissed.

Tags : GOODS   EXEMPTION   ENTITLEMENT  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved