# M/s Sonal Metal Industries v. State of U.P. and others

- **Citation:** (2003) 2 ILRA 244
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2003-01-16
- **Case number:** Civil Misc. Writ Petition No. 1306 of 1988
- **Bench:** M. Katju, Prakash Krishna
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-sonal-metal-industries-v-state-of-u-p-and-others-40079
- **Pages:** 3

## Headnote

Trade Tax Act- Section 4-A Small scale
industry unit having investment of less
than Rs. 3,00,000 would be entitled for
exemption for five years- respondent to
modify the eligibility certificate dated
30.1.1988 accordingly, that is for a
period of five years instead of three
years till the issuance of modified
eligibility certificate for a period of five
years, they should not insist on realizing
trade tax for the period 5.1.1983 to
4.1.1988.

Held- Para 8

Having
regard
to
the
facts
and
circumstances of the case, the writ
petition is allowed and a direction is
issued to the respondent no. 2 no modify
the eligibility certificate dated 30.1.1968
accordingly that is, for a period of five
years
instead
of
three
years.
The
respondents are further directed that till
the
issuance
of
modified
eligibility
certificate for a period of five years they
should not insist realizing trade tax for
period 05.11.1986 to 04.01.1988.
Case law referred:
1989 U.P.T.C. 88
1989 U.P.T.C. 118

## Text

http://www.allahabadhighcourt.nic.in
 INDIAN LAW REPORTS ALLAHABAD SERIES [2003
244
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 16.1.2003

BEFORE
THE HON'BLE M. KATJU, J.
THE HON'BLE PRAKASH KRISHNA, J.

Civil Misc. Writ Petition No. 1306 of 1988

M/s Sonal Metal Industries ...Petitioner
Versus
State of U.P. and others ...Respondents

Counsel for the Petitioner:
Sri Bharatji Agarwal
Sri R.K. Agarwal

Counsel for the Respondents:
Sri S.P. Kesarwani
S.C.

Trade Tax Act- Section 4-A Small scale
industry unit having investment of less
than Rs. 3,00,000 would be entitled for
exemption for five years- respondent to
modify the eligibility certificate dated
30.1.1988 accordingly, that is for a
period of five years instead of three
years till the issuance of modified
eligibility certificate for a period of five
years, they should not insist on realizing
trade tax for the period 5.1.1983 to
4.1.1988.

Held- Para 8

Having
regard
to
the
facts
and
circumstances of the case, the writ
petition is allowed and a direction is
issued to the respondent no. 2 no modify
the eligibility certificate dated 30.1.1968
accordingly that is, for a period of five
years
instead
of
three
years.
The
respondents are further directed that till
the
issuance
of
modified
eligibility
certificate for a period of five years they
should not insist realizing trade tax for
period 05.11.1986 to 04.01.1988.
Case law referred:
1989 U.P.T.C. 88
1989 U.P.T.C. 118

(Delivered by Hon'ble Prakash Krishna, J.)

1. The present writ petition arises
out of proceedings under section 4-A of
the U.P. Trade Tax Act. The petitioner
claimed exemption from payment of trade
tax for a period of five years but the
eligibility certificate was issued for a
period of three years. The review
application filed by the petitioner has
been dismissed by the impugned order
dated 17.5.1988 (Annexure 6 to the writ
petition).

2. The petitioner claimed that it is a
new unit within the meaning of section 4A of the U.P. Trade Tax Act and was
registered as a small scale industry on
22.8.1988 by the Directorate of Industries,
Ghaziabad vide Annexure 1 to the writ
petition. In the said certificate the date of
commencement
of
production
was
mentioned
as
February
1981.
The
petitioner unit has also been registered
under the Factories Act w.e.f. 01.02.1983
vide Annexure 2 to the writ petition. On
the application claiming exemption under
Section 4-A, the District Level Committee
made a recommendation for grant of
exemption for five years from 05.01.1983
to 04.01.1988 vide annexure 3 to the writ
petition. However, the Divisional Level
Committee
issued
the
eligibility
certificate under 4-A granting exemption
from payment of tax for three years only
from 5.1.1983 to 4.1.1987. The petitioner
thereafter filed a review application which
has been dismissed by the impugned order
on the ground that the petitioner has
purchased
machineries
etc.
worth
Rs.19,730/- after the date of production
and as such the total capital investment up
to the date of production being less than
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2All] M/s Sonal Metal Industries V. State of U.P. and others
245
Rs.3,00,000/-, it is entitled for exemption
only for a period of three years. Against
the aforesaid order the present writ
petition has been filed claiming a writ,
order of direction for modifying the
eligibility certificate dated 30.01.1988
(Annexure 4 to the writ petition) issued
by the respondent no. 2 for a period of
five years instead of three years.

3. The respondents no. 2 and 3 have
filed separate counter affidavits, although
raising similar pleas. It has been stated
that as the Divisional Level Committee
found the amount of investment below
Rs.3,00,000/-, the petitioner is not entitled
for exemption for a period of five years.

4. We have heard Sri Bharatji
Agarwal, learned Senior Advocate on
behalf of the petitioner and Sri S.P.
Kesarwani on behalf of the respondents.
The only point in the present writ petition
is whether the petitioner, being a
registered unit both as small scale
industry with the Directorate of Industries
and under the Factories Act, and having
started its production in February 1981, is
entitled for eligibility certificate for a
period of three years or for a period of
five years.

5. Learned counsel for the petitioner
has placed reliance upon two Government
Orders being no. 8244 dated 30.09.1982
and its clarificatory letter dated 16.3.1983
issued by the Directorate of Industries and
the Notification dated 27.8.1984. True
copy of the Government order dated
16.03.1983 has been filed as Annexure 7
to the writ petition. The controversy
involved in the present writ petition is
covered by the judgment of two Division
Benches of this Court reported in 1989
UPTC 88 Bajaj Packwell Meerut vs. State
of UP and others and M/s Accurate
Electronics Pvt. Ltd. vs. State of UP and
others 1989 UPTC 118. This court has
interpreted the aforesaid two Government
orders. It has been held that in paragraph
one of the clarificatory letter dated
16.03.1983 it has been clarified that those
small scale units which are registered as
such with the Directorate of Industries
and also registered under the factories Act
would be entitled to exemption from
payment of sales tax and in addition to
such units those which are not registered
under the Factories Act but whose
investment in land, building, machinery
and
equipment
was
more
than
Rs.3,00,000/- would also be entitled to the
same exemption.

6. In M/s Accurate Electronics Pvt.
Ltd. (supra) interpreting Government
order no. 8244 dated 30.9.1982 it has
been held that a small scale industry unit
having
investment
of
less
than
Rs.3,00,000/- would be entitled for
exemption for five years. In the present
case it is not disputed that the petitioner is
registered as a small scale industry unit
with the Directorate of Industries and it is
also registered under the Factories Act
with effect from 1.2.1983. The date of
production is 5.1.1983 and the date of
first sale is 18th March, 1983 as
mentioned in the exemption certificate
dated 30.1.1988 granted by the Divisional
Level Committee for a period of three
years vide Annexure 4 to the writ petition.

7. Following the aforementioned
two judgments of this court, we are of the
opinion that the petitioners unit is entitled
for exemption for a period of five years
from the date of starting its production,
i.e.
05.01.1983.
The
fact
that
the
investment
in
land,
building
and
http://www.allahabadhighcourt.nic.in
 INDIAN LAW REPORTS ALLAHABAD SERIES [2003
246
machinery was less than Rs.3,00,000/- is
of no consequence. The petitioner is
entitled for grant of exemption for a
period of five years in view of the
Government
order
no.
8244
dated
30.9.1982 and the clarificatory letter
dated 16.3.1983.

8. Having regard to the facts and
circumstances of the case, the writ
petition is allowed and a direction is
issued to the respondent no. 2 to modify
the eligibility certificate dated 30.1.1968
accordingly, that is, for a period of five
years
instead
of
three
years.
The
respondents are further directed that till
the issuance of modified eligibility
certificate for a period of five years, they
should not insist on realizing trade tax for
period 05.11.1986 to 04.1.1988.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 6.6.2003

BEFORE
THE HON'BLE SUNIL AMBWANI, J.

Civil Misc. Writ Petition No. 742 of 2002

Sita Ram Rai and others ...Petitioners
Versus
Additional Registrar of Firm, Societies
and Chits and others
 ...Respondents

Counsel for the Petitioners:
Sri R.N. Singh
Sri S.K. Rai
Sri Shashi Nandon

Counsel for the Respondents:
Sri Ashok Khare
Sri Balwant Singh

Constitution
of
India,
Article
226-
Sarvodaya Shiksha Samiti Kauri Ram a
registered society - By laws 17 (2) a
Provides- if any reason on special case-
election not held within the prescribed
period- the term of erstwhile committee
can be extended for another 3 month
before expiry of the term the election
process
started-
DIOS
refused
to
nominate the observer on the pretext
that the validity of membership is still
under consideration before the District
Magistrate- held illegal, till the newly
elected committee come in existence the
erstwhile
committee
shall
continue-
other necessary direction issued.
Case law referred:
2000 ACJ 1083, 2002 (1) AWC 771
2002(3) ESC 129
1999 (2) UPLBEC (Summay) 77
1996(3) UPLBEC 154
1977(1) UPLBEC 412

(Delivered by Sunil Ambwani, J.)

1.

Sarvodaya
Shiksha
Samiti
Kauriram, district Gorakhpur is a society
registered under the Society's registration
Act 1860 (in short, the Act), with its
registration renewed upto 10.10.05. The
society runs many educational institutions
including Sarvodaya Kisan Intermediate
College, Kauriram, district Gorakhpur .
The bye laws of the society provide for
several categories of members. This
includes ex-officio members, nominated
members, Panchayat members patrons,
fellows, life members, ordinary members
and special members. The management of
the
society
vests
in
an
executive
committee.
The
District
Magistrate,
Gorakhpur, Sub Divisional Magistrate
Basgaon, Tehsildar, Basgaon, all the
principals of the institutions run and
managed by the societies, and one
representative of the employees of every
such educational institution are provided
to be the ex-officio members. The District
Magistrate or person nominated by him is
an ex officio, president of the society. Bye
laws no. 17 provides for the period of