Ganga Thermowares Private Limited vs Commissioner, Commercial Tax, U.P., Lucknow

Rajes Kumar, J.—These are two revisions against the order of the Tribunal dated November 18, 2010, for the assessment year 1998-99. The applicant established a new unit for manufacturing of thermowares and vacuumwares, etc. The applicant has been granted exemption u/s 4A of the Act. The applicant claimed further rebate u/s 4AA of the Act on the ground that it has employed labours in the unit in the proportion of 23 per cent scheduled castes, 27 per cent backward classes and 12 per cent minorities. It appears that the applicant has been granted rebate up to the assessment year 1997-98, as submitted by the learned counsel for the applicant. For the assessment year 1998-99, the applicant has again claimed rebate u/s 4AA of the Act. The rebate has been denied on the ground that the applicant could not furnish the certificate of the District Magistrate and the competent authority of the Labour Department.

The applicant filed the appeal against the assessment order, which has been rejected. The applicant further filed the appeal before the Tribunal. The Tribunal by the order dated March 28, 2007 remanded the matter back to the assessing authority with the direction to the assessing authority to make an effort to get the certificate from the Labour Department and also to get the endorsement from the District Magistrate.

In pursuance thereof, the assessing authority has made the effort. The applicant was able to obtain the certificate from the Labour Commissioner on March 11, 2008 and furnished the same before the assessing authority. However, the certificate of the District Magistrate could not be furnished. In the absence of the certificate of the District Magistrate, the claim of the rebate u/s 4AA of the Act has been denied.

Aggrieved by the assessment order, the applicant filed the appeal before the Joint Commissioner (Appeal), which has been rejected. The applicant further filed the appeal before the Tribunal, which has also been rejected by the impugned order. Hence, the present revisions.

Heard Sri Rishi Raj Kapoor, learned counsel for the applicant and Sri K.M. Sahai, learned standing counsel.

The learned counsel for the applicant submitted that the Labour Commissioner has granted the certificate on the basis of the labour employed in the assessment year 1997-98. The labours, who were employed in the assessment year 1997-98, have also been employed in the assessment year 1998-99 and, therefore, the applicant was entitled for the rebate u/s 4AA of the Act.

The learned standing counsel submitted that for the claim of the rebate u/s 4AA, under Notification No. TT-2/779/XI-9(226)/94-U.P. Act-15-48-Order 95, dated March 31, 1995, issued in exercise of the power u/s 4A of the Act, the exemption is subject to the conditions and restrictions mentioned therein. The conditions and restrictions are that the industrial unit has to file before the assessing authority up to 31st December of the succeeding assessment year a certificate of the District Magistrate to the effect that the person, who has been provided employment, belongs to the category of scheduled castes or scheduled tribes or other backward classes of citizens or minorities, as the case may be, and further a certificate of an officer not below the rank of an Assistant Labour Commissioner to the effect that such industrial unit has provided employment to the persons belonging to the scheduled castes, scheduled tribes, other backward classes of citizens and minorities in the required proportion to the total employment during the whole or part or parts of the assessment year concerned. In the present case, the applicant failed to furnish the requisite certificate of the District Magistrate by the time stipulated in the notification and, therefore, the claim of the rebate u/s 4AA of the Act has been rightly disallowed.

I have considered the rival submissions, perused the impugned order, section 4AA of the Act and the notification issued thereunder.

Section 4AA of the Act and the Notification No. TT-2-779/XI-9(226)/94-U.P. Act-15-48-Order 95, dated 31st March, 1995 read as follows :

Section 4AA of the Act

4AA. Concession in rate of tax to certain industrial units.-(Notwithstanding anything contained in any other provisions except the provision of section 3H of this Act), the State Government may, by notification, grant concession by such percentage in the rate of tax, not exceeding twenty-five, on the sale of goods manufactured by such industrial unit which provides employment to the persons belonging to the scheduled castes, scheduled tribes, other backward classes of citizens and minorities in such proportion to the total employment being provided by such industrial units and subject to such conditions and restrictions, as may be specified therein.

Notification No. TT-2-779/XI-9(226)/94-U.P. Act-15-48-Order 95, dated 31st March, 1995:

In exercise of the powers u/s 4AA of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948), the Governor is pleased to grant, with effect from April 1, 1995, a concession of twenty-five per cent in the rate of tax to such industrial units in the private sector as are registered under the Factories Act, 1948 and provide employment to the persons belonging to scheduled castes and scheduled tribes, other backward classes of citizens and to minorities at the rate respectively of not less than 23 per cent, 27 per cent and ten per cent of the total employment being provided by such industrial unit subject to the following conditions and restrictions :

Conditions and restrictions.-(1) An industrial unit may be granted concession in the rate of tax only if it files before the concerned assessing authority up to 31st December of the succeeding assessment year a certificate :

(a) of the District Magistrate to the effect that the person who has been provided employment belongs to the category of scheduled castes or scheduled tribes or other backward classes of citizens or minorities, as the case may be;

(b) of an officer not below the rank of an Assistant Labour Commissioner to the effect that such industrial unit has provided employment to the persons belonging to scheduled castes, scheduled tribes, other backward classes of citizens and minorities in the required proportion to the total employment during whole or part or parts of the assessment year concerned.

Under the aforesaid notification, the rebate u/s 4AA is subject to the conditions and restrictions mentioned therein. The conditions and restrictions therein are that the unit has to furnish the certificate up to 31st December of the succeeding assessment year of the District Magistrate to the effect that the person who has been provided employment belongs to the category of scheduled castes or scheduled tribes or other backward classes of citizens or minorities, as the case may be, and further a certificate of an officer not below the rank of an Assistant Labour Commissioner to the effect that such industrial unit has provided employment to the persons belonging to scheduled castes, scheduled tribes, other backward classes of citizens or minorities in the required proportion to the total employment during whole or part or parts of the assessment year concerned.

Admittedly, the required certificate could not be furnished within the time stipulated in the notification. It was furnished in the year 2008. The applicant has also failed to furnish the certificate of the District Magistrate, as required under the notification, for the grant of the rebate. In this view of the matter, the applicant failed to comply with the requirements of the notification for the claim of the rebate u/s 4AA of the Act as the conditions and restrictions have not been fulfilled, as required under the notification. In view of the above, both the revisions fail and are, accordingly, dismissed.