1996 INSC 1714
                                        SUPREME COURT OF INDIA

                                                    Bani Polymers

                                                           Vs.

                                  Assistant Commissioner, Commercial Taxes

                                          (J Verma and S V Manohar JJ.)

                                                      22.11.1996

                                                       ORDER

1. Leave granted.

2. The appellant M/s. Bani Polymers is a registered dealer under the West Bengal Finance (Sales
Tax) Act, 1941 and the West Bengal Sales Tax Act, 1954. It started business on 1-3-1979. It is also
registered as a small-scale industry with the Directorate of Cottage & Small-Scale Industries with
effect from 25-2-1980. It is a manufacturer of rubber goods. The appellant applied to the Assistant
Commissioner of Commercial Taxes for grant of eligibility certificate under Rule 3(66) of the
Bengal Sales Tax Rules, 1941 read with Section 4-AA of the West Bengal Sales Tax Act, 1954. The
application for eligibility certificate was rejected by the Assistant Commissioner by order dated 29-
4-1981 specifying the grounds of rejection.

3. The appellant challenged the above order by a writ petition filed in the Calcutta High Court
which stood transferred to the West Bengal Taxation Tribunal for decision. The Tribunal by the
impugned judgment dated 24-7-1990 has rejected that petition. Hence this appeal by special leave.

4. The only question for decision is about the meaning of the word "investment" in Rule 3(66), the
relevant part of which is as under:

"(i) with an investment up to rupees twenty lakhs on plant and machinery, excluding land and
building."

5. There is no dispute that if the total investment of the appellant on the plant and machinery
excluding land and building was up to Rs 20 lakhs and not in excess thereof, the appellant would be
entitled to grant of the eligibility certificate. The Tribunal took the view that the expression connotes
purchase or capital expenditure on purchase and that expenditure on lease is not investment, nor is it
an expenditure of capital nature. From the additional material produced by the appellant before The
Tribunal which remained unrebutted, it is clear that the total investment on plant and machinery of
the appellant amounted to Rs 3,05,203.62 p. only which is much less than Rs 20 lakhs which is the
limit prescribed in Rule 3(66) as quoted above.
6. Learned counsel for the respondents contended that the figure does not appear to be real in view
of the fact that the transaction of purchase of the leased machinery was with a sister concern. Apart
from this bald assertion, there is no material produced by the respondents at any stage to support
their claim that the price is not the real price. Moreover, the margin between the total amount of
investment in the present case and the permissible limit of Rs 20 lakhs specified in Rule 3(66) is
considerable, so that a bare assertion of this kind is alone not sufficient to reject the appellant's
claim. The appellant was, therefore, entitled to grant of the eligibility certificate as claimed by it.

7. Consequently, the appeal is allowed. The impugned orders of the Assistant Commissioner and the
Tribunal are set aside.