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2009 (2) TMI 446 - SC - VAT and Sales TaxWhether an eligibility certificate issued under sub-rule (5) of rule 28A could be withdrawn on a ground other than those specified in clause (a) of sub-rule (8) of rule 28A? Whether in this case, withdrawal can be said to be on any of the grounds mentioned under clause (a) of sub-rule (8) of rule 28A? Held that - Appeal allowed. Once an eligibility certificate was granted, it can only be withdrawn in the circumstances mentioned in clause (a) of sub-rule (8). Therefore, non-production of NOC/CLU certificate by itself cannot be a ground for withdrawal as it is not one of the grounds/circumstances mentioned in clause (a) of sub-rule (8). Where the NOC/CLU certificate was required because the unit was situated in an agricultural land, but the applicant suppressed the fact that the land where the unit was situated was an agricultural land, to avoid production of the NOC/CLU certificate, then it is concealment and mis-representation of a material fact, which squarely falls under sub-rule (8)(a)(i). When the eligibility certificate is withdrawn for non-production of NOC/CLU certificate, and the fact that land was agricultural land was not disclosed, the withdrawal can be traced to ground (i) under sub-rule 8(a)(i) of rule 28A.
Issues Involved
1. Validity of withdrawal of the eligibility certificate under Rule 28A of the Haryana General Sales Tax Rules, 1975. 2. Grounds for withdrawal of the eligibility certificate. 3. Impact of non-production of the NOC/CLU certificate on the eligibility certificate. Detailed Analysis Issue 1: Validity of Withdrawal of the Eligibility Certificate The core issue revolves around whether the eligibility certificate issued under Rule 28A can be withdrawn on grounds other than those specified in sub-rule (8)(a). The eligibility certificate is critical for availing tax exemptions or deferments under the Haryana General Sales Tax Act, 1973. Issue 2: Grounds for Withdrawal of the Eligibility Certificate The relevant legal provisions, specifically Rule 28A, outline the conditions and procedures for granting and withdrawing eligibility certificates. Sub-rule (8)(a) lists three specific grounds for withdrawal: 1. If the certificate was obtained by fraud, deceit, misrepresentation, misstatement, or concealment of material facts. 2. Discontinuance or closure of business for a continuous period exceeding six months. 3. Disposal or transfer of fixed assets adversely affecting manufacturing or production capacity. The appellant argued that these grounds are not exhaustive and that the power to withdraw is implied in the power to grant the certificate, referencing Section 19 of the Punjab General Clauses Act, 1898. However, the court held that the eligibility certificate could only be withdrawn for the reasons explicitly mentioned in sub-rule (8)(a). The penal consequences under sub-rule (8)(b) apply only when withdrawal is based on these specified grounds. Issue 3: Impact of Non-Production of the NOC/CLU Certificate The non-production of the No-Objection Certificate/Change of Land Use Certificate (NOC/CLU certificate) was a significant point of contention. The application form for the eligibility certificate required this certificate if the industrial unit was situated on agricultural land. The respondent did not produce the NOC/CLU certificate and did not disclose that the land was agricultural, which the court deemed as concealment and misrepresentation of material facts. The court clarified that while non-production of the NOC/CLU certificate alone is not a ground for withdrawal under sub-rule (8)(a), the failure to disclose the agricultural nature of the land and the absence of the NOC/CLU certificate constituted concealment and misrepresentation. This falls under the first ground for withdrawal specified in sub-rule (8)(a)(i). Conclusion The court concluded that the eligibility certificate could only be withdrawn on the specific grounds enumerated in sub-rule (8)(a). In this case, the non-disclosure of the agricultural status of the land and the failure to produce the NOC/CLU certificate amounted to concealment and misrepresentation, justifying the withdrawal of the eligibility certificate under sub-rule (8)(a)(i). The appeals were allowed, setting aside the High Court's judgment, and the withdrawal of the eligibility certificates was upheld. This decision was applied consistently across similar cases presented in the appeals.
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