1987 (4) TMI 464 - HC - VAT and Sales Tax

Summary

Issues:
1. Denial of renewal of eligibility certificate for exemption of sales tax.
2. Delay in disposal of the application for renewal.
3. Compliance with the requirement of maintaining separate accounts and issuing serially numbered bills.

Analysis:

Issue 1: Denial of renewal of eligibility certificate for exemption of sales tax
The petitioners applied for renewal of their eligibility certificate for the period 1st April, 1982 to 31st March, 1983, which was rejected by the respondent on 1st March, 1985. The rejection was based on the failure of the petitioners to issue serially numbered bills for the sale of manufactured goods. The Additional Commissioner dismissed the petitioners' application for revision on 19th May, 1986. The court noted that the circular did not prescribe a time limit for disposal of such applications, and while there was a delay in processing the application, the court could not strike down the order solely on the grounds of delay or limitation.

Issue 2: Delay in disposal of the application for renewal
The petitioners argued that the delay in processing their application for renewal prejudiced them as they did not collect sales tax assuming the certificate would be renewed. The court found this argument unsubstantiated, noting that the application was made on 23rd December, 1982, and the petitioner could have collected sales tax on sales effected during the pending period. The court highlighted that the delay was due to the belated application by the petitioners, which was not adequately explained.

Issue 3: Compliance with the requirement of maintaining separate accounts and issuing serially numbered bills
The petitioners contended that they maintained separate accounts and issued serially numbered bills for the goods manufactured in their small-scale industry. However, the court held that the proviso to rule 3(66a) mandates separate accounts and serially numbered bills specifically for goods manufactured in the new industrial unit. Any deviation from this requirement would lead to the denial of the exemption. The court emphasized that strict compliance with all requirements is necessary to claim the exemption, and even minor deviations cannot be overlooked.

In conclusion, the court dismissed the writ petition but directed that the petitioner's application for extension of the eligibility certificate for subsequent periods should be considered on merit if all requirements are fulfilled. The court also allowed the petitioner to apply for a review of the order within a specified period to investigate the alleged trivial nature of the breach in compliance.