1987 (11) TMI 346 - HC - VAT and Sales Tax

Summary

Issues:
Petitioners denied eligibility certificates for exemption from sales tax as small-scale industrial units. Challenge to orders dismissing eligibility certificate applications. Interpretation of executive instructions and notifications regarding eligibility certificates for blending tea industrial units.

Analysis:
The petitioners, registered as small-scale industrial units for blending tea, applied for eligibility certificates to claim sales tax exemption under a notification. However, their applications were denied based on insufficient investment and the nature of their business not being considered a manufacturing process.

The petitioners argued that they were entitled to eligibility certificates based on a Division Bench decision. The Court acknowledged the petitioners' status as small-scale industrial units and the need for eligibility certificates for exemption, as per the notification.

Executive instructions by the Industries Department did not exclude blending tea industrial units from eligibility certificates. No notification was found barring such units from obtaining eligibility certificates, except one in 1986, which did not apply to the petitioners.

The Court noted that the petitioners' blending tea units were distinct from those specified in the executive instructions and subsequent notifications. Referring to the Division Bench decision, the Court held that blending tea units were entitled to eligibility certificates under the notification.

Granting eligibility certificates would enable the petitioners to seek tax relief from sales tax authorities. The Court directed the issuance of eligibility certificates to the petitioners, allowing their writ petitions and ordering the refund of security amounts.

In conclusion, the Court ruled in favor of the petitioners, emphasizing their eligibility for exemption certificates as small-scale industrial units blending tea, in accordance with the relevant notification and executive instructions.