1989 (2) TMI 373 - HC - VAT and Sales Tax

Summary

Issues:
- Application for exemption of payment of sales tax for manufacturing and selling goods under the Bengal Finance (Sales Tax) Act, 1941.
- Rejection of eligibility certificate application by Assistant Commissioner and Additional Commissioner of Commercial Taxes.
- Review application allowed, directing re-evaluation of eligibility certificate application.
- Rejection of revisional application by Additional Commissioner based on lack of seller information in purchase voucher.
- Interpretation of conditions for tax holiday for newly set up small-scale industrial units.
- Allegation of improper consideration of eligibility certificate application.

Analysis:
The writ petition was filed seeking a mandamus to direct the respondents to dispose of the application for exemption of sales tax for manufacturing and selling goods under the Bengal Finance (Sales Tax) Act, 1941. The petitioners, a partnership firm manufacturing wooden furniture, claimed entitlement to exemption due to being a small-scale unit. The Assistant Commissioner rejected their application in 1982, leading to subsequent revision and review applications. The Additional Commissioner directed a fresh evaluation of the eligibility certificate application, which was then rejected in 1986 for not maintaining serially numbered bills for all goods. The petitioners challenged this rejection, arguing that the tax holiday conditions had been fulfilled, and the concept of "notified commodities" was wrongly introduced.

The Court noted that the application for the eligibility certificate had not been properly considered, emphasizing the need for the petitioners to present further evidence and receive a fair hearing to justify their claim for tax holidays. It was deemed essential to follow the rules' conditions and issue a reasoned order for justice. Consequently, the impugned orders and the rejection of the eligibility certificate application were set aside. The respondent was directed to reevaluate the application within four months, considering the materials on record and any additional evidence provided by the petitioners, without making a decision on the merit of their contentions at that stage.

Furthermore, the Court ordered a status quo on the realization of the assessed amount until the reevaluation of the application was completed. This decision was to apply to another application by the same petitioners. The writ petition was disposed of with the directive for a fresh evaluation of the eligibility certificate application, ensuring a fair process and adherence to the rules' conditions, without prejudice to the petitioners' contentions.