1994 (2) TMI 276 - HC - VAT and Sales Tax

Summary

Issues:
1. Challenge to rejection of eligibility certificate application for sales tax exemption
2. Authority to issue eligibility certificate under Notification S.R.O. No. 969/80
3. Supersession of Notification S.R.O. No. 969/80 by S.R.O. No. 499/90

Analysis:
1. The petitioner, a small-scale industrial unit, challenged the rejection of its application for an eligibility certificate for sales tax exemption under Notification S.R.O. No. 969/80. The rejection was based on a decision by the District Level Committee, which the petitioner argued was improper as the application should have been dealt with by the General Manager of the District Industries Centre. Additionally, the petitioner was not given an opportunity to be heard, and the reasons for the rejection were not provided, rendering the decision arbitrary. The court found merit in both contentions and quashed the decision (exhibit P5).
2. The court emphasized that under Notification S.R.O. No. 969/80, the authority to issue the eligibility certificate for exemption lies with the General Manager of the District Industries Centre. The petitioner's claim should have been considered solely based on the terms and conditions of this notification, and not by an external body like the District Level Committee. The court ruled that the decision by the Committee was illegal and directed the General Manager to reconsider the application in accordance with the notification's provisions.
3. The Government Pleader argued that Notification S.R.O. No. 499/90 superseded S.R.O. No. 969/80, justifying the District Level Committee's decision. However, the court rejected this argument, stating that while S.R.O. No. 499/90 imposed stricter conditions for exemption, it did not replace the more lenient benefits provided under S.R.O. No. 969/80. The court clarified that the General Manager must evaluate the petitioner's claim under the original notification, disregarding any conflicting provisions in subsequent notifications. Consequently, the court quashed exhibit P5 and instructed the General Manager to reassess the application within three months, ensuring the petitioner's right to be heard.