1995 (2) TMI 392 - HC - VAT and Sales Tax

Summary

Issues:
Petition seeking modification of eligibility certificate for exemption from sales tax at a higher rate. Review application rejected without reason. Dispute over entitlement to exemption at 125% instead of 100%. Cancellation of registration of petitioner-unit and its impact on exemption eligibility. Court's jurisdiction under Article 226 to remand the case for further adjudication.

Analysis:
The petitioners sought a writ to modify an eligibility certificate issued under the U.P. Sales Tax Act, 1948, exempting them from sales tax at a higher rate. The petitioners argued that their industrial unit qualified as a small-scale industry, entitling them to a 125% exemption instead of the granted 100%. The review application was rejected without providing reasons, leading to a challenge based on the lack of a speaking order. The respondents contended that the registration of the petitioner-unit had been canceled, affecting the exemption claim. However, the petitioners asserted that cancellation of registration did not impact their eligibility for the exemption under the Act.

The Court, after considering the arguments, decided to remand the case to the authority concerned for further adjudication. It held that the issues raised required detailed examination in light of the Act's provisions, rules, and relevant government orders. The Court emphasized that it was not appropriate to delve into factual matters under its extraordinary jurisdiction under Article 226. Consequently, the Court set aside the previous order and directed the authority to reexamine the case, ensuring the petitioners are given a fair opportunity to present their case.

The Court instructed the authority to reconsider the petitioner's case within three months, taking into account all relevant rules and government orders. The order also highlighted the need to address the impact of the canceled registration on the relief sought by the petitioners. Ultimately, the Court allowed the petition, quashed the previous order, and directed the authority to conduct a fresh evaluation of the case within the specified timeframe.