1994 (9) TMI 319 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of eligibility certificate and exemption from sales tax.
2. Review of rejection of application by Divisional Level Committee.
3. Examination of unit closure exceeding six months continuously.
4. Consideration of documentary evidence and admission by petitioner.
5. Legal principles regarding admission and its interpretation.

Analysis:
1. The petitioner sought a mandamus to modify the eligibility certificate for exemption from sales tax and quash the rejection of the review application by the Divisional Level Committee. The petitioner contended that despite providing evidence that the unit was not closed for more than six months continuously, the eligibility certificate was limited to a shorter period than claimed, leading to the writ petition challenging this decision.

2. The Divisional Level Committee rejected the petitioner's initial application based on alleged closure of the unit for over six months. The petitioner filed a review application, presenting evidence of temporary closures due to internal disputes among directors. The eligibility certificate was eventually issued, but the petitioner challenged its limited scope, asserting that the unit started production before the alleged closure period.

3. The key issue was whether the unit remained closed continuously for more than six months. The relevant notification required no discontinuation of production for such a period. The petitioner argued that the closure did not exceed six months at a stretch, supported by labor survey reports, production registers, and documents indicating production continuity before and after the disputed period.

4. The Standing Counsel highlighted an alleged admission by the petitioner regarding unit closure beyond six months in a document. However, the petitioner argued that the admission was not binding, as specific closure dates were not provided, and other evidence contradicted this claim. The Court emphasized the need to consider admissions in their entirety and allow parties to explain or prove them erroneous.

5. Citing legal precedents, the Court emphasized that while admissions are strong evidence, they are not conclusive and can be explained or proven erroneous. The Court found the impugned order unsustainable as it solely relied on the disputed admission without considering the petitioner's evidence. Consequently, the order was quashed, and the case remanded for fresh consideration in light of the Court's observations.

In conclusion, the writ petition was allowed, the impugned order was quashed, and the case remanded for reconsideration. Recovery and assessment proceedings were stayed pending the review application's disposal. The judgment emphasized the importance of considering admissions in their entirety and allowing parties to challenge or explain them effectively.