1993 (8) TMI 283 - HC - VAT and Sales Tax

Summary

Issues:
1. Cancellation of Certificate of Registration under the Liberalised State Incentive Scheme, 1989 and consequent temporary eligibility certificate for sales tax exemption.
2. Compliance with principles of natural justice in the issuance of the order dated February 20, 1992.
3. Authority to alter or clarify conditions in the Government order.
4. Competency of the State Level Committee to modify the terms of G.O. No. 498.

Analysis:
The petitioner challenged the cancellation of the Certificate of Registration and temporary eligibility certificate under the Liberalised State Incentive Scheme, 1989. The petitioner had applied for project finance, and after various stages of progress, commercial production commenced. The State Level Committee relaxed norms to grant temporary registration and eligibility certificate, which were later cancelled by the Government. The petitioner argued that the cancellation without notice was illegal and unsustainable. The petitioner contended that the State Level Committee's decision should prevail unless cancelled for valid reasons after due notice.

The Government Pleader highlighted clause 10 of G.O. No. 498, which specified the eligibility criteria for industrial units under the incentive scheme. The Government's decision on whether an industrial unit qualifies for concessions was deemed final. Despite the State Level Committee's recommendation, the Government's refusal to relax the conditions of clause 10 was upheld. The Court emphasized that the Government's decision was conclusive under the Government order.

The petitioner claimed a violation of natural justice in the order dated February 20, 1992, citing circular memos directing the withdrawal of temporary eligibility certificates. The Court ruled that the petitioner, aware of the order's conditional nature, could not claim a breach of natural justice. The Court held that the State Level Committee lacked the authority to modify G.O. No. 498, emphasizing that only the State Government could grant such relaxations.

In conclusion, the Court found no merit in the petitioner's contentions. However, the petitioner was granted the option to seek modification from the State Government to avail benefits under the Incentive Scheme. The Court disposed of the petition with this observation, leaving the petitioner the opportunity to pursue relief through the appropriate channels.