1997 (5) TMI 406 - HC - VAT and Sales Tax

Summary

Issues:
- Challenge to eligibility certificate granted for a limited period
- Interpretation of unit closure for more than six months
- Chairman's refusal to grant eligibility certificate based on job-work
- Allegation of contempt of court by Chairman, Noida

Detailed Analysis:
1. The petitioner challenged the eligibility certificate granted for a limited period, arguing that the unit did not remain closed for more than six months as it continued production on a job basis. The court, in an earlier judgment, found merit in the petitioner's contention and directed the Chairman to reconsider the application for the eligibility certificate in accordance with the law. The court emphasized that job-work should not be considered as a closure of the unit for over six months.

2. The Chairman, Noida, in the impugned order, rejected the petitioner's application for the eligibility certificate, citing the clarification from the Sales Tax Commissioner that job-work does not qualify as manufacturing for sales. Despite the court's previous judgment and acceptance of job-work as production, the Chairman refused to grant the eligibility certificate beyond a certain period. The court criticized the Chairman's decision as contrary to the court's earlier judgment and expressed disappointment in the Chairman's actions.

3. The court noted that after the previous judgment, the Chairman's duty was to comply with the court's decision and grant the eligibility certificate. The court refrained from initiating contempt proceedings against the Chairman but directed him to issue the eligibility certificate within a specified timeframe. The court emphasized the Chairman's obligation to follow the court's directives without further delay or resistance.

4. In conclusion, the court allowed the petition, quashed the impugned order of the Chairman, Noida, and directed him to grant the eligibility certificate based on the court's observations and previous judgment. The court also stayed recovery proceedings related to assessment years until the issuance of the eligibility certificate. The judgment highlighted the importance of adherence to court decisions and the Chairman's responsibility to act in accordance with the law and court directives.