1998 (11) TMI 613 - HC - VAT and Sales Tax

Summary

Issues:
1. Interpretation of eligibility certificate under U.P. Trade Tax Act, 1948.
2. Effect of registration under Indian Factories Act on eligibility for benefits.
3. Consideration of subsequent developments during the pendency of the case.
4. Availability of alternative remedy under section 11 of U.P. Trade Tax Act, 1948.

Detailed Analysis:
1. The judgment dealt with the interpretation of an eligibility certificate issued under the U.P. Trade Tax Act, 1948. The petitioners had established a new industrial unit for rice manufacturing and were granted the eligibility certificate for a period of seven years. However, a restriction was imposed, limiting the benefit from January 28, 1989, to October 25, 1989, due to the registration under the Indian Factories Act on October 26, 1989. The petitioners challenged this restriction, arguing that the eligibility should be based on the date of the first sale, not the registration date under the Factories Act.

2. The impact of registration under the Indian Factories Act on eligibility for benefits was a crucial issue in the judgment. The petitioners contended that the registration requirement was directory in nature and should not curtail the period of benefit under the eligibility certificate. Subsequently, the registration certificate under the Factories Act was modified to be effective from November 1, 1988, aligning with the manufacturing start date. The petitioners sought the benefit for the entire period specified in the eligibility certificate, emphasizing the significance of the first sale date over the registration date.

3. The judgment considered the subsequent developments during the case proceedings. The petitioners had initially faced rejection based on the ground of limitation for seeking modification of the registration certificate. However, the subsequent modification of the certificate and the alignment of dates with the manufacturing and first sale events were pivotal in determining the entitlement to benefits for the full period specified in the eligibility certificate. The court acknowledged the changed circumstances and developments that favored the petitioners' claim for relief.

4. The issue of the availability of an alternative remedy under section 11 of the U.P. Trade Tax Act, 1948 was also addressed. The State Counsel argued that the petitioners could have sought revision under this section instead of filing a writ petition. However, the court held that considering the undisputed facts and subsequent events, the petitioners were entitled to the relief sought based on the principle that the alternative remedy would not be an absolute bar in cases where facts and circumstances warranted a different approach. The judgment ultimately allowed the writ petition, quashing the restriction on benefits and granting the petitioners the entitlement for the full specified period under the eligibility certificate.