1998 (8) TMI 572 - HC - VAT and Sales Tax

Summary

Issues:
Whether the rejection of petitioner's application for grant of eligibility certificate is legally correct and justified.

Analysis:
The petitioner, engaged in the manufacture of Hawai chappals and shoes, applied for an eligibility certificate under the Haryana General Sales Tax Rules. The lower level screening committee rejected the application as time-barred, a decision upheld by the higher level screening committee. The petitioner argued that the rejection was improper as they were not eligible to apply until October 30, 1996, due to their goods being tax-free until then. It was contended that the rejection violated principles of natural justice as reasons for the decisions were not communicated. The respondent argued that the application was rightly rejected as time-barred, despite conceding the tax-free status of the goods until October 30, 1996.

Upon review, the Court found the decisions of the screening committees to be invalid due to a lack of reasons provided for the rejection. The Court noted that the decisions lacked any indication of the application of mind by the authorities. The committees failed to consider whether the petitioner was entitled to the eligibility certificate given the tax-free status of their goods. The rejection was deemed to be summary and without cogent reasons, thus violating principles of natural justice. Consequently, the Court held the decisions to be vitiated due to this violation.

As a result of the above findings, the writ petition was allowed, and Annexures P3 and P6 were quashed. The lower level screening committee was directed to reconsider the petitioner's application for the eligibility certificate, this time providing reasons for their decision. Importantly, the Court clarified that this direction did not imply a mandate for the grant of the eligibility certificate, leaving the committee free to make a decision in accordance with the law.