2000 (3) TMI 1054 - HC - VAT and Sales Tax

Summary

Issues:
1. Denial of eligibility certificate by respondent No. 1 under the "Sales Tax Incentive Scheme for Industries, 1986".
2. Delay in responding to the application for eligibility certificate.
3. Interpretation of the eligibility criteria based on the no objection certificate from Gujarat Pollution Control Board.
4. Consideration of the period of manufacturing activity and possession of the no objection certificate.

Analysis:
The petitioner raised concerns regarding the denial of an eligibility certificate by respondent No. 1, crucial for availing benefits under the "Sales Tax Incentive Scheme for Industries, 1986". The petitioner's application for the certificate, submitted in December 1989, faced prolonged scrutiny without a response until June 1999, citing cessation of drug manufacturing and lack of a no objection certificate from the Gujarat Pollution Control Board as reasons for denial.

During the hearing, the petitioner's counsel argued that the petitioner should have been granted the eligibility certificate based on the possession of a valid no objection certificate until March 1994, despite discontinuing drug manufacturing in October 1996. The respondent contended that the petitioner's manufacturing halt at the time of inspection and the limited validity of the no objection certificate justified the denial.

Upon review, the Court acknowledged the petitioner's possession of a valid no objection certificate until March 1994 and the continuation of drug manufacturing until October 1996. The Court opined that the petitioner should have been granted the eligibility certificate for the period during which manufacturing and the no objection certificate were valid, emphasizing the prolonged inaction by respondent No. 1 after the application submission in 1989.

Consequently, the Court directed respondent No. 1 to reassess the petitioner's case, considering the valid no objection certificate and the manufacturing timeline, instructing a reevaluation and issuance of the eligibility certificate or a reasoned order by a specified date in 2000. The Court ruled in favor of the petitioner, maintaining an interim relief until a set date.

In conclusion, the judgment highlighted the importance of considering the circumstances surrounding the application, the possession of necessary certificates, and the period of manufacturing activity in determining eligibility for the incentive scheme, emphasizing the need for a timely and fair assessment by the concerned authority.