1998 (11) TMI 641 - AT - VAT and Sales Tax

Summary

Issues:
1. Interpretation of rule 99 for eligibility certificate duration under the West Bengal Sales Tax Act, 1994.
2. Application of amended provisions to pending applications.
3. Discrimination in granting tax holiday benefits.
4. Nature of statutory rights based on the law prevailing at the time of eligibility.

Analysis:
1. The key issue in this case is the interpretation of rule 99 under the West Bengal Sales Tax Act, 1994, specifically regarding the duration of the eligibility certificate (EC) for tax holiday benefits. The applicant, a partnership firm, argued that the EC should be valid for seven years as per the amended provision of rule 99, which extended the tax holiday period for small-scale industrial units outside the CMDA area. However, the respondents contended that the rules in force at the time of the first sale of the product determine the tax holiday period.

2. The second issue involves the application of amended provisions to pending applications. The applicant claimed that the amended rule 99 should apply to their case as the application for EC was pending when the rule was amended. However, the respondents argued that the amended provision, effective from July 15, 1996, cannot be applied retrospectively to a sale that occurred before this date.

3. The issue of discrimination in granting tax holiday benefits was raised by the applicant's representative. They argued that different treatment based on the date of application disposal could lead to unfair advantages for other dealers. However, the tribunal highlighted that the legal rights conferred by the statute depend on the provisions existing at the time of eligibility, not on the timing of application disposal.

4. Lastly, the case delves into the nature of statutory rights based on the law prevailing at the time of eligibility. The tribunal emphasized that the substantive right to tax holiday arises from the date of the first sale of the product, and the applicable rule at that time determines the duration of the benefit. The nature of the right is not altered by subsequent amendments unless expressly provided.

In conclusion, the tribunal dismissed the applicant's claim, stating that the amended rule 99 did not entitle them to a seven-year tax holiday as the first sale occurred before the amendment. The decision emphasized that statutory rights are determined by the law in force at the time of eligibility, and the timing of application disposal does not alter the nature of those rights.