2000 (11) TMI 1187 - HC - VAT and Sales Tax

Issues Involved:
1. Withdrawal of eligibility certificate by LLSC and HLSC.
2. Entitlement to sales tax exemption under the Haryana General Sales Tax Rules, 1975.
3. Validity of eligibility certificate issuance and its subsequent withdrawal.
4. Applicability of the Haryana Regulation and Control of Crushers Act, 1991.
5. Interpretation of the notification dated April 28, 1992, regarding incentives for industries.
6. Jurisdiction and authority of the Deputy Excise and Taxation Commissioner.

Detailed Analysis:

1. Withdrawal of Eligibility Certificate by LLSC and HLSC:
The petitioner sought to quash the decisions of the Lower Level Screening Committee (LLSC) and the Higher Level Screening Committee (HLSC) regarding the withdrawal of the eligibility certificate issued under rule 28A(2)(i) of the Haryana General Sales Tax Rules, 1975. The LLSC initially granted the eligibility certificate, but later withdrew it, citing that stone crushers fall in the negative list. The HLSC upheld this decision, emphasizing that stone crushers were not eligible for tax incentives under rule 28A as they were included in Schedule III (negative list).

2. Entitlement to Sales Tax Exemption:
The petitioner's application for an exemption certificate was rejected by the Deputy Excise and Taxation Commissioner (DETC) on the grounds that stone crushers are included in the negative list and thus do not qualify as eligible industrial units. The Tribunal upheld this decision, stating that the eligibility certificate was issued erroneously and should be set aside by the HLSC, as provided in rule 28A.

3. Validity of Eligibility Certificate Issuance and Subsequent Withdrawal:
The Joint Excise and Taxation Commissioner (Appeals) noted that the DETC did not have the authority to nullify the eligibility certificate granted by the LLSC. However, since the stone crusher was in the negative list, the benefit of exemption could not be granted. The Sales Tax Tribunal also confirmed that the eligibility certificate should be reviewed by the HLSC, and the LLSC's decision to withdraw the certificate was upheld.

4. Applicability of the Haryana Regulation and Control of Crushers Act, 1991:
The petitioner argued that under the Haryana Regulation and Control of Crushers Act, 1991, and the notification dated April 28, 1992, they were entitled to sales tax exemption. However, the court found that the petitioner was not eligible for such benefits as their stone crusher was not installed in a crusher zone as required by the 1991 Act. Section 11 of the 1991 Act provides incentives only to crushers installed in designated zones.

5. Interpretation of the Notification Dated April 28, 1992:
The notification states that industries not falling in the negative list are eligible for incentives. However, the court clarified that the stone crusher industry, even if holding a valid license under the 1991 Act, was not entitled to sales tax exemption under rule 28A of the Haryana General Sales Tax Rules, 1975, because it was included in the negative list.

6. Jurisdiction and Authority of the Deputy Excise and Taxation Commissioner:
The petitioner contended that the DETC did not have the locus standi to question the LLSC's decision. The court, however, upheld the actions of the DETC and other authorities, stating that the eligibility certificate was void ab initio as it was contrary to the explicit provisions of rule 28A.

Conclusion:
The court concluded that the petitioner was not entitled to sales tax exemption as their stone crusher was not in a designated crusher zone and was included in the negative list under rule 28A. The decisions of the LLSC and HLSC to withdraw the eligibility certificate were consistent with the provisions of the Haryana General Sales Tax Rules, 1975. The writ petition was dismissed, affirming the legality of the actions taken by the LLSC and HLSC.

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