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2000 (7) TMI 936 - HC - VAT and Sales Tax
Issues:
Whether the eligibility certificate granted to the petitioner could be withdrawn without following the rule of audi alteram partem? Analysis: The petitioner, engaged in manufacturing and sale of yarn, applied for an eligibility certificate in 1995-96 under the Haryana General Sales Tax Rules, 1975. The certificate was granted entitling tax exemption. However, the Lower Level Screening Committee decided to withdraw the certificate due to alleged non-compliance with land use permission regulations. The petitioner challenged this decision through appeals, arguing violation of natural justice rules and arbitrariness. The Higher Level Screening Committee upheld the decision citing lack of necessary documents. The Assessing Authority then demanded tax payment for the relevant years. The petitioner contended that the withdrawal decision lacked proper hearing and was ultra vires to the rules. The Respondents argued that the petitioner did not fulfill the necessary requirements for the certificate issuance. The Court, after considering the arguments, held that the withdrawal decision violated the rule of audi alteram partem. The eligibility certificate granted a valuable right to the petitioner, and the decision to withdraw it without proper notice and hearing was deemed invalid. The Higher Level Screening Committee's decision was also quashed for the same reason. The Court refrained from deciding whether the conditions in the application form were mandatory or directory. It was suggested that these issues should be examined by the competent authority with proper notice and hearing. The writ petition was allowed, declaring the withdrawal and consequential actions illegal. The case was remanded for a fresh decision with both parties given an opportunity to present their arguments. In conclusion, the judgment emphasized the importance of following natural justice principles and providing a fair hearing before taking decisions that affect valuable rights granted through official certificates.
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