2000 (2) TMI 809 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to communication withdrawing eligibility certificate without opportunity of hearing and on unauthorized grounds.

Analysis:
The petition challenged a communication dated June 30, 1997, withdrawing an eligibility certificate without providing an opportunity of hearing to the petitioner. The Lower Level Screening Committee decided to withdraw the certificate due to the petitioner not obtaining change of land use permission from the Town and Country Planning Department. The petitioner appealed to the Higher Level Screening Committee, which dismissed the appeal on July 1, 1999. The challenge was based on the lack of a show cause notice and hearing before withdrawing the certificate, and the unauthorized ground of withdrawal. The State Counsel conceded that the petitioner was not afforded a hearing before the withdrawal, rendering the communication and the committee's decision unsustainable.

The Court considered the matter and found that the withdrawal of the eligibility certificate was not justified as it was based on a ground not permissible under the law. The eligibility certificate was granted under specific rules subject to conditions outlined in the law. The grounds for withdrawal or cancellation of such certificates were clearly specified in the rules. The relevant sub-rule (8) of rule 28A listed specific circumstances under which the certificate could be withdrawn, including fraud, discontinuance of business, or asset disposal. Importantly, the sub-rule did not include non-production of land use permission as a valid ground for withdrawal. The Court emphasized that taxing statutes must be strictly construed, and authorities cannot add grounds for withdrawal beyond those specified in the law.

Consequently, the Court allowed the writ petition, quashing the action of the Lower Level Screening Committee in withdrawing the eligibility certificate. The Court clarified that if any valid grounds for withdrawal as per the specified rules existed, the authorities could proceed against the petitioner lawfully. The petitioner was awarded costs amounting to Rs. 1,000.