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2007 (11) TMI 576 - HC - VAT and Sales TaxBenefit of sales tax concession withdrawn - Held that - The HLSC after taking into account all the conditions appears to have issued and approved the case of the petitioner-industrial unit as a new industrial unit eligible for sales tax concession to the tune of ₹ 885.15 lacs which is 100 per cent of total FCI for a period of 10 years from the date of issue of entitlement certificate for manufacturing of automobile accessories namely catalytic of manufacture converters falling under NIC Board manufacture of parts and accessories NEC for transport equipment NEC. A perusal of letter dated March 18, 2005 (annexure P 14) further shows that the aforementioned decision was taken by HLSC in its 89th meeting held on December 6, 2004. A review is by no means an appeal as disguised whereby an erroneous decision is reheard and corrected. Review lies only for a patent error as apparent from the face of record. Therefore, we find that the HLSC has admittedly made an attempt to correct erroneous decision particularly the issue, which has been adjudicated upon, therefore, the impugned order dated June 7, 2007 (annexure P 17) is liable to be set aside. For the reasons aforementioned, this petition succeeds. Order dated June 7, 2007 (annexure P 17) passed by HLSC in its 99th meeting withdrawn the benefit of sales tax concession of ₹ 885.15 lacs, granted in favour of the petitioner-company pursuant to the decision of the HLSC that was taken in the 89th meeting, held on December 6, 2004 (P 17) is hereby quashed and the order dated December 6, 2004 taken by HLSC in its 89th meeting is restored.
Issues Involved:
1. Validity of the withdrawal of sales tax concession by the Higher Level Screening Committee (HLSC). 2. Fulfillment of conditions for "units in pipeline" status under Rule 28C of the Haryana General Sales Tax Rules, 1975. 3. Power of review exercised by the HLSC. Detailed Analysis: 1. Validity of the Withdrawal of Sales Tax Concession by the HLSC: The petitioner-company challenged the withdrawal of the sales tax concession of Rs. 885.15 lacs granted earlier by the HLSC. The HLSC had initially approved the concession in its 89th meeting held on December 6, 2004, but later withdrew it in the 99th meeting on June 7, 2007, claiming the decision was erroneously conveyed. The court found that the HLSC had indeed granted the concession initially and that the withdrawal was based on irrelevant considerations. 2. Fulfillment of Conditions for "Units in Pipeline" Status: The petitioner-company argued that it met all conditions for being classified as a "unit in pipeline" as per Rule 28C(3)(o). These conditions included: - Registration with the Department of Industries before April 30, 2000. - Arrangement of land or premises. - Application for finances from a regular financial institution. - Commencement of production before May 1, 2002. The court found that: - The petitioner was registered with the Department of Industries on February 23, 2000. - The land was allotted to the petitioner on January 14, 2000. - The unit was self-financed, fulfilling the third condition. - Commercial production commenced on September 29, 2000. Therefore, the court concluded that the petitioner fulfilled all the required conditions for "units in pipeline" status. 3. Power of Review Exercised by the HLSC: The HLSC reviewed its earlier decision under Rule 28C(15), which allows review in cases of new evidence, error apparent on the face of the record, or other sufficient reasons. The court held that the HLSC's review was not based on any new evidence or error apparent on the face of the record but was an attempt to correct an allegedly erroneous decision. The court emphasized that a review cannot replace the appellate process and is only for correcting patent errors. The court cited the Supreme Court judgments in Aribam Tuleshwar Sharma v. Aribam Pishak Sharma, Parsion Devi v. Sumitri Devi, and Haridas v. Usha Rani Banik to support its conclusion that the HLSC exceeded its review powers. Conclusion: The court quashed the HLSC's order dated June 7, 2007, and restored the original decision from December 6, 2004, granting the sales tax concession to the petitioner. The court found that the petitioner met all conditions for "units in pipeline" status and that the HLSC's review was unjustified. The petition succeeded, and no costs were awarded.
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