2008 (9) TMI 892 - HC - VAT and Sales Tax

Grant of eligibility Certificate - Held that - To ascertain as to whether the nature of goods produced and are to be produced is the same or different, it is necessary to discuss the articles as the revisionist has set up that earlier in the first eligibility certificate he was producing non-edible oil, i.e., the rice-bran oil and after diversification he started production of edible oils, which are all together different from the earlier goods produced by it. So far as the exercise of power by the Divisional Level Committee is concerned, if it is a case of review then no doubt under rule 25(3)(c) the same Divisional Level Committee, which has granted the earlier certificate, has the right to review its order, but if it is a case of fresh grant, then the authority to whom the jurisdiction is vested on the date of application shall have the right to entertain the same and it shall also be cleared after discussion on the nature of goods, for which the eligibility certificate was granted and has been asked to grant. The Tribunal shall also discuss the comparative specification of the goods. Under the circumstances, feel it appropriate to remand the matter to the Trade Tax Tribunal to consider it afresh after providing opportunity of hearing and pass a fresh order in the matter. Therefore, hereby set aside the order dated January 9, 2004, passed by the Trade Tax Tribunal in Appeal No. 77 of 2003 and remand the matter to the Trade Tax Tribunal for fresh decision, in view of the observations made hereinabove.

Summary

Issues:
1. Validity of the order passed by the Trade Tax Tribunal setting aside the Divisional Level Committee's order.
2. Interpretation of eligibility certificate under rule 25 of the U.P. Trade Tax Rules, 1948.
3. Review application regarding diversification of goods and grant of exemption under section 4A of the U.P. Trade Tax Act.
4. Nature of goods produced and the distinction between non-edible and edible oils.
5. Authority to review or grant eligibility certificates for exemption under the U.P. Trade Tax Act.

Analysis:
1. The High Court considered the appeal against the Trade Tax Tribunal's order setting aside the Divisional Level Committee's decision. The Tribunal had canceled the amended eligibility certificate granted to the revisionist for diversification of goods. The Court noted that the Tribunal did not adequately discuss the nature of goods produced under the original and amended certificates, leading to an error in the decision-making process.

2. The case involved the interpretation of rule 25 of the U.P. Trade Tax Rules, 1948, specifically regarding the grant of eligibility certificates. The Court highlighted the importance of distinguishing between cases of review and fresh grants of certificates, emphasizing the need for clarity on the nature of goods produced and to be produced under the eligibility certificates.

3. The revisionist had submitted a review application for diversification of goods and exemption under section 4A of the U.P. Trade Tax Act. The Court observed discrepancies in the goods produced under the original and amended certificates, emphasizing the need for a detailed analysis of the nature of goods to determine eligibility for exemption.

4. The Court focused on the distinction between non-edible and edible oils produced by the revisionist before and after diversification. It highlighted the importance of assessing the nature of goods to establish whether the revisionist qualified for exemption under the U.P. Trade Tax Act based on the goods produced.

5. The Court addressed the authority responsible for reviewing or granting eligibility certificates for exemption under the U.P. Trade Tax Act. It emphasized the need for the correct interpretation of the law to ensure that the appropriate authority handles review applications and fresh grant requests in compliance with the legal provisions.

In conclusion, the High Court allowed the revision, setting aside the Trade Tax Tribunal's order and remanding the matter for fresh consideration. The Court directed the Tribunal to conduct a detailed analysis of the goods produced, provide an opportunity for hearing, and issue a new decision based on the observations made in the judgment.