2008 (8) TMI 853 - HC - VAT and Sales Tax

Summary

Issues:
Validity of order under section 4A(3) of the U.P. Trade Tax Act, 1948 regarding cancellation of eligibility certificate for a new unit due to closure for more than six months.

Analysis:
The dealer challenged the order passed under section 4A(3) of the U.P. Trade Tax Act, 1948, seeking cancellation of the eligibility certificate for their new unit. The Tribunal upheld the order, stating that the dealer failed to provide evidence that the unit was not closed for over six months. The eligibility certificate was issued for three years starting from March 29, 1985. During the assessment year 1987-88, the unit was closed due to various reasons, including curfew. A survey report from September 6, 1988 revealed that production had stopped since April 1987, leading to the initiation of proceedings for cancellation of the certificate.

In response to the show-cause notice, the dealer mentioned curfew as the reason for closure and claimed that production resumed in October. Despite multiple opportunities, the dealer did not substantiate their defense or participate in the proceedings. The authority canceled the certificate from April 1, 1987, which was confirmed by the Tribunal. The dealer's argument that the certificate could not be canceled post-expiry was rejected, citing retrospective amendments in the law. The court noted the lack of participation from the dealer and upheld the validity of the cancellation based on the unchallenged survey report as valid evidence.

The court emphasized that the dealer failed to provide any valid reasons for non-participation in the proceedings. The decision on whether the unit was closed for over six months depended on evidence, and in the absence of contrary material, the survey report was considered valid evidence. The court found no merit in the revision and dismissed it, affirming the cancellation of the eligibility certificate.