2010 (12) TMI 1088 - HC - VAT and Sales Tax

Petition seeks quashing of order dated April 21, 2006 passed by the General Manager, District Industries Centre, Jhajjar withdrawing the eligibility certificate granted to the petitioner under rule 28B(10)(a)(ii), (iii) of the Haryana General Sales Tax Rules, 1975 as upheld by the appellate authority vide order dated May 6, 2008. Held that - In the facts and circumstances of the case, we do not find any ground to interfere with the order of withdrawal of eligibility certificate passed by the General Manager, District Industries Centre, Jhajjar and order dated May 6, 2008 dismissing the appeal. The review application of the petitioner was dismissed on January 30, 2009. The petitioner remained quiet till June 9, 2010 for a period of about 1 years. The petition thus, suffers from laches. Apart from this, there is concurrent finding of fact recorded by original authority and the appellate authority that the petitioner closed its unit in violation of conditions for exemption which finding has not been shown to be perverse. Petition dismissed.

Summary

Issues:
Challenge to the withdrawal of eligibility certificate under rule 28B(10)(a)(ii), (iii) of the Haryana General Sales Tax Rules, 1975.

Detailed Analysis:

1. Withdrawal of Eligibility Certificate:
The petitioner, engaged in the manufacture of food color and flavors, was granted an eligibility certificate for tax exemption from 1999 to 2006. The General Manager, District Industries Centre withdrew the certificate due to the unit being closed and machinery shifted to another state. The decision was based on findings that the unit was not operational, machinery lying idle, and no production since 2004. The withdrawal was in line with rule 28B(10)(a)(ii) of the HGST Rules, 1975.

2. Appeal Dismissal:
The appeal against the withdrawal was dismissed in 2008, noting the unit's discontinuation of business activities and lack of supporting documents. The subsequent review application and further application were also rejected. The Higher Level Screening Committee found no merit in the appeal and upheld the withdrawal decision.

3. Legal Contention:
The petitioner argued that the Director of Industries and Commerce lacked the authority to decide on behalf of the Higher Level Screening Committee. Reference was made to a previous court order, but the court found no grounds to interfere with the withdrawal decision. The petitioner's delay in raising objections was also noted, indicating laches.

4. Concurrent Findings:
Both the original and appellate authorities found that the petitioner violated exemption conditions by closing the unit. The court upheld these findings, emphasizing that the petitioner failed to demonstrate any error in the decisions. As a result, the writ petition challenging the withdrawal of the eligibility certificate was dismissed.

The judgment highlights the importance of compliance with tax exemption conditions and the authority of screening committees to withdraw eligibility certificates in case of violations. The court's decision underscores the need for timely challenges to administrative decisions and the significance of providing evidence to support claims in legal proceedings.