1999 (8) TMI 962 - HC - VAT and Sales Tax

Summary

Issues:
1. Cancellation of eligibility certificate under Section 4-A (3) of the U.P. Trade Tax Act.
2. Remission of tax following cancellation of eligibility certificate.
3. Jurisdiction of the Tribunal regarding remission of tax.
4. Exercise of discretionary power under Section 4-A (3) by the Commissioner.

Analysis:
1. The revision petition challenged the Trade Tax Tribunal's order dismissing the dealer's Second Appeal against the Commissioner's cancellation of the eligibility certificate granted under Section 4-A (3) of the U.P. Trade Tax Act. The eligibility certificate was revoked on the grounds that the dealer was also availing tax exemption on raw material purchases under Section 4-B. The Commissioner's decision to cancel the certificate after a significant delay of about four and a half years post the expiration of the exemption period was deemed improper by the High Court.

2. The dealer had requested remission of tax post the cancellation of the eligibility certificate, citing a circular dated 24th May, 1994. However, the Commissioner rejected this plea, and the Tribunal upheld the decision, stating that the Government's order did not apply in this scenario. The Court noted that Section 4-A (3) of the Act does not explicitly address the consequences of eligibility certificate cancellation, focusing on the Commissioner's authority to cancel or amend the certificate.

3. The Tribunal's jurisdiction regarding the remission of tax was questioned, with the Court ruling that the Tribunal's decision to entertain the appeal on the remission issue was beyond its scope. The Court clarified that since the remission request did not fall under the purview of Section 4-A (3), no appeal could be made to the Tribunal under Section 10 of the Act. Therefore, the Tribunal's order on the remission issue was deemed to lack jurisdiction.

4. The High Court emphasized the discretionary nature of the power vested in the Commissioner under Section 4-A (3) and stressed the importance of judicious and cautious exercise of such authority. The Court highlighted that the eligibility certificate cancellation in this case was based on a departmental error, and the delay in taking action post the exemption period's expiration was significant. Despite finding the Commissioner's decision to cancel the certificate improper, the Court noted that the dealer did not raise this argument before the Tribunal, leading to the matter being concluded at that stage.

In conclusion, the High Court dismissed the revision petition, emphasizing the discretionary nature of the Commissioner's power under Section 4-A (3) and the importance of exercising such authority judiciously.