2013 (3) TMI 384 - HC - VAT and Sales Tax

Cancellation of eligibility certificate u/s 4-A of the U.P. Trade Tax Act, 1948 - old machines for the new unit were used - Held that - It appears that the eligibility certificate was issued on 30.04.1984 for a period of five years w.e.f. 06.05.1983 to 05.05.1988 and Assistant Commissioner recommended the assessee s case for cancellation of the eligibility certificate after the expiry of eligibility certificate. Thus the cancellation certificate was issued when the eligibility period had already expired. Thus, it is well settled legal position that no cancellation certificate can be issued after the expiry of the eligibility certificate is over.

Summary

Issues:
Challenge to cancellation of eligibility certificate under U.P. Trade Tax Act, 1948.

Analysis:
The judgment pertains to a revision filed under section 11(1) of the U.P. Trade Tax Act, 1948 against a decision by the Trade Tax Tribunal, Lucknow. The case involved the cancellation of an eligibility certificate granted to the assessee for establishing a new unit for manufacturing refractories. The eligibility certificate was issued on 30.04.1984 for a five-year period starting from 06.05.1983 to 05.05.1988. The Assistant Commissioner recommended cancellation of the certificate on 05.09.1988, citing the use of old machines for the new unit by the assessee. The Tribunal allowed the assessee's claim and set aside the cancellation. The department, dissatisfied with the Tribunal's decision, filed the revision.

Upon hearing the learned Standing Counsel for the department and reviewing the records, the court noted that the cancellation proceedings were initiated after the expiration of the eligibility certificate. The court emphasized that as per established legal principles, a cancellation certificate cannot be issued after the expiry of the eligibility period. Citing precedents mentioned in the Tribunal's order, the court affirmed that the cancellation proceedings initiated post the expiry of the eligibility period were invalid. Consequently, the court upheld the Tribunal's decision, stating that the impugned order did not require any interference.

In conclusion, the court dismissed the revision filed by the department, thereby maintaining the decision of the Tribunal. The judgment highlights the importance of adhering to legal principles and timelines in matters concerning the cancellation of eligibility certificates under the U.P. Trade Tax Act, 1948.