2014 (2) TMI 204 - HC - VAT and Sales Tax

Amendment in eligibility certificate - Jurisdiction of Tribunal - Whether the eligibility certificate issued Under Section 4-A of the Act is liable to be amended by adding a new item - Held that - assessee was having an eligibility certificate under Section 4-A of the Act in respect of T.V. cabinets. He had started new business of manufacturing of cabinets of speakers in the same premises and as such sought exemption in respect thereof also by making an application for amendment. It is in this context that the court issued the above directions for permitting the assessee to make an application to the authorities concerned who was directed to consider it in accordance with law - authority passing the order under Section 4-A of the Act and issuing eligibility certificate thereof is vested with power if necessary to amend its order and the consequential eligibility certificate in exercise of its inherent power read with Section 21 of the U.P. General Clauses Act, 1904. Thus, the DLC as well as the Tribunal manifestly erred and failed to exercise jurisdiction vested in them in law for considering the application of the assessee for amending the eligibility certificate. An order refusing to permit addition of new goods in the eligibility certificate which is commonly described as an amendment application, virtually amounts to refusal to grant the eligibility certificate and as such is appealable under Section 10 (2) of the Act - impugned orders dated 25.09.2003 and 13.02.2003 passed by the Tribunal and the DLC respectively are set aside and the matter is remanded to the Divisional Level Committee to consider afresh the application of the assessee for the addition of wired chassis as an exempted item in the eligibility certificate in accordance with law as expeditiously as possible - Decided in favour of assessee.

Summary

Issues:
1. Eligibility for tax exemption on 'wired chassis' under Section 4-A of U.P. Trade Tax Act.
2. Authority's power to amend eligibility certificate.
3. Appealability of rejection of application for amending eligibility certificate.

Eligibility for tax exemption on 'wired chassis':
The judgment involves a case where the applicant, a company manufacturing colour T.V. sets and computer monitors, sought tax exemption under Section 4-A of the U.P. Trade Tax Act for these products. The issue arose when the applicant also wanted tax exemption for 'wired chassis,' a component used in manufacturing the aforementioned products. The Divisional Level Committee initially granted exemption only for T.V. sets and computer monitors, excluding 'wired chassis.' The applicant later applied for exemption on 'wired chassis' as well, which was rejected by the DLC and the Tribunal. The revision challenged these rejections, questioning the eligibility for tax exemption on 'wired chassis.'

Authority's power to amend eligibility certificate:
The main contention revolved around whether the eligibility certificate issued under Section 4-A of the Act could be amended to include a new item such as 'wired chassis.' The applicant argued that the power to grant an eligibility certificate inherently includes the power to amend it, citing Section 21 of the U.P. General Clauses Act and Rule 25 (3) (c) of the Act's rules. The respondent, however, opposed this, stating that the eligibility certificate is merely a grant and not subject to amendment. The court analyzed the provisions and previous judgments to conclude that the eligibility certificate is a statutory instrument amenable to amendment, and the authorities have the jurisdiction to amend it as necessary.

Appealability of rejection of application for amending eligibility certificate:
Another issue addressed was whether the rejection of an application to amend the eligibility certificate is appealable. The respondent argued that the refusal or grant of the certificate is not an order, making it non-appealable. However, the court referenced Section 10 (2) of the Act, which allows appeals against orders granting or refusing eligibility certificates. It highlighted a previous case where refusal to permit addition of new items in the eligibility certificate was considered a refusal to grant the certificate, making it appealable. The court held that the rejection of the amendment application is appealable under Section 10 (2) of the Act, contrary to the Tribunal's decision.

In conclusion, the court set aside the orders of the Tribunal and the DLC, remanding the matter to the Divisional Level Committee to reconsider the application for adding 'wired chassis' to the eligibility certificate. The judgment emphasized the authority's power to amend the certificate and the appealability of rejections concerning such amendments, ensuring a comprehensive analysis of the legal provisions and precedents involved in the case.