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TMI Blog1994 (1) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Act, 1956, for manufacturing round angle, M.S. rounds, tore, angle, flat T-2, etc. and later on the certificate was amended to incorporate processing of iron and steel and other raw materials. The petitioner was also granted exemption from payment of sales tax for six years from October 6, 1987 to October 5, 1993, as also exemption from payment of entry tax. The petitioner was also issued eligibility certificate. 4.. The controversy in this case relates to recognition certificate required to be issued under section 16-C of the Act to enable the petitioner to purchase goods for use as raw material or incidental goods in accordance with section 6(2)(b) of the Act. Rule 14-C of the Rules deals with the grant of recognition certificate. Sub-rule (4) enables the appropriate officer to cancel the recognition certificate. The petitioner contends that the rule-making authority has no power to frame a rule enabling the appropriate officer to cancel the certificate once granted. 5.. Section 4 of the Act deals with incidence of tax. Tax is payable on the taxable turnover in respect of sales or supplies of goods effected in the State. Section 6 of the Act deals with levy of tax. Sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes than the rate of tax on goods used as raw material or incidental goods or that the goods manufactured are wholly or substantially sold in the course of export or for any other reason. The issue of recognition certificate is based on the satisfaction of the officer concerned that the conditions prescribed in the provisions exist. The recognition certificate so granted enables the dealer to avail of the concessional rate of tax prescribed in section 6(2)(b) of the Act. 8.. Section 51 confers on the State Government power to make rules for carrying out purposes of the Act. Clause (ffff) of sub-section (2) of section 51 enables the Government to make Rules prescribing the form and manner in which, restrictions and conditions subject to which, a recognition certificate should be issued under section 16-C. In exercise of the rule-making power, the Government issued the rules. Rule 14-C deals with grant of recognition certificate. Sub-rule (1) requires application for the purpose in form III-B. Sub-rule (2) requires the officer to make such enquiry as he considers necessary to ascertain the correctness of the particulars furnished in the application and if he is satisfied that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate in section 16-C, it has not made any statutory provision enabling cancellation of the certificate. It is pointed out that in regard to registration certificates, specific provisions have been made for cancellation, as in sections 15(1), 16 and 16-13. It is argued that where the dealer holding a recognition certificate misuses the certificate, statute has prescribed penalty as can be seen from sub-section (3) of section 6. It is, therefore, contended that the State Government has no power to frame a rule enabling cancellation of the certificate on the ground that the registered dealer has ceased to be eligible or has committed breach of rule 14-C, or default in payment of tax due. The answer of the respondent is based on section 21 of the M.P. General Clauses Act, 1957. 11.. Section 21 of the M.P. General Clauses Act reads thus: "21. Power to make to include power to add, amend, vary or rescind orders, etc.-Where, by any Madhya Pradesh Act, a power to issue notifications, orders, rules or by-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanctions and conditions, if any, to add to, amend, vary or rescind any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not enable the Government to rescind or amend the notification. 17.. Section 21 embodies a rule of construction which should be applied only if the construction cannot be arrived at or determined with reference to the context or the subject-matter of a particular statute. Its applicability has to be considered having regard to the scheme and object of the enactment as well as the context in which the power is conferred. 18.. It is, therefore, necessary to examine the context in which the power to grant recognition certificate is created and conferred. The certificate is to be issued to enable the dealer to avail the concessional rate of tax prescribed in section 6(2)(b). All dealers are not entitled to recognition certificate and the benefit of concessional rate of tax. The dealer must be a registered dealer; he must manufacture taxable goods; there must be likelihood of his suffering in view of provisions of section 8 and this likelihood must be related to particular reasons mentioned in section 16-C of the Act. It is only where the Commissioner is satisfied with regard to these aspects that he may issue a recognition certificate. The Act which enables the grant of recognit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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