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TMI Blog1993 (6) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... ed dealer under the Bengal Finance (Sales Tax) Act, 1941 (henceforth referred to as "the 41 Act"), the 54 Act as also the Central Sales Tax Act, 1956. She had applied to the respondent No. 2 for grant of eligibility certificate under rule 3(66a) of the Rules framed under the 41 Act and Notification No. 1177-F.T. dated March 31, 1983, under section 4AA of the 54 Act. Though the eligibility certificate under the 41 Act was granted to the applicant for the period from March 28, 1988 to February 1, 1989, by an order dated November 17, 1988, the application under the 54 Act for grant of similar eligibility certificate from February 5, 1988 to February 4, 1989, was rejected by an order dated July 31, 1990, by the Assistant Commissioner (respondent No. 2) on various grounds as enumerated in his order. A revision petition was filed before the Additional Commissioner (respondent No. 3) against the same. The Additional Commissioner, while setting aside or ignoring some of the findings and observations of the Assistant Commissioner, however, rejected the application for eligibility certificate by his order dated November 7, 1991, on two grounds. First, the petitioner did not maintain the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February, 1990, a period subsequent to the period for which the application for eligibility certificate had been made. Moreover, the mere fact that the unit was closed down cannot lead to the conclusion that the unit was not economically viable. Hence, all the grounds taken by the respondents in support of rejection of the prayer for eligibility certificate are either extraneous or relating to subsequent years and hence bad in law and liable to be set aside. 4.. The respondents have in their affidavit-in-opposition stated that one of the major conditions for grant of eligibility certificate is that the S.S.I. unit shall have to establish that the goods sold by the industry are manufactured in the industry itself and that in order to prove this fact, the owner of the industry is required to maintain necessary documents and books of account which the applicant had failed miserably to comply with. The applicant had also failed to prove that the goods allegedly sold by her were produced in her own industry and had not also issued serially numbered cash/credit memos for the sales of goods allegedly manufactured in her unit. Moreover, the grant of eligibility certificate under the 41 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid conditions, the application is liable to be rejected and such order of rejection can neither be termed erroneous or illegal, being quite valid and well within the jurisdiction of the respondents. 5.. Arguing the case for the applicant, Shri M.L. Bhattacharjee, the learned advocate, contended that the transactions cited by the Additional Commissioner for rejection in his order dated November 7, 1991, related to a subsequent period outside the relevant period. The Additional Commissioner in his order of November 7, 1991, had taken two grounds for rejection of the application for eligibility certificate. The first was that the applicant did not maintain the sales records properly and as such had failed to prove that the sales claimed as exempt under the notification had been of notified commodity manufactured in her unit. However, all the alleged irregularities noted in the orders of Assistant Commissioner and the Additional Commissioner relate to the period subsequent to March 5, 1989, which cannot be valid ground for refusing eligibility certificate for a prior period. Reference was made to a decision of the Calcutta High Court cited in [1986] 63 STC 354 (Shri Shiv Kumar Bajaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is erroneous in law. 7.. As for the second ground taken by the Additional Commissioner that the unit is not economically viable, Shri T.N. De, the learned State Representative, argued that an analysis of the profile of the business activities of the applicant will show wild fluctuations and indicate that the petitioner's unit was not at all viable. In fact, the petitioner's industry did not survive for long and closed down in the month of February, 1990, belying thereby the expectation of revenue to the State in the long run after the period of tax-holiday which was an underlying objective behind the grant of such incentive by way of exemption from sales tax for new units. In this context, he referred to a decision of the Calcutta High Court reported in (1989) 22 STA 1 (Cal) (Gajraj Masala Products v. Commercial Tax Officer) wherein it was held that since the notification under section 4AA of the 54 Act is a notification giving incentive, it is to be construed strictly in the course of its objective and that having regard to the purport of the scheme, eligibility certificate should not be renewed if anything is done which adversely affects the economic viability of the newly se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewal of eligibility certificate for an earlier period should be refused. In order to reject the prayer for renewal on that ground, it must be shown or found as a fact that the economic viability was disturbed due to an act of omission or commission on the part of the applicant praying for renewal of the eligibility certificate. In the absence of such a finding, a casual averment that it was not economically viable was not by itself sufficient ground for refusing to grant the renewal of the eligibility certificate. Shri M.L. Bhattacharjee, therefore, contended that in the absence of any finding on fact by the respondents that the unit had ceased to be economically viable due to any act of omission or commission on the part of the applicant, the rejection by them of the applicant's prayer on this ground was totally erroneous in law. Though the Full Bench decision of this Tribunal, referred to above, related to a case of renewal of eligibility certificate under the 41 Act, and the present case relates to initial grant of eligibility certificate under the 54 Act, we agree totally with the Full Bench decision, having regard to the fact that the provisions under the 41 Act and 54 Act are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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