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TMI Blog1996 (7) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... the grant of eligibility certificate which was issued by the relevant screening committee on January 25, 1990. The petitioner became eligible for purposes of exemption from payment of tax under the Act from June 20, 1989 to June 19, 1996. After the petitioner received the eligibility certificate for a period of 7 years as aforesaid, an application was made for the issuance of an exemption certificate before the Deputy Excise and Taxation Commissioner. Exemption certificate was granted on May 26, 1990 entitling the petitioner to receive the benefit of exemption for the same period of 7 years for which the eligibility certificate had been issued by the relevant screening committee. Quarterly returns were filed for the financial year 1989-90 and, for that year, assessment was made by the Assessing Authority, vide order dated August 24, 1992. The Assessing Authority gave benefit of exemption from tax in respect of sales declared by the new diversified unit at Rs. 10,15,332. Notional liability of Central sales tax at 4 per cent on the aforesaid total amount of inter-State sales was worked out at Rs. 40,613. This amount of tax being notional tax was treated was exempt from payment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date of production, the relevant authority granting the certificate should have been moved for necessary action. Section 40 of the Act empowered the revisional authority to call for the record of any case pending before, or disposed of by, any Assessing Authority or appellate authority, other than the Tribunal, for the purposes of satisfying himself as to the legality or to propriety of any proceedings or of any order made therein. It has been contended by the learned counsel for the petitioner that the revisional authority could call for the record of the assessment but could not interfere with the order made by the relevant screening committee declaring the petitioner as eligible for the benefit of exemption from deduction of tax. Similarly, order passed by the Deputy Excise and Taxation Commissioner granting the exemption certificate to the petitioner could also not be revised as it was not part of the assessment nor was this order made by the Assessing Authority as such. Exemption certificate had been issued by the Deputy Excise and Taxation Commissioner under the relevant rules framed under section 13B of the Act. Section 13B of the Act reads as under: "The State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make an application within 60 days of the receipt of the eligibility certificate for the grant of exemption or entitlement certificate. This application has to be made under sub-rule (6) of rule 28A of the Rules to the Deputy Excise and Taxation Commissioner of the district in which the unit is located. In the case of application which is found to be incomplete or incorrect, it shall be deemed that no such application had been made at all. The Deputy Excise and Taxation Commissioner shall, after satisfying himself that the unit is holding a genuine and valid eligibility certificate and has furnished adequate security and that the application is in order, issue the exemption or entitlement certificate, as the case may be, within 30 days of the receipt of the application. The provision regarding withdrawal of the eligibility certificate has been given in sub-rule (8) of rule 28A of the Rules. An eligibility certificate can be withdrawn at any time during its pendency by appropriate screening committee in 3 situations: (i) where it is discovered that it has been obtained by fraud, deceit, misrepresentation, misstatement or concealment of material fact; (ii) where there is discontinu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certificate number of the new diversified unit has not been filled in the eligibility certificate. The certificate was issued for a period of 7 years starting from June 20, 1989. Therefore, the lower level screening committee did not consider it necessary that the new diversified unit should have immediately obtained the registration certificate under the Act. Even if it was an error, that could be rectified by the lower level screening committee only. In the exemption certificate, the Deputy Excise and Taxation Commissioner has given the registration number JAG-HGST-6654 valid from January 25, 1990. It is thus clear that the authority issuing the exemption certificate took notice of the registration certificate obtained by the diversified unit and found it appropriate to grant exemption from the date of commencement of production as had been done by the lower level screening committee while granting the eligibility certificate. The existing industrial unit of the petitioner did hold necessary registration certificate and the lower level screening committee, taking notice of it, issued eligibility certificate. It has to be seen that in view of the object of the scheme regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, design and scope. In deciding whether a provision is mandatory or directory one of the important questions which has to be considered is whether the object of the legislation will be defeated or furthered in holding the provision to be mandatory or directory. In the present case of the petitioner, the scheme regarding exemption does not admit of a plea that registration under the Act was mandatory. As has already been seen, the existing industrial unit held registration certificates issued in the year 1982. The diversified industrial unit was granted registration with effect from January 25, 1990 though it was issued on May 26, 1990. It is not clear as to why the certificate of registration was issued with effect from January 25, 1990. The petitioner has explained that an application for modification of the certificate was filed before the registering authority on July 17, 1991 but no separate orders were passed. However, assessment was completed vide order dated August 24, 1992 and benefit of exemption was duly granted for the entire period commencing from June 20, 1989. The plea of the petitioner is that the fixing of the effective date of registration as January 25, 1990 h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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