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TMI Blog1999 (7) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... w units. It was under the Government order that the petitioner applied for and was granted an eligibility certificate by the Divisional Level Committee granting it exemption from the sales tax for a period of five years with effect from January 9, 1983. The period of exemption expired on the January 8, 1988. Under section 4-A(3) the Commissioner has the power to cancel or amend the eligibility certificate. The said provision of law stands as under: (3) Where the Commissioner of Sales Tax is of the opinion that the facility of exemption from, or reduction in the rate of tax obtained on the basis of an eligibility certificate referred to in clause (d) of sub-section (1) or on the basis of any eligibility certificate issued under any executive orders of the Government issued before or after September 13, 1985 has been misused in any manner whatsoever or that the new unit has committed breach of any of the conditions, subject to which the facility of exemption from, or reduction in the rate of tax was granted or that the new unit to which the eligibility certificate has been granted in accordance with the provisions of this Act is not entitled to facility under this section or is en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not accepted and the Commissioner in exercise of powers under section 4-A(3) ordered that the eligibility certificate would be effective only up to August 26, 1984 and the exemption could not be available for any period thereafter. The revisionist appealed to the Tribunal but without any success. 5.. A perusal of the provisions of sub-section (3) would show that the power conferred on the Commissioner to cancel or amend the eligibility certificate is discretionary. This being a statutory power, that can adversely affect a taxpayer, the discretion has to be exercised judiciously and the facts of this case would show that the Commissioner s action is thoroughly injudicious and arbitrary. 6.. As stated above, in this case the dealer was subjected to the same exercise by the Commissioner that ended in favour of the dealer by an order passed on July 10, 1989, i.e., much after the issuance of the Government order dated August 27, 1984 which has been made the basis of the present action. If at all the ground of the revisionist having availed the benefit of section 4-B was to be pressed into service, the same could have been done earlier also but not having woken up during the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, bad or indifferent, for initiation of any action like this. The present case is also one of such cases. An earlier proceedings terminated in favour of the revisionist and yet the department after several years chose to find out another ground of action which is nothing but a mala fide exercise of discretion. In Hindustan Steel Ltd. v. State of Orissa [1970] 25 STC 211; [1972] 83 ITR 26, the honourable Supreme Court held that whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of the relevant circumstances and the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or a venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. The ratio of the aforesaid case applies to all actions which adversely affect the other side and where the authority concerned has that discretion to initiate or not initiate the action. In the present case the dealer was not at fault at all. If the Revenue was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r on the sale of manufactured goods. It is admitted that atta, maida and suji which the dealer-revisionist was manufacturing, was not an item mentioned in annexure 3 and, therefore, the revisionist could avail the benefit under section 4-B as well as under section 4-A and the eligibility certificate was accordingly granted to the revisionist knowing fully well that it had a recognition certificate as well under section 4-B. The requirement of opting out of the exemption under section 4-B came vide Government Order No. 6468 dated August 27, 1984. A copy of this Government order has been placed before me and there is nothing therein that this Government order affected the exemption already granted to industrial units in terms of the Government Order No. 8244 dated September 30, 1982. In fact the Government order dated August 27, 1984 does not refer to the Government order dated September 30, 1982. Therefore at the most what the Government order dated August 27, 1984 provided was that in respect of the pending applications for exemption under section 4-A a new unit may be required to opt out of the exemption under section 4-B. The Government order dated August 27, 1984 cannot be read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder. Therefore, even if it be assumed that the notification dated August 27, 1984 repealed the earlier notification dated September 30, 1982 (which could not be done by virtue of section 25 aforesaid), the exemption already granted under the Notification dated September 30, 1982 to unit already established would remain unaffected. 8.. In view of the above discussions, I find that the action of the Commissioner in initiating proceedings under section 4-A(3) against the assessee was without jurisdiction and suffered from legal mala fides. The Tribunal s order sustaining such action is, therefore, not legally sustainable. The revision petition, therefore, deserves to be allowed and the dealer-revisionist should be compensated by adequate costs. 9.. The revision petition is allowed. The Tribunal s order dated April 26, 1999 is set aside and it is ordered that the revisionist s appeal No. 55 of 1998 under section 4-A(3) will stand allowed and the Commissioner s ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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