9911796707
TMI Blog2002 (1) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 2, the Assistant Commissioner of Commercial Taxes, Special Cell, by his order dated June 16, 1997, issued eligibility certificate in favour of the said respondent under section 39 of the said Act for the period from July 1, 1996 to June 30, 1999. Subsequently, the respondent No. 2 was asked to show cause as to why the eligibility certificate issued in his favour should not be cancelled and ultimately the respondent No. 2 was served with an order dated February 19, 1998, cancelling the said eligibility certificate. On challenge by the respondent No. 2, the said order was quashed by the West Bengal Taxation Tribunal with liberty to the Assistant Commissioner of Commercial Taxes, Special Cell, to proceed afresh. 3.. Pursuant to the order of the learned Tribunal fresh proceedings for cancellation of the eligibility certificate were started and ultimately the Assistant Commissioner of Commercial Taxes, Special Cell, by his order dated July 20, 1998, cancelled the eligibility certificate issued in favour of the respondent No. 2 with effect from July 1, 1996. The said order was confirmed by the Deputy Commissioner of Commercial Taxes, Special Cell, by his order dated May 25, 1999 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that since the respondent No. 2 had not only obtained the eligibility certificate by misrepresentation and fraud, but had flagrantly violated the terms and conditions thereof, he would not be entitled to any exemption under the said certificate and the Assistant Commissioner of Commercial Taxes, Special Cell, had quite rightly directed the same to be cancelled from the date it had become effective. 9.. Mr. Dutta also urged that an assessee who obtains an exemption certificate on false and fabricated information with the intention of evading payment of tax cannot take shelter under a fiction of law to deprive the Government exchequer of its revenue by enjoying any benefit of exemption thereunder. 10.. Mr. Dutta submitted that the learned Tribunal had erred in applying the decisions cited on behalf of the respondent No. 2 in the special facts of this case since it has consistently been held by the courts that fraud vitiates everything. 11.. In support of his submissions Mr. Dutta firstly referred to the decision of the Court of Appeal in Lazarus Estates Ltd. v. Beasley [1956] 1 All ER 341, wherein speaking for the majority, Lord Denning, inter alia, observed that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-rule (3) of rule 98 of the said Rules. It was pointed out that the said rule also provides that after giving the dealer a reasonable opportunity of hearing the said authority by an order in writing was empowered to declare such certificate to be invalid from such date as he might specify in the order. Mr. Bajoria submitted that the expression "such date as he may specify in the order" had fallen for consideration of different High Courts, including this Court, and it had uniformly been held that the said expression should be construed to mean either the date of the order cancelling the eligibility certificate or a date subsequent to the date of the order and not a date prior to the date of the order. 17.. Mr. Bajoria urged that the grant of an eligibility certificate conferred benefits not only to the holder of the certificate but also to those who dealt with the holder of the certificate on the basis thereof. It was submitted that those dealers who had supplied raw materials to the respondent No. 2 would be entitled to claim exemption from payment of sales tax on the basis of such eligibility certificate and since the respondent No. 2 had not collected tax from persons to who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th retrospective effect. 22.. Mr. Bajoria went on to add that under different statutes different powers had been given to the authorities for realising dues which had either been short-levied or short-paid or erroneously refunded and the concerned authorities would be required to act within the periods of limitation as prescribed. 23.. As to the decisions cited by Mr. Dutta, Mr. Bajoria contended that the same could have no application to the facts of this case since the statutory authorities could not assume a jurisdiction they did not possess under the relevant provisions of the statute and the Rules framed thereunder. 24.. Mr. Bajoria submitted that the observations made by Lord Denning in the Lazarus Estate Ltd. case [1956] 1 All ER 341 were made in the facts of the case where an increase of rent was sought to be obtained by a fraudulent misrepresentation and in such context it was observed that the person gaining such advantage should not be allowed to retain such advantage which he had obtained by fraud. Mr. Bajoria contended that the said case did not involve exercise of powers under a statute. 25.. Mr. Bajoria pointed out that in the case of Fedco (P) Ltd. AIR 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration that the transactions on the basis of the eligibility certificate and registration certificate involved third party interests, it was uniformly held by the different High Courts, including this Court, that an order to declare such certificate as invalid could not be given retrospective effect. 31.. We respectfully agree with the views expressed in the said decisions cited on behalf of the respondent No. 2. Registered dealers who had transacted business with the respondent No. 2 on the basis of the eligibility certificate issued in favour of the respondent No. 2 treating the same as valid would be adversely affected if the said certificate is cancelled and/or revoked from the date it was issued as that would affect all such previous transactions. If any dealer dealt with the respondent No. 2 after the eligibility certificate issued in his favour was declared invalid, he would be entitled to realise sales tax from the said respondent who would no longer be in a position to claim exemption. 32.. Consequently, we also agree with Mr. Bajoria that the Assistant Commissioner of Commercial Taxes could not travel beyond the scope of the powers contained in rule 101 which emp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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