2000 (9) TMI 1013 - HC - VAT and Sales Tax

Summary

Issues:
1. Eligibility certificate under U.P. Trade Tax Act, 1948 granted to M/s. Hindustan Coir Products Ltd.
2. Discontinuation of production by M/s. Hindustan Coir Products Ltd. and cancellation of eligibility certificate.
3. Appeal filed by Super Coir India against the order dated March 9, 1998.
4. Tribunal's dismissal of the appeal and subsequent legal proceedings.

Eligibility Certificate Issue:
M/s. Hindustan Coir Products Ltd. was granted an eligibility certificate under section 4-A of the U.P. Trade Tax Act, 1948, providing exemption from tax on the sale of finished goods for six years. The unit was financed by the U.P. Financial Corporation. Subsequently, possession was taken over by the Corporation due to non-payment of instalments and interest, and the unit was sold to Super Coir India. Super Coir India applied for continuation of the exemption under section 4A(2B) of the Act.

Discontinuation of Production Issue:
The Commissioner of Trade Tax initiated proceedings against M/s. Hindustan Coir Products Ltd. for discontinuing production since March 1, 1990. An ex parte order was passed on March 9, 1998, canceling the eligibility certificate without notice to Super Coir India. Super Coir India, feeling aggrieved, filed an appeal before the Trade Tax Tribunal, which was dismissed on April 6, 2000. The Tribunal's dismissal was challenged on the grounds that the unit had not discontinued production for over six months continuously, and Super Coir India, as the successor firm, had the right to appeal.

Appeal and Tribunal's Decision Issue:
Super Coir India, as the successor firm, filed an appeal under section 10(2) of the Act before the Trade Tax Tribunal. The Tribunal dismissed the appeal without considering the documents filed by Super Coir India along with the appeal memo. The Tribunal's failure to review the documents led to a miscarriage of justice, resulting in the order being set aside. The Court directed the Tribunal to re-decide the appeal in accordance with the law.

Legal Proceedings Issue:
Legal proceedings were stayed by the High Court until the appeal was decided by the Tribunal. The High Court intervened to ensure justice by halting recovery proceedings against the applicant until the appeal was re-evaluated by the Tribunal. Ultimately, the petition was allowed, and the Tribunal was instructed to re-examine the appeal, considering all relevant documents and legal aspects.