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2023 (5) TMI 1146 - PUNJAB AND HARYANA HIGH COURTCancellation of Exemption/Entitlement Certificate for discontinuance of business by the unit during the currency of Exemption Period - activities did not totally stopped in Delhi as there were still many suppliers - Rule 28A of HGST Rules, 1975 - HELD THAT:- It is not in dispute that the appellant was granted benefit of exemption from sales to the tune of Rs. 68,24,200/-for nine years, but, he availed the benefit of only Rs. 6,22,830/-, as the industry unit was closed down and he could not run the unit for next five years, as per the policy. Whether the circumstances were beyond the control of the appellant-Company? HELD THAT:- After going through order dated 09.11.2017, it appears that the authorities had accepted this fact that identical units in the area closed down due to the fact that the consumers of their product started their own units and thus, their market was lost. Further the earlier yarn units also started their own woven fabrics units and are in bad shape. The appellant was allowed exemption to compete in the market but he chose to close the business, after availing the benefit of exemption. Most of the suppliers of the appellant were in Delhi and it cannot be presumed that such activities totally stopped in Delhi. The demand of the product is much more. The reasons given by the appellant were held to be not beyond its control so as to be covered under the proviso to Rule 28A (11) of the HGST Rules, 1975. In Priti fan’s case, the appellant-unit suffered due to the floods directly as well as indirectly due to over all loss of economic activity in the vast flood affected region in and around Rohtak. The appeal was allowed and it was held that the adverse effects of the floods cannot be underestimated which appeared to have delivered the final crushing blow to the viability of the Unit. It was opined that the Unit, tiny as it was since its inception, deserve the benefit of first proviso to Rule 28A (11B). In the facts of the present case, it is not in dispute that the appellant had availed the benefit of 6,22,830/- during the relevant period, he was granted the benefit of exemption from sales to the tune of Rs. 68, 24,000/- for a period of nine years. This fact in itself shows that there was loss in business, which were beyond the control of the appellant. The case of the appellant cannot be discarded on the ground that the company should increase the business and invest more money in production. It is not a case where the assessee had availed the benefit of exemption beyond Rs .68,24,000/-, which was granted to it. The writ petition is allowed.
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