9911796707
TMI Blog2000 (2) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... ad, respondent No. 2 for the assessment years 1983-84 (U.P. and Central), 1984-85 (U.P.), and 1985-86 for the months of April to October, 1985 and filed collectively as annexure-9 to the writ petition: (b) that a suitable writ, order or direction be issued quashing the demand of Rs. 3,39,100 being tax imposed by the Sales Tax Officer, respondent No. 2 on the petitioners turnover of glass bangles for the assessment year 1983-84 (U.P. and Central), 1983-85 for the months of April to October, 1985; (ii) that a suitable writ, order or direction be issued in the nature of mandamus or prohibition prohibiting or restraining the Sales Tax Officer, Sector 3, Firozabad, respondent No. 2, from in any way imposing or realising any amount as sales tax on the turnover of glass bangles manufactured by the petitioner's unit; (iii) that a suitable writ, order or direction be issued holding the petitioner's unit entitled for the grant of exemption under section 4-A of the U.P. Sales Tax Act; (iv) that any other and further writ, order or direction, which this Honourable Court deems fit and proper in the circumstances of the case, be also issued; (v) that costs of the petition be awarded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut Rs. 3,00,000 (rupees three lacs) from the State Bank of India, New Branch, Firozabad, and thereafter, the present unit was set up at Negla Kalan Singh (Sati Ashram) bypass road, Firozabad. In the certificate of registration the date of commencement of its production was mentioned as 1st of November, 1982. It was also registered under the Factories Act, 1948 and the U.P. Sales Tax Act. It has also applied for the grant of recognition certificate under section 4-B of the Act, which was issued with effect from January 3, 1983. It has been alleged that when the unit started its production, i.e., on November 1, 1982, an application for grant of eligibility certificate under section 4-A of the Act was moved before the prescribed authority, i.e., the General Manager, District Industrial Centre, Agra, in the prescribed pro forma along with all the relevant and necessary information and papers. However, till the issuance of the eligibility certificate the petitioners continued to realise the sales tax and accordingly deposited the same on its turnover. When after necessary enquiry and verification of the papers, the petitioners' unit was found to be eligible for grant of exemption under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ji Agrawal, learned Senior Counsel appearing for the petitioners, vehemently argued that once the eligibility certificate is granted by the competent authority under section 4-A of the Act, the same cannot be ignored by the sales tax authorities and it is outside the purview of the assessing authority to question grant of eligibility certificate or to examine as to whether it has rightly been issued or not. The argument proceeds that whether the applicant seeking exemption under section 4-A of the Act is an industrial unit or not and, therefore, eligible for exemption or not is to be considered by the State Government or by an officer empowered by the State Government. The Sales Tax Department or its authority has not been vested with the power either to grant any exemption or sit in judgment over the grant of exemption under section 4-A of the Act. It is submitted that even under section 4-A(3) of the Act the Commissioner has only been empowered to cancel the eligibility certificate in a case where the facility of exemption from the payment of sales tax has been misused or breached in any manner that too after giving a reasonable opportunity of being heard. In support of the afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on from the payment of sales tax nor they have been given power to cancel or amend the same except the Commissioner who has been given limited power under section 4-A(3) to cancel where it has been misused or breached and not otherwise. The proviso to section 4-A(3) of the Act further provides that no order under subsection (3) cancelling the eligibility certificate shall be passed without giving the dealer a reasonable opportunity of being heard. Learned Standing Counsel could not place before us any provision in the Act which empowers the Sales Tax Officer to examine the validity of eligibility certificate granted under section 4-A of the Act or to cancel the same and, therefore, respondent No. 2 had no jurisdiction to ignore the eligibility certificate issued under section 4-A of the Act so long it was not cancelled or withdrawn by the competent authority. The contention of the learned Standing Counsel that since by suppressing the material facts, the petitioners have obtained the certificate, in our view, does not give handle to the Sales Tax Officer to ignore the certificate until it is cancelled by the competent authority, i.e., the State Government or any officer empowered b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or grant of a reduction of tax. But that is an entirely different matter than the power to cancel eligibility certificate on the ground that it was obtained on wrong premises. That power vested only in the State Government." 12.. The above view was again followed by another division Bench in the case of Paras Furnishers, Deoband, Saharanpur v. State of U.P. 1987 UPTC 1131, wherein it has been held that the Sales Tax Officer was not competent to sit in appeal or to review the decision contained in the recommendation of the Joint Director of Industries and the former cannot review the same or examine the whole thing as fresh but to act in accordance with the recommendation of the Joint Director of Industries. 13.. The above view was again reiterated by another Division Bench of this Court in the case of Pan Tyres v. State of U.P. reported in [1997] 105 STC 111; 1996 UPTC 569 in which one of us (Honourable Mr. Justice M.C. Agarwal) was also member wherein it has been held as under; "It is settled law that the eligibility certificate will remain operative till it is cancelled by a competent authority. The said certificate having not been cancelled by the competent authority so fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inclined to hold that the Sales Tax Officer has passed the impugned order by ante-dating the same with a view to frustrate this Court's interim order. 16.. The objection of the respondents regarding availability of alternative remedy under section 9 of the Act has also no substance for the reason that the impugned notices are clearly without jurisdiction and it is settled legal position that where the order impugned is completely without jurisdiction, this Court can interfere with the same and is not precluded from exercising its power under articles 226/227 of the Constitution merely on the ground of existence of alternative remedy. 17.. Having considered the submissions made on both sides, we are of the view that the impugned notices calling upon the petitioner for assessment in utter disregard of the eligibility certificate is clearly without jurisdiction and, therefore, the subsequent order of assessment on the basis of the aforesaid notice also cannot sustain and deserves to be quashed. 18.. In the result, the writ petition succeeds and is allowed. The impugned notice dated December 10, 1985 and the impugned orders of assessment dated December 26, 1985 are hereby quashed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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