TMI Blog2010 (10) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... the rejection of the application for the eligibility certificate on December 11, 1991. Therefore, the rejection of the application of the petitioner-company by invoking clause 7(e) is illegal. The issue of retrospective application of clause 7(e) of the notification dated May 23, 1987 is insignificant as per the aforesaid finding on the issue of compounding of tax evasion prior to the rejection of the eligibility certificate. In the result, the writ petition is allowed. The rejection order dated December 11, 1991, issued pursuant to the meeting dated November 22, 1991, is quashed and set aside. So far as denial of eligibility certificate to the petitioner-company is concerned, the case is remanded back to the District Level Committee wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was entitled to exemption of sales tax under the Incentive Scheme, 1987, for which the petitioner-company submitted an application on December 5, 1987. When the said application was pending, a notification was issued by the respondents on May 28, 1991 whereby clause 7(e) was inserted in the notification dated May 23, 1987, according to which an industrial unit covered by the Scheme shall not be entitled to claim any benefit under it if it has been penalised for avoidance or evasion of tax or any case of avoidance or evasion of tax is pending against it, at any forum of hearing. The application filed by the petitioner-company was rejected by the District Level Screening Committee in the meeting held on November 22, 1991 on the ground of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries, Kota [2008] 20 Tax Up-date 3. Since no one appeared from the respondents to oppose the writ petition, therefore, the contents of the reply are taken as submissions of the respondents which are to the effect that case of evasion of tax was pending against petitioner, therefore, his application has been rightly rejected. I have gone through record of the writ petition and further considered submission of counsel for the petitioner as also contents of the reply to the writ petition. Before proceeding further, it is relevant to reproduce paras 7, 8 and 9 of the judgment in District Level Screening Committee, Kota v. Vardhman Industries, Kota [2008] 20 Tax Up-date 3. The same are as under: 7. The relevant clause 7(e) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of tax is compounded by the assessee and determined composition amount is paid by him, neither the offence nor penalty survives. (emphasis1 supplied) 9. The assessee under the provisions of the Act is free to compound such cases waiving his right to litigate in the matter and the assessing authority is also spared the labour of holding enquiry and passing the penalty orders. In such matter, it cannot be said that the assessee has been penalised for avoidance or evasion of tax. Therefore, neither of the conditions stipulated in clause 7(e) of the Incentive Scheme can be said to be available if a case of alleged evasion of tax is compounded by the assessee and duly determined amount of composition is paid by him. Clause 9(c) of the Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X
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