M/S Ess Kay Fibres P.LTD.Panipat vs. State Of Hy.Etc.

Held

The Court held that the petitioner was not entitled to the eligibility certificate for tax exemption for its second expansion. The primary reason for the rejection, affirmed by the appellate authority, was the petitioner's failure to produce the mandatory change of land use certificate as required under Rule 28-B(3)(f)(vi) of the Haryana General Sales Tax Act, 1975. The Court also noted that the burden of tax, if collected by the petitioner, had likely been passed on to the next buyer, making a refund to the petitioner against the principles of unjust enrichment. Furthermore, given the significant change in the tax regime with the introduction of Goods and Services Tax (GST) in July 2017, the Court concluded that no effective relief could be granted to the petitioner at this stage. Therefore, the petition was dismissed.

Facts

The petitioner, M/s Ess Kay Fibres Private Limited, sought an eligibility certificate for tax exemption for its industrial unit. The unit commenced commercial production on July 7, 1992, and an eligibility certificate was issued for the period July 7, 1992, to February 6, 1999. The petitioner expanded its unit, with the expanded capacity commencing production on January 1, 1996, for which eligibility and exemption certificates were issued valid until December 31, 2000. A second expansion commenced production on December 1, 1997. The petitioner applied for an eligibility certificate for this second expansion, but it was declined. An appeal against this rejection was also dismissed by the Higher Level Screening Committee. The rejection was based on the petitioner's failure to furnish a No Objection Certificate (NOC) and a change of land use permission, as required under Rule 28-B(3)(f)(vi) of the Haryana General Sales Tax Act, 1975.

Key Issues

1. Whether the petitioner is entitled to an eligibility certificate for tax exemption for its second expansion, considering the non-furnishing of a No Objection Certificate (NOC) and change of land use permission, as required by Rule 28-B(3)(f)(vi) of the Haryana General Sales Tax Act, 1975? Petitioner's contention: The petitioner argued that its prayer for issuance of an eligibility certificate was wrongly declined. The judgment does not record specific arguments made by the petitioner regarding the NOC and change of land use permission, but implies they sought the certificate. Revenue's contention: The respondents (State of Haryana and others) contended that the eligibility certificate was rightly declined because the petitioner failed to produce the required change of land use certificate, as mandated by Rule 28-B(3)(f)(vi) of the Haryana General Sales Tax Act, 1975. The appellate authority noted that no one appeared before the lower level Screening Committee.