Prospective permission for shared supervision charges cannot stand without a reasoned denial, especially where similarly placed units received relief.

An assessee seeking permission to share supervision and establishment charges was entitled to the benefit from the date of its proper application where the competent authority did not pass a reasoned order rejecting the request. The department's reliance on a bare communication from an Assistant Commissioner could not substitute for a lawful speaking decision, particularly when a similarly placed unit had already been allowed the same benefit. On those facts, restricting permission to prospective effect had no valid basis, and the demand founded on that approach was unsustainable. The impugned orders were set aside and consequential relief followed.

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Issues: Whether the appellants were entitled to share the supervision and establishment charges from the date of their application, and whether the demand based on a prospective grant of permission could be sustained.

Analysis: The appellants were 100% EOUs under the same supervision range and had already deposited 50% of the charges in advance. They had applied by a proper application for permission to share the charges, but no speaking order on that application was shown to have been passed by the competent authority. The communication relied upon by the department was issued by an Assistant Commissioner, contained no reasons, and could not displace the need for a lawful decision by the competent authority. A similar unit had been permitted to share such charges from the date of application, and no valid basis was shown to deny the same treatment to the appellants. On these facts, the permission could not be confined prospectively.

Conclusion: The appellants were entitled to share the supervision and establishment charges from 17-2-1998, the date of application, and the demand founded on prospective operation was unsustainable.

Final Conclusion: The impugned orders were set aside and the appeals were accepted with appropriate consequential relief.

Ratio Decidendi: Where an assessee makes a proper application for permission to share statutory charges and the competent authority does not pass a reasoned decision denying the request, the permission cannot be restricted prospectively without lawful basis, especially when parity with similarly placed units is established.

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