Beneficial tax exemption preserved where delayed registration by the authorities could not defeat eligibility for a five-year holiday.

Where a small-scale industry timely applied for registration but the certificate was issued later with retrospective effect, the Calcutta High Court held that administrative delay could not deprive the assessee of the more beneficial exemption under rule 3(66) of the Bengal Sales Tax Rules, 1941. As the industry otherwise satisfied the substantive conditions for the older provision, the eligibility certificate was to be treated as granted under that rule rather than rule 3(66a). The petitioner was therefore entitled to consideration for renewal on the basis of a five-year tax holiday, and the revisional order was quashed with reconsideration directed accordingly.

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Issues: Whether the petitioner was entitled to have the eligibility certificate treated as granted under rule 3(66) of the Bengal Sales Tax Rules, 1941, so as to obtain a five-year tax holiday, instead of under rule 3(66a) of those Rules.

Analysis: The petitioner had applied for registration within the statutory time after liability accrued, but the registration certificate was granted only later with retrospective effect. The industry otherwise fell within the class contemplated by rule 3(66), and the delay in processing the registration application was attributable to the authorities. In these circumstances, the petitioner could not be deprived of the more beneficial exemption merely because the eligibility application was made after 1 April 1983, when the delay was caused by the administration itself. The beneficial exemption provision was required to be applied so as not to defeat the legislative object of granting tax relief to newly set up small-scale industries.

Conclusion: The eligibility certificate ought to be treated as one issued under rule 3(66), and the petitioner was entitled to consideration for renewal on the basis of a five-year tax holiday.

Final Conclusion: The revisional order was quashed and the matter was sent back for reconsideration in accordance with the petitioner's entitlement under the older exemption provision.

Ratio Decidendi: Where an assessee has timely applied for registration and the authority's delay prevents application within the period for the more beneficial exemption, the assessee cannot be denied that benefit if the substantive conditions of the older exemption provision are otherwise satisfied.

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