Eligibility certificate renewal cannot be refused solely because a unit later stopped manufacturing or became unprofitable.

Renewal of an eligibility certificate for an earlier tax-holiday period could not be refused merely because the industrial unit later stopped manufacturing or became unprofitable. The tribunal treated Rule 3(66) of the Bengal Sales Tax Rules, 1941 as an incentive provision and held that rejection required a factual finding that the applicant itself did something, or failed to do something, that disturbed the unit's economic viability. As no such finding was recorded, and later cessation of activity alone was insufficient, the refusal of renewal was not sustained and renewal for the relevant period ending June 1983 was directed.

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Issues: Whether renewal of the eligibility certificate for the period ending June 1983 could be refused on the ground that the industrial unit had later ceased manufacturing and that its economic viability had been frustrated.

Analysis: Rule 3(66) of the Bengal Sales Tax Rules, 1941 was understood as an incentive provision for newly set up industries, but the refusal of renewal for an antecedent period required a factual finding that the applicant had done, or omitted to do, something which disturbed the economic viability of the unit. The later cessation of manufacturing activity and the fact that the unit did not generate revenue after the tax holiday period could not by themselves justify rejection of renewal for the earlier period under consideration. The orders below also contained no positive finding that the losses or alleged unviability were attributable to any act or omission of the applicant.

Conclusion: The refusal of renewal could not be sustained, and the eligibility certificate was directed to be renewed for the period ending June 1983.

Final Conclusion: The applicant succeeded, and the impugned refusal of renewal was set aside in substance by directing renewal of the eligibility certificate for the relevant period.

Ratio Decidendi: Renewal of an eligibility certificate for an earlier tax-holiday period cannot be denied merely because the unit later stopped manufacturing or became unprofitable unless there is a finding that the applicant's own act or omission disturbed its economic viability.

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