Period-specific tax holiday eligibility can revive after later compliance, and limitation runs from the effective certificate date.

Eligibility for a tax holiday under Rule 3(66) of the Bengal Sales Tax Rules, 1941 must be examined separately for each certificate period, because the eligibility certificate operates for a limited period and compliance is tested independently for each renewal or grant. Earlier ineligibility arising from collection of sales tax did not permanently bar a dealer from obtaining eligibility for a later period once the prescribed conditions were satisfied. The application was also not time-barred, because limitation ran from the date on which the certificate was required to take effect, and the application made shortly after that date was within time. The rejection orders were set aside and the matter was remitted for fresh consideration from 9 September 1981.

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Issues: (i) Whether a dealer who was ineligible for an eligibility certificate in the initial period because of collection of sales tax could be granted eligibility for a subsequent period after compliance with the rule; (ii) Whether the application for eligibility certificate was barred by limitation.

Issue (i): Whether a dealer who was ineligible for an eligibility certificate in the initial period because of collection of sales tax could be granted eligibility for a subsequent period after compliance with the rule.

Analysis: Rule 3(66) of the Bengal Sales Tax Rules, 1941 contemplates tax holiday for a newly set up industry for a maximum period counted from the date of first sale, while the eligibility certificate operates for a period not exceeding 12 months and may be granted or renewed separately for each such unit. Compliance with the prescribed conditions has to be tested independently for each period. Ineligibility during an earlier period does not, by itself, permanently bar eligibility for a later period if the dealer satisfies the rule during that later period. Exemption provisions are to be construed so as to advance the legislative object.

Conclusion: The dealer's earlier ineligibility did not bar grant or renewal of eligibility certificate for the subsequent period, and eligibility from 9 September 1981 was recognised, subject to fulfilment of the rule's conditions.

Issue (ii): Whether the application for eligibility certificate was barred by limitation.

Analysis: The relevant date for limitation under rule 3(66)(iv) is the date from which the certificate is required to be granted. As the certificate was sought with effect from 9 September 1981 and the application was made on 14 September 1981, it was within the permissible time.

Conclusion: The application was not barred by limitation.

Final Conclusion: The orders rejecting the dealer's claim were set aside, the matter was sent back for fresh consideration of the application for eligibility certificate from 9 September 1981, and the dealer was granted relief on contest.

Ratio Decidendi: Eligibility for a tax holiday under a periodical exemption scheme must be determined separately for each certificate period, so prior non-compliance does not preclude eligibility for a later period if the prescribed conditions are then fulfilled.

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