Natural justice in sales tax exemption proceedings requires a hearing before adverse rejection; appeal limitation runs from proved communication.

Exemption proceedings under section 13B of the Haryana General Sales Tax Act and rule 28A were treated as quasi-judicial, so a screening committee could not reject an application on adverse inspection material without first giving the unit a hearing. The rejection was therefore invalid for breach of natural justice and had to be set aside. On limitation, the appeal period under rule 28A(5)(f) commenced only on proved communication of the lower committee's decision; a bare assertion of dispatch was insufficient. The appeal was not time-barred. Both committee orders were set aside and the matter was remitted for fresh consideration after hearing the applicant.

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Issues: (i) Whether the rejection of the application for sales tax exemption was vitiated for want of opportunity of hearing before the screening committee. (ii) Whether the appeal before the higher screening committee was barred by limitation when the decision of the lower committee had not been shown to have been communicated to the petitioner.

Issue (i): Whether the rejection of the application for sales tax exemption was vitiated for want of opportunity of hearing before the screening committee.

Analysis: The exemption mechanism under section 13B of the Haryana General Sales Tax Act, 1973 and rule 28A was held to be quasi-judicial in nature because it affected civil rights and provided for an appeal. Where the committee formed a prima facie adverse view on the basis of inspection reports, fairness required that the unit be heard before its application was rejected. No such opportunity had been afforded.

Conclusion: The rejection was invalid for breach of natural justice and was liable to be set aside.

Issue (ii): Whether the appeal before the higher screening committee was barred by limitation when the decision of the lower committee had not been shown to have been communicated to the petitioner.

Analysis: Under rule 28A(5)(f), the limitation period for appeal runs from the date of communication of the lower committee's decision. Mere assertion that the order was sent, without showing receipt or effective service, was insufficient to establish communication. In the absence of proof of communication, limitation could not be invoked to reject the appeal.

Conclusion: The appeal was not barred by limitation.

Final Conclusion: The orders of both screening committees were set aside and the matter was directed to be reconsidered afresh by the lower screening committee after giving the petitioner a hearing.

Ratio Decidendi: Where an exemption application is decided by a quasi-judicial screening committee, adverse rejection must comply with natural justice, and limitation for appeal begins only upon proved communication of the decision.

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