Incorrect computation of tax exemption ceiling made the repayment demand unsustainable, with refund ordered for the collected amount.

A demand for alleged excess sales tax exemption under the 1979 Package Scheme could not stand because the exemption ceiling had to be determined by the eligibility certificate, certificate of entitlement, and the statutory exemption entry, all of which governed the benefit available to the unit. The notional sales tax liability used to monitor the ceiling had already been certified and was undisputed, yet the corporation relied on an incorrect computation and offered no substantiation for the repayment demand with interest. The impugned demand was therefore invalid, and the amount recovered under it was refundable to the petitioners.

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Issues: Whether the demand raised by the industrial corporation for alleged excess availing of sales tax exemption under the package scheme was valid, and whether the amount recovered pursuant to that demand was liable to be refunded.

Analysis: The eligibility certificate and certificate of entitlement granted the unit exemption benefits under the 1979 Package Scheme up to the prescribed ceiling. The notional sales tax liability, which was the basis for monitoring the ceiling, had been certified by the Sales Tax Officer and was not disputed. The corporation nevertheless proceeded on an incorrect computation of the exemption limit and demanded repayment with interest, without substantiating the demand. The scheme, the entitlement certificate, and the statutory exemption entry under the sales tax law governed the extent of benefit, and the demand made on a mistaken and unsupported calculation could not be sustained.

Conclusion: The demand for alleged excess exemption was invalid and liable to be quashed, and the amount collected under that demand was refundable to the petitioners.

Final Conclusion: The petitioners were held entitled to relief against the impugned demand, with consequential refund and costs.

Ratio Decidendi: A demand for repayment of incentive benefits under a tax exemption scheme cannot be sustained when it is founded on an incorrect computation of the statutory and scheme-based ceiling and is unsupported by justification.

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