Conditional tax exemption under incentive schemes depends on statutory compliance; dismissal of SLP in limine cannot override binding law.

Exemption under an incentive scheme was treated as conditional on fulfilment of statutory requirements, including the certificate of authorisation, so the earlier assessment could be cancelled and tax levied on inter-State sales. The Court noted that the cancellation was made after considering the record and the later legal position declared by the Supreme Court in the Pine Chemicals review decision. It also stated that a mere dismissal of an SLP in limine does not decide any legal question and cannot override binding law laid down in a reasoned Supreme Court ruling. On that basis, the impugned order was held lawful.

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Issues: Whether the cancellation of the earlier assessment and the consequential levy of tax on inter-State sales under the sales tax laws was lawful in view of the exemption scheme and the later Supreme Court decision.

Analysis: The assessment had originally been made granting exemption under the incentive scheme, but the authorities later held that the exemption was conditional and depended upon fulfilment of the statutory requirements, including the certificate of authorisation. The Court noted that the cancellation order was passed after considering the record and the subsequent legal position declared by the Supreme Court in the review decision in Pine Chemicals. It further held that mere dismissal of an SLP in limine does not amount to a decision on any legal question and cannot override the binding law laid down by the Supreme Court in its reasoned decision. On that basis, the impugned order was found to be lawful and no injustice was shown.

Conclusion: The challenge to the cancellation of assessment failed and the impugned order was upheld.

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