Tax deferment eligibility turns on financial viability, and later facts showing closure may justify refusal of the certificate.

Under the deferment scheme in section 10F of the Bengal Finance (Sales Tax) Act, financial viability is treated as an implied material condition because the deferred tax must be repayable when it matures. If the industrial unit has ceased production and there is no realistic prospect of reopening, refusal of an eligibility certificate is justified. In an application for deferment-based relief, subsequent events occurring before issuance of the certificate may be considered where they show closure, financial collapse, or inability to repay the deferred liability. The refusal of the eligibility certificate was therefore upheld on the ground of commercial non-viability.

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Issues: (i) Whether lack of financial viability of the industrial unit can be a ground for refusing an eligibility certificate under section 10F of the Bengal Finance (Sales Tax) Act, 1941. (ii) Whether an event occurring after the period for which the eligibility certificate is sought can be taken into account in deciding an application for deferment-based eligibility certificate.

Issue (i): Whether lack of financial viability of the industrial unit can be a ground for refusing an eligibility certificate under section 10F of the Bengal Finance (Sales Tax) Act, 1941.

Analysis: The scheme of section 10F concerns deferment of tax, not outright exemption. Under that scheme, the State's right to collect the deferred tax continues beyond the eligible period, and repayment depends on the unit's ability to survive and function when the deferred liability matures. On that basis, financial viability is treated as intrinsic to the scheme, even if not expressly stated as a condition. Where the unit has ceased production and there is no realistic prospect of reopening, refusal of the certificate is justified.

Conclusion: Lack of financial viability can validly justify refusal of an eligibility certificate under section 10F, and the refusal in the present case was upheld.

Issue (ii): Whether an event occurring after the period for which the eligibility certificate is sought can be taken into account in deciding an application for deferment-based eligibility certificate.

Analysis: The distinction between exemption-based certificates and deferment-based certificates is decisive. In exemption cases, later events do not affect completed relief for the earlier period. In deferment cases, however, the relevant consideration is whether the unit will be capable of repaying the deferred tax when it falls due. Therefore, a subsequent development showing closure, cessation of production, or financial collapse may properly be considered when the application is still pending and the certificate has not yet been issued. The earlier authorities on exemption certificates were therefore held inapplicable.

Conclusion: A subsequent event bearing on the unit's financial viability can be considered in an application for an eligibility certificate under section 10F.

Final Conclusion: The application failed because the industrial unit was found to be commercially non-viable for the purpose of tax deferment, and the impugned orders refusing the eligibility certificate were sustained.

Ratio Decidendi: In a tax deferment scheme, financial viability is an implied and material condition, and a pending application for eligibility certificate may be refused on the basis of subsequent facts showing that repayment of deferred tax is unlikely.

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