1998 (2) TMI 574 - HC - VAT and Sales Tax

High Court grants relief in industrial unit's exemption application challenge under Industrial Policy, 1995

Tis Fab Limited Versus State of Bihar and Others

The High Court of Patna allowed the writ petition challenging the rejection of an industrial unit's application for exemption under the State Government's ... - Issues:Implementation of State Government's Industrial Policy, 1995 through a notification providing incentives for industrial units. Jurisdiction of Deputy Commissioner and Joint Commissioner in granting exemption certificates. Opportunity of being heard before rejecting an application. Correction of errors in the certificate issued by the Director of Industries. Consideration of subsequent events in rendering judgment. Maintainability of writ petition despite alternative remedy of revision.Analysis:The judgment by the High Court of Patna dealt with the implementation of the State Government's Industrial Policy, 1995 through a notification granting incentives to industrial units. The Governor of Bihar issued a notification on December 22, 1995, providing relief in the form of exemption from sales tax for industries starting production between September 1, 1995, and August 31, 2000. To avail of the relief, entrepreneurs were required to submit an application with necessary documents, including a certificate from the Director of Industries. The petitioner applied for an exemption certificate, which was initially rejected by the Deputy Commissioner. The Commissioner later allowed the revision, remanding the matter to the Joint Commissioner for a decision. The Joint Commissioner rejected the application on the grounds of missing certification from the Director of Industries, leading to the filing of a writ petition by the petitioner.The Court considered the submissions made by the petitioner, focusing on the lack of opportunity to be heard before the rejection of the application by the Joint Commissioner. The petitioner had applied for a corrected certificate from the Director of Industries due to a typographical error in the initial certificate. Despite informing the Deputy Commissioner of this correction process, the Joint Commissioner rejected the application on the same day without providing an opportunity for the petitioner to present their case. The Court noted that the rejection violated Clause 19 of the notification, which required giving an opportunity to the applicant before rejecting an application for exemption.Regarding the corrected certificate issued by the Director of Industries certifying the production date falling within the exemption period, the Court acknowledged bureaucratic delays in the correction process. The judgment cited a Supreme Court case emphasizing the importance of considering changed circumstances to deliver justice. The Court highlighted that bureaucratic delays should not penalize applicants who have taken necessary steps within their control to comply with requirements.The Court also addressed the maintainability of the writ petition despite the availability of an alternative remedy through revision. It was decided that since the Court had already entertained the petition and affidavits had been exchanged, dismissing the petition on procedural grounds would not be appropriate. The writ petition was allowed, quashing the impugned order and directing the Joint Commissioner to reconsider the application within a specified timeframe in accordance with the law.