Statutory incentive schemes cannot be revised without review power, and diversification does not cover an unrelated new unit.

An exemption certificate issued under a statutory sales tax incentive scheme cannot be altered by an authority without statutory review power; only the competent tax authority may correct an apparent mistake within the governing framework. The scheme's diversification concept is tied to an existing project and its investment base, so it does not extend to a wholly independent unit manufacturing an unrelated product. On that construction, a new and unconnected unit is entitled to treatment as a new unit rather than as mere diversification, and unilateral reduction of the exemption limit is invalid.

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Issues: (i) whether the Industries Commissioner had jurisdiction to alter the earlier exemption certificate by treating the unit as one of diversification and reducing the exemption limit; (ii) whether, on a proper construction of the sales tax incentive scheme, diversification could apply to an altogether unconnected new product and unit.

Issue (i): whether the Industries Commissioner had jurisdiction to alter the earlier exemption certificate by treating the unit as one of diversification and reducing the exemption limit.

Analysis: The exemption certificate issued under the incentive scheme was treated as an order affecting the dealer's entitlement under the sales tax law. The scheme operated in conjunction with the statutory power of exemption under section 49 of the Gujarat Sales Tax Act, 1969, and the Commissioner of Sales Tax alone was the authority empowered to rectify an apparent mistake within the statutory framework under section 72 of the Gujarat Sales Tax Act, 1969. The Industries Commissioner, who functioned only at the stage of factual verification for eligibility, had no independent power of review or revision to nullify or modify the exemption already granted. Where an order is quasi-judicial, review can exist only by statute and cannot be assumed.

Conclusion: The Industries Commissioner lacked jurisdiction to revise the exemption certificate unilaterally.

Issue (ii): whether, on a proper construction of the sales tax incentive scheme, diversification could apply to an altogether unconnected new product and unit.

Analysis: The scheme defined a new industry to include expansion and diversification, but both concepts were tied to the existing project. Expansion required an increase in fixed capital investment and production capacity of the existing unit. Diversification required commencement of a new product by the specified manufacturer with investment linked to the original project, and the exemption for diversification was restricted to additional manufacture arising from that expansion or diversification. Read as a whole, the scheme did not support treating a wholly independent unit manufacturing an unrelated product as diversification. The construction advanced for the revenue would produce an irrational result by giving a more limited benefit to a truly new and unrelated product than to a new unit manufacturing the same product. The scheme had therefore to be construed in favour of full effect to the exemption where eligibility was established.

Conclusion: Diversification could not extend to a wholly unconnected and independent new product and unit; the petitioner was entitled to treatment as a new unit.

Final Conclusion: The impugned order reducing the exemption limit was quashed, and the petition succeeded with no order as to costs.

Ratio Decidendi: An exemption certificate issued under a statutory incentive scheme cannot be altered by an authority lacking statutory review power, and a scheme defining diversification in relation to an existing project cannot be construed to cover an entirely independent and unrelated unit.

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