Subsisting eligibility certificate bars coercive tax recovery until cancelled or modified by the competent issuing authority.

Commercial tax authorities could not demand or recover tax from the petitioner while a final eligibility certificate issued by the competent industrial authority remained in force. The certificate had to be treated as operative until cancelled or modified by the authority competent to do so, and the tax authorities were not entitled to ignore or nullify it on their own. If they had material suggesting earlier commencement of production than stated in the certificate, the proper course was to place that material before the issuing authority for appropriate action. In the absence of such cancellation or modification, coercive recovery was impermissible.

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Issues: Whether the commercial tax authorities could demand and recover tax from the petitioner while the final eligibility certificate issued by the competent industrial authority remained in force.

Analysis: The petitioner was found entitled to rely on the subsisting final eligibility certificate. The commercial tax authorities were held not to be the competent authority to cancel or modify that certificate. If they possessed information that the petitioner had commenced production earlier than the date stated in the certificate, the proper course was to place such material before the competent issuing authority for appropriate action. In the absence of cancellation or modification of the certificate, coercive recovery of tax was held impermissible.

Conclusion: The tax authorities could not coerce the petitioner to pay tax so long as the final eligibility certificate remained uncancelled and unmodified.

Ratio Decidendi: A tax authority cannot ignore or effectively nullify a subsisting eligibility certificate issued by the competent authority unless that certificate is first cancelled or modified by the authority competent to do so.

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