Mandatory documentation and natural justice under a sales tax exemption scheme shaped the validity of eligibility rejection.

A condition embedded in the prescribed application form under the Haryana sales tax exemption scheme was treated as part of the delegated rule framework, so production of the change of land use certificate for agricultural land was a mandatory requirement and non-compliance could justify rejection of eligibility. The later reconsideration and rejection of the appeals by the Higher Level Screening Committee was also found unlawful where it was taken without notice or hearing, contrary to audi alteram partem, and where it relied on rule 28B even though that provision was not in force at the relevant time. The matter was remitted for fresh decision by a competent committee after hearing the petitioners.

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Issues: (i) Whether production of the change of land use certificate was a mandatory requirement for grant of eligibility certificate under the sales tax exemption scheme; (ii) Whether the reconsideration and rejection of the appeals by the Higher Level Screening Committee without notice and hearing was vitiated.

Issue (i): Whether production of the change of land use certificate was a mandatory requirement for grant of eligibility certificate under the sales tax exemption scheme.

Analysis: Section 13B of the Haryana General Sales Tax Act, 1973 authorises exemption to eligible industries subject to prescribed conditions, and rule 28A of the Haryana General Sales Tax Rules, 1975 regulates the procedure and documentation for that benefit. Form ST-70, which is incorporated into rule 28A(5)(a), requires submission of the specified annexures, including permission for change of land use in the case of agricultural land. The Court treated the form as part of the rule itself and held that non-compliance with the prescribed documents could justify rejection of the application. The insertion of rule 28B did not dilute that requirement.

Conclusion: The change of land use certificate requirement was held to be mandatory and non-production could validly lead to rejection.

Issue (ii): Whether the reconsideration and rejection of the appeals by the Higher Level Screening Committee without notice and hearing was vitiated.

Analysis: The appeals had earlier been favourably considered, but the adverse decision in the subsequent meeting was taken without notice to the petitioners and without affording them an opportunity of hearing. The Court held that the earlier favorable decision had not matured into an enforceable order, but the later rejection suffered from violation of audi alteram partem and was also arbitrary because it relied upon rule 28B, which was not in force when the appeals were considered. The impugned rejection therefore could not stand.

Conclusion: The rejection of the appeals was held to be illegal and vitiated by breach of natural justice and arbitrariness.

Final Conclusion: The petitions succeeded, the impugned rejection was set aside, and the matters were sent back for fresh decision by the competent committee through a speaking order after hearing the petitioners.

Ratio Decidendi: A condition incorporated into the statutory application form and made part of the delegated rule-making framework is enforceable as a mandatory requirement, but any adverse administrative decision affecting civil rights must comply with audi alteram partem and cannot rest on a provision not in force at the relevant time.

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