Sales tax deferral condition breached by stopping normal production and doing only job-work, so cancellation was valid.

Sales tax deferral benefit granted for manufacture of poly sacks was conditional on continued normal production under the eligibility certificate. The assessee admittedly carried on only job-work for others and stopped manufacturing the eligible product for more than six months, which breached condition VII(a) prohibiting stoppage of normal production during the scheme period. The reference to G.O. Ms. No. 500 dated 14.05.1990 did not override that condition. The cancellation of the deferral benefit was therefore valid, and the challenge failed.

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Issues: Whether the cancellation of sales tax deferral benefit for breach of the eligibility certificate condition by stopping normal production and carrying on job-work for more than six months was valid.

Analysis: The deferral benefit had been granted for manufacture of poly sacks under the eligibility certificate, which specifically required continued normal production. The material on record showed that the assessee admittedly carried on only job-work for others and did not manufacture the eligible product for more than six months. That conduct amounted to breach of condition VII(a), which prohibited stoppage of normal production for a period exceeding six months during the scheme period. The reliance on G.O. Ms. No. 500 dated 14.05.1990 did not , as it did not override the condition relating to continuous stoppage of production.

Conclusion: The cancellation of the deferral benefit was valid and the challenge failed.

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