Withdrawal of Tax Certificate Over Land Use Certificate Absence Deemed Unjustified

The Court held that withdrawal of an eligibility certificate under Haryana General Sales Tax Rules, 1975 due to the non-production of a certificate regarding change of land use was not justified. The Court emphasized strict interpretation of taxing statutes and ruled that the specified grounds for withdrawal must be adhered to, with the affected party given a fair hearing. As non-production of the land use certificate was not a valid ground, the Higher Level Screening Committee's decision to withdraw the certificate was quashed. Each party was directed to bear their own costs.

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Issues:
Challenge to withdrawal of eligibility certificate under Haryana General Sales Tax Rules, 1975 based on non-production of certificate regarding change of land use.

Analysis:
The judgment of the Court focused on a writ petition challenging the withdrawal of an eligibility certificate under rule 28A of the Haryana General Sales Tax Rules, 1975 due to the failure to produce a certificate regarding change of land use. The communication informing the withdrawal was addressed by the General Manager, District Industries Centre, Panipat. The Higher Level Screening Committee's order rejecting the appeal was also impugned in the petition.

The grounds for withdrawal of an eligibility certificate are outlined in sub-rule (8)(a) of rule 28A of the Rules. These include instances of fraud, misrepresentation, discontinuance of business, or disposal of fixed assets affecting manufacturing capacity. Importantly, the rule mandates that withdrawal can only occur on the specified grounds and after affording a reasonable opportunity of being heard to the affected unit.

The Court emphasized that the provisions of a taxing statute, especially those related to cancellation/withdrawal of certificates, must be strictly interpreted. It was clarified that non-production of a certificate regarding change of land use is not a valid ground for withdrawing an eligibility certificate. The judgment cited a previous division Bench decision to support this interpretation.

Ultimately, the Court held that neither the Higher Level Screening Committee nor the Lower Level Screening Committee were justified in withdrawing the eligibility certificate based on the non-production of the certificate regarding change of land use. Consequently, the impugned orders were quashed, allowing the writ petition and directing each party to bear their own costs.

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