Eligibility certificate controls sales tax exemption; later cancellation cannot retrospectively defeat benefits already earned during its validity.

Sales tax exemption attached to an eligibility certificate issued by the competent authority could not be denied by the assessing authority by re-examining the basis on which the certificate was granted, unless the certificate was shown to be nonexistent or bogus. A later cancellation of the certificate operated only prospectively and did not retrospectively defeat exemption for transactions covered while the certificate remained in force and was relied upon by the assessee. The Revenue's challenge therefore failed, and the exemption was held available for the relevant period.

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Issues: Whether the assessee was entitled to sales tax exemption on the strength of the eligibility certificate granted by the competent authority, and whether its subsequent cancellation could deprive the assessee of the exemption for the past period.

Analysis: The exemption scheme required production of the eligibility certificate issued by the General Manager, District Industries Centre. Once such certificate was issued and was not shown to be nonexistent or bogus, the assessing authority could not sit in appeal over its validity or independently reject the exemption by examining whether the assessee belonged to the claimed community. The subsequent cancellation of the certificate could operate only prospectively and could not affect transactions already covered during the period when the certificate remained in force and was relied upon by the assessee. The reasoning applied to cancellation of registration was treated as equally applicable to cancellation of the eligibility certificate.

Conclusion: The assessee remained entitled to the exemption for the relevant assessment period, and the Revenue's challenge failed.

Ratio Decidendi: Where an exemption depends on an eligibility certificate issued by the competent authority, the tax authority cannot go behind that certificate unless it is shown to be nonexistent or bogus, and a subsequent cancellation cannot retrospectively defeat exemption already availed during the currency of the certificate.

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