Eligibility certificate under sales tax exemption can relate back, preventing recovery of earlier assessed tax demands.

An exempted industrial unit holding an eligibility certificate under Rule 28A of the Haryana General Sales Tax Rules, 1975 could not be compelled to pay assessed sales tax for earlier assessment years merely because the exemption certificate was issued later. The certificate covered the relevant exemption period and related back to that period, so assessments for 1996-97 and 1997-98 did not create a recoverable liability. The assessed amounts under the local sales tax law and the Central Sales Tax Act were therefore not recoverable from the unit and were to be adjusted against the exemption entitlement.

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Issues: Whether a unit holding an eligibility certificate under Rule 28A of the Haryana General Sales Tax Rules, 1975 could be compelled to pay tax assessed for earlier assessment years merely because the exemption certificate was issued later, though it related to the relevant exemption period.

Analysis: The petitioner was an exempted unit and was in possession of an eligibility certificate covering the period from 17 March 1997 to 16 March 2004. The assessments for the assessment years 1996-97 and 1997-98 had already resulted in demands under the local sales tax law and the Central Sales Tax Act. The Court held that the mere fact that the exemption certificate was issued on 25 June 2002 did not make the petitioner liable to pay the assessed amounts for the covered period. Since the certificate related back to the exemption period and the petitioner was entitled to exemption, the assessed amounts could not be recovered and were to be adjusted against the exemption limit.

Conclusion: The petitioner was not liable to pay or have recovered from it the assessed tax amounts for the assessment years 1996-97 and 1997-98, and those amounts stood adjustable against the exemption entitlement.

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