Statutory sales tax exemption cannot be curtailed by later executive instructions or extra-notification conditions.

A statutory sales tax exemption granted by notification had to be applied according to its terms, and the petitioner remained entitled to an eligibility certificate for the extended period because the earlier pioneer status was neither cancelled nor withdrawn and the required agreement had been executed. The authorities could not deny the certificate by importing the definition of pioneer industry from the Subsidy Rules, 1989 or by relying on a later resolution dated 29 December 2000, since no applicable subsidy rules were produced and executive instructions could not narrow or override the exemption already conferred under the notification. The adverse administrative decisions were therefore set aside.

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Issues: (i) Whether the petitioner was entitled to issuance of an eligibility certificate for sales tax exemption for the extended period under the applicable notifications. (ii) Whether the State Level Committee and appellate authority could deny the certificate by applying the definition of pioneer industry under the Subsidy Rules, 1989 and by relying on the subsequent resolution dated 29 December 2000.

Issue (i): Whether the petitioner was entitled to issuance of an eligibility certificate for sales tax exemption for the extended period under the applicable notifications.

Analysis: The petitioner had fulfilled the conditions of the notification dated 31 March 1992 issued under the sales tax law, had already been granted pioneer status for sales tax concession, and had executed the required agreement pursuant to the decision extending the exemption period to nine years. The earlier status letter had neither been cancelled nor withdrawn, and no material was shown to establish that the petitioner ceased to be covered by the notified concession. The exemption notification operated according to its own terms and could not be diluted by an executive view inconsistent with it.

Conclusion: The petitioner was entitled to issuance of the eligibility certificate for the extended exemption period.

Issue (ii): Whether the State Level Committee and appellate authority could deny the certificate by applying the definition of pioneer industry under the Subsidy Rules, 1989 and by relying on the subsequent resolution dated 29 December 2000.

Analysis: The subsequent resolution merely stated that the committee had stopped issuing such certificates from 1 July 1998, but it did not show cancellation of the earlier pioneer status or withdrawal of the governing decision in favour of the petitioner. No applicable subsidy rules were produced to justify the denial, and the authorities could not impose additional restrictions inconsistent with the notification. Executive instructions and later administrative resolutions could not whittle down the force of the exemption already granted under the statutory framework.

Conclusion: The denial of the certificate on the basis of the Subsidy Rules, 1989 and the resolution dated 29 December 2000 was unsustainable.

Final Conclusion: The writ petition succeeded, the adverse administrative decisions were set aside, and the petitioner's entitlement to the sales tax exemption certificate for the extended period was affirmed.

Ratio Decidendi: A tax exemption granted by a statutory notification must be honoured according to its terms, and it cannot be curtailed or defeated by later executive instructions or by imposing conditions not found in the notification.

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