Retrospective cancellation of eligibility certificate barred, while fresh VAT-era incentive claim was tested under the current legal regime.

An eligibility certificate granted under the West Bengal Sales Tax Act, 1994 could not ordinarily be cancelled retrospectively, particularly where the cancellation was made long after it had operated, the Act had ceased to govern the field, and the record disclosed no fraud or misrepresentation justifying ab initio withdrawal. That retrospective cancellation was therefore set aside. A separate claim for a fresh eligibility certificate under the West Bengal Value Added Tax Act, 2003 for the unexpired period was assessed under the prevailing legal regime and, on the facts, the refusal to grant fresh relief was upheld.

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Issues: (i) Whether the eligibility certificate granted under the West Bengal Sales Tax Act, 1994 could be cancelled retrospectively with effect from its original date. (ii) Whether the petitioners were entitled to a fresh eligibility certificate under the West Bengal Value Added Tax Act, 2003 for the unexpired period.

Issue (i): Whether the eligibility certificate granted under the West Bengal Sales Tax Act, 1994 could be cancelled retrospectively with effect from its original date.

Analysis: The cancellation order was passed long after the certificate had operated and after the 1994 Act had ceased to govern the field. The legal position applied was that an eligibility certificate, once granted by the competent authority, cannot ordinarily be withdrawn or cancelled with retrospective effect. The petitioners had also obtained provisional registration before 1 January 2000, and the record did not disclose fraud or misrepresentation warranting ab initio cancellation.

Conclusion: The retrospective cancellation of the eligibility certificate was unsustainable and was set aside.

Issue (ii): Whether the petitioners were entitled to a fresh eligibility certificate under the West Bengal Value Added Tax Act, 2003 for the unexpired period.

Analysis: The petitioners had already been treated as falling outside the small-scale category after the changed industrial policy, and they had also obtained benefits under the West Bengal Incentive Scheme, 2000. The authority was entitled to consider the prevailing legal position while deciding a fresh claim for future benefit under the VAT regime. On the facts, the refusal to grant a new eligibility certificate under the VAT Act was not interfered with.

Conclusion: The refusal to grant a fresh eligibility certificate under the VAT Act was upheld.

Final Conclusion: The order cancelling the earlier certificate retrospectively was invalid, but the claim for a new eligibility certificate under the VAT regime failed, leaving the parties only partly successful.

Ratio Decidendi: An eligibility certificate once granted cannot be cancelled with retrospective effect unless the law or facts clearly justify such ab initio withdrawal, and a fresh claim for future tax benefit may be tested on the governing legal regime in force when that claim is decided.

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