Eligibility certificate protection bars sales tax assessment until expiry or lawful cancellation under the incentive scheme.

An eligibility certificate granted to a new industrial unit under Section 4-A protected the petitioners from assessment and recovery of sales tax during its currency. The Court applied earlier binding authority that, once such a certificate is in force, the Sales Tax Officer cannot proceed in disregard of it. That protection continues until the eligibility period expires or the certificate is lawfully cancelled by the competent authority. The writ petition was therefore allowed, and mandamus issued restraining assessment until expiry or cancellation of the certificate.

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Issues: Whether, after grant of an eligibility certificate under Section 4-A of the U.P. Sales Tax Act, the Sales Tax Officer could assess and realise tax from the petitioners during the currency of that certificate.

Analysis: The petitioners had been granted an eligibility certificate treating the unit as a new industrial unit. Reliance was placed on earlier binding authority of the same Court holding that once such a certificate is granted, the Sales Tax Officer cannot proceed to assess the dealer in disregard of the certificate. The protection attached to the eligibility certificate continues until the period of eligibility expires or the certificate is cancelled by the competent authority.

Conclusion: The Sales Tax Officer had no power to assess the petitioners during the subsistence of the eligibility certificate, and the writ petition was rightly allowed with a mandamus restraining future assessment until expiry or cancellation of the certificate.

Ratio Decidendi: Where an eligibility certificate granting tax incentive is in force under the relevant sales tax law, assessment contrary to that certificate is impermissible until the certificate expires or is lawfully cancelled.

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