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Issues: (i) Whether the order denying the sales tax deferral benefit to the transferee unit was sustainable when approval for transfer of the deferral facility had been granted and the record showed subsequent registration and agreement in favour of the petitioner. (ii) Whether the matter required remand for fresh consideration in view of the rival factual claims regarding violation of the scheme conditions and the absence of prior notice.
Issue (i): Whether the order denying the sales tax deferral benefit to the transferee unit was sustainable when approval for transfer of the deferral facility had been granted and the record showed subsequent registration and agreement in favour of the petitioner.
Analysis: The record showed that the original unit had been granted interest-free sales tax deferral, that transfer of the unit and the deferral facility had been approved by the competent authority, and that fresh registration and agreement were thereafter obtained by the petitioner. In that factual setting, the impugned conclusion that the petitioner was not entitled to the facility was not supported by the materials then relied upon. The absence of prior notice and the non-consideration of the relevant documents also weighed against the validity of the impugned decision.
Conclusion: The denial of the deferral benefit could not be sustained on the materials considered in the impugned order.
Issue (ii): Whether the matter required remand for fresh consideration in view of the rival factual claims regarding violation of the scheme conditions and the absence of prior notice.
Analysis: The respondents had raised allegations that the petitioner had violated the conditions of the deferral scheme by manufacturing products different from the specified product. Since those factual allegations had not been fully examined with reference to the documents and an opportunity of hearing, a final adjudication on merits was not appropriate at that stage. A fresh assessment after hearing the petitioner was therefore necessary.
Conclusion: The matter was required to be remanded for fresh consideration after giving the petitioner an effective opportunity.
Final Conclusion: The impugned order was set aside and the controversy was sent back for reconsideration on merits after notice and hearing, leaving the substantive entitlement to deferral benefit open for fresh determination.
Ratio Decidendi: Where a fiscal adverse order is passed without proper consideration of the relevant approval documents and without affording effective opportunity, it cannot be sustained, but unresolved factual disputes may justify remand for fresh decision on merits.
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