Incentive scheme transfer restriction cannot be enforced after certificate expiry; writ relief remained available despite alternative remedy.

An incentive scheme restricting branch transfers beyond 20% of total production was held not to operate after expiry of the eligibility certificate, because Clause 4(e)(ii) was linked to the period for which the incentive remained available and did not create an independent post-expiry obligation. The demand based on alleged transfers after expiry was therefore unsustainable. The writ petition was also maintained despite an alternative appellate remedy, since the suggested appeal was ineffective in the circumstances and the objection was rejected in the exercise of writ discretion. The assessment and recovery orders, along with the tax, interest and penalty demands founded on the alleged breach, were quashed.

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Issues: (i) Whether the condition in Clause 4(e)(ii) of the Incentive Scheme, 1987 restricting branch transfers beyond 20% of total production operated after the expiry of the eligibility certificate. (ii) Whether the writ petition was not maintainable in view of the availability of an alternative appellate remedy.

Issue (i): Whether the condition in Clause 4(e)(ii) of the Incentive Scheme, 1987 restricting branch transfers beyond 20% of total production operated after the expiry of the eligibility certificate.

Analysis: The Scheme granted exemption under Section 4 of the Rajasthan Sales Tax Act, 1954 on fulfilment of stipulated conditions. Clause 4(e)(i) expressly required continued production for five years, but Clause 4(e)(ii) did not prescribe any independent future period beyond the life of the scheme or the currency of the eligibility certificate. The restriction on sales outside the State including branch transfers was held to be linked to the period during which the incentive was available and could not be extended to alleged transfers made after the eligibility certificate had expired.

Conclusion: The condition in Clause 4(e)(ii) did not operate beyond the eligibility certificate period, and the demand raised on the basis of post-expiry branch transfers was unsustainable.

Issue (ii): Whether the writ petition was not maintainable in view of the availability of an alternative appellate remedy.

Analysis: The existence of an alternative remedy was held not to bar writ jurisdiction in the facts of the case. The impugned order had been passed by a higher departmental authority, making the suggested appeal ineffective in the circumstances, and the objection was rejected as a matter of discretion under Article 226 of the Constitution of India.

Conclusion: The objection based on alternative remedy was rejected.

Final Conclusion: The impugned assessment and recovery orders were set aside, and the tax, interest, and penalty demands founded on the alleged breach of the incentive condition were quashed.

Ratio Decidendi: A condition in an incentive scheme restricting branch transfers beyond a specified percentage cannot be enforced after the expiry of the eligibility certificate unless the scheme expressly provides for such post-expiry operation.

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