Binding tax remission circular upheld where eligibility certificate cancellation still allowed relief on satisfied conditions.

A binding Government circular governed remission of trade tax after cancellation of an eligibility certificate: where a new unit had obtained the certificate without forgery, cheating, or breach of conditions, and had not collected tax from customers, remission of outstanding tax prior to cancellation remained available. The assessee's certificate had been cancelled under Section 4A(3) of the U.P. Trade Tax Act, but the circular was treated as binding on the authorities. As the assessee satisfied the circular's conditions, relief was upheld and no interference with the Tribunal and High Court findings was warranted.

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Issues: Whether the assessee, whose eligibility certificate had been cancelled, was nevertheless entitled to remission of trade tax under the Government circular; and whether the High Court's order granting relief called for interference.

Analysis: The assessee's unit was situated in Ghaziabad and, under the exemption notification, units in that tehsil were entitled only to five years' exemption. Although the Divisional Level Committee had earlier extended the certificate to six years, the Commissioner cancelled it under Section 4A(3) of the U.P. Trade Tax Act, 1948. The State Government's circular dated 26.05.1994 provided that where a new unit had obtained an eligibility certificate without forgery, cheating, or violation of conditions, cancellation or modification of the certificate would still entitle the unit to remission of the outstanding trade tax prior to cancellation, provided the unit had not collected tax from customers. The circular was treated as binding on the authorities, and it was noted that the assessee had not collected tax from customers.

Conclusion: The assessee was entitled to remission only in terms of the circular, and no interference with the concurrent findings of the Tribunal and the High Court was warranted.

Final Conclusion: The civil appeal failed, and the order in favour of the assessee was left undisturbed.

Ratio Decidendi: A binding Government circular governing remission of tax after cancellation of an eligibility certificate must be applied by the assessing authorities, and relief is available only if the conditions stated in the circular are satisfied.

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