Statutory entitlement to full tax adjustment prevailed over a departmental circular restricting adjustment under the eligibility certificate.

Section 3-H(3) permitted full adjustment of State Development Tax up to the monetary limit in the eligibility certificate under section 4-A, and the Court held that a departmental circular could not impose a proportionate restriction not found in the statute. The statutory provision prevailed over the administrative circular, so the assessment orders had to reflect that binding legal position. The Assessing Authority was directed to pass appropriate consequential orders granting adjustment for assessment years 2005-06, 2006-07 and 2007-08 in accordance with law and the earlier decision.

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Issues: Whether State Development Tax was to be adjusted in full up to the monetary limit specified in the eligibility certificate under section 4-A, and whether consequential assessment orders were required to be passed in light of the earlier binding decision.

Analysis: The statutory scheme under section 3-H(3) permitted adjustment of State Development Tax against the monetary limit specified in the eligibility certificate. The Court had already held in the connected matter that the impugned departmental circular could not introduce a proportionate adjustment not found in the statute, and that the legislative provision prevailed over the administrative circular. Since the assessment orders had been completed without giving effect to that position, consequential directions were necessary.

Conclusion: The issue was decided in favour of the assessee, and the Assessing Authority was directed to pass appropriate orders for adjustment for the assessment years 2005-06, 2006-07 and 2007-08 in accordance with law and the earlier decision.

Final Conclusion: The writ petition was disposed of with a direction to the Assessing Authority to grant the adjustment in accordance with the binding legal position already settled by the Court.

Ratio Decidendi: A departmental circular cannot curtail a statutory entitlement to adjustment where the statute permits adjustment up to the monetary limit specified in the eligibility certificate.

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