Appeal allowed; decision set aside, notices and order quashed; eligibility certificate grants sales-tax exemption under 1993 G.O.; s.20 bars reopening.

The SC allowed the appellant's appeal, set aside the HC decision and quashed the DCCT's show-cause notices and impugned order. The Court held the Eligibility Certificate issued by the Department of Industries under the 1993 G.O. conclusively determined entitlement to sales-tax exemption under the state incentive scheme; the Commercial Taxes Department had no jurisdiction under s.20 to re-open eligibility once the certificate and Commissioner's notification accepted it. A March 2000 circular cancelling certificates was given prospective effect from 31 March 2000, so the DCCT could not recover tax for prior periods.

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Issues Involved:
1. Entitlement to exemption from payment of sales tax under the Andhra Pradesh General Sales Tax Act, 1957.
2. Definition and interpretation of "manufacture" under the 1993 G.O.
3. Jurisdiction of the Deputy Commissioner of Commercial Taxes (DCCT) to issue show cause notices and demand recovery.
4. Validity of the eligibility certificate issued to the appellant.
5. Prospective effect of the cancellation of eligibility certificates by the Commissioner of Industries.

Issue-wise Detailed Analysis:

1. Entitlement to Exemption from Payment of Sales Tax:
The appellant sought exemption from sales tax under the Andhra Pradesh General Sales Tax Act, 1957, as notified by G.O.M.S. No. 117 dated 17th March 1993 (the '1993 G.O.'). The 1993 G.O. was issued to promote industrial development by granting incentives such as investment subsidies and sales tax holidays. The appellant, falling within the category of tiny and small-scale industries, was entitled to a five-year sales tax holiday subject to a ceiling of Rs. 35 lakhs or 100% of fixed capital costs.

2. Definition and Interpretation of "Manufacture":
The DCCT issued show cause notices asserting that the appellant's activity of refilling anhydrous ammonia into cylinders did not constitute "manufacture" as it did not result in a new and distinct commodity. The appellant argued that the term "manufacture" should be interpreted within the context of the incentive scheme, emphasizing industrial development rather than strict manufacturing definitions. The Supreme Court found that the DCCT's interpretation was incorrect, noting that the term "manufacture" in the 1993 G.O. was intended to exclude mere resale activities and promote industrial activity.

3. Jurisdiction of the DCCT to Issue Show Cause Notices:
The appellant challenged the jurisdiction of the DCCT to issue show cause notices and demand recovery, arguing that the eligibility for incentives was determined by the Department of Industries & Commerce, not the Commercial Taxes Department. The Supreme Court held that the DCCT did not have the jurisdiction to go behind the eligibility certificate issued by the Department of Industries & Commerce, as the certification process involved scrutiny and approval by the State Level and District Level Committees.

4. Validity of the Eligibility Certificate:
The appellant was granted a temporary eligibility certificate, later confirmed as final, certifying eligibility for sales tax exemption. The Supreme Court noted that the eligibility certificate was issued after thorough consideration by the relevant committees, including the DCCT. The Court found no evidence of mala fides or unfair advantage taken by the appellant. The eligibility certificate was valid and binding, and the Commercial Taxes Department could not unilaterally cancel it.

5. Prospective Effect of the Cancellation of Eligibility Certificates:
The Commissioner of Industries issued a circular on 17th March 2000, canceling eligibility certificates for certain industries, including industrial gas bottling units, with effect from 31st March 2000. The Supreme Court held that the cancellation was prospective and did not affect the appellant's exemption period, which had already expired by that date.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's decision and quashing the show cause notices and the impugned order of the DCCT. The Court emphasized that the interpretation of "manufacture" should align with the incentive scheme's objective of promoting industrial development. The eligibility certificate issued to the appellant was valid, and the DCCT lacked jurisdiction to demand recovery of sales tax based on a re-evaluation of the appellant's eligibility.

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