JUDGMENT
S. Sankarasubban, J.
1. This tax revision case is filed by the Revenue against the order in T.A. No. 133 of 1987 of the Sales Tax Appellate Tribunal, Ernakulam. The assessment year in question is 1981-82. The facts of the case are as follows :
2. The assessee is engaged in the manufacture and sale of polythene bags, etc. It is a small-scale industrial unit. It was established in 1978. At first, the assessee was collecting and remitting sales tax. In the meanwhile, the Government came out with a series of notifications granting exemption to the various types of SSI units from payment of sales tax with a view to promote industrial growth in the State. G.O. (P) No. 313/81/TD dated November 21, 1981 was issued by the Government and the Government granted sales tax exemption to all SSI units set up prior to April 1, 1979 for a period of five years. In the case of SSI units set up by the members belonging to the schedule caste/tribe community, woman entrepreneurs and mini industrial units, exemption was available even if the SSI units were set up prior to April 1, 1979.
3. The assessee claiming to be a member of the schedule tribe community, applied for the eligibility certificate before the General Manager, District Industries Centre, Alappuzha, who is the competent authority to issue such eligibility certificate. The assessee claimed the exemption stating that he belongs to Konda Reddy Community which is listed as a scheduled tribe community. The General Manager, District Industries Centre, Alappuzha, granted exemption to the assessee as per his order dated April 24, 1982, on the strength of the community certificate obtained from the concerned authorities of Tamil Nadu. The exemption covered from a period from October 17, 1978 to October 16, 1984. The amount of sales tax exempted comes to Rs. 1,74,204. The case of the assessee is that thereafter he did not collect sales tax from his customers. But the assessing authority did not accept the exemption certificate issued by the General Manager on the ground that the exemption certificate was found to be irregular as the assessee does not belong to the schedule tribe community.
3. Appeal filed against the above order was dismissed. Against the orders of the assessing authority and the first appellate authority, the assessee filed second appeal before the Tribunal. Before the Tribunal, the matter was argued elaborately. The case was heard by two members, namely, the Accounts Member and departmental Member of the Sales Tax Appellate Tribunal, Ernakulam. The accounts Member held that the assessee is entitled to get exemption, whereas the Departmental Member came to the conclusion that the assessee is not entitled to get exemption since the assessee obtained the exemption order by playing fraud and misrepresentation. The assessment years involved in the assessment proceedings are 1980-81, 1981-82 and 1982-83. The period covers by the assessment years are from April 1, 1980 to March 31, 1983. During the above period, the order by which exemption granted by the General Manager was in force. On this reasoning, the Accounts Member held that the assessee is eligible for sales tax exemption. The departmental member held that the exemption certificate dated April 24, 1982 was subsequently cancelled by the General Manager, District Industries Centre as per order dated August 12, 1988. Since it was found that the assessce obtained the order as a result of fraud and therefore the order granting exemption was void from the very beginning. The departmental member also relied on the certificate issued by the local Tahsildar to the effect that the assessee belongs to Reddiar community, which is recognised as a schedule tribe community. On the basis of the above information, the assessee was directed to get a certificate from the competent local authority. Since there was disagreement, the matter was heard by another Bench of three members including the Chairman. Ultimately the Chairman agreed with the findings of the accounts member. On the basis of the majority opinion, the Tribunal came to the conclusion that the assessee is entitled to get exemption.
4. Notice was issued to the assessee-respondent. Nobody appeared. Learned counsel for the Revenue submitted that since it has been found that subsequently in 1988, the certificate has been cancelled, the assessee is not entitled to get exemption. He has further submitted that the assessing officer and the appellate authority are correct in not relying on the certificate.
5. Having heard the learned Government Pleader, we are of the view that the majority view of the Tribunal is correct. According to us, the assessing authority cannot sit in judgment over the certificate issued by the General Manager, District Industries Centre. The Government order states that if the certificate is produced saying that the assessee is entitled to the benefit of the exemption, then the assessing authority is bound to take that into account unless it finds that the certificate obtained is not genuine. There is no case that the General Manager, District Industries Centre did not issue the certificate. What the assessing authority says is that the assessee docs not belong to Konda Reddy community. We are of the view that the matter cannot be looked into by the assessing authority.
6. The decision in Deputy Commissioner of Sales Tax (Law), Ernakulam v. Surya Refineries (P) Ltd. 91 KLJ (Tax Cases) 513, was cited. In the above decision S.R.O. No. 968/80 dated September 29, 1980 was extracted. A division Bench of this Court in the above decision held as follows :
“Once the condition laid down in the Government notification, to the effect that the unit shall produce the proceedings of the General Manager, District Industries Centre declaring the eligibility of the unit for claiming exemption from sales tax, is satisfied, it is not for the Sales Tax Officer to assume the role of a superior authority and ignore the proceedings of the General Manager. In other words, once the eligibility is declared by the appropriate General Manager, District Industries Centre the Sales Tax Officer cannot go behind it and negative the exemption on his own reasoning. There is no case for the Revenue that the eligibility certificate of the General Manager of the District Industries Centre is not genuine or otherwise bogus or its vitiated. The Sales Tax Officer cannot sit in judgment over the proceedings of the General Manager, District Industries Centre wherein he has declared the eligibility of the unit for claiming exemption from sales tax.”
In Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Debi Prasad Shyam Sunder & Sons [1991] 82 STC 305 (Ker), the question was with regard to cancellation of registration. The question arose in the above case is can it be said retrospectively in case the registration is cancelled subsequently. In the above decision, the division Bench held as follows :
“It should be remembered that a certificate is granted by the prescribed authority only after making such enquiries as he may consider necessary and only if he is satisfied that the application is in order and that the particulars furnished therein are correct, etc. It is not as if the certificate is granted mechanically. An enquiry is contemplated, on the basis of which the concerned officer should be satisfied that the person who has applied for registration is a real person, that the particulars furnished in the application are correct, and that in the circumstances, the officer is of opinion that the certificate of registration is to be granted for the applicant. When once such a certificate is granted, it clothes the person with certain privileges……………But, such cancellation of registration can take effect only from the date when the order was so passed. It cannot have any retrospective effect. It cannot in any manner affect the past transactions bona fide entered into by persons, who relying on the certificate of registration, entered into business deals and arranged their affairs.”
7. We are of the view that the same reasoning can be applied here to the eligibility certificate granted. During the pendency of the eligibility certificate, the assessee made use of it and he did not collect tax. In that event, he cannot be compelled to pay tax on the ground that the certificate was subsequently cancelled. Thus, we are of the view that the majority order of the Tribunal is to be upheld.
Accordingly tax revision case is dismissed.