TRIVENI MICROCIRCUITS PVT LTD Vs. STATE OF HARYANA

JUDGEMENT

(1.) TRIVENI Microcircuits Private Limited, petitioner, was registered as a small-scale industrial unit on March 21, 1990, for the manufacture of printed circuit board, electronic/fire/security alarm units with sound and light blinkers, electronic tone disablers and echo suppressors, PCB sub-assemblies for coin box, etc. , and tariff pulse generators. It was also registered both under the Central Sales Tax Act, 1956, as well as the Haryana General Sales Tax Act, 1973. Under section 13b of the Haryana Act, the State Government is empowered to exempt specified class of industries from the payment of sales tax in the interests of industrial development of the State. Detailed rules have been framed in order to give effect to the above exemption. The relevant rules are contained in Chapter 4a beginning from rule 28a. The application for exemption is to be decided by the Lower Level Screening Committee (LLSC) and there is a provision for appeal to the Higher Level Screening Committee (HLSC ). The various sub-rules of rule 28a contain provisions for the constitution of these Committees and provision with regard to appeal. The case of the petitioner is that it applied for the said exemption on March 6, 1990, in the prescribed form. An inspection was carried out by one Mr. Bukal of the District Industries Centre on June 14, 1990, and he made a favorable report. The petitioner filed monthly returns for the year 1990-91, relevant extracts being mentioned in annexure P1. It further appears that the General Manager of District Industries Centre carried out a surprise inspection on August 31, 1990. He found the unit closed at the time of inspection and accordingly made an adverse report. The report received from the Deputy Excise and Taxation Commissioner earlier was also adverse to the petitioner. Relying on the aforesaid two reports and without affording any opportunity to the petitioner to explain about the closure of the factory at the time of inspection, the LLSC appears to have rejected the petitioner's application on September 11, 1990. The case of the petitioner is that even though the said Committee was bound to communicate the decision on its application, the same had not been communicated to it so far. However, from the date of knowledge, the filed an appeal to the HLSC on February 23, 1993. The appeal was dismissed by order annexure P2 dated December 17, 1993, on two grounds, namely (i) that it was barred by limitation, and (ii) that the unit had been found closed at the time of inspection and the petitioner had no case on the merits.

(2.) THE petitioner received a copy of the order of the Higher Level Screening Committee on February 14, 1994, and assailed the orders passed by the two Committees against it on various grounds through this writ petition. Separate written statements have been filed by the Deputy Excise and Taxation Commissioner on behalf of respondent No. 1 and the General Manager, District Industries Centre, on behalf on respondents 2 and 3. In the Written statements reference has been made to the inspection carried out by the Deputy Excise and Taxation Commissioner on April 20, 1990, and of the fact that from February 1991 to June 1993 the petitioner had submitted "nil" return. On two subsequent dates, the Deputy Excise and Taxation Commissioner visited the factory premises and found the same locked. Ultimately in the inspection carried out on July 25, 1990, it was reported by the Deputy Excise and Taxation Commissioner that there was no raw material, no finished goods and no testing equipment found in the premises, which was lying locked.

(3.) THERE can be no dispute that the decision of the petitioner's application made for exemption vitally affects the petitioner's rights. There can also be no dispute that the powers to be exercised by the two Committees constituted under rule 28a are quasi-judicial in nature, inasmuch as the rule itself makes a provision for appeal. If the petitioner feels aggrieved by the order passed by the Lower Level Screening Committee, it could file an appeal to the Higher Level Screening Committee. If the Committee was prima facie of the view that no manufacturing work was being carried on and the application for exemption made by the petitioner deserved to be dismissed, it was necessary for the Lower Level Screening Committee to have given an opportunity to the petitioner of being heard. Admittedly, no such opportunity was afforded to the petitioner.