R. S. KEJRIWAL, J. - (1.) THE petitioner established an industry in Bhimpura, Industrial Area, near Jagpura, Kota, and started commercial production with effect from June 27, 1987. THE petitioner manufactures stable bleaching powder, hydrated lime, pharmaceutical, industrial and organic and inorganic chemicals and petrochemicals. THE respondents vide their notification dated May 23, 1987, issued Sales Tax Incentive Scheme for Industries, 1987. As the petitioner's unit was new industrial unit, it applied for the grant of eligibility certificate under the said scheme. THE petitioner also submitted a certificate dated October 15, 1987, of its Chartered Accountant M/s. B. L. Bhojwani and Associates, to the respondent No. 2, i. e. , District Level Screening Committee, mentioning therein the value of the fixed assets at Rs. 19,80,983. 54. THE respondent No. 2 after perusing the application of the petitioner, recommended its case for grant of eligibility certificate to the respondent No. 3. THE petitioner was granted eligibility certificate from January 28, 1988 to January 19, 1989, and subsequently the same was renewed from time to time up to January 19, 1991. THE eligibility certificate is annexed with the writ petition and marked annexure 2. In this certificate, the amount for which exemption was granted was not mentioned. THE petitioner vide its letter dated August 9, 1989, enquired from the respondent No. 2 regarding the total limit of tax exemption granted to the petitioner but no reply was received by the petitioner. THE petitioner again submitted an application on January 18, 1991, to the respondent No. 2, enquiring about the total limit of sales tax exemption granted to it. THE petitioner further enquired as to whether any deductions have been made in his application for grant of exemption for Rs. 19,80,983. 54. THE respondent No. 2 was also informed that in the absence of the desired information, petitioner would presume that full value of Rs. 19,80,983. 54 had been exempted from sales tax. THE respondent No. 3, vide its letter dated February 15, 1991, informed the petitioner that according to the order of respondent No. 2, the petitioner was entitled to eligibility certificate to the extent of 85 per cent of the total expenditure of Rs. 13. 20 lakhs. THE petitioner had already obtained benefit of sales tax exemption for Rs. 13. 98 lakhs, which was more than the limit for which the petitioner was entitled. Under these circumstances, prayer of the petitioner for extension of period of eligibility certificate was refused. THE petitioner was also directed to deposit the excess tax, failing which he would be further liable for penalty. THE petitioner vide its application dated March 4, 1991, addressed to the respondent No. 2, copy of which was also sent to the respondent No. 3, requested the respondent No. 2 for giving complete details of deductions/disallowances, made out of the value of fixed assets in order to enable it to plan its future course of action. THE petitioner also requested the respondent No. 3 that the proceedings envisaged by it be kept in abeyance as the petitioner had approached in this connection to the respondent No. 2. THE petitioner also submitted a review petition before the respondent No. 2. THE respondent No. 2, vide its order dated January 28, 1992, marked annexure 9, rejected the said review petition and held that according to the scheme submitted by the petitioner, it was entitled to sales tax exemption up to Rs. 13. 92 lakhs. THE petitioner has challenged the order of respondent No. 3, dated February 15, 1991, marked annexure 5 and the order of respondent No. 2, dated January 28, 1992, marked annexure 9 in this writ petition. THE petitioner has further prayed that the respondents Nos. 2 and 3 be directed to renew the petitioner's eligibility certificate for the year 1991-92, and to grant the eligibility certificate to the extent of 85 per cent of the total capital investment of Rs. 19,80,983. 54. It also prayed that the respondents be restrained from collecting the sales tax prior to the receipt of letter, annexure 5.
(2.) THE respondents Nos. 1 and 2 submitted reply to the writ petition. THEy alleged that the eligibility certificate issued to the petitioner was subject to the maximum limit of exemption in the notification. THE petitioner was liable to pay sales tax beyond the limit of exemption and in case of failure to deposit the same, it was also liable to pay penalty. THE petitioner was found entitled to the benefit under the incentive scheme to the extent of 85 per cent of Rs. 13. 92 lakhs and not on the amount claimed by it. THE respondents Nos. 1 and 2 also submitted a letter dated January 13, 1988, written by respondent No. 2 to respondent No. 3. Along with this letter, the respondent No. 2 also sent a detailed order of the committee and directed the respondent No. 3 to issue a formal eligibility certificate as per law to the petitioner. I have heard learned counsel for the parties. Counsel for the petitioner argued that along with its application, it submitted a certificate of Chartered Accountant, showing the total capital investment in the industrial unit to the extent of Rs. 19,80,983. 54. Under these circumstances, the petitioner was entitled to get sales tax exemption up to 85 per cent of this amount. The respondents allowed exemption application and granted it exemption under the scheme but the amount was not specified. The petitioner also requested the respondents Nos. 2 and 3 from time to time for renewal of its application and to specify the amount for which exemption was granted to it but at no stage the respondents Nos. 2 and 3 informed the petitioner about the total amount for which exemption was granted to it. In the eligibility certificate also the total amount for which exemption was granted to it was not shown and its eligbility certificate was renewed from time to time without any objection and under these circumstances, it could not recover any sales tax from those persons who purchased goods from it. Now the respondent No. 3, cannot recover any sales tax from the petitioner, as the petitioner itself did not recover the same from the purchasers. Counsel for the petitioner, further argued that without any reason, the respondents have reduced the amount mentioned in his application, which was duly certified by Chartered Accountant. He further argued that the order dated February 15, 1991, marked annexure 5 and order dated January 28, 1992, marked annexure 9 are against the principles of natural justice. The petitioner was not given any opportunity of hearing before passing the impugned orders. In support of this argument, he placed reliance on AIR 1967 SC 1269 (State of Orissa v. Dr. Binapani Dei ). On the other hand, counsel for the respondents argued that the respondent No. 2 decided the application of the petitioner for grant of exemption in accordance with law. The petitioner was issued eligibility certificate subject to the maximum limit of exemption. If the petitioner has sold goods beyond the limit of exemption, it is liable to pay sales tax and if it fails to deposit the same, it is further liable to pay the penalty. The eligibility certificate was valid from January 20, 1988 to January 19, 1989, subject to maximum limit of exemption. The review application of the petitioner was rejected rightly. There was no necessity of giving any opportunity of hearing to the petitioner at the time of fixing the total amount of exemption or while deciding the review application. From the various applications submitted by the petitioner from time to time as mentioned in para No. 5 of the writ petition, it appears that the petitioner requested the respondent No. 2 to inform it about the total limit of sales tax exemption granted to it. The facts mentioned in para No. 5 of the writ petition have not been denied by the respondents. Under these circumstances, I presume that the petitioner submitted the applications mentioned in para No. 5 to the respondents, but no reply was given by the respondents. Under these circumstances, it can be inferred that the petitioner was not informed at any time by the respondents regarding the quantum of sales tax exemption granted to it. The applications of the petitioner for renewal were granted from time to time. Vide order dated February 15, 1991, marked annexure 5, for the first time, the respondent No. 3, informed the petitioner that it had already availed benefit of Rs. 13. 98 lakhs whereas the exemption granted to it was 85 per cent of Rs. 13. 20 lakhs and as such request of the petitioner for renewal of eligibility certificate after December 13, 1990, was refused. Prior to that the petitioner was never informed about the maximum limit of exemption. Under these circumstances, neither the petitioner could file any appeal before the Sales Tax Tribunal, nor recover any sales tax from the purchasers, due to the negligence of the respondents. Now it cannot be asked by the respondent No. 3 to deposit the excess amount beyond the maximum limit of exemption of sales tax. It is further to be observed that when the respondent No. 2 had already informed the respondent No. 3, vide letter dated January 13, 1988, it was its duty to convey the same to the petitioner but the respondent No. 3 did not convey the letter of the respondent No. 2, dated January 13, 1988, to the petitioner and under these circumstances, the petitioner could not challenge the same in appeal nor he collected any sales tax from the purchasers but remained in the belief that his application in toto was accepted by the respondent No. 2. I am also of the view that if the respondent No. 2, wanted to make any deductions in the capital investment of the petitioner, it should have informed the petitioner in time to enable it to file appeal before the Sales Tax Tribunal and to recover sales tax from purchasers, but neither the respondent No. 2, nor the respondent No. 3 informed the petitioner in this connection. The petitioner is seriously prejudiced on account of arbitrary action of the respondents Nos. 2 and 3. Consequently, I allow the writ petition, quash the order dated February 15, 1991, passed by respondent No. 3, asking the petitioner to deposit excess sales tax beyond sales tax exemptions and in case the petitioner fails to deposit the same, he shall be further liable to pay penalty. Anyhow, the petitioner will be liable to pay sales tax on the goods which it sold to other persons after the receipt of letter dated February 15, 1991, issued by respondent No. 3. Parties to bear their own costs. Writ petition allowed. . ;