# M/S Beltek India Ltd v. The Commissioner of Trade Tax U.P. at Lucknow

- **Citation:** (2019) 1 ILRA 1416
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-07-31
- **Bench:** Saumitra Dayal Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-beltek-india-ltd-v-the-commissioner-of-trade-tax-u-p-at-lucknow-44423
- **Pages:** 13

## Headnote

A. Section 4-A U.P. Trade Tax Act. Neither
the assessing authority nor the first
appellate authority can sit in judgment
over the Eligibility Certificate issued by the
Divisional
Level
Committee.
1 All. M/S Beltek India Ltd. Vs. The Commissioner of Trade Tax U.P. at Lucknow
1417
Assessing
authority
and
First
Appellate
Authority adjudicated upon the Eligibility
Certificate issued u/s 4A and altered the
entitlement of exemption. Tribunal confirmed
the same. Allowing the present revisions, the
High Court. Held:-The assessing authority is
legally bound to give full effect to the eligibility
certificate in assessment proceedings. In
absence of any statutory intent, it does not
appeal to reason and consequently it was
never open either to the assessing authority or
to the first appeal authority to either decline,
alter or modify the exemption granted to the
assessee.
 (Para
15)

B. Jurisdiction can neither be conferred
with the consent of the parties nor by a
superior Court.

The application filed by the assessee before
Divisional Level Committee after grant of
Eligibility Certificate was wholly non est. It did
not confer jurisdiction on the Divisional Level
Committee to review or to re-examine or
modify the entitlement to exemption, already
granted. (Para 17)

Precedent followed: -

## Text

1416 INDIAN LAW REPORTS ALLAHABAD SERIES

(iii) If crop is standing on the
acquired land or building/structure exists,
mere going on the spot by the concerned
authority will, by itself, be not sufficient
for taking possession. Ordinarily, in such
cases, the authority concerned will have
to give notice to the occupier of the
building/structure or the person who has
cultivated the land and take possession in
the presence of independent witnesses and
get their signatures on the panchnama. Of
course, refusal of the owner of the land or
building/structure may not lead to an
inference that the possession of the
acquired land has not been taken.

(iv) If the acquisition is of a
large tract of land, it may not be possible
for the acquiring/designated authority to
take physical possession of each and
every parcel of the land and it will be
sufficient that symbolic possession is
taken by preparing appropriate document
in the presence of independent witnesses
and getting their signatures on such
document.

(v)
If
beneficiary
of
the
acquisition is an agency/instrumentality
of the State and 80% of the total
compensation is deposited in terms of
Section 17(3-A) and substantial portion of
the acquired land has been utilised in
furtherance of the particular public
purpose, then the Court may reasonably
presume that possession of the acquired
land has been taken."

21. In Jagdish and others Vs.
State of U.P. and others, 2008(5) ADJ 5,
(a Division Bench judgment of this Court)
wherein one of us (Hon'ble Sudhir
Agarwal, J.) was a member, Court
referred to an authority letter of Special
Land
Acquisition
Officer
containing
endorsement of Executive Engineer taking
possession. It was held that possession
was taken by revenue authorities."

28. Accordingly, the present writ
petition succeeds and is allowed. The
Ceiling proceedings initiated against
petitioner, stood abated. Part of land of
petitioner declared as excess vacant land
would continue to belong to petitioner.
Respondents
are
restrained
from
interfering with possession of petitioner
over disputed land and from dispossessing
petitioner from disputed land. In the facts
and circumstances of the case, petitioner
is entitled to cost which we quantify at
Rs. 50,000/- payable by respondent nos. 1
and 2, within a period of one month from
today.
------
REVISIONAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 31.07.2019

BEFORE
THE HON'BLE SAUMITRA DAYAL SINGH, J.

TRADE TAX REVISION NO. 645 of 2004
AND
TRADE TAX REVISION NO. 646 of 2004

M/S Beltek India Ltd. ...Petitioner
Versus
The Commissioner of Trade Tax U.P. at
Lucknow ...Respondent

Counsel for the Petitioner:
Sri Praveen Kumar.

Counsel for the Respondent:
C.S.C.

A. Section 4-A U.P. Trade Tax Act. Neither
the assessing authority nor the first
appellate authority can sit in judgment
over the Eligibility Certificate issued by the
Divisional
Level
Committee.
1 All. M/S Beltek India Ltd. Vs. The Commissioner of Trade Tax U.P. at Lucknow
1417
Assessing
authority
and
First
Appellate
Authority adjudicated upon the Eligibility
Certificate issued u/s 4A and altered the
entitlement of exemption. Tribunal confirmed
the same. Allowing the present revisions, the
High Court. Held:-The assessing authority is
legally bound to give full effect to the eligibility
certificate in assessment proceedings. In
absence of any statutory intent, it does not
appeal to reason and consequently it was
never open either to the assessing authority or
to the first appeal authority to either decline,
alter or modify the exemption granted to the
assessee.
 (Para
15)

B. Jurisdiction can neither be conferred
with the consent of the parties nor by a
superior Court.

The application filed by the assessee before
Divisional Level Committee after grant of
Eligibility Certificate was wholly non est. It did
not confer jurisdiction on the Divisional Level
Committee to review or to re-examine or
modify the entitlement to exemption, already
granted. (Para 17)

Precedent followed: -

1. Jagmitter Sain Bhagat and others Vs.
Director, Health Services, Haryana and others,
(2013) 10 SCC 136 (Para 21)

2. United Commercial Bank Ltd. Vs. Workmen,
AIR 1951 SC 230 (Para 20)

3. M/s Gurunanak Surgical Pvt. Ltd., Meerut
and another Vs. Divisional Level Committee,
Sales Tax

4. M/s Newage Printing Ink Co., Meerapur,
Allahabad and another Vs. State of U.P. and
others 1995 UPTC 952 (Para 10, 19)

5. Vasudev Dhanji Modi Vs. Rajabhai Abdul
Rehman and others, (1970) 1 SCC 670 (Para
18)
6. Kiran Singh and others Vs. Chaman Paswan,
AIR 1954 SC 340 (Para 17)
7. Sarup Singh and another Vs. Union of India
and another, (2011) 11 SCC 198 (Para 11)
8. M/s Precise Laboratories Ltd. Vs. The
Divisional Level Committee and another, 1997
UPTC 635 (Para 10)

9. M/s Kumar Fuels, Pucca Bagh, Purana Ganj,
Rampur Vs. State of U.P. and another, 1986
UPTC 357 (Para 6, 8)
10. Precedent distinguished:Mentha Oil and
Allied Product Vs. State of U.P., (1996) 103
STC 316 (Para 5, 22, 23)

Revisions against order dated 14.01.
2004 by Trade Tax Tribunal, Ghaziabad
for AY 1999-2000

(Delivered by Hon'ble Saumitra Dayal
Singh J.)

1. The present revisions have been
filed by the assessee against the common
order
of
the
Trade
Tax
Tribunal,
Ghaziabad dated 14.01.2004 in Second
Appeal Nos. 64 of 2003 and 65 of 2003,
for A.Ys. 1999-2000 (UP and Central
respectively). By that order, the Tribunal
has confirmed the order passed by the
First Appellate Authority that had, in turn,
confirmed the assessment orders whereby
the claim of exemption made by the
assessee on strength of the Eligibility
Certificate dated 05.02.1998, issued under
section 4-A of the U.P. Trade Tax Act,
1948 (hereinafter referred to as the Act),
had been declined. Also, the finding of
rejection of books of account and best
judgment assessment have been affirmed.
By order dated 15.11.2018, the present
revision had been admitted on the
following questions of law:-

"(i) Whether the Trade Tax
Tribunal is legally justified in law in
ignoring the Eligibility Certificate issued
to Revisionist by competent Authority
1418 INDIAN LAW REPORTS ALLAHABAD SERIES
dated 5.2.1998, which provide rate of tax
payable in each Assessment years during
the period of exemption?

(ii) Whether the Trade Tax
Tribunal is legally justified in law in
confirming
the
orders
passed
by
Authorities below rejecting the books of
account
of
revisionist
without
any
incriminating material available to him?"

2. Heard Sri Praveen Kumar, learned
counsel for the applicant-assessee and Sri
B.K. Pandey, learned counsel for the
revenue.

3. During A.Y. 1999-2000, the
assessee manufactured black & white and
colour television sets. It set up a "new
unit" within the meaning of that term
under Section 4-A of the Act, at
Ghaziabad. It applied to the Divisional
Level Committee to grant exemption in
terms of twin exemption notifications nos.
780 and 781 (both issued by the State
Government on 31.3.1995) under Section
4-A of the Act, and section 8(5) of the
Central Sales Tax Act 1956, respectively.
Also admittedly, on 05.02.1998, the
Divisional
Level
Committee,
Noida
granted the Eligibility Certificate to the
assessee in relation to the aforesaid "new
unit" set up by it, for a period of eight
years from the date of its first sale, being
14.06.1996. According to Clause 10 of
the said certificate, the assessee was
granted full exemption from tax for the
first two years. For the third and fourth
years, it was granted exemption to the
extent of 75% of the tax liability. For the
fifth and the sixth years, it was granted
exemption up to 50% of the tax liability
and for the seventh and the eighth years, it
was granted exemption up to the extent of
25% of the tax liability.

4. It is a fact that the assessment
proceeding of the assessee for the A.Y.
1999-2000 (U.P. & Central) came to be
completed
much
thereafter,
on
20.02.2003. Therein, the assessee relied
on
the
Eligibility
Certificate
dated
05.02.1998, and thus claimed exemption
up to 75% of the tax liability, treating
A.Y. 1999-2000 to be the third/fourth
year of exemption. Perusal of the
assessment order further reveals, that the
Assessing
Authority,
though
acknowledged
the
entitlement
to
exemption claimed by the assessee under
the
Eligibility
Certificate
dated
05.02.1998,
however,
strangely,
he
treated A.Y. 1999-2000 to be the
fourth/fifth
year
of
exemption.
Accordingly, he only allowed exemption
from tax liability up to the extent of 50%.
The assessee being aggrieved, preferred
first appeals against the assessment
orders, being first appeal nos. 93 of 2002
and 94 of 2002. These came to be
dismissed by the order dated 16.01.2003
passed
by
the
Joint
Commissioner
(Appeal), Noida. The First Appellate
Authority made out a new case against the
assessee. He reasoned that the exemption
claimed by the assessee would fall under
Part-II of the exemption notifications nos.
780 and 781, both dated 31.03.1995.
Thus, according to the first appellate
authority, the assessee was a manufacturer
of electronic goods, and therefore, his
claim for exemption could arise only
under Part-II of those notifications and
not under Part I (as had been considered
by the Divisional Level Committee).
Consequently, the assessee was held
entitled to 100% exemption for the first
two years; to exemption up to 75% of tax
liability for the third year whereas for the
next four years being fourth to seventh
years, it would be entitled to exemption
1 All. M/S Beltek India Ltd. Vs. The Commissioner of Trade Tax U.P. at Lucknow
1419
only up to 50% of it's tax liability while
for the last year, it would be entitled to
exemption only upto 25% of its tax
liability. Another difference that would
arise on such reasoning would be, though
according
to
the
Divisional
Level
Committee, the assessee was entitled to
exemption up to the monetary limit
computed at 175% of the fixed capital
investment expended by it to set up the
"new unit", yet, according to the first
appeal authority, under Part-II of the
exemption notification, it would be
entitled to exemption from tax without
reference to any monetary limit.

5.

Thus,
the
entitlement
to
exemption was completely altered by the
first appellate authority. The assessee
being aggrieved, carried the matter in
appeal to the Tribunal, that has been
dismissed by the impugned order on the
reasoning - the entitlement to exemption
flows from the exemption notification and
not from the Eligibility Certificate. Since,
Part-II to the exemption notifications had
been added by the amendment made
thereto with effect from 16.11.1995,
notwithstanding a contrary recital of
rights
contained
in
the
Eligibility
Certificate,
the
assessee
being
a
manufacturer of electronic goods would
remain entitled to exemption under Part-II
of
Annexure
1
to
the
exemption
notifications. In that regard, the Tribunal
has relied on a decision of this Court in
Mentha Oil and Allied Product Vs. State
of U.P. (1996)103 STC 316. Thus, the
Tribunal
has
further
reasoned,
the
amendment made to the exemption
notification would automatically attach to
and have the effect of amending the
Eligibility Certificate granted by the
Divisional Level Committee.

6. As to the rejection of books of
account, the Tribunal has again affirmed
the finding of the first appellate authority.
Learned counsel for the assessee has first
relied on the Annexure No.1 Part-I
Clause-3 of the exemption notifications
and Clause 3(1) of Part-II of that
notification. He would submit while
issuing the exemption notifications, the
State Government had provided for
separate schemes for grant of exemption
to "new units" engaged in manufacture of
electronic goods and those engaged in
manufacture of other goods. However,
upon filing its application for grant of
exemption,
the
Divisional
Level
Committee
i.e. the only competent
authority granted exemption
to
the
assessee vide Eligibility Certificate dated
05.02.1998. There under, the exemption
was made available to the assessee under
Part-I Clause 3(1) of of Annexure 1 to the
exemption notification as a general "new
unit". Reliance has been placed on the
principle - once Eligibility Certificate had
been granted, it was not open for the
Assessing Authority to deny its benefit in
the
assessment
proceedings,
as
propounded by the Division Bench
decision of this Court in M/S. Kumar
Fuels,
Pucca
Bagh,
Puranaganj,
Rampur Vs. State of U.P. & Another,
1986 U.P.T.C. 357, followed by other
Division
Bench
in
M/S.
Paras
Furnishers, Deoband, Saharanpur Vs.
State of U.P. & Others 1987 (2) U.P.T.C.
1131; M/S Pan Tyres Vs. State of U.P. &
Others 1996 (1) U.P.T.C. 569 and Anil
Kumar Ramesh Chandra Glass Works,
Firozabad & Another Vs. State of U.P. &
Another, 2000 U.P.T.C. 383. Thus, it has
been submitted, the Assessing Officer as
also the first appeal authority could not sit
in
judgment
over
the
Eligibility
1420 INDIAN LAW REPORTS ALLAHABAD SERIES
Certificate, rather, they were bound to
fully comply with it.

7. In any case, it has been submitted,
the Assessing Authority did not disturb
the terms of the Eligibility Certificate, but
had only misapplied the same by treating
A.Y. 1999-2000 to be the fourth/fifth year
of exemption, whereas on a plain reading
of the Eligibility Certificate it was clear,
since exemption had been granted with
effect
from
A.Y.
1996-1997
(from
14.06.1996),
hence
A.Y.
1999-2000
would always remain the third/fourth year
of exemption.

8. In such circumstances, the First
Appellate Authority is claimed to have
acted wholly outside its jurisdiction in
culling out a completely new, nonexistent, objection. The jurisdiction of the
first
appellate
authority
being
coextensive with that of the Assessing
Authority and nothing more. In an appeal
against assessment order, it could not sit
in
judgment
over
the
Eligibility
Certificate granted by the Divisional
Level Committee. The principle of law
laid down in M/S. Kumar Fuels, Pucca
Bagh, Puranaganj, Rampur Vs. State of
U.P.& Another (supra) would bind the
first appellate authority as well.

9. Next, it has been submitted,
owing to the difficulties created by the
Assessing Authority and the Appellate
Authority, the assessee had been forced to
approach the Divisional Level Committee
to seek clarification with respect to the
exemption granted to it. The Divisional
Level Committee, by it's order dated
20.02.2003 made an observation that the
assessee was entitled to exemption in
terms of Part-II, Clause 3(1) of the
exemption notifications i.e. treating the
assessee
to
be
a
manufacturer
of
electronic goods. This order passed by the
Divisional Level Committee is claimed to
be wholly without jurisdiction and a
nullity, inasmuch as, neither the assessee
had any right to file any application
seeking such clarification or modification
nor the Divisional Level Committee had
any jurisdiction to modify the Eligibility
Certificate already granted by it.

10. The power, if any, would have
remained with the Commissioner [under
Section 4-A(3) of the Act], to cancel or to
amend the Eligibility Certificate already
granted, if that authority had formed a
view, that the assessee was entitled to
lesser exemption than that granted by the
Divisional Level Committee. However as
to its power, the another Division Bench
of this Court in M/S Gurunanak Surgical
Pvt. Ltd., Meerut & Another Vs.
Divisional Level Committee, Sales Tax,
Meerut,
1991
U.P.T.C.
620,
had
specifically held that the Divisional Level
Committee had no power to cancel the
Eligibility Certificate already granted.
That decision of the Division Bench has
been followed in M/S Newage Printing
Ink Company Meerapur, Allahabad &
Another Vs. State of U.P. & Others, 1995
U.P.T.C. 952, wherein a modification
made by the Divisional Level Committee
to reduce the period of exemption, from
five years (originally granted) to three
years was quashed following the ratio in
the case of M/S Gurunanak Surgical Pvt.
Ltd., Meerut &Another Vs. Divisional
Level Committee, Sales Tax, Meerut
(supra). Similar view has been taken by
yet another decision of this Court in M/S
Precise Laboratories Ltd. Vs. The
Divisional
Level
Committee
And
Another, 1997 U.P.T.C. 635. Thus, it has
been submitted the Divisional Level
1 All. M/S Beltek India Ltd. Vs. The Commissioner of Trade Tax U.P. at Lucknow
1421
Committee
had
no
jurisdiction
or
competence to modify its order dated
05.02.1998
/
Eligibility
Certificate,
granting exemption for a period of eight
years from 14.06.1996 in terms of Clause
3 of Part-I of Annexure No.1 to the
exemption notifications dated 31 March,
1995.

11. As to the legal consequence of
the above principle being applied, further
reliance has been placed on a decision of
the Supreme Court in Sarup Singh &
Another Vs. Union of India & Another
reported in 2011 (11) SCC 198, to submit
(consequentially), the order 20.02.2003
being without jurisdiction, would be a
nullity and such plea may be raised and
examined in the present proceedings as
well. Thus, it has been submitted, the fact
that an order had been passed by the
Divisional
Level
Committee
on
20.02.2003 and the same came to be
unsuccessfully challenged in a writ
petition which was dismissed, leaving it
open to the assessee to pursue his
remedies in the present revision, it would
have no impact and no legal consequence
may
flow
from
the
order
dated
20.02.2003.

12. Responding to the above,
learned Standing Counsel would submit,
it is too late in the day for the assessee to
turn around and claim entitlement to
exemption in terms of Clause 3, Part-I of
Annexure
1
to
the
exemption
notifications, as the assessee had itself
made the application to the Divisional
Level Committee seeking clarification, as
to its entitlement to exemption. Having
succumbed to the jurisdiction of the
Divisional Level Committee, the assessee
cannot escape the consequences of the
order dated 20.02.2003 passed on its own
application.
Further,
it
has
been
submitted, no remedy having been availed
by the assessee against that order,
inasmuch as the assessee did not file any
appeal before the Tribunal, it cannot resist
the direct legal consequences of the order
dated 20.02.2003, which has attained
finality.

13. Having heard learned counsel
for the parties and having perused the
record, under Section 4-A of the Act,
Annexure 1, Part-I Clause-3 of the
exemption notifications and Clause 3(1)
of Part-II of that notification read as
under:-
ANNEXURE-I

S.N
o.
Lo
cat
ion
of
Un
it
Y
ea
r
Tota
l
peri
od
of
exe
mpti
on/r
edu
ctio
n in
the
rate
of
tax
Exemption from or
reduction in the rate
of tax[denoted as
percentage of the
rate of tax payable
under the UP Act to
the
goods
concerned][Omitted
]
In
case
of
In Case
units
with
of other
a
fixed
units
capital
investment
exceeding 50
crores

Monetary
limit upto
which the
benefit of
exemption
from
or
reduction
in the rate
of
tax
under the
Act
together
with
the
benefit of
exemption
from
or
reduction
in the rate
of
tax
under the
Central
Sales
Tax
Act,
1956
is
admissible
1
2

3
4
5

A B
C

PART-I CLAUSE-3

 ANNEXURE-D
1422 INDIAN LAW REPORTS ALLAHABAD SERIES
3.
The
district
ofAgra
Taj
Trapezi
um
Area),
Aligarh
(excludi
ng Taj

T
rapeziu
m
Area),
Allahab
ad(exclu
ding the
area in
south of
rivers
Jamuna
and
conflue
nt
Ganga
but
includin
g
the
area
included
under
Municip
al
Corpora
tion,
Allahab
ad),
Bareilly,
Bhadohi
, Bijnor,
Firozab
ad
(excludi
ng
Taj
Trapezi
umArea
),
Ghaziab
ad
(excludi
ngthe
Greater
NOIDA
Industri
al

D
evelopm
ent
Area),

Eight
years
1st
year

2st
year

3st
year

4st
year

5st
year

6st
year

7st
year

8st
year
100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

75%

75%

50%

50%

25%

25%
75%
of
the fixed
capital
investme
nt or as
the case
may

 be, 175
percent
of
additiona
l
fixed
capital
investme
nt

in
case
of
small
 scale
units and
150% of
the fixed

capital
investme
nt
 or
150
percent
of
additiona
l fixed
capital
investme
nt

in
case
of
otherg
units.

G
orakhpu
r,
Haridwa
r,

K
anpur
(Nagar),

L
akhimp
ur-kheri,

L
ucknow,
Maharaj
ganj,
Meerut,
Mirzapu
r,

Muzaffa
rnagar,

S
aharanp
ur,
Sonbha
dra

a
nd
Varanas
i.
1 All. M/S Beltek India Ltd. Vs. The Commissioner of Trade Tax U.P. at Lucknow
1423

Clause 3(1) of Part-II
३.(१)
जिला
आगरा
(ताि
ट्रापेजिय
म
क्षेत्र
को
छोड़कर)
अलीगढ
(ताि
ट्रापेजिय
म
क्षेत्र
को
छोड़कर)
इलाहाबा
द
(जिसमेद
जक्षण का
क्षेत्र
शाजमल
नहीं
है
जकन्तु
इलाहाबा
द नगर
जनगम के
अंतगगत
आने
वाला क्षेत्र
शाजमल
है) बरेली,
भदोही,
जबिनौर,
जिरोज़ा
बाद,
(ताि
ट्रापेजिय
म
क्षेत्र
को
छोड़कर)
ग़ाजज़या
बाद(बृहत्त
र नोएडा
औद्योजग
क
जवकास
क्षेत्र को
छोड़कर)
गोरखपुर
, हररद्वार,
कानपूर
(नगर),
लखीमपु
र खीरी,
लखनऊ,
महरािगं
ि, मेरठ,
जमज़ागपुर,
मुज़फ्फर

आठ
वर्ग

पहला वर्ग
दूसरा वर्ग
तीसरा वर्ग
चौथा वर्ग
 पांचवा वर्ग
छठा वर्ग
सातवां वर्ग
आठवां वर्ग

१०० प्रजतशत
१०० प्रजतशत
७५ प्रजतशत
५० प्रजतशत
 ५० प्रजतशत
५० प्रजतशत
५० प्रजतशत
२५ प्रजतशत

कोई सीमा नहीं
नगर,
सहारनपु
र,
सोनभद्र
और
वाराणसी
के जिले
1424 INDIAN LAW REPORTS ALLAHABAD SERIES

14. Then a "new unit" could claim
exemption subject to the terms and
conditions of the Act read with the U.P.
Trade Tax Rules, 1948 (hereinafter
referred to as the Rules) and the
exemption notifications that came to be
issued by the State Government. The
plain scheme of the Act (as may be culled
out from Section 4-A(5) read with Rule
25 of the Rules) unequivocally provides,
for a claim of exemption to arise, the
application must be made by the "new
unit" in the prescribed form before the
appropriate committee constituted by the
State Government in terms of Rule 25.
Undisputedly, under Rule 25(2) of the
Rules that authority in the present case,
was the Divisional Level Committee.
Then, under section 4-A(2)(d) of the Act
read with clause 4(iv) of the exemption
notifications
dated
31.03.1995,
the
exemption from tax became available to
the assessee only upon his production of
the Eligibility Certificate before his
assessing authority and not before. The
exemption notification/s, by itself only
constituted the law whereunder any "new
unit" could claim exemption. However,
the right to exemption from tax arose only
upon issuance of the Eligibility Certificate
dated 05.02.1998 by the Divisional Level
Committee.

15. Further, upon production of that
Eligibility
Certificate
the
assessing
authority remained legally bound to give
full effect to it in the assessment
proceedings. He had no authority or
jurisdiction to make any adjudication
whether the assessee was or was not
entitled to claim exemption from tax. He
was similarly bereft of any jurisdiction to
enter judgement as to the extent of
exemption from tax granted to the
assessee. He was only to measure and
deliver to the assessee exemption from
tax, to the extent the assessee had been
held entitled to by the Divisional Level
Committee, vide order dated 05.02.1998.
Therefore, in absence of any other
statutory intent, it does not appeal to
reason and consequently it was never
open either to the assessing authority or
the first appeal authority to either decline
or alter or modify the exemption granted
to the assessee. Those authorities could
not have read a clause in the exemption
notifications differently, so as to over ride
the specific order passed by the competent
authority, when that order had itself been
passed after a conscious application of
mind to those notifications itself.

16. Then, against an order that may
be passed by the Divisional Level
Committee either granting or refusing to
grant exemption, a remedy had been
provided under Section 10(2) of the Act
by filing appeal before the Tribunal. Thus,
at the relevant time, the revenue had a
remedy of appeal against the grant of
Eligibility Certificate to the assessee on
05.02.1998. However, admittedly, that
order was never assailed in appeal by the
revenue. Other than that, in the case of the
assessee/applicant, if his application had
been rejected, an additional remedy under
Rule 25(3)(c) of the Rules would have
been available - to file a review
application before the same committee.
That situation never arose. Third, upon
amendment made to the Act, sub-section
(3) was introduced where under the
Commissioner was given the power to
cancel
or
amend
the
Eligibility
Certificate, if in his opinion, the facility of
exemption or reduction from the rate of
tax had been obtained upon any legal or
factual error or if the assessee was found
not entitled to facility of exemption or
1 All. M/S Beltek India Ltd. Vs. The Commissioner of Trade Tax U.P. at Lucknow
1425
was found to be entitled to that facility for
a lesser period from a different date.
Other than the above three contingencies,
neither the Act nor the Rules nor the
notifications,
would
allow
for
any
alteration or modification or cancellation
in the Eligibility Certificate, once granted.

17. Clearly, in the facts of the case,
since the original exemption application
filed by the assessee had been allowed
(and not rejected), by the Divisional Level
Committee, by its order dated 05.02.1998,
there never arose any remedy to the
assessee to apply for review in terms of
Rule 25(3)(c) of the Rules. Therefore, the
application that came to be filed by the
assessee
after
grant
of
Eligibility
Certificate was wholly non est. It did not
confer jurisdiction on the Divisional
Level Committee to review or to reexamine or modify the entitlement to
exemption, already granted. In the context
of lack of jurisdiction as to the subject
matter of proceedings, in Kiran Singh
And Others v. Chaman Paswan, AIR
1954 SC 340 the Supreme Court
reasoned "6. The answer to these
contentions must depend on what the
position in law is when a court entertains
a suit or an appeal over which it has no
jurisdiction, and what the effect of
Section 11 of the Suits Valuation Act is
on that position. It is a fundamental
principle well established that a decree
passed by a court without jurisdiction is a
nullity, and that its invalidity could be set
up whenever and wherever it is sought to
be enforced or relied upon, even at the
stage of execution and even in collateral
proceedings. A defect of jurisdiction,
whether it is pecuniary or territorial, or
whether it is in respect of the subjectmatter of the action, strikes at the very
authority of the court to pass any decree,
and such a defect cannot be cured even by
consent of parties".

18. Again, in Vasudev Dhanji
Modi v. Rajabhai Abdul Rehman And
Others, (1970) 1 SCC 670, the Supreme
Court held: "7.When a decree which is a
nullity, for instance, where it is passed
without bringing the legal representative
on the record of a person who was dead at
the date of the decree, or against a ruling
prince without a certificate, is sought to
be executed an objection in that behalf
may be raised in a proceeding for
execution. Again, when the decree is
made by a court which has no inherent
jurisdiction to make objection as to its
validity may be raised in an execution
proceeding if the objection appears on the
face of the record: where the objection as
to the jurisdiction of the Court to pass the
decree does not appear on the face of the
record and requires examination of the
questions raised and decided at the trial or
which could have been but have not been
raised, the executing Court will have no
jurisdiction to entertain an objection as to
the validity of the decree even on the
ground
of
absence
of
jurisdiction.
InJnanendra Mohan Bhaduriv.Rabindra
Nath Chakravarti[LR 60 IA 71] the
Judicial Committee held that where a
decree was passed upon an award made
under the provisions of the Indian
Arbitration Act, 1899, an objection in the
course of the execution proceeding that
the decree was made without jurisdiction,
since under the Indian Arbitration Act,
1899, there is no provision for making a
decree upon an award, was competent.
That was a case in which the decree was
on the face of the record without
jurisdiction".

19. Same position of law inheres in
the
ratio
of
the
Division
Bench
1426 INDIAN LAW REPORTS ALLAHABAD SERIES
pronouncements of this Court in the case
of M/S Gurunanak Surgical Pvt. Ltd.,
Meerut & Another Vs. Divisional Level
Committee, Sales Tax, Meerut (supra)
as specifically applied in the case M/S
Newage
Printing
Ink
Company
Meerapur, Allahabad & Another Vs.
State of U.P. & Others (supra). It that
case, the Divisional Level Committee had
reduced the period of exemption from five
years (under the Eligibility Certificate), to
three years by subsequent order of the
Divisional Level Committee. It was found
to have done so without any power to
cancel or modify the order granting
Eligibility Certificate. The same principle
would govern the present case and no
different conclusion may be drawn herein.

20. The consequence of the above
would be - the order passed by the
Divisional
Level
Committee
dated
20.2.2003 would remain a nullity, it being
an order passed in proceedings without
inherent jurisdiction. Hence, the fact that
the assessee did not directly challenge that
order or that order had been passed on the
application of the assessee cannot be cited
as a ground to contend that the assessee is
estopped from assailing that order as
without jurisdiction or authority. That
principle is also well entrenched in our
jurisprudence to doubt its applicability -
being once the order was found to be
without
jurisdiction
or
a
nullity,
acquiescence may never be found to
confer
jurisdiction.
In
United
Commercial Bank Ltd. v. Workmen,
AIR 1951 SC 230, the Supreme Court
held: "15. The final contention that the
sittings in the interval constituted only an
irregularity in the proceedings cannot
again be accepted because, in the first
place, an objection was raised about the
sitting of the two members as the
Tribunal. That objection, whether it was
raised by the appellants or the other party,
is immaterial. The objection having been
overruled, no question of acquiescence or
estoppel arises. Nor can consent give a
court jurisdiction if a condition which
goes to the root of the jurisdiction has not
been
performed
or
fulfilled.
No
acquiescence or consent can give a
jurisdiction
to
a
court
of
limited
jurisdiction which it does not possess. In
our opinion, the position here clearly is
that the responsibility to work and decide
being the joint responsibility of all the
three
members,
if
proceedings
are
conducted and discussions on several
general issues took place in the presence
of only two, followed by an award made
by three, the question goes to the root of
the jurisdiction of the Tribunal and is not
a matter of irregularity in the conduct of
those proceedings. The absence of a
condition
necessary
to
found
the
jurisdiction to make the award or give a
decision deprives the award or decision of
any conclusive effect. The distinction
clearly is between the jurisdiction to
decide matters and the ambit of the
matters to be heard by a Tribunal having
jurisdiction to deal with the same. In the
second case, the question of acquiescence
or irregularity may be considered and
overlooked. When however the question is
of the jurisdiction of the Tribunal to make
the award under the circumstances
summarized
above,
no
question
of
acquiescence or consent can affect the
decision."

21. Relying on the aforequoted
principal,
the
Supreme
Court
in
Jagmittar Sain Bhagat And Others v.
Director, Health Services, Harayana
And Others, (2013) 10 SCC 136, held: 9.
Indisputably,
it
is
a
settled
legal
1 All. M/S Beltek India Ltd. Vs. The Commissioner of Trade Tax U.P. at Lucknow
1427
proposition that conferment of jurisdiction
is a legislative function and it can neither
be conferred with the consent of the
parties nor by a superior court, and if the
court
passes
a
decree
having
no
jurisdiction over the matter, it would
amount to nullity as the matter goes to the
root of the cause. Such an issue can be
raised at any stage of the proceedings.
The finding of a court or tribunal becomes
irrelevant and unenforceable/inexecutable
once the forum is found to have no
jurisdiction. Similarly, if a court/tribunal
inherently lacks jurisdiction, acquiescence
of party equally should not be permitted
to perpetrate and perpetuate defeating of
the legislative animation. The court
cannot derive jurisdiction apart from the
statute. In such eventuality the doctrine of
waiver also does not apply. (VideUnited
Commercial Bank Ltd.v.Workmen[AIR
1951
SC
230]
,Nai
Bahuv.Lala
Ramnarayan[(1978) 1 SCC 58 : AIR 1978
SC 22] ,Natraj Studios (P) Ltd.v.Navrang
Studios[(1981) 1 SCC 523] andKondiba
Dagadu
Kadamv.Savitribai
Sopan
Gujar[(1999) 3 SCC 722]."

22. nsofar as the decision relied
upon by learned Standing Counsel in
Mentha Oil and Allied Product Vs. State
of U.P. (1996)103 STC 316 is concerned,
the same is wholly distinguishable. That
was a case where a recognition certificate
holder under section 4-B of the Act,
engaged in the manufacture of notified
goods, claimed exemption from tax on
purchase of raw materials under an earlier
notification
issued
by
the
State
Government
providing
for
such
exemption. The precise argument of the
petitioner in that case was, since its
recognition certificate under Section 4-B
of that Act had been renewed for the
period upto 1995-96, the subsequent
notification dated 21.05.1994 imposing
tax on purchase of raw materials (by
persons engaged in manufacture of
notified goods), would not apply to the
petitioner. That submission had been
rejected by the Division Bench on the
reasoning, the rate of tax on purchase of
raw materials would continue to be
governed by the notifications issued by
the State Government and the fact that the
petitioner
may
have
held
a
valid
recognition certificate, would only imply
that it would remain eligible to exemption
or concession from tax if such exemption
or concession were provided by the State
Government. Insofar as the subsequent
notification
dated
21.05.1994
had
imposed tax on the purchase of raw
materials, the exemption that was earlier
available under a pre-existing notification,
would cease to exist. To that extent and in
that context the claim of exemption was
held to be founded on the notification and
not the recognition certificate.

23. The above principle has no
application in the facts of the present case,
inasmuch as, here, the notification only
provided for the enabling law under which an
eligibility certificate may be obtained.
However, the actual exemption became
available to the assessee not by virtue of that
declaration of law but upon the claim made by
the assessee (in the shape of an application for
grant of exemption), being allowed by the
Division Level Committee, by its order dated
05.02.1998. Thus, the claims arising under
Sections 4-B and 4-A of the Act being based
in entirely different statutory schemes,
reliance placed by the Tribunal on the
decision of the Division Bench in Mentha Oil
(supra), is wholly erroneous.

24. The only power that may have
remained with the revenue would have been
1428 INDIAN LAW REPORTS ALLAHABAD SERIES
under
Section
4-A(3)
of
the
Act,
whereunder the Commissioner may have
modified the Eligibility Certificate issued
by the Divisional Level Committee vide its
order dated 05.02.1998. That power having
not been exercised, it was neither for the
assessing authority nor for the first appellate
authority to sit in judgement over the same
or to deprive the assessee of any part of the
exemption
already
granted
by
the
Divisional Level Committee. In that context
and regard, the assessing authority as also
the first appellate authority, were purely
executing authorities, that had to give full
effect to the Eligibility Certificate duly
granted by the competent authority namely
Divisional Level Committee. Consequently,
question of law no.1 is answered in the
negative i.e. completely in favour of the
assessee and against the revenue.

25. Insofar as the second question is
concerned, plainly, the books of account
had been rejected for varied reasons that
have been noted and considered by the
Tribunal as well. That being a question of
fact and findings recorded thereon being
based on material and evidence on record,
it does not call for any interference by this
Court in exercise of revisory jurisdiction.
The question of law no. 2 is answered in
the affirmative i.e. in favour of the
revenue and against the assessee.

26. Accordingly, both revision
applications are partly allowed.
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