G.S. Singhvi, J.
1. In this petition filed under Article 226 of the Constitution of India, the petitioner has prayed for quashing the decisions taken by Lower Level Screening Committee (for short, 'the LLSC') and the Higher Level Screening Committee (for short, 'the HLSC') in their meetings held on March 3, 1999 and June 29, 2000 respectively in the matter of withdrawal of eligibility certificate issued to the petitioner under Rule 28A(2)(i) of the Haryana General Sales Tax Rules, 1975 (for short, 'the Rules'). It has also prayed for issuance of a writ in the nature of mandamus to the Deputy Excise and Taxation Commissioner, Yamunanagar (respondent No. 3) to issue exemption certificate.
2. A perusal of the record shows that after obtaining necessary certificate from the District Town Planner, Ambala, and the General Manager, District Industries Centre, Yamuna nagar, and the Haryana State Board for the Prevention and Control of Water Pollution, the petitioner installed stone crusher at Village Dev Dhar in District Yamunanagar. Thereafter, it applied for grant of eligibility certificate under Rule 28A(5) of the Rules. The General Manager, District Industries Centre, Yamunanagar, referred the same to respondent No. 3 for comments. Vide memo dated May 11, 1993, respondent No. 3 expressed the view that benefit of tax exemption cannot be granted to the petitioner because stone crusher falls in the negative list. Notwithstanding this, the LLSC accepted the petitioner's application. Consequently, the General Manager, District Industries Centre, Yamunanagar, issued eligibility certificate dated July 10, 1993 entitling the petitioner to claim exemption from payment of sales tax of Rs. 22,10,144 for the period from February 16, 1993 to May 31, 1997. However, the application submitted by the petitioner under Rules 28A(6)(b) of the Rules for issuance of exemption certificate was rejected by respondent No. 3 vide order, annexure P13, mainly on the ground that stone crusher does not fall within the definition of eligible industrial unit. The relevant extract of that order is reproduced below :
'After examining the issue it was observed that as per condition 4 of Rule 28A(2)(f) a unit to be eligible industrial unit should not be included in Schedule III appended to the Rules. And as per entry four of the Schedule III the stone crusher has been included in the negative list. Meaning thereby the industry of stone crusher was not an eligible industrial unit for availing the benefit granted under Section 13B of the Act read with Rule 28A, Further the provision of Rule 28-A(6) under which an exemption certificate is granted, start with the words 'an eligible industrial unit'. From the above, it was clear that this unit was not an eligible industrial unit under the Rules and thus was not entitled to any exemption benefit. Accordingly a show cause notice was issued to the dealer for September 9, 1996. On September 9, 1996, i.e., today Shri A.K. Sachdeva, Advocate is present on behalf of the dealer. The case has been discussed at length with the learned counsel. The reply furnished by the dealer has also been considered but has not been found tenable in view of the legal propositions elaborated above. The point raised in para 1 of the written reply is not tenable in view of the provision contained in Rule 28A(6)(b) wherein it has been laid down that the exemption certificate shall be issued by the Deputy Excise and Taxation Commissioner after satisfying himself that the applicant-unit is holding a genuine and valid eligibility certificate which is not so in this case. Since the unit was not an eligible industrial unit from the very beginning, the decision of the honourable Punjab and Haryana High Court mentioned in this para of the reply is also not applicable to this case as the same is distinguishable on facts. In this decision, the honourable Court had observed that the Deputy Excise and Taxation Commissioner (Inspection) was not the competent authority to amend the conditions of exemption certificate issued by a competent authority, but in the instant case the Deputy Excise and Taxation Commissioner himself is a competent authority to decide the issuance of an exemption certificate under the Rule 28A(6). The point raised in para 2 of the reply has also been found not tenable in view of entry 4 of the Schedule III (negative list) attached to Rule 28A under which exemption is granted. The similar issue was also examined by the honourable HLSC in its 35th meeting held on September 18, 1996 in appeal case of Nirmal Honey Stone Crusher Enterprises and others. The plea of appellants that they were entitled to exemption/deferment of sales tax in view of the provision of Section 11 of the Haryana Regulation and Control of Crushers Act, 1991 was not found acceptable by the honourable Committee on the ground that the stone crushers were in the negative list under Rule 28A of Haryana General Sales Tax Rules, 1975 which has come into force on May 17, 1989 whereas the Haryana Regulation and Control of Crushers Act, 1991 has come into force on August 17, 1992. The benefit of exemption from payment of sales tax has been envisaged under Section 13B of the Haryana General Sales Tax Act, 1973, read with Rule 28A of the Haryana General Sales Tax Rules, 1975. In this rule it has been provided that the benefit of exemption from payment of sales tax shall not be given to an industry included in the negative list. The stone crusher industries had been included in the negative list right from May 17, 1989 onwards todate. For these reasons the honourable Committee decided to reject the appeal.'
3. In the appeal filed by the petitioner against the order, anneuxre P13, the Joint Excise and Taxation Commissioner (Appeals), Ambala, observed that respondent No. 3 could not have indirectly nullified the eligibility certificate. She too declined to entertain the petitioner's prayer for exemption on the ground that the stone crusher falls within the negative list. This is clearly borne out from the following extracts of the order, annexure P15, dated July 13, 1997 passed by her :
'So far as the order of the Deputy Excise and Taxation Commissioner is concerned, I fear that he enjoys any authority to undo the eligibility certificate granted by the LLSC. As a matter of fact, the Deputy Excise and Taxation Commissioner should have brought the matter to the notice of higher authorities or should have preferred an appeal before the HLSC against the order of the LLSC instead of taking action himself. The withdrawal of eligibility certificate is the exclusive prerogative of the appropriate screening committee as per Sub-rule (8)(a) of Rule 28A of the Haryana General Sales Tax Rules, 1975. The Deputy Excise and Taxation Commissioner cannot interfere with the eligibility certificate. The impugned order of the Deputy Excise and Taxation Commissioner is not sustainable, the same is, therefore, quashed. But since the unit is covered by the negative list,the benefit of exemption cannot be allowed to be given to the appellant-unit. The Deputy Excise and Taxation Commissioner is at liberty to take the matter to the appropriate authority for further necessary action. The appeal is decided accordingly.'
4. The Sales Tax Tribunal, Haryana (for short, 'the Tribunal'), before whom the petitioner had filed an appeal under Section 39(2) of the Haryana General Sales Tax Act, 1973 (for short, 'the 1973 Act') upheld the order passed by the Joint Excise and Taxation Commissioner (Appeals) by observing that the unit of the petitioner falls in the negative list and therefore, it was not entitled to get exemption under Rule 28A of the Rules. The operative part of the Tribunal's order reads as under :
'I have considered the submission. Section 39 nowhere lays down that the right to appeal only vests in the dealer. On the contrary, it states that the order passed in appeal shall be further appealable to the Tribunal. The contention of the appellant in this regard is not borne out from the perusal of Section 39. I, therefore, hold that appeal filed by State is maintainable.
On the second issue, it is not disputed that the unit was in the negative list and eligibility certificate cannot be granted to such units. However, if the eligibility certificate has been issued wrongly by LLSC, the proper forum for getting this order set aside is HLSC, as provided in Rule 28A. There was nothing wrong in the first appellate authority directing the Assessing Authority to move the proper forum for the desired relief. It has also been brought to my notice that the appeal was filed before HLSC and the same is pending disposal before it. The fact has been got confirmed. HLSC is, therefore, requested to dispose of the appeal as early as possible so that further tax liability of the dealer is determined. Copy of this order be sent to HLSC for necessary action. As a consequence of above discussion, both the appeals are dismissed and order of the Joint Excise and Taxation Commissioner (A) is upheld.'
5. In the meanwhile, LLSC issued notice to the petitioner to show cause proposing withdrawal of the eligibility certificate on the ground that the stone crusher falls in the negative list and in its meeting held on March 3, 1999, the LLSC decided to withdraw the eligibility certificate issued by the General Manager, District Industries Centre, Yamunanagar. The relevant portion of that decision is extracted below :
'The party was advised to appear before the committee. Mr. Walia appeared before the committee and explained that his counsel is away to Chandigarh for some appeal cases before Sales Tax Tribunal, Haryana, Chandigarh and therefore this hearing may kindly be put off to next meeting. Member Secretary brought in the notice of committee that the case of the unit was placed before the LLSC meeting on July 2, 1993 and an eligibility certificate was issued in favour of the unit vide GM, DIC Memo No. 5305 dated July 13, 1993. DETC filed an appeal against the decision of LLSC to HLSC. The case of the unit was referred to D.I., Haryana, vide GM DIG Memo No. 14533 dated April 23, 1998. As per D.I., Haryana, Memo No. 24131-A dated August 27, 1998 the item stone crusher falls in the negative list and as such unit is not eligible for sales tax exemption. DETC brought in the notice of committee that the similar cases of stone crushers have already been rejected by Higher Level Screening Committee. After detailed discussion the committee decided that the eligibility certificate issued in favour of the unit may be withdrawn.'
6. The HLSC dismissed the appeal filed by the petitioner against the decision of the LLSC by making the following observations :
'This committee has perused the record of both the appeals and have considered the arguments in both these appeals. Facts relevant to the main issue involved in these appeals are that Walia Stone Crusher commenced its commercial production on February 16, 1993. Rule 28A was the relevant rule at that time for the purpose of tax incentives. At the relevant times stone crusher was one of the industry which was not to be considered for tax incentives under the said rules as stone crusher were included in negative list, i.e., Schedule III appended to Rule 28A of the Rules ibid. It is also not disputed that the negative list issued by the industry department did not include stone crushers in it. The issue, therefore, is whether negative list as published by industry department or as contained in Schedule III of Rule 28A will apply. This issue has earlier come up for consideration of this committee in a number of cases. A consistent view taken by HLSC is that the negative list published by industry department is not operative under Rule 28A and list as contained in Schedule III appended to the said rule will be applicable. This question has also come up for consideration of honourable Punjab and Haryana High Court in C.W.P. No. 11682-85 of 1994 (Rao Stone Crushing v. State of Haryana [1997] 106 STC 471) and the honourable High Court was pleased to uphold the view taken by the HLSC.
There is no dispute that this industrial unit did not qualify for tax benefits under Rule 28A as it was not an eligible unit because as on the day of commercial production, stone crusher was in the negative list, i.e., Schedule III appended to Rule 28A of Rules ibid.
Now, the only question to which the committee should address is whether the eligibility certificate issued to an ineligible unit could be withdrawn without there being any contravention of the condition as prescribed in Sub-rule (8) of Rule 28A of Rules ibid. It has not been disputed that none of the conditions mentioned in the said sub-rule has been violated. However, the fact remains that the eligibility certificate (later on withdrawn by LLSC) was void ab initio is contrary to the explicit provisions of Rule 28A and could not be given effect.
The committee have also perused the provisions of the Haryana Regulation and Control of Crushers Act, 1991. Under the related provisions the benefit have been contemplated to the crusher industry only where the same is permissible under the law. The said Act does not contain any kind of tax incentives in its own provisions and speaks of the tax benefits as may be permissible under any law. This law is contained under Rule 28A which has been formulated under Section 13B of the Haryana General Sales Tax Act, 1973. Under the provisions of the related Haryana General Sales Tax Rules, tax incentives are not admissible to stone crushers as explained above. Therefore, the contention of the learned Advocate for the industrial unit regarding estoppel does not hold good. Estoppel cannot be enforced against law.'
7. The petitioner has challenged the decisions of the LLSC and HLSC mainly on the ground that the same are ultra vires to the provisions of the Haryana Regulation and Control of Crushers Act, 1991 (for short, 'the 1991 Act') and the notification dated April 28, 1992 issued by the Government of Haryana for grant of incentives to the industries.
8. On November 3, 2000, learned counsel for the petitioner, sought adjournment to inform the court as to whether the stone crusher set up by the petitioner falls in the crusher zone notified by the State Government in terms of Section 2(b) of the 1991 Act and as to on what date the stone crusher had been installed. However, instead of furnishing information on the two points, Shri K.L. Goyal filed an affidavit of Shri Charanjit Singh, son of Shri Kehar Singh Walia, one of the partners of the firm. In paragraphs 1 to 4 of the said affidavit, following averments have been made :
'1. That the firm Walia Stone Crushing Company has installed a stone crusher at village Dev Dhar in Tehsil Chhachhrauli in district Yamuna Nagar. The commencement of production started on July 25, 1992. The first machinery for the purpose of installing the stone crusher was purchased on April 12, 1992 vide Bill No. 245 of the same date issued by Bharat Mechanical Works, Lakhapur, district Faridabad. No machinery of any kind was purchased before that date.
2. That there was no crusher zone specified by the Government of Haryana before the enactment of the Haryana Regulation and Control of Crushers Act, 1991, assented by the President of India on July 31, 1992 and published in Haryana Gazette on August 17, 1992 and effective from the same date. After the enactment of the Act, the crusher zone was defined under Section 2(b) of the 1991 Act.
3. That Section 3 of the said 1991 Act provided that licence shall be given only to those owners of the crushers which are installed in crusher zone.
However, it was further provided that any owner who is running a crusher at the commencement of this Act (i.e., August 17, 1992), shall have to obtain a licence within a period of three months, if he is allowed to run the crusher at the site where it is installed.
4. That in pursuance of the said provision, an application was made by the deponent for allowing the firm to run the crusher at the old site. Vide letter dated January 22, 1993 addressed to the Director, Mines and Geology, Haryana, Chandigarh, by Haryana State Pollution Control Board, the crusher of the deponent, along with the others was also decided to be allowed at the old place is according to the decision taken by the Government at higher level, it was found that these firms are fulfilling parameters for granting any such permission. The licence was ultimately granted on February 1, 1993 vide annexure P4 annexed to the original writ petition. Copy of the letter dated January 22, 1993 is separately being furnished. Therefore, the deponent is running the said crusher, as defined in Section 3 of the 1991 Act.'
9. Shri K.L. Goyal submitted that in view of the notification dated April 28, 1992, the petitioner is entitled to get the benefit of sales tax exemption as of right and the LLSC and HLSC have committed serious illegality by withdrawing the eligibility certificate which constitutes the foundation of claim for tax exemption. Learned counsel referred to the contents of the said notification to show that only those stone crushers are not entitled to get the benefit of sales tax exemption which do not hold licence under the 1991 Act and submitted that the petitioner cannot be deprived of such benefit because it possesses the required licence. He then argued that the conditions prescribed under the Rules for grant of sales tax exemption cannot be applied to the petitioner's case because the eligibility certificate had been granted to it in view of the notification dated April 28, 1992 issued by the Industries Department. The last argument of Shri Goyal is that the eligibility certificate granted to the petitioner could not have been withdrawn at the instance of the Deputy Excise and Taxation Commissioner because he did not have the locus standi to question the decision of the LLSC.
10. We have considered the arguments/submissions of the learned counsel. For the purpose of deciding the issue relating to the petitioner's entitlement to get the benefit of sales tax exemption, it will be useful to notice the relevant provisions of 1991 Act, the notification dated April 28, 1992, the 1973 Act and the Rules. Sections 2(b) and (d), 3 and 11 of the 1991 Act, extract of paras 4 and 5 and annexure D of the notification dated April 28, 1992 annexure A. Section 13B of the 1973 Act and Rule 28A(2), (f), (j), (k), (l), (o) and (5)(a) of the Rules read as under :
'Section 2(b) of the 1991 Act--
In this Act, unless the context otherwise requires--..............(b) 'crusher zone' means a zone or area which the State Government may, by notification in the Official Gazette, declare or specify for location, installation or working of crushers ;.............(d) 'licence' means a licence granted by the director ;..............3. After the commencement of this Act, no person shall instal or run any crusher in any area within the State of Haryana unless he obtains a licence or gets his licence renewed from the Director under this Act on such terms and conditions as may be prescribed :
Provided that licence shall be given only to those owners of the crushers which are installed in the crusher zone :
Provided further that any owner who is running a crusher at the commencement of this Act, shall have to obtain a licence within a period of three months, if he is allowed to run the crusher at the site where it is installed, or within a period of six months, in case re-location of crusher in the crusher zone is required, after such commencement.
11. In case an owner on installation of crusher in the crusher zone obtains a licence under this Act, he shall be entitled to the following incentives :
(a) rebate of 5 per cent on payment of annual contract money in case of quarrying contract granted under Rule 30 of the Punjab Minor Mineral Concession Rules, 1964, subject to a maximum of Rs. 50,000 (rupees fifty thousand only), provided quarrying contract is obtained for feeding the crusher in the crusher zone :
(b) cash subsidy, exemption/deferment of sales tax and electricity duty as admissible to the industries under various incentive schemes of the Industries Department of the State Government...............'
Extract of notification dated April 28, 1992 :
'The Governor of Haryana is pleased to sanction the following incentives to the industries :..............4. Capital investment subsidy for balanced regional development :..............For the purpose of backward areas, the identified No Industry Blocks specified Industrial Estates and the Growth Centres shall be treated as State Backward Areas ;..............(ii) The industries falling in the negative list details given at annexure D shall not be eligible for any incentive that is Sales Tax Exemption/Deferment/Capital Investment Subsidy and Electricity Duty Exemption. The negative list shall be reviewed by the Department of Industries from time to time and the items included or excluded shall be eligible or debarred from the incentives from the date of the issue of the revised negative list................
5. Reconstitution of zones for grant of fiscal incentives,--
The State of Haryana has been divided into three zones for the purpose of fiscal incentives, i.e., grant of exemption/deferment of sales tax and payment of octroi as follows :
Zone A : comprising centrally and State identified backward areas. Centrally notified backward areas are districts of Mahendragarh, Bhiwani, Hissar, Jind (Except Rajound Block), Sinsa, Kaithal (only Kalayat Block) and Rewari (Except Nahar Block). The State identified backward areas include 68 No Industry Blocks (list given at annexure A) ten industrial estates (list given at annexure B) and two growth centres, Bawal, District Rewari and Julana, District Jind.
Zone B : Areas other than those mentioned in zone A and zone C.
Zone C : Faridabad and Ballabgarh Complex Administration area :.............Annexure D : Industries falling in the negative list..............4. Stone crusher not holding licence under Haryana Regulation and Control of Crushers Act, 1991.................ANNEXURE A
District wise list of development blocks where there are no large and medium industry.Sr. No. District No Industry Block.................9. Yamunanagar I Bilaspur II ChhachhrauliIII RadaurIV Sadhaura...............'
The provisions of the 1973 Act ;
'Section 13-B : The State Government may, if satisfied that it is necessary or expedient so to do in the interest of industrial development of the State, exempt such class of industries from the payment of tax, for such period and subject to such conditions as may be prescribed.
Rule 28A(2). For the purpose of this chapter unless the context otherwise requires,--............(f) 'eligible industrial unit' means,--
(i) a new industrial unit or expansion or diversification of the existing unit, which--
(I) has obtained certificate of registration under the Act ;
(II) is not a public sector undertaking where the Central Government held 51 per cent or more shares :
(III) is not availing incentive of interest free loan from the Industries Department for investment after the 1st day of April, 1988.
(IV) is not included in Schedule III appended to these rules.................(j) 'eligibility certificate' means a certificate granted in form S.T. 72 by the appropriate Screening Committee to an eligible industrial unit for the purpose of grant of exemption/deferment.
(k) 'exemption certificate' means a certificate granted in form S.T. 73 by the Deputy Excise and Taxation Commissioner of the district to the eligible industrial unit holding eligibility certificate which entitles the unit to avail of exemption from the payment of sales or purchase tax or both, as the case may be ;
(l) 'entitlement certificate' means a certificate granted in form S.T. 72 by the Deputy Excise and Taxation Commissioner of the district to the eligible industrial unit holding eligibility certificate which entitles it to get deferment of sales tax.............(o) 'Negative list' means a list of class of industries as specified in Schedule III appended to these rules ;...........(5)(a) Every eligible industrial unit which is desirous of availing benefit under this rule shall make an application in form S.T. 70 in triplicate along with attested copies of the documents mentioned therein to the General Manager, District Industries Centre, within 90 days of the date of its going into commercial production or the date of coming into force of this rule whichever is later. No application shall be entertained if not preferred within time. An application with incomplete or incorrect particulars including the documents required to be attached therewith shall be deemed as having not been made if the applicant fails to complete it on an opportunity afforded to him in this behalf.'
11. An analysis of the provisions quoted above shows that after the commencement of the 1991 Act, no person can instal or run a stone crusher within the State of Haryana except in accordance with the licence granted or renewed by the Director, Mines and Geology under Section 3 of the said Act. First proviso to Section 3 contemplates grant of licence only to those owners of the crushers which are installed in the crusher zone notified by the State Government. Second proviso to Section 3 requires the owner of the existing crusher to obtain a licence within a period of three months, if he is to run the crusher at the existing site or within six months if he wishes to re-locate the crusher in the crusher zone. Section 11 of the 1991 Act entitles the owner of a crusher in the crusher zone to get incentives including exemption/deferment of sales tax, etc., admissible to the industries under various incentive schemes of the Industries Department. Paragraph 4 of the notification dated April 28, 1992 declares that an industry not falling in the negative list detailed in annexure D is entitled to claim benefit of sales tax exemption/deferment. Entry 4 of annexure D refers to the stone crusher not holding licence under the 1991 Act. This necessarily means that a stone crusher holding licence under the 1991 Act is entitled to claim the benefit of sales tax exemption/deferment under the notification issued by the Industries Department.
12. Section 13B of the 1973 Act read with Rule 28A of the Rules entitles an eligible industrial unit to avail incentives in the form of exemption on the basis of appropriate certificate issued by the competent authority. The definition of the phrase eligible industrial unit contained in Rule 2(f) of the Rules excludes the industrial unit included in Schedule III appended to the Rules. Stone crusher is one of such industries. This means that so far as the provisions of the 1973 Act and the Rules are concerned, the owner of stone crusher is not entitled to get the benefit of sales tax exemption under Rule 28A of the Rules notwithstanding the fact that he may be holding a valid licence granted under the 1991 Act.
13. In the light of the above, it is to be determined whether the petitioner is entitled to get sales tax exemption under the notification dated April 28, 1992 and whether the decisions taken by the LLSC and HLSC on the issue of withdrawal of eligibility certificate are legally sustainable. A perusal of the averments made in the writ petition shows that the petitioner's claim for grant of sales tax exemption is based on the premise that its stone crusher does not fall within the ambit of entry 4 of appendix D annexed with the notification dated April 28, 1992. According to it, only those stone crushers are not entitled to get the benefit under the notification dated April 28, 1992 which do not hold valid licence granted under the 1991 Act and as it holds the requisite licence, the respondents cannot deny the benefit admissible under the said notification by relying upon entry 4 of Schedule III appended to the Rules.
14. In our opinion, the petitioner is not entitled to avail the benefit of sales tax exemption under the notification dated April 28, 1992 because its case is not covered by the provisions of the 1991 Act. Section 11 of the said Act under which the owner of the crusher can get various benefits including sales tax exemption postulates installation of stone crusher in the crusher zone as a condition precedent to the grant of incentives enumerated therein. In other words, the stone crushers falling outside the crusher zone are not eligible to get the benefit of incentive including sales tax exemption. It is not the petitioner's case that the crusher installed by it in village Dev Dhar, District Yamunanagar falls in the crusher zone notified by the State Government in terms of Section 2(b) or that after the commencement of the 1991 Act, which was notified on August 7, 1992, it had got the crusher re-located in the crusher zone. Therefore, its claim for grant of exemption in terms of the notification dated April 28, 1992 cannot be entertained.
15. The question which remains to be considered is whether the decisions taken by the LLSC and HLSC on the issue of cancellation of eligibility certificate granted to the petitioner in 1993 are vitiated by any error of law and call for interference by this Court under Article 226 of the Constitution of India. A perusal of annexures P20 and P23 which contain the impugned decisions shows that the LLSC decided to withdraw the eligibility certificate on the ground that the stone crusher falls in the negative list and is not eligible for sales tax exemption under the Rules. The HLSC confirmed the decision of the LLSC on the premise that the applications filed by similarly situated persons had been rejected and the same had been upheld by the High Court while dismissing C.W.P. Nos. 11682 to 11685 of 1994 [Rao Stone Crushing v. State of Haryana [1997] 106 STC 471 (P&H;)]. It further held that the stone crusher falls in the negative list and, therefore, the petitioner does not qualify for grant of eligibility certificate. In our opinion, the reasons assigned by the LLSC and HLSC are consistent with the provisions of the Rules to which reference has been made hereinabove and we do not find any valid ground to direct issuance of eligibility certificate to the petitioner de hors the provisions of the Rules.
No other point has been argued.
For the reasons mentioned above, the writ petition is dismissed.