JUDGMENT A. R. TIWARI, J. - The petitioner carries on the business of manufacturing and/or processing iron and steel cubes under the name and style of "M/S. Indian Steel Corporation" at Chatri Pool, Ratlam. This concern is registered as a dealer under the M.P. General Sales Tax Act, 1958, as also under the Central Sales Tax Act, 1956. The petitioner claims to have founded the aforesaid industrial unit on June 19, 1981 and commenced the production on October 10, 1981 as a new unit. It purchases certain goods from the market. Such goods are used in manufacturing process and are converted into cubes. The cubes are therefore, manufactured out of the iron scrap purchased by the petitioner. By notifications (annexures F-1 and F-2), certain exemptions from the payment of State sales tax and entry tax have been granted to the new industrial unit going into production after April 1, 1981. The procedure for grant of exemption certificate under the aforesaid notification has been prescribed vide letter dated January 12, 1984 (annexure G) issued by respondent No. 1. The aforesaid letter contains the instructions. The petitioner claimed that it has complied with the said instructions and earned the eligibility for obtaining the certificate in that behalf. The petitioner submitted an application on October 3, 1983, annexure H, in the prescribed form to respondent No. 3, an officer authorised by respondent No. 2, to grant necessary eligibility certificates for exemption from payment of taxes. A similar application seeking exemption from entry tax was also filed on October 5, 1983 (annexure I-2) to the same authority. The details were asked furnished vide annexures J and J-1. It is contended that the District Level Committee recommended the grant of necessary eligibility certificate to the petitioner. However, respondent No. 3 conveyed to the concern of the petitioner on August 7, 1984 (annexure K) that the concern, on the basis of the decision taken by the State Level Committee of the petitioner was not found eligible for grant of eligibility certificate. 2. Aggrieved by this communication, the petitioner presented this writ petition and has sought quashment of annexure K and declaration of the entitlement to the benefits of the notification, annexures F-1 and F-2 as noted above. 3. This Court directed on September 18, 1984 that proceedings for assessment shall not be taken. This order was confirmed on June 19, 1985. 4. Aggrieved by this communication, the petitioner presented this writ petition and has sought quashment of annexure K and declaration of the entitlement to the benefits of the notification, annexures F-1 and F-2 as noted above. 3. This Court directed on September 18, 1984 that proceedings for assessment shall not be taken. This order was confirmed on June 19, 1985. 4. The respondents have submitted the return controverting the assertion and justifying the rejection of the application submitted by the petitioner. 5. The learned counsel for the petitioner submitted that the order (annexure K) is liable to be quashed with appropriate directions on the undernoted grounds : (a) The application was required to be disposed of by the District Level Committee and in case an case an adverse order was passed, the petitioner had further right to approach the State Level Committee. The order is, therefore, in flagrant violation of the scheme of law. (b) The order is violative of the principles of natural justice in that no opportunity of hearing was afforded and further in that the order does not contain any reason as to why, despite compliance of all the instructions the application came to be rejected. (c) The order does not disclose as to on what basis the State Level Committee chose to reject the prayer. 6. It is noticed from para 11 of the petition that the District Level Committee had favoured grant of eligibility certificate to the petitioner. In para 11 of the return of respondents Nos. 1, 4 and 5, it is admitted that the District Level Committee had favoured the grant of the requisite certificate. However, it is sought to be avoided by the averment that the District Level Committee opined that way on an erroneous construction of the process of unit. 7. It is admitted before me that the aforesaid view of the District Level Committee was reversed by the State Level Committee without giving any opportunity of hearing to the petitioner. It is also undisputed that the order impugned in this petition is bereft of reasons. 8. In S. L. Kapoor v. Jagmohan AIR 1981 SC 136 , it is laid down as under : "The requirements of natural justice are met only if opportunity to represent is given in view of proposed action. It is also undisputed that the order impugned in this petition is bereft of reasons. 8. In S. L. Kapoor v. Jagmohan AIR 1981 SC 136 , it is laid down as under : "The requirements of natural justice are met only if opportunity to represent is given in view of proposed action. The demands of natural justice are not met even if the very person proceeded against has furnished the information on which the action is based, if it is furnished in a casual way or for some other purpose. The person proceeded against must know that he is being required to meet the allegations which might lead to a certain action being taken against him." 9. It cannot be gainsaid that grant or refusal of such certificate is a very material question and deserves to be answered in fair manner. In S. N. Mukherjee v. Union of India AIR 1990 SC 1984 , it is further laid down as under : "The recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and assures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. Therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review." 10. In the instant case, the grievance of the petitioner is found to be of substance on the additional ground that a favourable order passed by the District Level Committee was upset by the State Level Committee without disclosure of any reason and without any hearing in this behalf. 11. In the ultimate analysis of the factual and legal position, I am satisfied that the order (annexure K) is not sustainable in law. It is accordingly set aside. The respondent No. 3 is thus, directed to treat the application seeking grant of eligibility certificate for exemption from payment of taxes, of the petitioner alive and forward the same to the District Level Committee for consideration within a period of two months from today. It is accordingly set aside. The respondent No. 3 is thus, directed to treat the application seeking grant of eligibility certificate for exemption from payment of taxes, of the petitioner alive and forward the same to the District Level Committee for consideration within a period of two months from today. It is further directed that the District Level Committee, on receipt of the application from respondent No. 3, shall decide the same after hearing the petitioner within a period of three months thereafter. The question of assessment, if necessary, shall be taken up only after disposal of the aforesaid application. The District Level Committee shall thus, pass appropriate orders in conformity with law under intimation to the petitioner. 12. The petition is, thus, allowed in terms as indicated above, but without any order as to costs. The amount of security deposit shall be returned to the petitioner after due verification. Petition allowed.