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2016 DIGILAW 1557 (GUJ)

Shree Shiv Shakti Oil Mill v. State of Gujarat

2016-07-29

A.J.SHASTRI, AKIL ABDUL HAMID KURESHI

body2016
JUDGMENT : Akil Abdul Hamid Kureshi, J. 1. In this group of cases, similar questions are involved. Tax Appeal No. 444 of 2015 being a lead matter, we may refer to facts arising in this case. 2. Brief facts are as under. 3. The appellant Shree Shiv Shakti Oil Mill is a proprietary concern and is engaged in the business of manufacture and sale of oil. The appellant is registered dealer under the Gujarat Value Added Tax Act, 20 06, ('the VAT Act' for short). Previously, the assessee was registered under the Gujarat Sales Tax Act ('the Sales Tax Act' for short). 4. The appellant had got itself registered as a certified manufacturer of oil with the Gujarat Khadi Gramodhyog Board ('the Board' for short). The Board issued a certificate of eligibility to the appellant, covering period between 17.06.2005 to 16.06.2008. Based on such eligibility certificate issued by the Board, the appellant was also granted certificate of exemption by the Assistant Commissioner of Sales Tax in prescribed format as per Entry 74 of Schedule 1 of the Sales Tax Act. The appellant was simultaneously issued certificate in the prescribed form under Entry 95 of the exemption notification issued by the Government under section 49(2) of the Sales Tax Act. This would mean that the appellant was entitled to make purchases of the raw material without payment of sales tax. 5. The VAT Act was activated with effect from 01.04.2006 and with that, the State Government rescinded all exemption notifications issued under the Sales Tax Act. On 18.08.2006, the State Government issued a fresh exemption notification under the VAT Act concerning certain specified industries which did not include the industry in which the appellant was engaged. 6. The appellant and large number of other dealers therefore approached the Gujarat High Court challenging the action of the Government in withdrawing the exemption in their cases. Division Bench of this Court by judgment in case of Kishorkumar Prabhudas Tanna and another v. State of Gujarat and others reported in, [2009] 23 VST 298 (Guj) held that the withdrawal of exemption from the eligible industries during the period when the eligibility certificate granted by the Khadi Board or the Khadi Commission, as the case may be, was in operation, would not be permissible. The Court was of the opinion that until the period of exemption which was already granted on the basis of such eligibility certificate; in the said case for the period between 01.12.2015 to 30.11.2008 was over, exemption could not have been withdrawn merely because the Sales Tax Act was substituted by the VAT Act. Having said that, the Court did not accept the principal challenge of the petitioners to the withdrawal of the exemptions by the Government. The prayer for a direction to extend such exemption was rejected. The Court concluded as under: "201. Therefore, in light of the discussion made hereinabove, the present petitions are hereby allowed partly. Prayer in terms of para 7(c) in Special Civil Application No. 23720 of 2006 is granted. The impugned Notifications dated 31.3.2006, by which the earlier Notifications dated 29th April, 1970 & 1st April, 1992 have been rescinded, are hereby quashed and set aside in all these petitions and the original certificate at Annexure-G granting exemption for the period from 1.12.2005 to 30.11.2008 would remain in force till it expires. 202. However, the rest of the prayers regarding issuance of Writ of Mandamus or writ in the nature of mandamus directing the respondents to grant exemption or to make available to the petitioners the exemption under the newly substituted VAT Act, and also seeking prayer to grant exemption to the industries of the petitioners under the provisions of the VAT Act from the date of coming into force of the VAT Act, cannot be granted, nor any such prayer with regard to extension of benefit granted under Entry 95 or Entry 74 of the Schedule of the Sales Tax Act to be made applicable to the VAT Act could be granted. 203. However, as the issue regarding grant of benefit of exemption under the newly substituted VAT Act would be either a legislative function by issuance of notification in exercise of power conferred under the statute, or it would be a matter of policy to be decided by the respondent Government as to how the benefit of exemption should be extended, for which, while substituting the VAT Act, the entries have been deleted and some of the entries are specified, it may not be proper for this court to issue directions granting the reliefs as prayed for regarding the exemption under the newly substituted VAT Act. However, it will be open for the petitioners to apply to the respondent Government by making a representation highlighting the fact that the industries are established under the KVIC Act and also the new scheme also has the same object of development and therefore the core idea remains the same for which the benefit of exemption granted earlier should also continue and it will be for the respondent Government to decide it afresh in accordance with law." 7. On 27.02.2009, the State Government issued a notification authorizing the Commissioner to grant refund to certified manufacturer of tax charged by a registered dealer from whom he has purchased the goods subject to certain conditions. Since this notification is at the center of entire controversy, it would be necessary to reproduce entire document. "No. (GHN-8)VAT-2009/S. 40(1)(5)-TH:-WHEREASAS the government of Gujarat considers it necessary so to do in the public interest; NOW, THEREFORE, In exercise of the powers conferred by sub-Section (1) of section 40 of the Gujarat Value Added Tax Act, 2003 (Guj. 1 of 2005) and in supersession of the Government Notification, Finance Department No. (GHN-93) VAT - 2006/S.40(1)(2)-TH:, dated the 18th August 2006, the Government of Gujarat hereby authorized the Commissioner to grant refund to the certified manufacturer of amount of tax separately charged by a registered dealer from whom he has purchased the goods, subject to the following conditions, namely:- 1. Eligibility. A registered dealer who is a manufacturer of specified goods and who has obtained the Eligibility Certificate prior to the 1st April, 2006 from the Khadi and Village Industries Commission or Gujarat Rajya Khadi and Gramodhyog Board (hereinafter referred to as the appropriate authority) and the Exemption Certificate from the Commissioner under the provisions of earlier law. 2. Procedure (1) The eligible dealer referred to in condition 1 shall apply in form KVIC-1 appended to this notification to the Commissioner within thirty days from the date of issue of this notification. (2) On receipt of such application, the Commissioner may, subject to the provisions of this notification issue a certificate of entitlement in Form KVIC-2 appended to this notification, for the period and on the terms and conditions mentioned in the eligibility certificate granted by the appropriate authority. 3. (2) On receipt of such application, the Commissioner may, subject to the provisions of this notification issue a certificate of entitlement in Form KVIC-2 appended to this notification, for the period and on the terms and conditions mentioned in the eligibility certificate granted by the appropriate authority. 3. General conditions (1) The eligible dealer entitled to refund under section 40 shall make an application in Form 306 to the Commercial Tax Officer to whom he has furnished such returns. (2) Subject to the provisions of section 11, the certified manufacturer Shall be entitled to refund of tax on purchases of taxable goods other than the capital goods. (3) The refund shall be granted with effect from 1st April, 2006 for the period- (a) Specified in eligibility certificate issued by the appropriate authority or (b) till the manufacturer of goods does not exceed the quantity approved by the appropriate authority as specified in the eligibility certificate Whichever event occurs earlier. (4) The refund of tax shall be granted only for the purchases used in manufacture of specified goods sold within the time limit mentioned in condition 3(3). (5) The tax credit shall not be admissible for the purchases for which refund of tax is granted. (6) The Certified manufacturer shall furnish the detail of tax invoices of the purchases for claiming the refund of tax alongwith the application. (7) The certified manufacturer shall use the goods so purchased for which refund of tax is claimed, in his manufacturing unit situated in the State as raw materials for the manufacture of specified goods or as packing materials in the packing of goods so manufactured. (8) If the certified manufacturer contravenes any of the conditions of this notification or any of provisions of the Act or the rules made in this behalf, the certificate issued to him by the Commissioner shall be liable to be cancelled and on such cancellation, the benefit granted under this notification shall cease to have effect from the date of such contravention. (9) He certified manufacturer shall make an application for refund of tax to the concerned Commercial Tax Officer and such Officer shall, as far as possible, grant refund within one month after the receipt of the application for refund. Explanation (1) The expression certified manufacturer means the dealer who has been granted a certificate of entitlement by the Commissioner, issued under this notification. Explanation (1) The expression certified manufacturer means the dealer who has been granted a certificate of entitlement by the Commissioner, issued under this notification. (2) The expression 'specified goods' means the products of 'village industries' of 'khadi' as defined under the khadi and Village industries Commission Act, 1956 and for which the eligibility certificate has been granted by the appropriate authority." 8. Similar notification was issued also on 27.02.2009 giving remission on sale of specified goods by the dealers. It would not be necessary to separately refer to this notification while interpreting the said earlier mentioned exemption notification dated 27.02.2009. 9. The appellant, as noted earlier, was granted eligibility certificate by the Board for the period between 17.06.2005 to 16.06.2008. The appellant was also granted certificate of exemption by the Assistant Commissioner of Sales Tax at the relevant time. In terms of the notification dated 27.02.2009, the assessee applied for certificate of entitlement which was granted by the Commercial Tax Officer on 08.01.2010 for the said period between 17.06.2005 to 16.06.2008. The Board extended the eligibility of the appellant from 17.06.2008 to 16.06.2011. On the basis of such renewal of eligibility, the Commercial Tax Department also granted extension of certificate of entitlement upto 16.06.2011 by amending the original certificate dated 08.01.2010. Yet again the Board extended the eligibility of the assessee from 17.06.2011 to 16.06.2014 and the Commercial Tax Department also extended the certificate of entitlement upto 16.06.2014. 10. On 27.12.2013, the Assistant Commissioner of Commercial Tax issued a show cause notice to the appellant, in which, he pointed out that as per Government Resolution dated 07.03.2009, exemption would be available only to those units who have been granted eligibility certificate by the Board and the entitlement certificate by the department prior to 01.04.2006. Accordingly, the entitlement of the appellant for exemption would be effective only between 17.06.2005 to 16.06.2008 and such exemption would not be extended merely because the appellant had been granted renewal of registration by the Board. The entitlement certificate granted to the appellant for the period after 17.06.2008 was therefore required to be canceled. The appellant was called upon to show cause why action should not be taken accordingly. 11. The appellant replied to the show cause notice under letter dated 04.01.2013 and raised two main contentions. The entitlement certificate granted to the appellant for the period after 17.06.2008 was therefore required to be canceled. The appellant was called upon to show cause why action should not be taken accordingly. 11. The appellant replied to the show cause notice under letter dated 04.01.2013 and raised two main contentions. First contention of the appellant was that as per the plain terms of the exemption notification, the case of the appellant was covered. According to the appellant, extension of registration by the Board would be sufficient for the appellant to claim benefit of exemption. The second contention of the appellant was that in any case, the VAT department had granted such benefits by issuing entitlement certificates and the same cannot be withdrawn with retrospective effect. 12. The Commissioner of Commercial tax however by the order dated 12.02.2014, withdrew the benefits of exemption in case of the appellant after 17.06.2008. He was of the opinion that the Government scheme for exemption would be available only till the validity of the registration certificate issued by the Board prior to 01.04.2006. Any renewal or extension thereafter would not entitle the dealer to a continued benefit of exemption. 13. Aggrieved by the order of the Assistant Commissioner, the appellant first approached the Appellate Commissioner and thereafter the VAT Tribunal. The Tribunal by the impugned judgment, dismissed the appeal holding that by virtue of the judgment of this Court in case of Kishore Prabhudas (supra), the appellant cannot claim benefit of exemption after 17.06.2008. Any extension of registration would not permit the appellant to claim such benefit. 14. In background of such facts, the Court while admitting the Tax Appeal, framed following questions of law. "(1) Whether the Gujarat Valued Added Tax Tribunal was justified in holding that the renewal of certificate of entitlement by the Commercial Tax Officer was contrary to the notification and order dated 27th February, 2009 issued by the State Government under the Value Added Tax Act, 2003? (2) Whether the Gujarat Value Added Tax Tribunal was justified in confirming the cancellation of certificate of entitlement granted to the appellant under the Value Added Tax Act, 2003 with retrospective effect from 17th June, 2008? (3) Whether the certificate of entitlement granted under the Value Added Tax Act, 2003 could have been cancelled in exercise of powers under the notification issued under the Gujarat Sales Tax Act, 1969?" 15. (3) Whether the certificate of entitlement granted under the Value Added Tax Act, 2003 could have been cancelled in exercise of powers under the notification issued under the Gujarat Sales Tax Act, 1969?" 15. Writ petitions arise in substantially similar background. Only difference being that the petitioners therein had approached the Value Added Tax Tribunal by filing revision petitions which came to be dismissed. Against such judgments, they have therefore filed writ petitions. 29.07.2016 16. In background of such facts, learned counsel for the appellant submitted that the notification dated 27.02.2009 was sufficiently clear and in plain terms, extended the benefit of exemption to all Khadi and village industries concerning the specified goods who had obtained the eligibility certificate prior to 01.04.2006 from the Khadi and Village Industries Commission or Gujarat Rajya Khadi and Gramodhyog Board, as the case may be. This notification nowhere provided that such exemption would continue only upto the initial period of the eligibility certificate. In other words, as long as such eligibility certificate was extended, automatically as per the said notification, the exemption would continue. Drawing our attention to the judgment of this Court in case of Kishorkumar Prabhudas Tanna (supra), the learned counsel contended that the judgment did limit the power of the Government to grant such exemption. This was so held by the Division Bench in judgment dated 29.04.2011 in Special Civil Application No. 1863 of 2011 in case of Janseva Khadi Gramodhyog Sangh v. State of Gujarat & Ors. Counsel submitted that the authorities therefore committed a serious error in withdrawing the exemptions already granted to the assessees. 17. Counsel further submitted that in any case, the eligibility certificate which was already granted by the department on the basis of its understanding of the said notification could not have been withdrawn with retrospective effect. The departmental authorities did not possess any such powers. Even otherwise such retrospective portion of the order would cause immense prejudice to the assessees since the Value Added Tax being an indirect tax, if the same was payable, would have been passed on to the consumers. 18. Counsel relied on following judgments to contend that the benefits already granted could not have been withdrawn with retrospective effect. In case of Birla Jute And Industries Ltd. v. State of M.P. And Another, reported in, 119 STC 14 (SC), in which, it was observed as under: "7. 18. Counsel relied on following judgments to contend that the benefits already granted could not have been withdrawn with retrospective effect. In case of Birla Jute And Industries Ltd. v. State of M.P. And Another, reported in, 119 STC 14 (SC), in which, it was observed as under: "7. Learned counsel for the State submitted that it became necessary to review the said certificate because it had been subsequently got amended at a subordinate level to include gunny bags. There is no warrant for the submission. As the High Court noted, the said certificate specified gunny bags from the very beginning. In any event, the case now sought to be made out would have been a case of fraud which would have been specified in the notice to review. As we have seen, the notice for review did not so state. It did not even mention which items in the said certificate were sought to be excluded on the ground that they had been "specified in addition to raw materials". 8. There was, in our view, no justification for reviewing the said certificate long after the term thereof had expired and, therefore, long after its benefit had been availed by the appellant or at all. The view taken by the High Court in the judgment to which we have referred to is correct, and is borne out by the decision of this Court aforementioned." In case of Ikon Orogchem v. Sales Tax Officer (1) & 5 State of M.P. And Another, passed in Special Civil Application No. 7168 of 2004, in which, it was observed as under: "11. The facts of the present case, wherein the eligibility certificate is sought to be amended without any justification, that too, long after its benefit had been availed by the petitioner would be squarely covered by the aforesaid decision. Under the circumstances, the impugned amendment certificate dated 9th October, 2001 as well as the order dated 15th April, 2004 cannot be sustained." In case of Sheth and Co. Textile Pvt. Ltd. v. State of Gujarat, passed in Special Civil Application No. 3510 of 1990, in which, it was observed as under: "6. Having heard the learned counsel for the parties, we find that it is not the case of the respondents that there was any misrepresentation on the part of the petitioner. Textile Pvt. Ltd. v. State of Gujarat, passed in Special Civil Application No. 3510 of 1990, in which, it was observed as under: "6. Having heard the learned counsel for the parties, we find that it is not the case of the respondents that there was any misrepresentation on the part of the petitioner. It was the decision of the authorities in 1983 to classify the petitioner's industry as falling in "C" grade growth centre and to grant the petitioner sales-tax incentives on that basis. The petitioner acted upon the same and did not collect sales-tax from its customers to the extent of the exemption limit indicated in the exemption certificate which was issued on 23.6.1983 and even exhausted the exemption limit by 31.10.1986 and thereafter started collecting sales-tax from its customers and paid the same over to the State Government. By amending those eligibility/exemption certificates in the year 1990, what the respondents have done is to purport to give retrospective effect to those amendments and take away the benefits which were already vested in the petitioner. The respondents could not have done so without inviting the charge of arbitrariness and unfairness violative of the petitioner's fundamental right under Article 14 of the Constitution. The petitioner is, therefore, entitled to succeed." 19. On the other hand, learned AGP Mr. Tirthraj Pandya opposed the appeal and the petitions contending that this Court in case of Kishorkumar Prabhudas Tanna (supra) had already turned down the challenge of the assessees against the withdrawal of the exemption. The Court in case of Janseva Khadi Gramodhyog Sangh (supra), nowhere held that the notification dated 27.02.2009 granted exemption to all existing industries for all times to come till the eligibility certificates were valid. Plain language of the exemption notification would not permit such an interpretation. Being an exemption notification, conditions thereof must be strictly applied. 20. The core of the issue is the true interpretation of the terms of the said exemption notification dated 27.02.2009. Before undertaking such exercise, a few peripheral issues need to be sorted out. We have noticed that this Court in case of Kishorkumar Prabhudas Tanna (supra) was dealing with a situation where the exemption was being withdrawn. The Court considered the issue in two parts. Before undertaking such exercise, a few peripheral issues need to be sorted out. We have noticed that this Court in case of Kishorkumar Prabhudas Tanna (supra) was dealing with a situation where the exemption was being withdrawn. The Court considered the issue in two parts. Insofar as the effect of such withdrawal of the exemption affected those industries who were by then already granted eligibility certificates, the Court was of the opinion that the withdrawal of the exemption would not affect such industries till the time the eligibility certificates were valid. However, with respect to the petitioner's main challenge to the withdrawal of the exemption is concerned, the Court rejected the challenge. It was held that writ of mandamus cannot be issued. The issue of granting exemption under the newly enacted VAT Act would be a legislative function of a policy matter to be decided by the Government as to how said benefit should be extended. 21. This judgment therefore, while refusing to issue mandamus to the Government to grant exemption, did not, as obviously it would not, limit the powers of the Government to grant any such exemption if it was otherwise found necessary or expedient. This is precisely what was observed by the Division Bench in case of Janseva Khadi Gramodhyog Sangh (supra) as under: "12.1 This, however, does not mean that the petitioner was precluded from applying for fresh exemption as per the Government policy. When the Government itself came up with exemption Circular dated 7.3.2009, the petitioner was eligible to apply for exemption and entitled to be considered in terms of such circular. The Division Bench in the case of Kishorkumar Prabhudas Tanna & Anr. [Supra] never envisaged that there shall be no further exemptions from the payment of Value Added Tax, even if the Government desired to do so. All that the Court did was to prevent the Government from withdrawing the tax exemptions already granted under the Sales Tax Act, till the validity of the period of such exemption certificates. The Court limited the relief to this extent, declining thereafter, to issue mandamus to the Government to issue fresh exemptions under the Gujarat Value Added Tax Act. This, by no means, was to limit the Government's discretion of granting fresh exemptions on such conditions, as found necessary. The Court limited the relief to this extent, declining thereafter, to issue mandamus to the Government to issue fresh exemptions under the Gujarat Value Added Tax Act. This, by no means, was to limit the Government's discretion of granting fresh exemptions on such conditions, as found necessary. In fact, the Government itself came up with a fresh set of Circulars; particularly the Circular dated 9th March 2009. Under such circular, the Government envisaged exemption from payment of Value Added Tax on fulfilling conditions laid down therein." 22. This judgment however, did not involve the question of the interpretation of the said exemption notification and merely recognized the right of the Government to grant exemption even after the judgment of the High Court in case of Kishorkumar Prabhudas Tanna (supra). 23. With this background, we may refer to the relevant portion of the said notification dated 27.03.2009. This notification envisages grant of refund to the certified manufacturer amount of tax separately charged by a registered dealer from whom he has purchased the goods subject to certain conditions. Para 1 refers to the eligibility and provides that a registered dealer who is manufacturer of a specified goods and who has obtained eligibility certificate prior to 01.04.2006 from Khadi Commissioner or Khadi Board and the exemption certificate from the Commissioner under the provisions of the earlier law, would be eligible. Thus, the basic eligibility required a registered dealer to be a manufacturer of specified goods and should have obtained eligibility certificate from Khadi Commissioner or Khadi Board as the case may be and exemption certificate from the Commissioner under the provisions of the earlier law prior to 01.04.2006. Paragraph No. 2 of the notification provides the procedure for claiming such refund. Clause-1 thereof requires the eligible dealer to apply in prescribed format within 30 days from the date of issue of the notification. Upon receipt of such application, the Commissioner would issue entitlement certificate provided the conditions of the notification were fulfilled. 24. Paragraph 3 pertains to general conditions. Clause-3 thereof provides that the refund would be granted with effect from 01.04.2006 for the period specified in the eligibility certificate issued by the appropriate authority or till the manufacturer of the goods does not exceed the quantity approved by the appropriate authority as specified in the eligibility certificate whichever occurs earlier. 24. Paragraph 3 pertains to general conditions. Clause-3 thereof provides that the refund would be granted with effect from 01.04.2006 for the period specified in the eligibility certificate issued by the appropriate authority or till the manufacturer of the goods does not exceed the quantity approved by the appropriate authority as specified in the eligibility certificate whichever occurs earlier. As per Clause-4 of paragraph 3, the refund would be granted only for the purchases used in manufacturing of specified goods sold within the time limit mentioned in clause-3. 25. It can thus be seen that this notification had a direct relation to and was a fall out of the judgment of this Court in case of Kishorkumar Prabhudas Tanna (supra) under which, the Court had declared that the withdrawal of the exemptions with the introduction of the VAT would not apply to the dealers where previously the eligibility certificates were already issued upto the period when the certificate was valid. Upon close perusal of this notification, we do not gather any intention on part of the government that in case of such industries who had obtained the eligibility certificate from the Khadi Commissioner or the Khadi Board and exemption certificate from the Commissioner prior to 01.04.2006 till eligibility certificates were rendered from time to time, the benefit of exemption would continue to flow in their favour. This notification aimed at putting in action the judgment of the High Court in case of Kishorkumar Prabhudas Tanna (supra). It merely codified what the High Court had directed in the said judgment. In other words, instead of leaving the application of the High Court judgment to individual officers of the Commercial Tax department and thereby leaving scope for different understanding and application of the judgment, the Government issued the said notification and provided for uniform exemption in cases of those manufactures who had been already granted eligibility certificate by the Board or the Commission prior to 01.04.2006 and on the basis of which Commissioner of commercial tax had granted exemption certificate. This was in consonance with the judgment of this Court in case of Kishorkumar Prabhudas Tanna (supra). 26. It is true that this notification does not specifically provide that such exemption would not continue after the expiry of the period of initial eligibility of the certificate issued prior to 01.04.2006. This was in consonance with the judgment of this Court in case of Kishorkumar Prabhudas Tanna (supra). 26. It is true that this notification does not specifically provide that such exemption would not continue after the expiry of the period of initial eligibility of the certificate issued prior to 01.04.2006. However, various terms of the notification when read as a whole and interpreted conjointly, would lead to an inescapable conclusion that the notification never meant to continue the exemption in perpetuity upon mere renewal of eligibility certificate by the Khadi Commissioner or the Khadi Board. For example, the very first paragraph of the notification pertaining to the eligibility refers to the requirement of the registered dealer manufacturing specified goods who have obtained eligibility certificate from Khadi Commissioner or Khadi Board prior to 01.04.2006 and also exemption certificate from the Commissioner under the earlier law. The term 'earlier law' must have reference to the now rescinded Sales Tax Act. The notification itself refers to grant of refund and the refund therefore would necessarily relate to the tax already collected from the dealer, one more indication that the notification applied for a period anterior to its issuance. Under para 2 of the notification, the eligible dealer would have to apply for the exemption which the Commissioner would grant upon the conditions of the notification being fulfilled. Under clause (3) of para 3, the refund would be granted effective from 01.04.2006 for the period specified in eligibility certificate issued by the appropriate authority till the dealer exhausts the quantity approved in the eligibility certificate. This reference to the refund being granted for period between 01.04.2006 till the period specified in the eligibility certificate is of great significance. It limits the period of exemption till the period specified in the eligibility certificate. The exemption was thus clearly envisaged between 01.04.2006 and till the end of period of eligibility certificate, or sooner if the dealer exhausted the quantity approved in the eligibility certificate. Under clause (4) of para 3, the refund would be granted only for the purchases used in manufacturing of specified goods sold within the time limit mentioned in condition No. 3(3). 27. All these conditions therefore, necessarily refer to the validity of the eligibility certificate granted by the appropriate authority prior to 01.04.2006. Under clause (4) of para 3, the refund would be granted only for the purchases used in manufacturing of specified goods sold within the time limit mentioned in condition No. 3(3). 27. All these conditions therefore, necessarily refer to the validity of the eligibility certificate granted by the appropriate authority prior to 01.04.2006. The object of the authority issuing this notification therefore, was to lay down a uniform procedure for grant of refund of tax to those industries who were enjoying the eligibility and exemption certificates as on 01.04.2006 when the Government withdrew the exemptions, but where the High Court held that till the end of validity of such eligibility certificates, the exemption could not be withdrawn. 28. This brings us to the withdrawal of exemption benefits already granted for the period of extended eligibility certificates issued by the appropriate authority on the basis of which, the Commissioners had also granted exemption certificates. Though, we have held that the notification dated 27.02.2009 did not envisage grant of exemptions after expiry of the initial period of eligibility either in original or under renewal as per the eligibility certificate which a dealer would be enjoying as on 01.04.2006, the question of withdrawing such benefits once granted even if under erroneous belief, would stand on a different footing. We have noticed that in these very-cases after completion of period of eligibility, the same were extended or renewed by the Khadi Commissioner or Khadi Board, as the case may be, and on the basis of which, the department had also renewed exemption certificates and issued certificates of entitlement. On the basis of such certificates, the assessees would naturally have been granted the benefit of exemption. For various reasons, it would not be open for the department to withdraw the same. First and foremost, we have serious doubt about the very power of the authority to suo-motu recall such exemption certificates. The notification itself makes no such reference. Para No. 8 of the notification envisages cancellation of the certificate issued by the Commissioner if the certified manufacturer contravenes any of the conditions of the notification and/or any of the provisions of the Act or the Rules made in this behalf. The notification itself makes no such reference. Para No. 8 of the notification envisages cancellation of the certificate issued by the Commissioner if the certified manufacturer contravenes any of the conditions of the notification and/or any of the provisions of the Act or the Rules made in this behalf. This condition essentially would apply in a case where manufacturer contravenes the provisions of the Act or the Rules or conditions of the notification and has no reference to recalling a certificate already granted on erroneous application of the notification. Contravention of the conditions of the notification and error on part of the authority to grant a certificate are two entirely different concepts. In some of the cases, we notice that the withdrawal of the certificate of exemption has been done by the same authority and in some cases, though the same was approved by the higher authority during audit assessments. This would be additional grounds to hold that the retrospective withdrawal of the exemption certificates were bad in law. 29. Quite apart from this, we cannot lose sight of the fact that the tax in question being an indirect tax, if it is otherwise not exempt, it is always open for the dealer to pass on the same to the successive dealer or the consumer as the case may be. Having granted such exemption, it would cause enormous financial hardship to the dealer if the same were to be withdrawn, that too for no fault on his part. We may notice that under section 80 of the VAT Act, the Commissioner has the power to determine disputed questions when brought before him by an assessee. Sub-section (2) of section 80 provides that the Commissioner while doing so, may direct that the determination shall not affect the liability of any person with respect to any sale or purchase affected prior to the determination. Sub-section (2) of section 80 therefore, brings in the concept of avoiding retrospective effect of the determination under section under sub-section (1). We are conscious that the said provision would not directly apply in the present case. Sub-section (2) of section 80 therefore, brings in the concept of avoiding retrospective effect of the determination under section under sub-section (1). We are conscious that the said provision would not directly apply in the present case. However, taking cue from the said provision and the judgment of this Court in case of Kishorkumar Prabhudas Tanna (supra), we would be holding an opinion that wherever despite the notification dated 27.02.2009, the benefit of exemption was granted on the basis of eligibility certificate renewed by the Khadi Commissioner or Khadi Board and on the basis of which, certificate of exemption was also granted by the Commissioner, such benefits cannot be withdrawn. 30. In the result, we answer the question No. 1 against the assessee and in favour of the department, questions No. 2 and 3 in favour of the assessee and against the department and dispose of the appeals and the petitions by allowing in part. In writ petitions to the extent the orders of the authorities are contrary to the declarations herein above, the same shall stand set aside. All proceedings disposed of accordingly.