Holding

The eligibility certificate was validly withdrawn under clause (a)(i) of sub‑rule 8 because the applicant concealed the agricultural status of the land, which is a material misrepresentation, and withdrawal cannot be based on any other ground.

Summary

The State of Haryana sought to withdraw an eligibility certificate granted to Baldev Spinners Pvt. Ltd. under Rule 28A of the Haryana General Sales Tax Rules, 1975, on the ground that the applicant failed to produce a NOC/CLU certificate for agricultural land. The applicant had not disclosed that its unit was situated on agricultural land and therefore concealed a material fact. The High Court held that non‑production of the NOC/CLU was not a ground for withdrawal under sub‑rule 8(a) and set aside the withdrawal. The Supreme Court held that the eligibility certificate could be withdrawn only under the three specific grounds listed in clause (a) of sub‑rule 8, and that the applicant’s concealment amounted to fraud/misrepresentation falling within clause (a)(i). Section 19 of the Punjab General Clauses Act does not expand the grounds for withdrawal where the rule itself specifies them. Consequently, the Court allowed the State’s appeal, upheld the withdrawal, and set aside the High Court judgment.

Issues considered

Whether an eligibility certificate issued under Rule 28A can be withdrawn on grounds other than those enumerated in clause (a) of sub‑rule 8.
Whether the failure to produce a NOC/CLU certificate, coupled with non‑disclosure of the agricultural nature of the land, constitutes a ground of fraud/misrepresentation under clause (a)(i) of sub‑rule 8.
Whether Section 19 of the Punjab General Clauses Act can be invoked to broaden the grounds for withdrawal despite the specific provisions of the Rules.

Legislation cited

Haryana General Sales Tax Rules, 1975

Subjects

eligibility certificatewithdrawalHaryana General Sales Tax RulesNOC/CLU certificatemisrepresentationSection 19 Punjab General Clauses Acttax exemptionstatutory interpretation

Judgment

[2009] 2 S.C.R. 1156 .

A STATE OF HARYANA & ORS.
v
BALDEV SPINNERS PVT. LTD. & ORS.
Civil Appeal No.1973 of 2006
FEBRUARY 25, 2009 L
B '
[R.V. RAVEENDRAN AND P. SATHASIVAM, JJ.]
Haryana General Sales Tax Rules, 1975: r.28A(8)(a)(1)
- Eligibility certificate - Withdrawal of, for non-production of
C NOC/CLU certificate - Held: Once an eligibility certificate is
granted, it can only be withdrawn in the circumstances
mentioned in clause (a) of sub-rule (8) - Non-production of
NOCICLU certificate by itself not a ground for withdrawal as it
is not one of the grounds/circumstances mentioned in the said
clause - However, omission tq disclose that the land was an
D agricultural land and that assessee did not possess or produce
thf! NOC/CLU Certificate, was a concealment, misstatement
and misrepresentation of a material fact and department is
entitled to withdraw the eligibility certificate underclause (a)(i)
of sub-rule (8) - Punjab General Clauses Act - s. 19.
E
Punjab General Clauses Act: s. 19 - Power to issue
Notifications, orders, rules or byelaws includes power to add,
amend, vary or rescind.
The questions which arose for consideration in these
F appeals were whether an eligibility certificate issued
under sub-rule (5) of Rule 28A of Haryana General Sales
Tax Rules, 1975 could be withdrawn on a ground other
than those specified in Clause (a) of sub-rule 8 of Rule
28A; and whether withdrawal of eligibility certificate for
G non-compliance with the basic requirement of furnishing
a NOC/CLU certificate from the Town and Country
Planning Department for change of land use from
agricultural to non-agricultural along with its application

H 1156
STATE OF HARYANA & ORS. V. BALDEV . 1157
SPINNERS PVT LTD. & ORS.

in Form ST-70 could be said to be on any of the ground A
mentioned under Clause (a) of sub-rule 8 of rule 28A.
Allowing the appeals, the Court
HELD: 1.1. Sub-rule (8) of Rule 28A of Haryana
General Sales Tax Rules, 1975, provided for withdrawal 8
of the eligibility certificate in three specific circumstances
mentioned in clause (a) thereof. Where the rules prescribe
the conditions for grant of a benefit and also the
conditions for withdrawal of such benefit, then the benefit,
can be withdrawn only if any of the conditions prescribed C
exist, and not otherwise; unless the provision relating to
withdrawal/rescission also reserves discretion to the
authority concerned to exercise the power of withdrawal
wherever warranted. [Para 8] [1169-C-F]
1.2. Section 19 of the Punjab General Clauses Act, 0
.... which provides that where any State Act confers a power'
to issue a notification or orders, rules or bye-laws, then
that power includes a power exercisable in the like.
manner and subject to the like sanction and conditions
(if any) to add, to amend, vary or rescind any notification, E
orders, rules or bye-laws so issued. Section 19 of the.
Punjab General Clauses Act (corresponding to section 21 '
of General Clauses Act, 1897) merely embodies a rufe of
construction and that be displaced to the extent, the
provisions, the scheme and the object of any particular
statute indicate a contrary intention. It is intended to apply F
only where the rules in question do not contain a specific
provision govern.ing or regulating the matter. The question ·
whether or not the said rule of construction (the implied
power to rescind or withdraw an order) would. apply or
not, will depend on the subject matter, context and the G
effect of the relevant provisions of the statute/rules under
which the order is issued. Therefore, the scheme, its object
and all relevant provisions have to be examined to decide
the application of the said rule of. construction. [Para 9]
[1169-G-H; 1170-A-D] H
1158 SUPREME COURT REPORTS [2009] 2 S.C.R.

~

I
A The State of Bihar v. D. N. Gangu/y ( 1959) SCR 1191; State
of Kera/a v. K. G. Madhavan Pillai (1988) 4 SCC 669;
H. C. Suman v, Rehabilitation Ministry Employees'
Cooperative House Building Society Ltd. (1991) 4 SCC 485
....,. relied on. ·
B
Nice Spinners Pvt. Ltd. v. State of Haryana - 121 STC
456 - referred to.
Justice G.P Singh's Principles of Statutory Interpretation
(11th Edition) - referred to.
c · 1.3. Clause (a) of sub-rule (8) specifically enumerated
three circumstances in which eligibility certificate is liable
to be withdrawn. They were : (i) discovery that the certificate
had been obtained by the applicant~ by fraud, deceit,
misrepresentation, misstatement or concealment of material
D facts; (ii) discontinuance/closing down of the business by
the holder of the certificate; and (iii) disposal/transfer of fixed
assets by the holder of the certificate, adversely affecting its
manufacturing or 1production capacity. It did not empower
the appropriate screening committee to withdraw th.e
E eligibility certificate under any other circumstance. Nor
did it confer a general power upon the screening
committee to withdraw the certificate. It however required
that such withdrawal shall be after affording a reasonable
opportunity of hearing to the affected unit. Circumstances
F (ii) and (iii) mentioned in clause (a) of sub-rule (8) do not i
I

admittedly apply as this is neither a case of discon-
tinuance/closure of business nor a case of disposal of fixed
assets. [Paras 10, 12] [1170-F-H; 1171-G]
1 A. The prescribed form of application required the
G applicant to produce certain documents as annexures to
the application. Requirements (i) to (iv) and (vi) of the
prescribed form (extracted in para 2.3 above) were
specific. Requirement (v) was slightly different. It required
"in case of agricultural land", permission from the
H authority concerned for converting the same for non-
STATE OF HARYANA & ORS: V. BALDEV 1159
SPINNERS PVT. LTD. & ORS.

agricultural use. This meant that where the unit was A
situated in non-agricultural urban area, there was no need
to produce the NOC/CLU certificate. But, if the industrial.
unit was situated in an agricultural land, then a NOC/CLU
Certificate was required to be produced. The respondent
did not produce the NOC/CLU certificate. Nor did it B
disclose in its application thai its unit was situated in an
agricultural land. It merely gave a list of the documents
produced, where NOC/CLU certificate did not find a place.
It remained silent about requirement (v). This amounted
to suppression and concealment of a material fact or an c
implied misrepresentation -that NOC/CLU certificate was
not required to be produced. Where the NOC/CLU
Certificate was not produced, and the applicant did not
state that the land was agricultural land, there was every
likelihood of the concerned authority proceeding on the 0
·'- assumptions that the industry was not situated in an
agricultural land and therefore the applicant was not
required to produce the NOC/CLU Certificate. But if the
unit was situated in an agricultural land, it was mandatory
to either produce the NOC/CLU Certificate under . E 1

requirement (v) or disclose the fact that though the unit
was situated in an agricultural land, it did not possess
the required certificate. The suppression of the fact that
the land was agricultural was a material concealment and
misrepresentation which led the LLSC to assume that the
applicant had fulfilled the legal requirements. If the fact F
that the land was situated in an:-agricultural land was
disclosed, ttie eligibility certificate, would not have been
issued, in the absence of NOC/CLU Certificate. Therefore,
while the non-production of the 'NOC/CLU Certificate' by -
itself may not be a ground to withdraw the eligibility G
certificate under sub-rule (8), the omission to disclose that
the land was an agricultural land and that it did not
possess or that it was not able to prQduce the NOC/CLU
Certificate, was a concealment, misstatement and
misrepresentation of a material fact. When it was H
STATE OF HARYANA & ORS. V. BALDEV 1161
SPINNERS PVT. LTD. & ORS. [R. V. RAVEENDRAN J.,]

short 'the Act') enabled the state government, if satisfied that it A
is necessary and expedient so to do in the interest of industrial
development of the state, to exempt from. payment of tax, or
defer the payment of tax, by such class of industries, for such
period, subject to such conditions as may be prescribed.
Chapter IV-A of the Rules consisting of Rule 28A dealt with class B
of industries, period and other conditions for exemption/
deferment from payment of tax. The definitions of eligibility
certificate, exemption certificate and entitlement certificate in
clauses 0), (k) and (I) of sub-rule (2) of Rule 28A are extracted
below: c
"O) '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.
D
... (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 certificat~ which entitles the unit to avail
of exemption from the paym~nt of sales or purchase tax E
or both, as the case may be;
(I) 'Entitlement certificate' 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 it to get deferment of sales tax." F

2.1) Sub-Rule ·(3) gave an option· to an eligible industrial
unit either to avail benefit of tax exemption or deferment. Sub-
Rule (4) dealt with quantum and period of tax exemption/
deferment. Sub"'.rule (5) dealt-with the procedure for applying G
and obtaining eligibility certificate. Sub-rule (8) dealt with
~
withdrawal of eligibility certificate. Relevant portions thereof, that
is, clauses (a) of sub-Rule (4), clauses (a), (b) and (h) of sub-
rule (5) and clauses (a) and (b) of sub-rule (8) are extracted
below: H'

,.,I
1162 SUPREME COURT REPORTS [2009] 2 S.C.R.

A 4(a). Subject to other provisions of this rule, the benefit of
tax exemption or deferment shall be given to an eligible
. industrial unit holding exemption or entitlement certificate,
as the case may be to the extent, for the period, from year
to year in various zones from the date of commercial
B production or from the date of issue of entitlement/
exemption certificate as may be opted, as under :
Quantum and period of tax exemption/tax deferment :-
(i) New Industrial Units.
c . Name of the Zone Small Scale Medium Scale/large Time Limit
and the area scale
comprised therein
Zone 'B' comprising 125% affixed 100% affixed capital 7 years
areas other than capital investment but not
D Zones ·~ and 'C' investment exceeding Rs.1.5
crores

Provided that in the qase of exemption, the benefit shall
extend to tax on gross turn over and in the case of
deferment, it shall extend to tax on the taxable turn over of
E goods manufactured by the unit
xx xx
S(a). Every Eligible Industrial Unit which is desirous of
availing benefit under this Rule shall make an application
F in Form ST-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
in1o force of this rule whichever is later. No application
G shall be entertained if not preferred within time. An
application with incomplete or incorrect particulars
inc1uding 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
H afforded to him in this behalf.
STATE OF HARYANA & ORS. V. BALDEV t163
SPINNERS PVT. LTD. & ORS. [R. V. RAVEENDRAN J.,]

5(b). Applications from small scale units will be considered A
by the Lower Level Screening Committee and those from
Medium/Large scale units by the Higher Level Screening
Committee.
xx xx xx
B
5(h). The Eligibility Certificate will be issued by the General
Manager, District Industries Centre in cases approved by
J the Lower Level Screening Committee and by the Director
of Industries or any officer nominated by him not below the
rank of Additional Director in cases approved by the Higher C,
Level Screening Committee normally within a period of
45 days from the date of receipt of the application in the
office of the General Manager, District Industries Centre.
The certificate shall be valid from the date of commercial
production or from the date of issue of entitlement D
exemption certificate as the case may be for a period as
laid down under sub-rule (4) unless cancelled or withdrawn.
A copy of the Eligibility Certificate shall also be sent to the
Deputy Excise and Taxation Commissioner concerned.
xx xx xx
E
8(a). The eligibility certificate granted to an industrial
unit shall be liable to be withdrawn at any time during
its currency by the appropriate screening committee, in
the following circumstances -
(i) if it is discovered that it has been obtained by F
fraud, deceit, misrepresentation, misstatement
or concealment of material facts;
(ii) discontinuance of its business by the unit or closing
down of its business for a continuous period G
exceeding six months except in case of fire, flood
and other natural calamities, riots, strike or lock-out
which in the opinion of the committee concerned is
beyond the control of the unit;
(iii) disposal or transfer by the unit of any of its fixed H
1164 SUPREME COURT REPORTS [2009] 2 S.C.R)

A assets adversely affecting its manufacturing or ,l

production capacity :
"·
I'
Provided that no order of withdrawal of the eligibility
certificate shall be made without affording a reaso"nable
opportunity of being heard to the affected unit.
B
8(b). When the eligibility certificate is withdrawn, the
exemption/ entitlement certificate shall be deemed to have
been withdrawn from the 1st day of its validity and the unit '• .
. shall be liable to payment of tax, interest or penalty under .
c the Act as if no entitlement certificate had ever been granted
to it.
(emphasis supplied)
2.2) Thus, small scale industries requiring an eligibility
D certificate had to apply in the prescribed form (Form ST-70)
with an affidavit to the General Manager, District Industries
'\
J1
Centre for consideration by the Lower Level Screening
Committee ('LLSC' for short). Para (3) of the application form
tor Eligibility Certificate required the applicant to produce the
following annexures with the application:
E
(i) Certificate from Chartered Accountant regarding
estimated liability of sales tax for the period which
application is made.
(ii) Certificate from the Chartered Accountant regarding
F fixed assets on the date of commercial production
including the assets of the unit as erected at site and
paid for within 60 days to commercial production.
(iii) Latest copy of partnership deed/Memorandum and
G Articles of Association, list of Directors and 10 major
share-holders/partners.
(iv) Copy of the power of attorney or certified copy of
resolution passed by the Board of Di.rectors
authorizing a particular person to apply for the grant
H of eligibility certificate.
.;,

STATE OF HARYANA & ORS. V. BALDEV 1165
SPINNERS PVT. LTD. & ORS. [R. V. RAVEENDRAN J.,]

.., (v) In case of agricultural land permission from the A
authority concerned for converting the same
for non-agricultural use; and
(vi) Copy of Registration No./Letter of lntenUlndustrial
Licence/ DGTD Registration. (emphasis supplied)
B
2.3) It is evident from requirement No. (v) that where
agricultural land was used for the non-agricultural purpose of
constructing or putting up an industrial unit, such change in land
use had to be permitted/certified by the Town and Country
Planning Development by issue of a No Objection Certificate/ c
Change of Land Use Certificate ('NOC/CLU Certificate' for
short).
Civil AQQeal No.1973/2006
3. The. first respondent (for short 'respondent'), a small D
scale industry, was registered as a dealer under the Act. The
respondent made an application dated 14.11.1995 to the
General Manager, District Industries Centre, Panipat in the
prescribed form (ST-70) for grant of an eligibility certificate and
enclosed therewith the following annexures :
E
(1) Application form in prescribed format.
(2) Option letter seeking exemption to be given from the
date of Commercial Production.
(3) Affidavit duly attested by a First Class Magistrate. F
(4) Chartered Accountant's Certificate regarding Fixed
Assets at site.
(5) Certificate from ·Chartered Accountant regarding
projected Sales Tax to be exempted for the period of G
eligibility.
(6) Copy of Resolution.

(7) Memorandum and Article of Association and list of
Directors.
H
1166 · SUPREME COURT REPORTS (2009] 2 S.C.R.

A (8) Copy of Permanent SSI Registration.
(9) Copy of Registration certificate under the Act.
The respondent did not produce the NOC/CLU certificate,
which was a document to be produced, if the land was an
B agricultural land (SI. No. (v) of list of annexures to be produced,
as per the prescribed application form). The application was
processed and on 21.5.1996, the Lower Level Screening
Committee resolved to grant the eligibility certificate to the
respondent. In-pursuance of it, an eligibility certificate was issued
c on 12.6.1996 stipulating the period of eligibility as from 1.9.1995
to 31.8.2002 for availing exemption from payment of tax of
Rs.41,94,722/-. The respondent accordingly availed the
exemption.
4. The LLSC at its meeting held on 19.6.1997 decided to
D withdraw the eligibility certificate issued to the respondent, and
the said withdrawal was communicated to the respondent, by
the District Industries Centre, by letter dated 30.6.1997. That
was challenged by the respondent in CWP No.11383 of 1997.
The High Court by judgment dated 22.12.1997 allowed the said
E petition and quashed the withdrawal of the eligibility certificate
without notice or opportunity of hearing as illegal, reserving
liberty to the State government to proceed afresh in the matter
after affording an opportunity to the respondent to show cause
against the proposed action.
F 5. Thereafter the District Industries Centre, Panipat issued
a show-cause notice dated 4.3.1998 proposing to withdraw the
eligibility certificate on the ground that the respondent had not_
complied with the basic requirement of furnishing a NOC/CLU
Certificate from the Town and Country Planning Department for
G change of land use along with its application in Form ST-70.
The respondent sent a reply dated 26.3.1988 stating that as its
unit was situated in an area surrounded by a large number of
factories, the area should be considered as a non-agricultural
area. It also contended that the department was not earlier
H insisting upon the production of such NOC/CLU certificate if
STATE OF HARYANA & ORS. V. BALDEV 1167
SPINNERS PVT. LTD. & ORS. [R. V. RAVEENDRAN J.,]

the industry was situated in an area, where several industries A
were situated. The LLSC gave a hearing on 3.11.1998 to the
respondent. DL1ring the hearing, the respondent's Director was
informed that the District Town Planner, Panipat on verification
~ad informed the LLSC that the respondent's unit fell in an area
where, for setting up an industry, a NOC/CLU certificate was B
required from the Town Planning Department. The respondent's
director admitted that respondent had not obtained such NOC/
CLU Certificate. The LLSC therefore took a decision to withdraw
the eligibility certificate issued to the respondent for non-
prod uction of NOC/CLU certificate. The General Manager•.: c
District Industries Centre, Panipat, by letter dated 26.11.19.98
informed the respondent about the decision of LLSC to withdraw
the eligibility certificate. The appeal filed by the respondent
against the said decision was rejected by the Higher Level
Screening Committee by order dated 1. 7 .1999. The respondent D
challenged the said decision in CWP 13865/2000. The High
Court by order dated 10.10.2000 directed the appellant authority
to hear the appeal and pass a fresh order. The appeal was
heard again and dismissed on 6.2.2001. The appellate authority
noted that in spite of several opportunities being granted, the E
respondent had failed to produce the NOC/CLU Certificate. It
further held that in view of the non-production of NOC/CLU
certificate, the eligibility certificate issued to the respondent was
void ab initio. The respondent challenged the said withdrawal
of the eligibility certificate and the order of the appellate authority
in CWP No.9545 of 2001. The said petition was allowed by F
order dated 10.12.2002. The High Court held that the eligibility
certificate once granted could be withdrawn only in one of the
three circumstances enumerated in clause (a) of Sub-Rule 8 of
Rule 28A; and as non-production of NOC/CLU certificate was
not a ground on which the eligibility certificate could be withdrawn G
i.
under the said provision, the withdrawal was illegal and not
justified.
6. The said order is challenged in this appeal by special
leave. The Appellant has urged the following contentions:
H
1168 SUPREME COURT REPORTS [2009] 2 S.C.R.

A (i) The grounds for withdrawal of an eligibility certificate,
enumerated in clause (a) of sub-rule 8 are not
exhaustive. The power to withdraw an eligibility
certificate on valid grounds is implied in the power to
grant the certificate, having regard to section 19 of
8 the Punjab General Clauses Act. Therefore, the
eligibility certificate could be withdrawn for any valid
reason, even if such reason was not enumerated in
clause (a) of sub-rule 8.
(ii) Having regard to the law relating to town and country
c planning, no agricultural land or land in green belt
could be used for industrial purposes without
obtaining a NOC/CLU certificate. Therefore, the
prescribed application form for eligibility certificate
specifically required the applicants to produce the
D NOC/CLU certificate to ensure that the industry does
not violate the relevant law; and where such a
certificate is not produced, the industrial unit is not
entitled to an eligibility certificate. Where an eligibility
certificate had been wrongly issued on account of
E the small scale industry suppressing the fact the land
where its unit is situated is agricultural land, it is liable
to be withdrawn along with all consequential financial
benefits extended under the State Industrial Policy.
"
(iii) The High Court, in rendering the impugned judgment
F ignored a binding decision of a Co-ordinate Bench
in Nice Spinners Pvt. Ltd. Vs. State of Haryana -
(121 STC 456), wherein it was held that the
requirement regarding production of NOC/CLU
certificate, contained in Form No.ST-70 prescribed
G under the Rules was a mandatory requirement.
~
7. On the contentions urged, the following two questions
arise for our consideration :
(i) Whether an eligibility certificate issued under sub-
H rule (5) of Rule 28A could be withdrawn on a ground
STATE OF HARYANA & ORS. V. BALDEV 1169
SPINNERS PVT. LTD. & ORS. [R. V. RAVEENDRAN J.,]

~· other than those specified in clause (a) of sub-rule 8 A
of Rule 28A.
(ii) Whether in this case, withdrawal can be said to be
on any of the grounds mentioned under clause (a) ot'
sub-rule 8 of rule 28A.
B
Re : Question (i) :
8. Sub-rule (8) provided for withdrawal of the eligibility
certificate in three specific circumstances mentioned in clause
(a) thereof. Clause (b) of sub-rule (8) provided that where the
eligibility certificate is withdrawn, the exemption/entitlement c
certificate shall be deemed to have been withdrawn from the
first date of its validity and the unit becomes liable to pay tax,'
interest and penalty as if no entitlement certificate has ever been
granted to it. This penal provision was attracted only when the
withdrawal was on any of the grounds mentioned in clause (a) D
of sub-rule (8). It is not possible to hold that the penal
consequences under clause (b) of sub-rule (8) would apply even
where the specified circumstances/grounds in clause (a) of sub,
rule (8) did not exist or occur. Where the rules prescribe the
conditions for grant of a benefit and also the conditions for E
withdrawal of such benefit, then the benefit can be withdrawn
• I

only if any of the conditions prescribed e~ist, and not otherwise,
... unless the provision relating to withdrawal/rescission also
reser\tes discretion to the authority concerned to exercise thel
power of withdrawal wherever warranted. F
9. The appellant placed reliance upon section 19 of the
Punjab General Clauses Act, which provides that where an~
State Act confers a power to issue a notification or orders, rules
or bye-laws, then that power includes a power exercisable in
the like manner and subject to the like sanction and condition~ G
(if any) to add to amend, vary or rescind any notification, orders,
rules or bye-laws so issued. The question is, where the rules
contain a specific provision as to the circumstances in whic~
the power to grant an eligibility certificate can be exercised and
the specific circumstances in which the eligibility certificate once H
1170 SUPREME COURT REPORTS [2009] 2 S.C.R.

A granted can be withdrawn, whether reliance can be placed upon _,_
the implied power to rescind or withdraw under section 19 of
the General Clauses Act, de hors the specific provision in the
statute. Section 19 of the Punjab General Clauses Act
(corresponding to section 21 of General Clauses Act, 1897).
B merely embodies a rule of construction which can be displaced
to the extent, the provisions, the scheme and the object of any
particular statute indicate a contrary intention. It is intended to
apply only where the rules in question do not contain a specific 1:
provision governing or regulating the matter. The question
c whether or not the said rule of construction (the implied power
to rescind or withdraw an order) would apply or not, will depend
on the subject matter, context and the effect of the relevant
provisions of the statute/rules under which the order is issued.
Therefore, the scheme, its object and all relevant provisions have
0 to be examined to decide the application of the said rule of
construction. See : The State of Bihar v. D.N. Ganguly [1959
SCR 1191], State of Kera/a v. KG.Madhavan Pillai [1988 (4)
SCC 669], H. C. Suman v. Rehabilitation Ministry Employees'
Cooperative House Building Society Ltd. [1991 (4) SCC 485],
E and Justice GP. Singh's principles of Statutory Interpretation
(1lh Edition), pages 999 & 1000.
10. As noticed above, clause (a) of sub-rule (8) specifically
enumerated three circumstances in which eligibility certificate ..
is liable to be withdrawn. They were : (i) discovery that the
F certificate had been obtained by the applicant by fraud, deceit,
misrepresentation, misstatement or concealment of material
facts; (ii) discontinuance/closing down of the business by the
holder of the certificate; and (iii) disposal/transfer of fixed assets
by the holder of the certificate, adversely affecting its
G manufacturing or production capacity. It did not empower the
appropriate screening committee to withdraw the eligibility -.oi

certificate under any other circumstance. Nor did it confer a
general power upon the screening committee to withdraw the
, certificate. It however required that such withdrawal shall be after
a
H affording reasonable opportunity of hearing to the affected
STATE OF HARYANA & ORS. V. BALDEV 1171
SPINNERS PVT. LTD. & ORS. [R. V. RAVEENDRAN J.,]

unit. Clause (b) of sub-rule (8) prescribed certain penal A
consequences when the eligibility certificate was w.ithdrawn.
' Obviously, penal consequences could not be visited upon an
assessee on grounds or circumstances which were neither
specified in the rules, nor stipulated in the eligibility certificate.
The legislative intent as can be gathered from the scheme B
contained in the rules was that the eligibility certificate could be
withdrawn only in the circumstances enumerated in clause (a)
of sub-rule (8) and for no other reason. As a result, we reject the
j
contention of the appellant that the eligibility certificate issued
under sub-rule (5) of rule 28A_ could be withdrawn, if the c
circumstances warrant, on a· ground other than the ground
specified in clause (a) of sub-rule (8).
11. The contention that High Court failed to follow the
decision of a co-ordinate Bench in Nice Spinners (supra) does
not have any merit. Nice Spinners dealt with a situation where
D
J.
the request for an eligibility certificate was rejected under sub-
rule (5) and did not deal with a situation relating to withdrawal of
an eligibility certificate already granted. Once an eligibility
. certificate was granted, it can only be withdrawn in the
circumstances mentioned in clause (a) of sub-rule (8). Therefore,
E
'non-production of NOC/CLU certificate' by itself cannot be a
ground for withdrawal as it is not one of the grounds/
circumstances mentioned in clause (a) of sub-rule (8).
Re : question (ii) F
12. But the matter does not end there. The next question
will be whether the non-production of NOC/CLU Certificate had
any bearing on the three circumstances or grounds for withdrawal
enumerated in clause (a) ofsub-rule (8). Circumstances (ii) and
G
(Iii) mentioned in clause (a) of sub-rule (8) do not admittedly
j,_
apply as this is neither a case of discontin,uance/closure of
business nor a case of disposal of fixed assets. What therefore
remains to be considered is whether it can be said that the
eligibility certificate was obtained by the respondent by fraud,
H
1172 SUPREME COURT REPORTS [2009] 2 S.C.R.

A deceit, misrepresentation, misstatement or concealment of
facts. )

13. The prescribed form of application required the
applicant to produce certain documents as annexures to the
application. Requirements (i) to (iv) and (vi) of the prescribed
8
form (extracted in para 2.3 above) were specific. Requirement
(v) was slightly different. It required "in case of agricultural land",
permission from the authority concerned for converting the same
for non-agricultural use. This meant that where the unit was
situated in non-agricultural urban area, there was no need to
c produce the NOC/CLU certificate. But, if the industrial unit was
situated in an agricultural land, then a NOC/CLU Certificate was
r~quired to be produced. The respondent did not produce the
NOC/CLU certificate. Nor did it disclose in its application that
its unit was situated in an agricultural land. It merely gave a list I
D of the documents produced, where NOC/CLU certificate did
not find a place. It remained silent about requirement (v). This ~

amounted to suppression and concealment of a material fact
or an implied misrepresentation that NOC/CLU certificate was
not required to be produced. Where the NOC/CLU Certificate
E was not produced, and the applicant did not state that the land
was agricultural land, there was every likelihood of the concerned
authority proceeding on the assumptions that the industry was
not situated in an agricultural land and therefore the applicant
was not required to produce the NOC/CLU Certificate. But if .. ~

F the unit was situated in an agricultural land; it was mandatory to
either produce the NOC/CLU Certificate under requirement (v)
or disclose the fact that though the unit was situated in an
agricultural land, it did not possess the required certificate. The
suppression of the fact that the I.and was agricultural was a
G material concealment and misrepresentation which led the
LLSC to assume that the applicant had fulfilled the legal
requirements. If the fact that .the land was ~ituated in an ,\

agricultural land had been disclosed, the eligibility certificate,
would not have been issued, in the absence of NOC/CLU
Certificate. Therefore, while the non-production of the 'NOC/
H
STATE OF HARYANA & ORS. V. BALDEV 1173
SPINNERS PVT. LTD. & ORS. [R. V. RAVEENDRAN J.,]

CLU Certificate' by itself may not be a ground to withdraw the A
eligibility certificate under sub-rule (8), the omission to disclose
that the land was an agricultural land and that it did not possess
or that it was not able to produce the NOC/CLU Certificate, was
a concealment, misstatement and mi·srepresentation of a
material fact. When it was discovered on enquiry that the land £
was agriculturaL land and the respondent did not produce the
NOC/CLU Certificate, the department was entitled to withdraw
the eligibility certificate under clause (a)(i) of Sub-Rule (8).
14. A faint attempt was made to contend that the ground of c
rejection was 'non-production of NOC/CLU Certificate' and not
suppression or mis-representation of a material fact relating to
nature of land. There is no merit in this contention. If the
respondent had disclosed that the land was an agricultural land,
but failed to produce the NOC/CLU Certificate, and if the D
J.
department had issued the eligibility certificate, then it might
not have been possible for the department to withdraw the
Certificate. In such an event, the assessee could have contended
that it had not suppressed any information and the requirement
was waived, or that it· was not being insisted upon and that ~
therefore non-production was not a ground for cancellation. But
where the NOC/CLU Certificate was required because the unit
was situated in an agricultural land, but the applicant suppressed
the fact that the land where the unit was situated was an
1
agricultural land, to avoid production of the NOC/CLU Certificate, F
then it is a concealment and mis-representations of a material
fact, which squarely falls under Ru1e 8(a)(i). When the eligibility
certificate is withdrawn for non-production of NOC/CLU
Certificate, and the fact that land was agricultural land was not
disclosed, the withdrawal ca·n be.traced to the ground (i) under G
!.
sub-rule 8(a)(i) of Rule 28A.

15. In view of the above, the appeal is allowed, the
judgment of the High Court is set aside and the challenge to the
withdrawal of eligibility certificate is rejected.
H
1174 SUPREME COURT REPORTS [2009) 2 S.C.R.

A Civil Appeal Nos.1976/2006. 1982/2006, 1983/2006, 1986/
2006 and 350/2007.
16. The facts in these appeals are similar to those in Civil
Appeal No.1973/2006. In all these cases also, the eligibility
certificates issued to the respective respondent was withdrawn
8
on the ground that they did not produce the NOC/CLU certificate.
The High Court allowed the writ petitions filed by the respective
respondent in these appeals (by order dated 2.2.2004 in CWP
No. 79/2004, order dated 9.12.2003 in CWP No.15989/2003,
..'
order dated 7 .1.2003 in WP No.13058/2002, order dated '.
C 7.1.2003 in CWP No.11967/2002 and order dated 10.2.2004 '
.'
in CWP N·o.9715/2003) by following its decision dated
10.12.2002 in Baldev Spinners Private Ltd. which is the subject
matter of CA No.1973/2006 considered above. These appeals
also stand allowed in terms of CA No. 1973/2006.

D.G. Appeals allowed.

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