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1999 (4) TMI 523 - SC - VAT and Sales TaxWhether the respondents were rightly given by the High Court the benefit of the said incentive scheme in respect of exemption from Central sales tax as also Rajasthan sales tax? Held that - The judgment of the High Court, in so far as it sets aside the notification of May 7, 1990, issued under the Rajasthan Sales Tax Act, 1954, is set aside and the notification of May 7, 1990, issued under the Rajasthan Sales Tax Act, 1954 is upheld as valid. The respondents, however, will be entitled to retain the benefits received by them under the incentive scheme framed under the Rajasthan Sales Tax Act up to April 4, 1994. The judgment of the High Court in so far as it quashes the notification of May 7, 1990, issued in respect of the incentive scheme under the Central Sales Tax Act is upheld in the light of the decision of this Court in the case of State of Rajasthan v. Gopal Oil Mills 1995 (2) TMI 357 - SUPREME COURT OF INDIA . The appeal is disposed of accordingly
Issues Involved:
1. Validity of the notification dated May 7, 1990, under the Rajasthan Sales Tax Act, 1954. 2. Validity of the notification dated May 7, 1990, under the Central Sales Tax Act, 1956. 3. Application of the doctrine of promissory estoppel. 4. Retention of benefits under the incentive schemes. Detailed Analysis: 1. Validity of the Notification Dated May 7, 1990, Under the Rajasthan Sales Tax Act, 1954: The respondents challenged the notification dated May 7, 1990, which withdrew the benefits of the incentive scheme from oil extracting and manufacturing industries. The High Court had initially set aside this notification, but the Supreme Court upheld its validity. The Court reasoned that the State of Rajasthan was entitled to withdraw the benefits in public interest, as the incentive scheme had led to the closure of old units and the establishment of new ones, which was not the intended effect. The Court noted that the notification was issued due to a supervening public interest, which justified the withdrawal of the benefits. 2. Validity of the Notification Dated May 7, 1990, Under the Central Sales Tax Act, 1956: The Supreme Court had previously quashed the notification dated May 7, 1990, under the Central Sales Tax Act, in the case of State of Rajasthan v. Gopal Oil Mills, on the grounds that there was no public interest in withholding the benefits for the short period from May 7, 1990, to July 26, 1991. Consequently, the respondents were entitled to the benefits of the incentive scheme under the Central Sales Tax Act since they commenced commercial production on February 17, 1991, during the subsistence of the scheme. 3. Application of the Doctrine of Promissory Estoppel: The respondents argued that the doctrine of promissory estoppel should prevent the State from withdrawing the benefits of the incentive scheme, as they had relied on the promise made by the State in the form of the scheme. However, the Court held that promissory estoppel could not be invoked in this case due to the supervening public interest that justified the withdrawal of the benefits. Additionally, the respondents had not taken significant steps towards establishing their industrial unit before the notification of May 7, 1990, which further weakened their claim. 4. Retention of Benefits Under the Incentive Schemes: The respondents were granted an eligibility certificate on January 6, 1993, and had enjoyed the benefits of the incentive schemes since then. The Court acknowledged that similar benefits had been retained by other oil industries up to April 4, 1994, as per the judgment in State of Rajasthan v. Gopal Oil Mills. Therefore, the respondents were allowed to retain the benefits they had received under the Rajasthan Sales Tax Act up to April 4, 1994. However, they could not retain the benefits beyond this date, as the eligibility certificate was granted based on a judgment that had been set aside. Conclusion: The Supreme Court set aside the High Court's judgment in so far as it quashed the notification of May 7, 1990, under the Rajasthan Sales Tax Act, upholding the validity of the notification. The Court upheld the High Court's judgment quashing the notification of May 7, 1990, under the Central Sales Tax Act, allowing the respondents to retain the benefits under the Central Sales Tax Act. The respondents were permitted to retain the benefits under the Rajasthan Sales Tax Act up to April 4, 1994. The appeal was disposed of with no order as to costs.
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