1989 (8) TMI 313 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to sales tax assessment based on exemption claim under Tripura State Scheme for Incentives to Industrial Units, 1984; Interpretation of relevant provisions of the Scheme; Application of doctrine of promissory estoppel; Claim of estoppel based on advice by Inspector of Taxes.

Detailed Analysis:
The petitioner challenged a sales tax assessment order for the years 1984-85, 1985-86, and 1986-87, claiming exemption under the Tripura State Scheme for Incentives to Industrial Units, 1984. The Scheme provided for exemption of sales tax on finished products for five years from the date of starting production for eligible industrial units. The petitioner, operating a small-scale industrial unit since 1983, claimed exemption under the Scheme after learning about it post his sales and tax collection. However, the Superintendent of Taxes levied tax, stating the product was not exempted under the Act. The petitioner's claim was based on promissory estoppel and the advice from the Inspector of Taxes to stop collecting sales tax.

The Court examined the Scheme's provisions, defining "industrial unit," "existing unit," and "new unit," and noted that the Scheme came into force from April 1, 1984. It highlighted that no provision in the Tripura Sales Tax Act aligned with the Scheme's exemption clause. The Court also mentioned a corrigendum substituting the exemption provision under the Scheme with a notification exempting specific industrial products from sales tax, which did not cover the petitioner's product.

Regarding the doctrine of promissory estoppel, the Court explained its principle and held that as the industrial unit was established before the Scheme's publication, and the petitioner was unaware of the Scheme, the doctrine did not apply. The Court further clarified that since the petitioner's industry was set up before the Scheme's specified date, he could not claim benefits under the Scheme. Additionally, the Court dismissed the claim of estoppel based on the Inspector's note, stating it was issued after the relevant assessment periods.

The Court concluded that the petitioner's claim lacked merit and dismissed the writ petition without costs, leaving open the question of the Inspector's note potentially acting as estoppel in a different case.

In summary, the Court rejected the petitioner's challenge to the sales tax assessment, emphasizing the inapplicability of promissory estoppel and the Scheme to the petitioner's situation, ultimately dismissing the petition.