1989 (9) TMI 374 - HC - VAT and Sales Tax

Summary

Issues:
1. Denial of eligibility certificate by the Director of Industries, resulting in denial of exemptions from payment of sales tax.
2. Interpretation of the term "rice mills" in notifications for exemption.
3. Whether poha mills are traditional industrial units.
4. Application of the rule of promissory estoppel.
5. Reconsideration of the Full Bench decision in Jagdamba Industries.
6. Additional prayers for quashing assessment proceedings.

Detailed Analysis:

1. The petitioners, registered dealers under the State and Central Sales Tax Acts, are engaged in manufacturing poha and seek eligibility certificates for exemptions from sales tax. The denial of eligibility certificates by the Director of Industries is the common grievance, hindering their tax exemptions under relevant notifications. The petitioners pray for directives to obtain the eligibility certificates to avail the exemptions.

2. The dispute revolves around whether poha mills fall under the term "rice mills" in the notifications, thereby impacting their eligibility for exemptions. The notifications specify conditions for exemptions, including the requirement of an eligibility certificate from the Director of Industries. The petitioners argue that poha mills should not be considered under the term "rice mills" based on the distinct manufacturing process and historical treatment of poha as a separate commodity.

3. The question of whether poha mills are traditional industrial units arises from the Director's refusal of eligibility certificates citing a Full Bench decision regarding traditional industries. The judgment clarifies that the Full Bench decision did not categorize poha mills as traditional industrial units, thereby rejecting the Director's basis for denial.

4. The concept of promissory estoppel is raised by the petitioners, contending that the State Government and its officers should issue eligibility certificates based on a promise or assurance. However, the court finds this argument unnecessary given the interpretation of the notifications and the absence of specific assurances from the State Government regarding exemptions.

5. The petitioners seek a reconsideration of the Full Bench decision in Jagdamba Industries, challenging its basis as erroneous. The court upholds the Full Bench decision's authority and relevance, emphasizing the need for judicial propriety and adherence to established precedents.

6. Additional prayers for quashing assessment proceedings are made by some petitioners, seeking further relief. The court deems it unnecessary to grant additional relief beyond directing the issuance of eligibility certificates, as the primary issue of eligibility for tax exemptions is addressed satisfactorily.

In conclusion, the court partly allows the petitions, directing the Director of Industries to grant eligibility certificates to the petitioners based on fulfillment of conditions specified in the notifications. The court refrains from awarding costs and orders the refund of any outstanding security amounts to the petitioners.