1993 (6) TMI 232 - AT - VAT and Sales Tax

Issues Involved:
1. Withdrawal of sales tax exemption for newly set up small-scale industrial units.
2. Alleged violation of Article 14 and Article 19 of the Constitution.
3. Application of the doctrine of promissory estoppel.
4. Issuance of eligibility certificates and declaration forms for sales tax exemption.
5. Issuance of permits for importation of goods from outside West Bengal.

Detailed Analysis:

1. Withdrawal of Sales Tax Exemption:
The applicants contended that the Government of West Bengal's notification dated March 31, 1983, which withdrew the exemption from sales tax for newly set up small-scale industrial units manufacturing certain oils, was invalid. They argued that the exemption, as provided under rule 3(66) of the Bengal Sales Tax Rules, 1941, could not be taken away by such notification. The respondents countered that the applicants did not mention reliance on the sales tax exemption in their applications for provisional certificates and that the exemption was validly withdrawn by the notification.

2. Alleged Violation of Article 14 and Article 19 of the Constitution:
The applicants claimed that the notification violated Article 14 (right to equality) and Article 19 (right to practice any profession or to carry on any occupation, trade, or business) of the Constitution. However, the court noted that no argument was advanced by the applicants' counsel regarding the alleged violation of these constitutional provisions.

3. Application of the Doctrine of Promissory Estoppel:
The primary issue was whether the applicants were entitled to an eligibility certificate based on the doctrine of promissory estoppel. The applicants argued that they had taken steps to set up the factory based on the Government's promise of tax exemption. The court analyzed the doctrine of promissory estoppel, referencing several Supreme Court judgments, including Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and Union of India v. Godfrey Philips India Ltd. The court concluded that the doctrine of promissory estoppel could not be invoked as the applicants did not alter their position substantially and irretrievably before the notification dated March 31, 1983, came into effect.

4. Issuance of Eligibility Certificates and Declaration Forms:
The applicants sought the issuance of eligibility certificates and declaration forms for availing the sales tax exemption. The court observed that the applicants had not started production by the cut-off date of April 14, 1983, as required under rule 3(66). Therefore, they were not entitled to the exemption under rule 3(66) and would be governed by rule 3(66a), which excluded certain oils from the exemption. However, the court noted that the applicants might be entitled to an eligibility certificate for refining linseed oil, which was not excluded under rule 3(66a), and directed the concerned authority to decide on this aspect within three months.

5. Issuance of Permits for Importation of Goods:
The applicants also sought permits for importing goods from outside West Bengal, which were withheld due to non-granting of the eligibility certificate. The court noted that no argument was advanced regarding the issuance of permits due to the interim orders passed by the High Court and the Tribunal, which had resolved the issue temporarily.

Conclusion:
The applications were dismissed with the direction that the concerned authority should decide on the issuance of an eligibility certificate for refining linseed oil within three months, after giving the applicants an opportunity to be heard. The court held that the applicants were not entitled to invoke the doctrine of promissory estoppel for obtaining a tax holiday under rule 3(66) as they did not start production by the required date. The court also found no violation of Articles 14 and 19 of the Constitution.

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