1992 (12) TMI 213 - HC - VAT and Sales Tax

Issues Involved:
1. Exemption from sales tax and additional tax under the Bihar Finance Act.
2. Interpretation of the notifications issued under Section 7(3) of the Bihar Finance Act.
3. Application of the principle of promissory estoppel.
4. Jurisdiction and authority of the Commissioner of Commercial Taxes.
5. Applicability of precedent cases cited by the petitioners.

Issue-wise Detailed Analysis:

1. Exemption from Sales Tax and Additional Tax:
The petitioners, companies incorporated under the Indian Companies Act, sought exemption from sales tax and additional tax on electronic goods and raw materials based on notifications issued by the State Government. The notifications (Nos. S.O. 92 and S.O. 94 dated January 18, 1988) exempted sales tax or purchase tax on electronic goods and raw materials for five years from September 1, 1986. The petitioners claimed that these exemptions should also cover additional tax and surcharge. However, the court found that the notifications only exempted sales tax or purchase tax and did not extend to additional tax imposed under Section 6 of the Bihar Finance Act. Section 6 is an independent charging provision, and its obligations cannot be nullified by the exemptions under Section 7(3).

2. Interpretation of Notifications:
The court examined the language of the notifications and the relevant sections of the Bihar Finance Act. Section 2(x) defines "tax" to include sales tax, purchase tax, and additional tax. Section 7(3) allows the State Government to exempt sales or purchase tax but does not mention additional tax. The court emphasized that the exemptions under the notifications were specific to sales tax and purchase tax only and did not extend to additional tax. The court held that the additional tax under Section 6 is a separate and independent obligation, not covered by the exemptions in the notifications.

3. Principle of Promissory Estoppel:
The petitioners argued that the State Government's promise to exempt sales tax and purchase tax should also cover additional tax based on the principle of promissory estoppel. The court rejected this argument, stating that there was no explicit promise by the State to exempt additional tax. The court held that promissory estoppel could not be invoked as there was no unequivocal promise regarding additional tax.

4. Jurisdiction and Authority of the Commissioner of Commercial Taxes:
The petitioners had approached the Commissioner of Commercial Taxes in revision, but their prayers were dismissed. The court noted that the orders of the Commissioner had not been challenged before the court. The principle of merger applied, meaning the impugned orders of the lower authority merged with the Commissioner's order. Since the Commissioner's order was not under challenge, the court could not entertain the petitioners' claims.

5. Applicability of Precedent Cases:
The petitioners cited several cases to support their claims, including decisions from the Supreme Court and various High Courts. The court distinguished these cases, noting that they were based on different state laws that were not in pari materia with the Bihar Finance Act. The court emphasized that exemptions are statutory creations and must be construed strictly according to the specific provisions of the relevant statute. The court cited the Supreme Court's observation that comparing state legislation is not always instructive due to local variations and different legislative intents.

Conclusion:
The court dismissed the writ petitions, directing the petitioners to pay the balance amount of additional tax within one month. The court held that the exemptions under the notifications did not cover additional tax, and the principle of promissory estoppel was not applicable. The court also noted that the petitioners had not challenged the Commissioner's order, and the cited precedent cases were not applicable to the present case. The court made no order as to costs, considering the peculiar facts and circumstances of the case.

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