1995 (9) TMI 357 - HC - VAT and Sales Tax

Summary

Issues:
1. Whether entry of plant and machinery by the assessee was subject to entry tax.
2. Whether the doctrine of promissory estoppel applied in this case.

Analysis:
1. The case involved a reference under section 44(1) of the M.P. General Sales Tax Act, 1958, and section 13 of the Entry Tax Act, 1976, regarding the imposition of entry tax on plant and machinery by the assessee. The assessee, a manufacturer of straw-board, brought in plant and machinery worth Rs. 79,76,885 into Bhopal. The assessing officer levied entry tax, which was upheld by the appellate authority and the Board of Revenue, leading to the reference. The key issue was whether the entry tax was justified under the relevant provisions of the Entry Tax Act.

2. The Court examined Schedule III of the Entry Tax Act, which specifies goods subject to entry tax. The provision under section 3(1)(b) of the Act stated that entry tax applied to goods brought for consumption, use as raw material, incidental goods, or in works contracts, but not for sale. The Court noted that the plant and machinery were intended for installation in the factory for manufacturing straw-board, not for the purposes mentioned in the provision. Citing a previous case, the Court held that entry tax was not applicable in such circumstances, as the goods were not brought for the specified purposes under the Act.

3. The second issue revolved around the doctrine of promissory estoppel. The assessee relied on an exemption notification from the District Level Committee, granting exemption from octroi on specific materials. The Court differentiated between octroi and entry tax, stating that the exemption from octroi did not extend to entry tax. As the imposition was for entry tax, the principle of promissory estoppel was deemed inapplicable. Therefore, the Court ruled in favor of the Revenue on this issue.

In conclusion, the Court answered the first question in favor of the assessee, stating that entry tax was not applicable to the plant and machinery brought in by the assessee. However, the Court ruled in favor of the Revenue on the second question, stating that the doctrine of promissory estoppel did not apply in this case. The judgment was transmitted to the Board of Revenue accordingly, resolving the reference.