2003 (1) TMI 673 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Entitlement to special sales tax incentives including deferment of payment of sales tax.
2. Validity of notices issued by assessing authorities for non-payment of sales tax.
3. Applicability of the doctrine of promissory estoppel against the State Government.
4. Legislative amendments required to enforce sales tax deferment.

Issue-Wise Detailed Analysis:

1. Entitlement to Special Sales Tax Incentives Including Deferment of Payment of Sales Tax:
The main question was whether the petitioners were entitled to special sales tax incentives, including deferment of payment, as announced by the State Government in a press note. The petitioners argued that they were entitled to these benefits based on the policy announcement by the Industries Department of the Government of Haryana.

2. Validity of Notices Issued by Assessing Authorities for Non-Payment of Sales Tax:
Notices were issued by the deputy Excise and Taxation Commissioner-cum-Assessing Authority for non-filing of returns and non-payment of tax. The petitioners contended that these notices should be quashed as they were entitled to deferment of tax payment based on the policy announcement. The assessing authority rejected the petitioners' representation and issued further notices requiring tax payment and proposing penalties.

3. Applicability of the Doctrine of Promissory Estoppel Against the State Government:
The petitioners claimed that the State Government was estopped from recovering sales tax because they had set up their units based on the sales tax incentives promised by the Government. The respondents argued that the policy announcement could not be construed as a binding promise because no corresponding amendments were made in the Act and the Rules to give it statutory status.

The court held that the plea of estoppel deserved to be rejected as the petitioners did not provide sufficient material to substantiate their assertion that they had set up their units based on the promise of incentives. The court also noted that no amount of promise made by executive authorities could be enforced if it violated statutory provisions.

4. Legislative Amendments Required to Enforce Sales Tax Deferment:
The respondents contended that the package of incentives announced by the Industries Department could not form the basis for granting sales tax deferment because no corresponding amendments were made in the Act and the Rules. Section 25A, added by Haryana Act No. 11 of 1984, empowered the State Government to defer tax payment, but the petitioners could not benefit from this section as the Rules had not been amended to provide for deferment.

The court noted that the Legislature had, for the first time in April 1984, empowered the State Government to defer tax payment. However, the petitioners could not claim this benefit as the necessary rules (17-A to 17-R) were inserted only in May 1986. The petitioners did not place any material before the court to show that they had applied for deferment after these rules came into force.

Conclusion:
The court dismissed the writ petitions, holding that the petitioners were not entitled to the deferment of sales tax payment as the necessary legislative amendments were not in place. The court also rejected the plea of promissory estoppel, stating that no binding promise could be enforced in violation of statutory provisions. The writ petitions were dismissed, and the notices issued by the assessing authorities were upheld.