2006 (9) TMI 503 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to judgment and order regarding exemption from sales tax under the Industrial Policy of Assam, 1986 and the Assam Industries (Sales Tax Concessions) Act, 1986 based on the plea of promissory estoppel.

Detailed Analysis:

Exemption from Sales Tax under Industrial Policy of Assam, 1986:
The writ appeals challenged a judgment regarding exemption from sales tax under the Industrial Policy of Assam, 1986, which provided incentives for new units and existing units undertaking expansion, modernization, or diversification. The scheme included sales tax exemption on raw materials and finished products for a specified period. The Assam Industries (Sales Tax Concessions) Act, 1986 was enacted to regulate sales tax concessions to industries, but it did not provide for exemption as per the 1986 Scheme. The appellants claimed entitlement to sales tax exemption based on the Scheme's promise, invoking the plea of promissory estoppel.

Promissory Estoppel and Legal Duty:
The central issue revolved around the plea of promissory estoppel raised by the writ appellants. The learned single judge rejected this plea, emphasizing that promissory estoppel could not override statutory provisions or the lawful duties of authorities. It was held that the doctrine of promissory estoppel could not prevent authorities from performing their legal obligations conferred by the statute. The court agreed with the single judge that post the Act's commencement, the plea of promissory estoppel could not compel the government to fulfill promises contrary to the statute.

Precedent and Interpretation of Law:
The Revenue contended that a Division Bench precedent established that promissory estoppel could not be invoked against actions ultra vires to the statute. The appellants argued against the applicability of this precedent, highlighting discrepancies in the interpretation of the Assam Industries (Sales Tax Concessions) Act, 1986 and 1987. The court clarified the factual position in a review petition, reaffirming the Division Bench's stance that the government was not bound by promissory estoppel in this context.

Final Decision and Dismissal of Writ Appeals:
The court found no compelling reasons to interfere with the impugned judgments, holding that the issues raised were conclusively addressed by the precedent established in Doson Chemicals' case. Consequently, the batch of writ appeals challenging the exemption from sales tax under the Industrial Policy of Assam, 1986 and the Assam Industries (Sales Tax Concessions) Act, 1986 failed and was dismissed. No costs were awarded considering the circumstances of the case.