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2014 (2) TMI 1148 - HC - VAT and Sales TaxDenial of exemption claim - Tripura Incentive Scheme 1995 - Withdrawal of scheme - Promissory estoppel - Held that - The doctrine of promissory estoppel can only apply in those cases where the person who claims that the State is estopped from withdrawing a benefit/concession granted to him has to plead and prove that he acted on the promise held out to him and changed his position to his disadvantage which has given rise to equities in his favour and therefore the State is estopped from withdrawing the concessions. In the present petitions when the units were set up the Notification of 1990 was in force. It only granted exemption of tax up to March 31 1995. There was no promise held out to the petitioners that they would be given any benefit after 1995. Therefore they set up the industries prior to March 31 1995 knowing fully well that the benefit would be available to them only till March 31 1995. The industries were set up before the Incentive Scheme of 1995 was even published. Therefore there is no question of the promissory estoppel being applicable in the present case because the petitioners did not set up the industry on the basis of the Incentive Scheme of 1995. Hence this principle is not at all applicable to the facts of the present cases. - State is well within its power to otherwise withdraw all concessions which may have granted to the industries and therefore we find no merit in the petitions - Petition disposed of.
Issues:
1. Interpretation of the Tripura Incentive Scheme, 1995 regarding sales tax exemption for industrial units established before April 1, 1995. 2. Application of the doctrine of promissory estoppel in the context of withdrawing tax exemptions. 3. Legal validity of the State's decision to replace the sales tax exemption scheme with a refund scheme. Analysis: Issue 1: Interpretation of the Tripura Incentive Scheme, 1995 The judgment addresses the interpretation of the Tripura Incentive Scheme, 1995, specifically focusing on sub-clause (d) of clause 10. This clause outlines the conditions for sales tax exemption for industrial units eligible under the Revenue Department's earlier notification. The scheme provided for a five-year exemption period from April 1, 1995, calculated from the date of first production. The petitioners claimed exemption based on this scheme, arguing for a five-year tax exemption starting from their respective dates of commercial production. Issue 2: Application of Promissory Estoppel The doctrine of promissory estoppel is examined in the context of the State's decision to withdraw the sales tax exemption scheme and replace it with a refund scheme in 2002. The petitioners contended that the State was estopped from withdrawing the exemptions under this doctrine. However, the State argued that the doctrine of promissory estoppel did not apply in this case, as there was no promise extending the tax benefits beyond the specified period. The judgment cites legal precedents emphasizing that the doctrine of promissory estoppel is not an indefeasible right and cannot be invoked against public interest. Issue 3: Validity of State's Decision to Replace Exemption Scheme The legality of the State's decision to replace the sales tax exemption scheme with a refund scheme is also analyzed. The judgment highlights that statutory exemptions granted by the State can be withdrawn unless the doctrine of promissory estoppel applies. It is noted that the petitioners did not set up their industries based on the Incentive Scheme of 1995, as they were established prior to its publication. Therefore, the principle of promissory estoppel was deemed inapplicable in this scenario. The court concluded that the State had the authority to withdraw concessions granted to industries, leading to the dismissal of the petitions. In conclusion, the judgment clarifies the interpretation of the Tripura Incentive Scheme, 1995, the limitations of promissory estoppel in tax exemption cases, and the State's power to modify or revoke concession schemes. The decision underscores that the doctrine of promissory estoppel must align with equity and public interest and is not an absolute right against the State's prerogative to alter fiscal policies.
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