2009 (9) TMI 937 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of Section 41C of the Bombay Sales Tax Act u/s Package Scheme of Incentive 1979, impact of subsequent legislative amendments, application of promissory estoppel, alleged discrimination and unreasonableness in legislation.

Summary:
The petitioners established Small Scale Industrial Units in a backward area under the Package Scheme of Incentive 1979. An Ordinance and subsequent Acts introduced limitations on gross fixed capital investment for entitlement under the Scheme. The petitioners challenged Act 16 of 1995, which imposed a limit not present in the original Scheme. The subsequent amendment to Section 41C by Act 19 of 1996 was not contested by the petitioners, despite being retrospective. The petitioners argued that Act 16 of 1995 was unreasonable and violated the doctrine of promissory estoppel, citing relevant case law. They claimed that denial of benefits due to subsequent legislation amounted to discrimination. The Court noted that the challenge was based on Act 16 of 1995, which was substituted by Act 21 of 1996, not under consideration. The entitlement certificate issued to the petitioners covered the period of operation of Act 16 of 1995, but their entitlement under Act 21 of 1996 was not raised. The Court held that the challenge to Act 21 of 1996 was not before them, and thus, the petition was dismissed. The petitioners were allowed to challenge Act 21 of 1996 separately if they deemed it necessary.

In conclusion, the Rule was discharged, and no costs were awarded. The Court clarified that the dismissal of the petition regarding Act 16 of 1995 would not prevent the petitioners from challenging Act 21 of 1996 independently in the future.