2017 (5) TMI 998 - HC - VAT and Sales Tax

Vires of Clause 12 of the Assam Industries (Sales Tax Concessions) Scheme, 1995 - refund of sales tax - Held that - Admittedly, Industrial Policy of Assam, 1991, nowhere says that industries involved in the manufacturing, processing, blending or packaging of tea will be exempted from payment of sales tax. Therefore, the petitioner s plea of promissory estoppel is wholly unacceptable - Admittedly, Industrial Policy of Assam, 1991, nowhere says that industries involved in the manufacturing, processing, blending or packaging of tea will be exempted from payment of sales tax. Therefore, the petitioner s plea of promissory estoppel is wholly unacceptable - petition dismissed - decided against petitioner.

Summary

Issues:
1. Validity of Clause 12 of the Assam Industries (Sales Tax Concessions) Scheme, 1995.
2. Refund of sales tax collected.
3. Interpretation of Industrial Policy of Assam, 1991 regarding exemption from sales tax.
4. Application of promissory estoppel in the case.
5. Exclusion of 'tea' as raw material under Clause 12.
6. Legal precedent regarding similar provisions in Assam Industries (Sales Tax Concessions) Rules, 1988.

Validity of Clause 12: The petitioner challenged the validity of Clause 12 of the Assam Industries (Sales Tax Concessions) Scheme, 1995, arguing that it was ultra vires to the Industrial Policy of Assam, 1991. The High Court examined the provisions of the Industrial Policy and the Scheme, noting that 'tea' was specifically excluded as a raw material for exemption from sales tax. The Court held that the petitioner was not entitled to exemption for tea as raw material based on the clear language of Clause 12.

Refund of sales tax: The petitioner sought a refund of sales tax amounting to a specific sum collected by the respondents. The Court, after analyzing the relevant provisions and the petitioner's claim, dismissed the petition for refund. The Court emphasized that since 'tea' was not included as a raw material for exemption under Clause 12, the petitioner could not claim any benefit or refund of the sales tax amount collected.

Interpretation of Industrial Policy: The Court scrutinized the Industrial Policy of Assam, 1991, to determine if industries engaged in manufacturing, processing, blending, or packaging of tea were exempted from sales tax. The Court found that the Industrial Policy did not mention any exemption for such industries regarding sales tax. Therefore, the petitioner's plea based on promissory estoppel was deemed unacceptable.

Application of promissory estoppel: The Court rejected the petitioner's argument based on promissory estoppel, emphasizing that there cannot be any estoppel against the law. Despite the issuance of an eligibility certificate and authorization, the petitioner could not claim exemption from sales tax on tea as raw material due to the statutory provisions of Clause 12.

Exclusion of 'tea' as raw material: The Court highlighted that Clause 12 explicitly excluded 'tea' as a raw material for exemption from sales tax. The Court referenced a previous legal challenge regarding a similar provision in the Assam Industries (Sales Tax Concessions) Rules, 1988, where the exclusion of 'tea' was upheld as legal and valid.

Legal precedent: The Court referenced a previous case where a similar provision excluding 'tea' as raw material was challenged, and the Court had upheld the provision as legal and valid. The Court reiterated that no exemption could be claimed for sales tax on the purchase or sale of tea based on the statutory provisions, despite any certificates issued to the petitioner.

In conclusion, the High Court dismissed the petition, ruling against the petitioner's claims for declaring Clause 12 as ultra vires, refund of sales tax, and application of promissory estoppel. The Court upheld the exclusion of 'tea' as a raw material for exemption from sales tax based on the clear language of the statutory provisions.