2020 (9) TMI 170 - HC - VAT and Sales Tax

Permission for withdrawal of petition - Grant and continuation with the exemption from payment of Sales-tax - purchase of Raw Materials on sale of Finished Products to the extent in respect of quantum/amount made in the Industrial Policy - withdrawal of exemption before completion of the period for availing the amount of exemption - petitioner seeks permission to withdraw the present petition as the same has become infructuous. HELD THAT - Petition disposed of as withdrawn.

Summary

Issues involved:
1. Interpretation of Industrial Policy Resolution, 1995 and 2006 in relation to Bihar VAT Act, 2005
2. Validity of alternative provided in Section 96[3[b] of Bihar VAT Act, 2005
3. Restraint on Sales-tax Authorities from raising demands during exemption period
4. Retroactive effect of Bihar VAT Act, 2005 on vested rights
5. Applicability of Bihar VAT Act, 2005 to Industrial Units with promised benefits
6. Validity of Section 94 of Bihar VAT Act, 2005 in relation to promissory estoppel

Analysis:
1. The petitioner sought a declaration that the State Government cannot withdraw the exemption promised under the Industrial Policy Resolution, 1995 for sales-tax on raw materials and finished products. The court was asked to direct the government to fulfill its promise without contravening the Bihar VAT Act, 2005. Additionally, the petitioner requested a similar promise made under the Industrial Policy, 2006 to be implemented attractively. The court was also asked to declare the deferment option in Section 96[3[b] of the Bihar VAT Act, 2005 as arbitrary and discriminatory.

2. The petitioner requested a restraint on Sales-tax Authorities from demanding tax during the exemption period covered by the Exemption Certificate. Moreover, the petitioner sought a declaration that the Bihar VAT Act, 2005 cannot nullify vested rights accrued for exemption from sales-tax on finished products under the Industrial Policy, 1995. The court was also asked to declare provisions denying benefits to industrial units enjoying promised benefits as inapplicable.

3. The petitioner challenged the validity of Section 96[3][b] and Section 94 of the Bihar VAT Act, 2005. Section 96[3][b] was argued to be arbitrary and discriminatory for denying exemption from sales-tax on finished products. Section 94 was contested for repealing acquired rights and privileges, being deemed arbitrary, discriminatory, and against the doctrine of promissory estoppel.

4. The court allowed the petitioner to withdraw the petition as it had become infructuous. Consequently, the petition was disposed of as withdrawn, and any interlocutory application was also disposed of. The judgment did not delve into the merits of the case due to the withdrawal of the petition.