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2020 (10) TMI 1061 - HC - VAT and Sales TaxEligibility for Sales Tax Exemption - time limitation - exemptions to industrial units or reduction in tax, payable on the sale or purchase - non-submission of loan document before due dates - HELD THAT - The pith and substance of the contention of the respondents, throughout from Exts.P12, P19, P21 and 22 had been that the petitioner did not fulfill the conditions of not having submitted an application for loan before 1.1.2000 and the land having purchased on 1.12.2001 entailing into dis-entitlement of exemption, in my view is wholly preposterous and fallacious, much less erroneous that neither the District level Committee nor the State Level Committee noticed the documents and the submissions of the petitioner, extensively. The Hon'ble Supreme Court in a matter of similar nature Pepsico India Holdings P.Ltd. case 2009 (5) TMI 529 - SUPREME COURT , while applying the question of interpretation of the notification observed that the notification dated 3.11.1999 was issued in terms of an industrial policy; whereto exemption was to be granted for a period of seven years and it was observed that obtaining of provisional registration in respect of SSI unit was sufficient. It is deemed appropriate to fix the time line in taking the decision, which is fixed as forty five (45) days from the date of receipt of certified copy of this judgment - petition allowed.
Issues Involved:
1. Eligibility for sales tax exemption. 2. Compliance with conditions specified in S.R.O No.1092/99. 3. Interpretation and application of the doctrine of promissory estoppel. 4. Procedural fairness in the rejection of the exemption application. Detailed Analysis: 1. Eligibility for Sales Tax Exemption: The petitioner challenged the rejection of their application for sales tax exemption, arguing that they had taken effective steps to set up the industrial unit before the cut-off date as per Exts.P1 and P2 notifications. The notifications stipulated that new industrial units, excluding public sector undertakings, which took effective steps before January 1, 2000, were eligible for tax exemptions. The petitioner claimed compliance with these conditions, citing provisional registration, land acquisition efforts, and financial support applications. 2. Compliance with Conditions Specified in S.R.O No.1092/99: The petitioner contended that they met the conditions for exemption, including obtaining provisional registration (Ext.P3), applying for financial assistance (Ext.P4), and attempting to acquire land (Ext.P5). The respondents argued that the petitioner did not satisfy conditions (b) and (c) of the notification, which required land acquisition and financial support applications before January 1, 2000. The court found the respondents' reasoning flawed, noting that the petitioner had indeed applied for a loan in 1997 (Ext.P4) and had a letter recommending land allotment (Ext.P5). 3. Interpretation and Application of the Doctrine of Promissory Estoppel: The petitioner argued that the doctrine of promissory estoppel applied, asserting that the government could not retract the promised tax exemption after the petitioner had made significant investments based on that promise. The court referenced the Supreme Court's judgment in Pepsico India Holdings v. State of Kerala, which supported the petitioner's position that mere provisional registration could suffice for exemption eligibility. The court agreed that the petitioner had changed their position based on the government's promise and that the exemption could not be withdrawn detrimentally. 4. Procedural Fairness in the Rejection of the Exemption Application: The petitioner claimed procedural unfairness, stating that their appeal was dismissed without a hearing and that the review petition was not considered. The court noted that the State Level Committee and the District Industries Centre failed to adequately examine the petitioner's documents and submissions. The court criticized the authorities for their mechanical and sketchy approach, emphasizing the need for a thorough and fair reconsideration of the petitioner's application. Conclusion: The court set aside the impugned orders (Exts.P12, P21, and P22) and directed the State Level Committee on Sales Tax Exemption to reconsider the petitioner's application in light of the findings and the Supreme Court judgment. The committee was instructed to review all submitted documents and afford the petitioner a hearing within 45 days. The court highlighted the need to avoid discrimination and ensure a consistent application of the exemption criteria. Judgment: The writ petition was allowed, and the matter was referred back to the State Level Committee for reconsideration.
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