2020 (2) TMI 861 - HC - VAT and Sales Tax

Grant of reimbursement of Commodity Taxes/Value Added Tax paid by the petitioner - Direction to the respondents to issue appropriate notification giving effect to the provisions of Tripura Industrial Investment Promotion Incentive Scheme, 2007 - Tripura VAT Act, 2004 - period from 2008-09 to 2013-14 - HELD THAT - Where a responsible authority such as the State Government formulates and publishes an incentive scheme making detail provisions for attracting investment, recognizing incentives, laying down conditions of eligibility for claiming such incentives, withdrawing from such scheme only by way of inaction of issuance of notification, would lead to applicability of the principle of promissory estoppel. It would also be a question of credibility of the Government of inviting investments and thereafter backing out from the promise of providing incentives by citing the reason of non issuance of notification, that too without justifying reasons for such inaction. The ground of the applications of the petitioner not being in proper form or verification is purely technical objection and the defects if any are curable. The petitioner has made out a case for issuing appropriate directions - it is directed that the respondents shall process the claims of the petitioner for reimbursement of the VAT and other taxes as per the Tripura Industrial Investment Promotion Incentive Scheme, 2007 and pay to the petitioner such sum as found admissible out of the claims of the petitioner for said assessment years - petition disposed off.

Issues Involved:
1. Entitlement to reimbursement of Commodity Taxes/Value Added Tax under the Tripura Industrial Investment Promotion Incentive Scheme, 2007.
2. Legality of the respondents' refusal to issue a notification for the scheme.
3. Applicability of the principle of promissory estoppel against the State Government.
4. Timeliness and procedural propriety of the petitioner's claims.

Issue-wise Detailed Analysis:

1. Entitlement to reimbursement of Commodity Taxes/Value Added Tax under the Tripura Industrial Investment Promotion Incentive Scheme, 2007:
The petitioner, a private limited company engaged in the manufacture and sale of rubber, sought reimbursement of Commodity Taxes/Value Added Tax paid under the TVAT Act for the period from 2008-09 to 2013-14. The petitioner argued that it had set up its industrial unit based on the incentives promised under the Tripura Industrial Investment Promotion Incentive Scheme, 2007. Clause 9 of the scheme specifically provided for the reimbursement of Commodity Taxes, including VAT, Central Sales Tax, and Purchase Tax, subject to the issuance of a notification by the State Government.

2. Legality of the respondents' refusal to issue a notification for the scheme:
The respondents contended that the petitioner's claims were not verified and countersigned by the competent authority and that the availability of incentives was subject to the issuance of a notification by the Finance Department, which was never issued. The respondents further argued that the 2007 scheme was superseded by a 2012 scheme, which also was not operationalized due to the lack of a notification.

3. Applicability of the principle of promissory estoppel against the State Government:
The petitioner invoked the principle of promissory estoppel, arguing that the State Government could not resile from its promise of granting incentives as contained in the scheme. The petitioner had set up its industry based on the promise of tax waivers and had fulfilled all conditions for receiving the incentive. The court agreed with the petitioner, stating that the State Government's failure to issue the notification could not absolve it from fulfilling the promises made in the incentive scheme. The court emphasized that the scheme was detailed and exhaustive, aimed at attracting investments, and the Government's inaction in issuing the notification would lead to the applicability of the principle of promissory estoppel.

4. Timeliness and procedural propriety of the petitioner's claims:
The respondents argued that the petition suffered from gross delay and latches, as it was filed in 2016 for claims starting from the assessment year 2008-09. The court acknowledged the delay but considered it a technical objection, stating that any defects in the applications were curable.

Judgment:
The court concluded that the petitioner had made out a case for issuing appropriate directions. Despite the delay in filing the petition, the court directed the respondents to process the petitioner's claims for reimbursement of VAT and other taxes as per the 2007 scheme. The payment would be made without interest until the date of filing the petition, after which it would carry simple interest at 7% per annum until actual payment. The directions were to be carried out within four months from the date of the judgment. The petition was accordingly disposed of.

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