2020 (9) TMI 117 - HC - VAT and Sales Tax

Exemption from payment of Sales-tax on sale of Finished Products under the Notification- S0 No. 479 dt. 22.12.1995 and Notification-S 0 No. 57 dt.02.03.2000 issued under the Industrial Policy, 1995 - petitioner fairly concedes that with the passage of time, present petition has become infructuous inasmuch as there is change with respect to the position of law - HELD THAT - This issue can be agitated by the petitioner first with the appropriate authority and thereafter before the appropriate forum in accordance with law. Petition disposed off.

Summary

Issues involved:
Petition for declaration of rights accrued under Bihar Value Added Tax Ordinance, 2005; denial of benefits to industrial units; validity of sections 96(3)(b) and 94 of the Ordinance; promissory estoppel; interpretation of government notifications for exemption; applicability of tax on products till reaching customers; precedent set by Iris Electronic Pvt. Ltd. case; restraining sales-tax authorities from raising demands; challenge to the deferment option under Section 96(3)(b) and Rule 57.

Analysis:
The petitioner sought various declarations regarding the Bihar Value Added Tax Ordinance, 2005. Firstly, they requested a declaration that the provisions of the Ordinance cannot nullify vested rights accrued before the expiry of the exemption period for sales-tax on finished products. They also sought a declaration that the denial of benefits to industrial units granted exemption by the State Government is not applicable to units enjoying promised benefits. Moreover, they challenged the validity of Section 96(3)(b) of the Ordinance, claiming it to be arbitrary and discriminatory in denying exemption from sales-tax. The petitioner further sought a declaration that Section 94 of the Ordinance, repealing rights acquired under previous laws, is arbitrary and opposed to the doctrine of promissory estoppel. Additionally, they requested to read down the provisions of the Ordinance to allow them to avail the exemption benefits as per government notifications. The petitioner also argued that the Ordinance should not be applicable to their products until reaching customers, and no tax should be levied on subsequent sales without deemed adjustment of the exempted portion. They relied on a precedent set by the court in the Iris Electronic Pvt. Ltd. case to support their claim that no tax should be levied on goods manufactured by an exempted unit. Furthermore, the petitioner sought to restrain sales-tax authorities from raising tax demands on their products and challenged the deferment option under Section 96(3)(b) and Rule 57 as arbitrary and discriminatory.

The court acknowledged that the petition had become infructuous due to changes in the law over time. However, it noted that the petitioner felt discriminated under the new enactment as compared to other industrial units receiving exemption benefits. The court advised the petitioner to address this issue with the appropriate authority and forum as per the law. The court granted liberty for the petitioner and similarly situated individuals to approach the authorities to address grievances of discrimination in benefit conferment under the relevant statute or policy. The court emphasized that such grievances should be considered and decided promptly and preferably within three months. Consequently, the petition was disposed of accordingly, with any interlocutory application also being disposed of.