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TMI Blog1999 (4) TMI 523X X X X Extracts X X X X X X X X Extracts X X X X ..... l Appeal No. 669 of 1997 - - - Dated:- 22-4-1999 - SUJATA V. MANOHAR AND MOHAPATRA D.P. AND LAHOTI R.C. JJ. Prakash Shrivastava and Sushil Kr. Jain, Advocates, for the appellants. Pallav Shishodia, Advocate, for A.P. Medh, Advocate, for the respondents. -------------------------------------------------- The judgment of the Court was delivered by MRS. SUJATA V. MANOHAR, J. -At all material times the respondent was an industry engaged in the business of oil extraction and manufacture in the State of Rajasthan. 2.. By a notification dated May 23, 1987, issued in the exercise of its powers under section 4(2) of the Rajasthan Sales Tax Act, 1954, the appellant- State of Rajasthan notified a Sales Tax Incentive Scheme for Industries, 1987 (hereinafter referred to as the incentive scheme ) under which it exempted (inter alia) new industrial units from payment of tax on the sale of goods manufactured by them for sale within the State of Rajasthan in the manner and to the extent and for the period as specified in that notification. The operative period of the scheme under that notification was from March 5, 1987 to March 31, 1992. It was subsequently extende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and manufacturing industries both in respect of Rajasthan sales tax as also Central sales tax. Thereafter by further notifications dated September 10, 1990, issued under the Rajasthan Sales Tax Act, 1954, and the Central Sales Tax Act, it was further notified, inter alia, that whenever an industry is included on any date during the period of operation of the scheme in annexure B, the units of such industry which have started commercial production and whose applications for benefit under the scheme are pending on the said date before the appropriate screening committee will be entitled to claim full benefit of the scheme. 6.. Thus by reason of the notifications issued on May 7, 1990, the benefit of the incentive scheme was withdrawn from oil extracting and manufacturing industries. Thereafter the position was reviewed by the Finance Department and the Industries Department of the State of Rajasthan. Ultimately by a notification dated July 26, 1991, the benefit of exemption from Central sales tax was restored to oil extracting and manufacturing industry to the extent of 75 per cent in the case of new industries and to the extent of 60 per cent in the case of industries going for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trine of promissory estoppel and gave relief to the six industries before it, as also new industries set up before March 31, 1992. 9.. The appellants in those cases filed a special leave petition before this Court in which this Court on April 4, 1994, granted an interim stay of the judgment of the High Court dated January 12, 1993. Thereafter the appeals of Gopal Oil Mills and other appeals were decided by this Court on February 23, 1995 [see [1999] 115 STC 25 (SC) supra]. Before this Court, the respondents in those appeals only pressed their claim for exemption from Central sales tax for the period May 7, 1990 to July 26, 1991. This Court came to the conclusion that there was no public interest in withholding the benefit in respect of Central sales tax for the short period May 7, 1990 to July 26, 1991. Therefore, it set aside the notification of May 7, 1990, issued under the Central Sales Tax Act and upheld the High Court judgment in respect of the said notification issued under the Central Sales Tax Act. The respondents in those appeals stated that they were not pressing their challenge to the notification of May 7, 1990 issued under the Rajasthan Sales Tax Act, 1954. This Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f May 7, 1990, issued under the Rajasthan Sales Tax Act, on merit. This Court upheld the said notification in the said judgment merely on the basis of a concession made by the respondent-oil industries that they were not challenging the validity of the notification of May 7, 1990, issued under the Rajasthan Sales Tax Act. The respondents are right in contending that the validity or otherwise of the notification of May 7, 1990, issued under the Rajasthan Sales Tax Act has to be examined independently in their case. They are also right in contending that its validity must be considered independently of the validity of the notification of May 7, 1990, issued under the Central Sales Tax Act. The notification of May 7, 1990, issued under the Central Sales Tax Act was withdrawn on July 26, 1991. In the light of this fact, this Court said that there was no public interest in withholding the benefit of the incentive scheme granting exemption from Central sales tax from oil industries for the short period May 7, 1990 to July 26, 1991. In the case of the notification of May 7, 1990, under the Rajasthan Sales Tax Act, no subsequent notification has been issued to restore the benefit of the sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia [1997] 3 SCC 388 once again this Court after examining a number of authorities has held that if any supervening public interest so demands, the benefit under any incentive scheme can be withdrawn. The same view has been again reiterated in Union of India v. Godhawani Brothers [1997] 11 SCC 173. 16.. The State Government has, with the permission of this Court, relied upon an affidavit in this connection which they had filed in Civil Appeal No. 5738 of 1994 [State of Rajasthan v. Gopal Oil Mills [1999] 115 STC 25 (SC)]. The appellant-State has pointed out that their experience with regard to implementation of the said incentive scheme during the years 1988 and 1989 revealed that the object of having more new industries in the areas specified could not be achieved, particularly in the case of oil industry and cotton industry. On the contrary, the policy had adversely affected existing units in the State. Since the tax liability of new units was much less, and the tax liability on the old units was high, old units gradually started closing down while new units started coming up. As a result, in the two years 1988 and 1989, 64 old units were closed down and 74 new units were starte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 lakhs in installing the industrial unit. However, there is no material to show that any of this was done prior to May 7, 1990. In fact, the respondents could commence commercial production only in February, 1991, long after the benefit of the incentive scheme had been withdrawn. Their application for eligibility certificate under the said scheme was made only on April 2, 1991, long after the benefit of the scheme had been withdrawn in respect of oil industry. In these circumstances, even if we were to hold that the doctrine of promissory estoppel can be invoked, the same cannot be invoked in the case of the respondents. 18.. In view of the withdrawal of the benefits under the said incentive scheme by the notification of May 7, 1990, which was issued in valid exercise of power by the appellant, the respondents are not entitled to the benefit of the incentive scheme pertaining to exemption from payment of sales tax under the Rajasthan Sales Tax Act, 1954. 19.. The respondents, however, contend that they were granted a certificate of eligibility in respect of both Central and State Sales Tax Schemes on January 6, 1993. They have enjoyed the benefit of exemption from the State sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal the matter was carried further by filing the present special leave petition/appeal before this Court. The respondents continued to enjoy the benefits of the said two schemes since no stay was obtained. Nevertheless, the question whether the respondents are entitled to the said benefits, has been sub judice throughout. Since the appeal is now being decided against the respondents, they cannot claim the benefit of an eligibility certificate which was granted entirely on account of a judgment of a single Judge in their favour which is now being set aside. 21.. The respondents, however, point out that this Court in its judgment in State of Rajasthan v. Gopal Oil Mills [1999] 115 STC 25 allowed the respondent-oil industries to retain the benefit they had obtained under the scheme framed under the Rajasthan Sales Tax Act up to April 4, 1994. This was on the ground that the stay of the impugned High Court judgment was granted by this Court only on April 4, 1994. In the present case, the respondents cannot be discriminated against. They should, therefore, be allowed to retain the benefits they have enjoyed at least up to April 4, 1994, just as the other oil industries have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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