9911796707
TMI Blog2009 (12) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... mmittee (for brevity, "the HLSC") rejecting the appeal of the petitioner filed against the order dated October 28, 1994. Brief facts of the case are that in the year 1988 the State of Haryana formulated an industrial policy and certain industries, which were set up after April 1, 1988, were exempted from payment of sales tax on the goods manufactured by them. Since there was no express provision of exemption in the Haryana General Sales Tax Act, 1973 (for brevity, "the HGST Act"), therefore, with a view to augment industrial development in the respondent State, section 13B was inserted in the HGST Act vide Haryana Act No. 26 of 1988, inter alia, empowering the State of Haryana to exempt any class of industry from payment of sales tax on the goods manufactured by them. On May 17, 1989, the State of Haryana notified the Haryana General Sales Tax (Second Amendment) Rules, 1989, amending the Rules. After Chapter IV of the existing Rules, Chapter IVA was inserted with the heading of "class of industries, period and other conditions for exempting/deferring from payment of tax". In the said Chapter, rule 28A has also been incorporated in the Rules. Rule 28A(2) of the Rules define ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on March 9, 1992, which has superseded the earlier negative lists (P2). On May 25, 1993, the State of Haryana in Industries Department has issued another notification notifying that the industries mentioned therein are placed in the negative list and they would not be entitled to any incentives including sales tax exemption/deferment. It has further been specifically mentioned that the said notification would be effective from the date of issue and the list contained therein would have no application to the industrial units set up under the Rural Industries Scheme (P3). It has been claimed by the petitioner that the notification dated May 25, 1993 has superseded the negative list which was notified on March 9, 1992. At this stage it is pertinent to mention that the petitioner is a partnership firm engaged in the business of manufacturing of "HDPE/PP woven sacks and polythene bags and sheets". It has been asserted that the manufacturing unit of the petitioner was excluded from the negative list with effect from May 25, 1993. In other words, the industries like that of the petitioner's, which were manufacturing polythene bags and sheets were made eligible y the State of Haryana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The commercial production in the industrial unit of the petitioner commenced on December 20, 1993. On February 11, 1994, the petitioner applied in the prescribed form ST 70 to respondent No. 4 for grant of an eligibility certificate enabling it to avail of the benefit of sales tax exemption under rule 28A of the Rules which was within the prescribed period of 90 days from the date of commercial production. On February 11, 1994 itself, the Excise and Taxation Department, Haryana, issued a notification amending the Third Schedule prospectively with effect from February 11, 1994 (P9). As a result the class of industries manufacturing polythene bags and sheets stood excluded from the negative list contained in the Third Schedule with effect from February 11, 1994. On October 28, 1994, respondent No. 4 informed the petitioner that its application for grant of sales tax exemption was considered by the LLSC and rejected because the industrial unit of the petitioner fell in the negative list of industries as per the Third Schedule of the Rules (P10). On November 24, 1994, the petitioner filed an appeal under rule 28A(5)(f) of the Rules against the order dated October 28, 1994 before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 of the petition and argued that even industrial plot in industrial estate, Karnal was allotted vide annexure P7 and loan of about Rs. 10 lacs for running the industrial unit was given by the Haryana Financial Corporation (P8) and those benefits were released to the petitioner on the basis of the recommendation made by the General Manager, District Industries Centre. Therefore, once the petitioner has applied in the prescribed form ST 70 for grant of eligibility certificate and to avail of the benefit of sales tax exemption on February 11, 1994 then there was no reason for the respondents to deny the benefit especially when on February 11, 1994 the industry concerning manufacturing of polythene bags and sheets have been removed from the negative list. The learned counsel has submitted that the principle of promissory estoppel would be attracted to the facts of the present case and in that regard he has placed reliance on the judgment of the honourable Supreme Court in the case of State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258 and State of Punjab v. Nestle India Ltd. [2004] 136 STC 35; [2004] 6 SCC 465 and argued that in similar circumstances the principle of promisso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the negative list. Accordingly, any manufacturer of polythene bags and sheets would not be eligible on December 20, 1993. He has further pointed out that there is option given by rule 28A(4)(a) to apply either from the date of production or from the date of issuance of certificate. However, the petitioner's unit has chosen to apply from the date of production when it fell within the negative list and, therefore, it could not be granted exemption. In so far as the retrospective effect of draft Rules is concerned, Mr. Sharma has submitted that the draft Rules were merely a proposal and objections were invited. According to the learned counsel the draft Rules were eventually notified on February 11, 1994 (P9) and the provision with regard to retrospective effect was not accepted by the Government. Therefore, it cannot be claimed that the draft Rule, which provided for retrospective operation of the item like polythene bags and sheets excluding from the negative list, would operate from a retrospective date. After hearing the learned counsel for the parties and perusing the record we find that the entitlement of the petitioner to seek tax exemption from the payment of tax would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deferment as per the option exercised. It has come on record that the operative period for exemption or deferment is April 1, 1988 to March 31, 1997. There is then procedure for availing of benefit provided by sub-rule (5)(a) of rule 28A of the Rules which reads as under: "5(a) Every eligible industrial unit which is desirous of availing benefit under this rule shall make an application in form ST 70 in triplicate along with attested copies of documents mentioned therein to the General Manager, District Industries Center within 90 days of the date of its going into commercial production or the date of coming into force of this rule whichever is later. No application shall be entertained if not preferred within time. An application with incomplete or incorrect particulars including the documents required to be attached therewith shall be deemed as having not been made, if the applicant fails to complete it on an opportunity afforded to him in this behalf." According to the aforesaid rule every eligible industrial unit is required to make an application in form ST 70 along with attested copies of documents to the General Manager, District Industries Center within 90 days from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Rules clearly postulates that the petitioner could claim benefit of tax exemption either from the date of commercial production or from the date of issuance of exemption/entitlement certificate as per his option. The aforesaid option is not irrevocable. It can always be claimed by the petitioner either from the date of issuance of entitlement/exemption certificate or from the date of commercial production. The provisions of sub-rule (4)(a) of rule 28A of the Rules are not mandatory especially when the provision is compared with sub-rule (3) of rule 28A. A perusal of sub-rule (3) would show that an option can be exercised by an eligible industrial unit either to avail of the benefit of tax exemption or deferment. It further provides that option once exercised is to be treated as final. The framer of the rule has not used the mandatory language in the succeeding sub-rule (4)(a) by providing that option once exercised was to be treated as final. It is further pertinent to notice that the expression "shall" has been used in sub-rule (3) whereas sub-rule (4)(a) uses the expression "may" which also shows intention of the framer of the Rules that the option of the Rules exercised under ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
