9911796707
TMI Blog2025 (2) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... f, Senior Advocate assisted by Mr. N.N. Dutta, Advocate. Advocate for the Respondents :Mr. S.C Keyal, Standing Counsel, CGST Mr. B. Chowdhury, Standing Counsel, SGST. JUDGMENT AND ORDER(CAV) This bunch of writ petitions can be clubbed into two separate groups. 2. W.P(C) No. 5133/2018; W.P(C) No. 5139/2018; W.P.(C) No. 5141/2018; W.P.(C) No. 5143/2018 and W.P(C) No. 5136/2018 are the writ petitions filed by the petitioners aggrieved by the rejection of their respective eligibility certificates which they had applied for under the relevant provisions of the Industrial Policy of 2008. The petitioners are aggrieved that without due and proper appreciation of the facts and materials available before the respondent-Department of Industries, their claim for eligibility certificates were rejected. Consequently they being aggrieved, they have approached this Court praying for appropriate Writ Direction or Order for setting aside their respective rejection orders for grant of eligibility certificates as well as consequential order to the respondents to issue the eligibility certificates and/or otherwise consider them eligible for availing the benefits under the Industrial Policy of Assam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 as the said industrial unit was presently found to be "non-functioning" assigning the reason that the Government provides tax exemptions and other fiscal incentives to encourage industrial units for their contribution in economic development of the State in general and employment generation in particular and a non-functioning unit neither contributes in economic development nor in employment generation and as such the same is not entitled for grant of eligibility certificate. W.P(C) No. 5141/2018 (Raj Coke Industries) This writ petition has been filed challenging the order dated 05.05.2018 issued by the Commissioner of Industries & Commerce, Udyog Bhawan, Assam holding the industrial unit of the petitioner firm to be ineligible for grant of eligibility certificate under the Industrial Policy of Assam, 2008 as the said industrial unit was presently found to be "non-functioning" assigning the reason that the Government provides tax exemptions and other fiscal incentives to encourage industrial units for their contribution in economic development of the State in general and employment generation in particular and a non-functioning unit neither contributes in economic development ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has been filed challenging the order of assessment dated 22.02.2019 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2014-15 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate W.P(C) No. 5932/2018 (Shiva Coke Industries) This writ petition has been filed challenging the order of assessment dated 31.03.2018 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2013-14 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate. W.P(C) No. 5931/2018 (Jai Coke Industries) This writ petition has been fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been filed challenging the order of assessment dated 22.03.2018 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2013-14 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate. W.P(C) No. 2111/2019 (Ganesh Met Coke Industries) This writ petition has been filed challenging the order of assessment dated 22.02.2019 passed by the Superintendent of Taxes, Central VAT Audit Team and the Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2014-15 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate. W.P(C) No. 2096/2019 (Ganesh Met Coke Industries) This writ petition ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled challenging the order of assessment dated 14.02.2019 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2014-15 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate. W.P(C) No. 5980/2018 (Sheo Shakti Coke Industries) This writ petition has been filed challenging the order of assessment dated 29.06.2018 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2013-14 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate. 6. The Government of Assam, Department of Industries and Commerce by Notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Generation, Subsidy on Feasibility Study costs, Subsidy on Quality Certification/Technical knowhow, Subsidy on Marketing Assistance, Subsidy on Drawal of power Line etc. 8. Initially when the policy was announced, exemption from Sales Tax was not part of the said Industrial Policy. Subsequently, the Assam Industries (Tax Remission) Scheme, 2005 was notified in the Assam Gazette (Extraordinary) No. 165 dated 02.05.2005. Under the said Assam Industries (Tax Exemption) Scheme, 2005, the eligibility criteria for enjoying the benefits by an industrial unit will be available if that industrial unit was considered to be an industrial unit eligible for the benefits available under the Industrial Policy of Assam 2003. Section 3 of the Scheme of 2005 provided for the Tax Exemption/Remission for the eligible unit. Under the said scheme, if an eligible unit registered under the Scheme manufactures any goods in Assam, the said eligible unit shall be entitled to remission of 99% of Tax payable by such unit according to its return in respect of sales of such goods manufactured in such unit and continue to be eligible for such remissions until the amount of such tax payable exceeds the unavail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing environment clearance of projects falling under category-A and category-B from the Ministry of Environment and Forests, Government of Assam. A communication from the Pollution Control Board, Assam was also enclosed therewith whereby the Assam Pollution Control Board expressed no objection in granting consent to establish Coke units provided that there is compliance to directives of the Government of India as per Notification No. 1533 dated 14.09.2006 and subject to clearance from necessary authorities. The petitioner thereafter applied for and was granted provisional consent to establish a Low Ash Metallurgical Coke and Breeze Coke manufacturing unit by the Pollution Control Board, Assam. The Pollution Control Board also gave consent to the petitioner to operate its business of the petitioner industry for the periods 2009-10, 2010-11 and 2011-12. License was also applied for and was granted by the Chief Inspector of Factories under the Factories Act, 1948 for setting up of factory. Upon due verification of the steps undertaken by the petitioner industry and due compliance of the procedure prescribed, the General Manager, District Industries and Commerce Centre issued an acknowl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not in operation because of the ban of coal by National Green Tribunal (NGT) and once the ban imposed by NGT is withdrawn, the petitioner will start its operation in the industrial unit. 11. That during the pendency of the process of examination of the eligibility of the petitioner to claim its benefit for exemption under the industrial policy which the Department of Industries was examining in terms of the judgment and order dated 12.05.2015 passed in W.P.(C) No. 2900/2011 directing the authorities to do so, the Department of Finance and Taxation initiated the assessment proceedings under the Central Sales Tax Act in respect of the writ petitioner for the period 2012-13 under section 36 (1) of the Assam Value Added Tax Act 2003 read with Rule 9(2) of the Central Sales Tax Act. According to the petitioner, since it was eligible for exemption from payment of tax by way of remission and the eligibility certificate in respect thereof was not issued till then by the industries department, the petitioner could not submit its annual and monthly returns online as is required to be submitted by dealers who were granted the benefit of exemption under the Industrial Policy. 12. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the petitioners putting to challenge the respective orders passed by the Department of Industries rejecting their claim for eligibility as an "eligible unit" under the Industrial policy of 2008 and thereby denying them the benefits and tax incentives available under the said industrial policy. 16. W.P.(C) No. 1828/2019; W.P(C) No. 2138/2019; W.P(C) No. 5954/2018; W.P(C) No. 5937/2018; W.P.(C) No. 5957/2018; W.P.(C) No. 2111/2019; W.P.(C) No. 1843/2019; W.P(C) No. 2096/2019; W.P(C) No. 6027/2018; W.P(C) No. 5960/2018; W.P(C) No. 5917/2018; W.P(C) No. 1860/2019; W.P(C) NO. 5980/2018; W.P(C) No. 5932/2018 and W.P(C) No. 5931/2019 have been filed by the petitioners whereby the assessments made by the Department of Finance and Taxation have been assailed as the same were completed during the pendency of the consideration of the claims of the petitioners to be eligible units by the industries department and by ignoring their claims that in the event they are considered to be eligible units, they will be entitled to all the fiscal benefits and the exemptions available under the industrial policies as well as the Assam Remission of Taxes scheme 2005. 17. In so far as the challenge m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the petitioner industrial unit was not issued. Nevertheless, the petitioner started its commercial production with effect from the dates mentioned in the chart. Because of the ban imposed by the National Green Tribunal in the State of Meghalaya, the commercial production had to be stopped as the coal which was sourced from the State of Meghalaya could not be obtained because of the ban imposed by the NGT. It is submitted that first, in view of the offer made by the state of Assam by virtue of industrial policy, the petitioner altered its position by making huge investments in purchase of land and setting up of the industrial unit. It is submitted that when the commercial production of the industrial unit started as far back as the dates mentioned in the chart given and continued thereafter, the respondent authorities could not refuse to issue eligibility certificate on the ground that in 2018 the said industrial unit was found to be non-functional. It is submitted that the industrial units which was operation for nearly seven years, therefore the claim of the respondents that as these industrial units did not satisfy or fulfil the required criteria, they were not eligible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industrial unit was in operation. It is submitted that that the activity carried on by the petitioner industrial units which was considered to be "not manufacture" in terms of rule 57A of the Assam VAT Rules having been declared ultra vires by this Court, there was no hurdle on the part of the respondents to issue the eligibility certificate in favour of the petitioner. However, the same was denied by treating the petitioner industrial unit to be "non-functional" which is contrary to the facts on the ground. It is submitted that ordinarily an eligibility certificate is issued immediately after commencement of commercial production and once the commercial production commences, the benefits available under the industrial policy of 2008 is required to be conferred on such an industrial unit during the entire period of the industrial policy. It is submitted that there is no provision under the industrial policy of 2008 and/or the Assam Industries Tax (Exemption) Scheme, 2009 that the benefits that if an industrial unit closes down before the expiry of the period of eligibility, the benefits availed will have to be refunded back to the government. It is further submitted that the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y held that the rejection of the claim of the benefit of transport subsidy was improper and consequential orders were issued by this Court. 21. The learned Senior counsel also referred to the judgment of the Tripura High Court rendered in Sukhumoy Paul Vs State of Tripura and others reported in (2021) SCC online (Tri) 273 to buttress his arguments that once the industrial unit commences its production, subsequent closure will not deprive the benefits which accrue to the industrial unit merely because the unit was non-functional subsequently. The learned counsel for the petitioners further submits that the fact that the petitioner industrial unit was functional and had commenced commercial production with effect from date of commercial production is evident from the fact that for the relevant period, the Department of Finance and Taxation had completed its assessment by treating the petitioner unit to be a dealer not covered by the exemptions and the benefits. It is submitted that a bare perusal of the assessment order which is impugned by way of a separate proceeding, will reveal that the assessments were completed by due examination of the books of accounts. It is submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment, the petitioners were deprived from filing the annual/monthly returns by the online mode. Since they were not issued the eligibility certificates by the industries department at the time they were required to furnish their returns, they had to file their returns in the physical form by mentioning therein that they are eligible for the exemptions and that their eligibility certificates have not yet been issued by the Industries department as the matters were under consideration of the State Authorities. However, the respondent Tax department refused to accept the plea of the respective Industrial units that the eligibility certificates were under active consideration by the designated authorities and thereby refused to grant the benefits attributable to the respective industrial units under the Industrial policy of 2008 read with the Assam Industries (Tax Remission) Scheme. It is submitted that because of the lapses on the part of industries department, the returns could not be filed by the online process and for which the petitioner industrial units are not at fault. The delay that had occurred in consideration of the claims for eligibility was not due to any fault of the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions of the respondent authorities in denying the petitioner unit its eligibility certificate to claim the benefits it is eligible to under the industrial policy of 2008 read with Tax Remission Scheme is wholly irrational, opposed to public policy, contrary to the very object and purpose of the industrial policy and the same is contrary to the facts available on record and therefore perverse inasmuch as the tax department concluded its assessments by holding that the industrial unit had completed its sales from the said industrial unit, the impugned orders, whereby the eligibility certificate was rejected needs to be interfered with, set aside and quashed. 26. The learned counsel appearing for the industries department submits that an affidavit has been filed on behalf of the industries department in W.P.(C) No. 1828/2018. He submits that since the facts involved are similar and common for the purposes of all the other cases, he would like to refer to and rely on the said affidavit. 27. The learned counsel for the Industries Department referring to the various provisions of the industrial policy submits that there are various steps which are required to be undertaken in so fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same could not be furnished by the Enquiry officer for the reasons mentioned, namely, for the unit being "non-functional", the State Level committee had no option but to reject the claim of the petitioner for eligibility certificate. It is therefore submitted that there is nothing available on record to show that these industrial units were functional at the relevant point in time and a field enquiry as required to be conducted could not be conducted by the industries department as the unit itself was "non-functioning". Under such circumstances, there is no infirmity in the order impugned the present writ petitions rejecting the claims of eligibility by the industries department. He therefore submits that there is no merit in these writ petitions and the same should therefore be dismissed as being devoid of any merit. 28. Mr. B. Chowdhury, learned counsel appearing for the Taxation department submits an affidavit in opposition has been filed in WP(C) No. 5917 of 2018 and he also submits that since the facts are similar for the purposes of the respondent Taxation department, they would like to rely on the affidavit filed in WP(C) No. 5917 of 2018 for all the other writ petitions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re held to be ultra vires and struck down on 12.05.2015 and thereafter, the petitioner unit, having become eligible to make a claim under the industrial policy, submitted its application for being considered as an eligible industry. It was for these reasons that notwithstanding the initiation of commercial production in 2009, the petitioner applied for eligibility certification in the year 2016. He further submits that if the unit was indeed found to be "non-functional", there was no question of any manufacture and consequent sales of its goods, therefore, there ought not to have been any imposition of sales tax by the respondent Finance department. It is submitted that if there is no manufacture, then there is no question of sales leading to imposition of sales tax/VAT. It is submitted that merely because the industrial unit was non-functional for a particular period of time would not disentitle such an industry from the benefits of the industrial policy by treating it to be an eligible industry, if during the currency of the policy, the industrial unit satisfies the prescriptions and the requirements under the said eligibility certificates under the industrial policy. 30. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d had claimed entitlement to the benefits of exemption from the payment of tax by way of remission as per the Industrial Policy of Assam, 2008 read with the Assam Industries (Tax Remission Scheme), 2005 and without taking into consideration the fact that the application for issuance of eligibility certificate was pending consideration before the competent authority. The challenge is made on the ground that the petitioners cannot be deprived of its due exemption which the petitioner claims to be entitled to under the Industrial Policy as well as the Tax Remission Scheme for no fault of the petitioners but only because the competent authority took time for disposal of the applications for issuance of the respective eligibility certificate. Since this fact was brought to the notice of the Tax authorities, the respective assessments of the petitioners ought not to have been proceed with till effective orders were passed on their claims for entitlements for the exemptions under the relevant Industrial Policy. 34. In order to appreciate the arguments addressed by the counsel, it is necessary to refer to the provisions of the Industrial Policy as well as the Tax Exemption. 35. The Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial Policy of Assam, 2003, the State of Assam promised and assured the people that various fiscal incentives would be provided which inter-alia were State Capital Investment Subsidy, Interest Subsidy on Working Capital, Power Subsidy, Subsidy on Captive Power Generation, Subsidy on Feasibility Study Costs, Subsidy on Quality Certification/Technical Know How, Subsidy on Marketing Assistance, Subsidy on Drawal of Power Line, etc. It may be relevant herein to mention that initially in view of the change to be brought into effect as regards the tax system, the exemption from sales tax was not mentioned in the Industrial Policy of Assam, 2003 but subsequently the Assam Industries (Tax Remission) Scheme, 2005 was notified in the Assam Gazette Extra-Ordinary No. 165 dated 02.05.2005. It may further be relevant herein to mention that under the Assam Industries (Tax Remission) Scheme, 2005, the eligibility criteria for enjoying the benefits thereon amongst others, was if an industrial unit is eligible under the Industrial Policy of Assam, 2003, the said Industrial Unit shall be treated as an eligible industrial unit. As per the terms of the Industrial Policy read with the terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the General Managers, District Industries and Commerce Centre not to issue temporary/permanent Registration Certificate for establishment of Coke Industries and further directing not to allow Coke Industries to start their industries which have obtained license but have not started operating to commence their operation. The aforementioned Writ Petition was disposed off vide an order dated 10.8.2007 by which the communication dated 16.5.2005 was set aside with a direction to the Pollution Control Board to consider the request of issuance of No Objection Certificate to the petitioner without being influenced by the directions contained in the letter dated 16.5.2005. 41. Pursuant to the said Judgment and Order dated 10.08.2007, the Petitioner completed construction of its proposed industrial unit by spending huge amounts of money. At this stage, it may be relevant herein to mention that the Petitioner made the following expenditures towards setting up its industrial unit. The same are stated herein below. Sl.No. Particulars Amount Spent 1 Land and land development Rs. 25,00,000 2 Factory shed and building Rs. 216,00,000 3 Plant and machinery Rs. 104,00,000 4 G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 for approval, licensing for registration of Factories under the Provisions of Factories Act, 1948. The Chief Inspector of Factories, Assam on 18.02.2009 granted the license bearing License No. KAM/1117 for setting up the Factory. The Pollution Control Board also gave the consent to operate the business of the Petitioner Industry for the period 2009-10, 2010-11 and 2011-12. 47. Subsequently, the Additional Director, Directorate of Industries and Commerce by a Communication dated 06.05.2009 intimated the General Manager, District Industries and Commerce Centre about the decision of the Government as given in the Communication dated 04.04.2009. Pursuant thereto, the General Manager, District Industries and Commerce Centre on 28.05.2009 by a Communication to the Director of Industries and Commerce with a request to inform as to whether the General Manager, Director of Industries and Commerce should accept the actual/declared date of commercial production of the said unit or as 04.04.2009, the date when the Government of Assam accorded its approval in the acknowledgement under the EM (Pt-II). 48. The Additional Director, Directorate of Industries and Commerce vide a Communication da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther be relevant herein to mention that the said Rule 57A was made retrospectively effective from 01.10.2008. The Assam Industries (Tax Exemption) Scheme, 2009 was also notified on 3.11.2009. 52. The validity of the said Rule 57A was challenged before this Hon'ble Court in a bunch of writ petitions. In those proceedings, it was contended that the Petitioner had on the basis of the various promises and assurances given by the Government of Assam in its Industrial Policy Resolution of 2003 had set up its Industrial Unit by altering its position and thereby it was not permissible for the State in view of the Doctrine of Promissory Estoppel to resile from the said promises by treating the activities of conversion of coal to coke carried out by the industrial unit of the petitioner firm not to be manufacture and thereby denying the benefit of various incentives to the petitioner firm. 53. Those writ petitions came up for hearing before a Division Bench of this Hon'ble Court and vide judgment and order dated 12.05.2015 allowed the writ petition and held Rule 57A (l) of the Assam Value Added Tax (Third Amendment) Rules, 2009 to be ultra vires the provisions of the provisions of the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was indicated as "non-functioning" by the Respondent No.2. The Respondent No.3 in the said order observed that the Government provides tax exemptions and other fiscal incentives to encourage industrial units for their contribution in economic development of the State in general and employment generation in particular and a "non-functioning" unit neither contributes in economic development nor in employment generation. 57. The Government of Assam announced the Industrial Policy of 2008 for encouraging industries to establish the units in the State of Assam by providing incentives in several aspects including taxation. The various features of the industrial policy are extracted below: INDUSTRIAL POLICY - INTRODUCTION 4.1 AIMS AND OBJECTIVES 1) To generate economic development by accelerating the process of industrialization. 2) To generate employment and increase income by encouraging the establishment of micro enterprises. 3) To increase the share of the Industrial sector in the State Domestic Product (SDP). 4) To make Nature - Economics Centric Development. 5) To make Agro and rural area linked industrial investment as focused programme. Besides, the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a minimum of 80% capacity during the period of three previous years and prior intimation to the concerned implementing agency. 4) NON-ELIGIBNLE UNIT: Non-eligible unit means those industries, which are declared as Non-eligible under this policy. 5) MANUFACTURE means any activity that brings out a change in an article or articles as a result of some process, treatment, labour and results in transformations into a new and different article so understood in commercial parlance having a distinct name, character use, but does not include such activity of manufacture as may be prescribed by Finance Department. 6) MICRO/SMALL/MEDIUM ENTERPRISE: As defined in the Micro, Small and Medium Enterprises Development Act, 2006 as amended from time to time. 7) INDUSTRIAL ESTATE/PARK under this policy means an area not less than 500 bighas with infrastructure facilities or built up space with common facilities for the purpose of industrial use commensurate with the master plan of the district or town or city as applicable. Minimum 25% area is to be left for open space and green belt and minimum 10% area for common utility. 4.6 ELIGIBILITY CRITERIA Unless otherwise specified, the eligi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to maximum of 150% of additional fixed capital investment Seven years subject to maximum of 100% of additional fixed capital investment Seven years subject to maximum of 90% of additional fixed capital investment. Fixed capital investment means & includes investment in plant & machinery or additional investment in plant & machinery (for expansion units) and building connected directly with manufacturing process. In case of micro industries only, cost of land purchased up to 40% of total investment in plant and machinery, can be included as part of fixed capital investment. The Finance Department of Government of Assam shall be the implementing agency for tax incentives. The Finance Department will bring out a separate notification in this regard. 702. EXEMPTION FROM STAMP DUTY AND REGISTRATION FEE To encourage setting up industrial infrastructure in the form of Industrial Park/ Estate through purchase of Private/ Government land, there will be 100% reimbursement of the stamp duty and registration fees against submission of equivalent Bank Guarantee from a nationalized bank that the Industrial Park/ Estate will be set up within a period of 3 years. The said Guarantee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The Court considered it apposite to permit the respondent authorities to place such materials to show the relevant date(s) when the physical inspection was made and the said unit was found to be non-functioning. On the other hand, the Sales Tax Department completed the assessments and raised the demand on the petitioner and other similarly situated petitioners. The assessment order clearly reveals that the assessment and the consequential demand was made after due examination of the books of accounts. The assessment of tax was made on the turnover of the unit/industry. Consequently, there appears to be a contrary stand reflected by the two departments of the Government namely, the Industries and the Finance Department. It is trite to mention here that in the State Level Committee constituted to examine and issue eligibility certificates, representatives of both the industries as well as the Finance and Taxation Department are members and which fact is not disputed by the respondents. Under such circumstances, it cannot be understood as to how a unit which was found to be non-functioning by the industries department could have reflected the turnover of goods manufacture and on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the unit was duly functioning on the date when the claims were made. It concluded that the State Level Committee ought not to have rejected the claims of the petitioners on the ground that the petitioner was non-functioning. In paragraph 9 of the said Judgment of Duroply Industries Limited (Supra), the Co-ordinate Bench of this Court held that the Petitioner's unit was duly functioning at the time when the claims for Transport Subsidy were made, and the said unit has to be closed down subsequently due to the financial crisis and shortage of raw material and thereby the State Level Committee ought not to have rejected the claims of the Petitioner on the ground that with effect from January, 2018 the Petitioner unit was not functioning. Paragraph 8 and 9 of the said Judgment and Order are relevant and the same are reproduced herein below: "8. The affidavit-in-opposition filed by the respondent Nos. 3, 4, 5 and 6 in both the writ petitions clearly shows that the claims of the petitioner were duly verified and due recommendations were made for payment of the amount of transport subsidy in favour of the petitioner. This Court has also raised a specific query upon the learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial unit continues such manufacturing activity for a period of 5 years that it can claim the transport subsidy. Therefore, even if, as pointed out by the respondents, the petitioner at some later point of time after commencing its production got engaged into the same activity as a job worker, this would not amount to breach of any of the eligibility conditions of the scheme." 64. The aforesaid two judgments of this Hon'ble Court and that of Tripura High Court are squarely applicable in the present case. 65. It is further seen from the pleadings that there is no dispute prior to closing down of the industrial unit of the Petitioner, the Petitioner's industrial Unit was producing the goods and was making sales of the same and the same will be evident from the orders of assessment passed by the Assessing Authority which are subject-matter of challenge in the other Writ Petitions: 66 In the orders of assessments, the Assessing Authority levied taxes on the sales made by the Petitioner's industrial unit on the ground that the Petitioner's industrial unit failed to produce the eligibility certificate for claiming the remission of the tax as per the Scheme of 2009. The said orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing that the conversion of coal into coke shall not be manufacture. It is only after the said Rules were declared ultra-vires by this Hon'ble Court, the Petitioner submitted its application for issuance of eligibility certificate. The other submissions advanced by the learned counsel for the Industry Department are not the ground on which the application for issuance of the eligibility certificate was rejected by the Commissioner of Industries & Commerce and thereby the same cannot be considered while examining the validity of the impugned order. It is a settled law that the validity of an order has to be examined on the basis of the contents of the said order and the validity of the same cannot be supported by subsequent affidavits and submissions. 69. In the case of Commissioner of Police, Bombay Vs. Gordhandas Bhanji, reported in AIR 1952 SC 16, the Apex Court in paragraph 9, held as under: "9. An attempt was made by referring to the Commissioner's affidavit to show that this was really an order of cancellation made by him and that the order was his order and not that of the Government. We are clear that public orders, publicly made, in exercise of a statutory autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the same, the respondent authorities cannot be allowed to resile from the promises and the refusal to grant eligibility certificate in respect of the industrial unit of the petitioner firm amounts to resiling from the promises made in the Industrial Policy and on the basis of the Doctrine of Promissory Estoppel, the respondent authorities are estoppel from acting contrary to the promises made in the Industrial Policy by refusing to grant eligibility certificate to the industrial unit of the petitioner firm on untenable grounds. Under the doctrine of promissory estoppels where the Government has made a promise and the prose relying on the promise has altered it's position to its detriment the Government is not exempt from it's liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex-parte appraisement of the circumstances in which the obligation has arisen. The superstructure of the doctrine with its preconditions, strengths and limitations has been out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "1) Since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. But it is only if the Court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. (2) No representation can be enforced which is prohibited by law in the sense that the person or authority making the representation or promise must have the power to carry out the promise. If the power is there, then subject to the preconditions and limitations noted earlier, it must be exercised. Thus, if the statute does not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government, because the Government cannot be compelled to act contrary to the statute. But if the statute confers power on the Government to grant the exemption, the Government can legitimately be held bound by its promise to exempt the promisee from payment of sales tax." 72. The Apex Court again th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court found that there was no clear material to show any definite or certain promise which had been made by the Minister to the persons concerned and there was no clear material also in support of the stand that the parties had altered their position by acting upon the representations and suffered any prejudice. On facts, therefore, no case for raising the plea of estoppel was held to have been made out. This Court proceeded on the footing that the notification granting exemption retrospectively was not in accordance with Section 10 of the State Sales Tax Act as it then stood, as there was no power to grant exemption retrospectively. By an amendment that power has been subsequently conferred. In these appeals there is no question of retrospective exemption. We also find that no reference was made by the High Court to the decision in M.P. Sugar Mills case [Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409 : 1979 SCC (Tax) 144]. In our view, to the facts of the present case, the ratio of M.P. Sugar Mills case [Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409 : 1979 SCC (Tax) 144] directly applies and the plea of estoppel is unanswerab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of the said article, can be made subject to the equitable doctrine of promissory estoppel in cases where because of their representation the party claiming estoppel has changed its position and if such an estoppel does not fly in the face of any statutory prohibition, absence of power and authority of the promisor and is otherwise not opposed to public interest, and also when equity in favour of the promisee does not outweigh equity in favour of the promisor entitling the latter to legally get out of the promise. *** 24. ... We, therefore, agree with the finding of the High Court on Issue 1 that by these notifications the Board had clearly held out a promise to these new industries and as these new industries had admittedly got established in the region where the Board was operating, acting on such promise, the same in equity would bind the Board. Such a promise was not contrary to any statutory provision but on the contrary was in compliance with the directions issued under Section 78-A of the Act. These new industries which got attracted to this region relying upon the promise had altered their position irretrievably. They had spent large amounts of money for establishin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. *** [E]quity will, in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights, even where they arise, not under any contract, but on his own title deeds or under statute. *** Whatever be the nature of the function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it." 79. The Apex Court distinguished its earlier decision in Kasinka Trading v. Union of India, (1995) 1 SCC 274, by holding as under: "40. The case of Kasinka Trading v. Union of India [(1995) 1 SCC 274] cited by the appellant is an authority for the proposition that the mere issuance of an exemption notification under a provision in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner Industries in respect of W.P.(C) No. 5133/2018; W.P.(C) No. 5139/2018; W.P(C) No. 5141/2018; W.P.(C) No. 5143/2018 and W.P.(C) No. 5136/2018 has established their units within the period concerned and pursuant Judgment and order dated 12.05.2015 passed in W.P.(C) No. 2899/2011 and other bunch of writ petitions setting aside the Rule 57A of the Assam Value Added Tax (Third Amendment) Rules 2009 as ultra vires provisions of the definition "manufacture" as prescribed under the Assam Value Added Tax Act, 2003, applications as necessary were duly made for grant of eligibility certificate. There being no material placed before the Court by the respondents to the effect that the units of the Industries concerned never commenced commercial production or were never established in terms of the provisions of the Industrial Policy, in the face of the assessments conducted by the Finance Department and levy of demand of sales tax on the sales made by these units/industries and these assessments having been made on the basis of due examination of the books of accounts of the said industries, it has to be held that these industries did establish their units in terms of the Industrial Polic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such circumstances, both the conclusions arrived at by the industries department as well as the Finance and Taxation Department run contrary to each other and cannot be accepted to be correct at the same time. If the conclusions arrived at by the Industries department that the industry was non-functioning is to be accepted, then the assessments made by the Finance Department and the consequential demand will have to be illegal and arbitrary as the industries department have held that the industry was non-functioning and therefore could not have generated any production and consequent sales. However, a perusal of the assessment order by the Finance and Taxation Department reveals that the said order was passed upon due verification of books of accounts and other relevant documents. The assessments were made treating the petitioners to be regular registered dealer in the absence of the eligibility certificate produced by the petitioners. The benefit of exemption was not granted as the eligibility certificate was not produced. Since the orders of assessment and the subsequent demands were stated to be passed by the Finance Department after due examination of the books of accounts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the pleadings that pursuant to the promises offered by the Government by way of the Industrial Policy, the petitioners altered their position to their detriment and made substantial investments. If these industries were indeed non-functioning then their registrations etc under the Industrial Policy also should have been cancelled and appropriate proceedings as per law should have been initiated against them by the Government. No such steps were initiated or even shown to be contemplated. Under such circumstances the state cannot be permitted to resile from its promise made without any justified reasons. Any such denial of the benefits under the Industrial Policy, if permitted, will be in total violation of the Doctrine of promissory Estoppel. 87. As have been discussed above, the State Level Committee comprises of representatives of various Government Departments including the Industries and Taxation. If the State Level Committee had indeed examined the claims of the petitioner for grant of eligibility certificates on relevant documents and materials, it would have been known to the State Level Committee that the Finance and Taxation Department have proceeded to make assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts from whom the clearance was required to be obtained like the Pollution Control Board, the Inspector of Factories etc were also duly obtained. Subsequently, the Finance Department came to initiate the assessment proceedings in respect of the unit for the industry concerned as registered dealer under the Assam Vat Act 2003 and the Rules thereunder and declined to grant the relevant exemptions as the eligibility certificate could not be produced at the time of filing the returns by the said units or industries. 90. As have been discussed, the assessment orders itself reflects that the books of accounts etc were examined and pursuant to which the assessment orders and the consequential demands were raised. Therefore, in the facts of the present case, besides the other departments which had the occasion to examine the papers submitted for establishment of the industry as well as assessment order and the consequential demands raised by the Finance Department, the fact remains that there is no mala fide alleged against the industry or unit by the respondent authorities. There is also no allegation that undue advantage has been sought to be taken by the industries in respect of Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in questions and the consequential demands raised. The sole ground for assailing the assessment orders in these writ petitions is that the Finance Department ought not to have proceeded with the assessments in question as the relevant applications for grant of eligibility certificates in respect of the industries or units were pending before the appropriate authority under the relevant Industrial Policy. As a consequence thereof, the benefit of exemptions by the petitioners could not be availed off as the returns could not be filed on the online mode supported by the eligibility certificate as is required under the procedure. These returns were filed in the physical mode with due representations that the claims for eligibility are under consideration and the department is required to await the grant of eligibility certificate by the Industries Department. No other ground is urged in these writ petitions. The industrial policy having been carefully examined does not provide for any exemptions for the period during which the eligibility certificate is under consideration. Even under the Assam Industries (Tax) Remission Scheme, 2005 which was announced to grant exemption from taxati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
