Industrial incentive exemption upheld where qualifying advance payments and promissory estoppel bound the State to its assurances.

An industrial incentive exemption notification was construed according to its plain deeming terms. For self-financed units, acquisition of, or firm orders for, the necessary plant and machinery before the cut-off date was sufficient, and advance payment by cheque or demand draft credited before that date could count as a firm order. The Court held that the word "any" in the deeming clause could not be read as "all" or as requiring advance payment for the entire project machinery. Because the unit had placed qualifying orders, made advance payments before the cut-off date, and commenced commercial production within the stipulated time, the exemption requirements were satisfied. The Court also applied promissory estoppel, holding that the State was bound by its prior inducements on which the appellant had acted.

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Issues: Whether the appellant had taken the requisite effective steps before the cut-off date so as to earn exemption under the industrial incentive notifications, and whether the State was bound by its prior assurances under promissory estoppel.

Analysis: The exemption scheme was framed to attract investment and to grant relief to new industrial units that had commenced commercial production or had taken effective steps before 1 January 2000. For self-financed units, the notification treated as sufficient the acquisition of, or firm orders for, the necessary plant and machinery before the cut-off date, and the amended notification further provided that any advance payment by demand draft or cheque credited before that date would be deemed to be a firm order. The Court held that the word "any" in the deeming clause could not be read as "all" or as requiring substantial advance payment for the entire project machinery. It was enough that the appellant had placed orders and made advance payments for part of the necessary plant and machinery before the cut-off date, and that the unit had commenced commercial production within the time stipulated. The Court also held that the State had issued the incentive after inducing investment and that the appellant had altered its position and undertaken substantial expenditure in reliance on those representations.

Conclusion: The appellant satisfied the notification requirements for exemption, and the State was bound by promissory estoppel; denial of sales tax exemption was unsustainable.

Final Conclusion: The exemption claim was upheld and the impugned decision rejecting the benefit was set aside, with the appeal succeeding on the merits.

Ratio Decidendi: Where an incentive notification is issued to induce industrial investment, its deeming provisions must be applied according to their plain terms, and an entrepreneur who has made qualifying advance payments for necessary plant and machinery before the cut-off date and altered its position on governmental assurance is entitled to the promised benefit.

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