Retrospective validating amendment and revised ineligibility list defeat cotton seed oil tax holiday claims under the incentive scheme

The amended sales tax incentive scheme was read with the revised ineligible industries list, so cotton seed oil units, including those with refinery, fell within the exclusion and could not claim the tax holiday. Promissory estoppel and legitimate expectation were unavailable where no enforceable representation survived the revision, and they could not compel a result contrary to law. The retrospective validating amendment was treated as capable of removing the basis of an earlier judicial declaration and operating notwithstanding prior judgments. Temporary eligibility certificate holders received limited protection for the earlier period, and some matters were remitted for reconsideration on the earlier implementation criterion.

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Issues: (i) whether cotton seed oil industries were entitled to sales tax holiday under the incentive scheme as modified by later governmental orders and the amending legislation; (ii) whether the doctrines of promissory estoppel and legitimate expectation could sustain claims after the ineligibility list was revised; (iii) whether the retrospective amendment could validly remove the basis of an earlier judicial declaration and defeat claims founded on the pre-amended provision; and (iv) whether petitioners holding temporary sales tax eligibility certificates were entitled to limited relief.

Issue (i): whether cotton seed oil industries were entitled to sales tax holiday under the incentive scheme as modified by later governmental orders and the amending legislation

Analysis: The original incentive order was later modified by an order revising the list of ineligible industries, and the subsequent amending legislation was read with that revised list. The expression referring to the annexure to the earlier Government Order was construed in light of the later modification, so that the revised ineligible list became part of the governing scheme. On that construction, industries engaged in extraction or production of cotton seed oil, with or without refinery, fell within the excluded category and could not claim the sales tax holiday under the amended arrangement.

Conclusion: Cotton seed oil industries were held to be ineligible for the sales tax holiday after the revision of the ineligible list and the retrospective amendment.

Issue (ii): whether the doctrines of promissory estoppel and legitimate expectation could sustain claims after the ineligibility list was revised

Analysis: The Court held that those doctrines require an unequivocal representation, reliance, and detriment, and that they cannot be invoked to enforce a representation contrary to law. For units that took steps after the revision of the ineligible list, there was no enforceable representation surviving in their favour. Only those whose implementation steps and reliance were referable to the period before the revision could potentially fall within the State Level Committee's relaxed criterion, and even then only for reconsideration on facts already protected by that decision.

Conclusion: The doctrines did not assist petitioners who acted after the revision, though some earlier cases were directed to be reconsidered under the State Level Committee's criterion.

Issue (iii): whether the retrospective amendment could validly remove the basis of an earlier judicial declaration and defeat claims founded on the pre-amended provision

Analysis: The earlier judicial declaration had proceeded on the then-existing statutory text. The retrospective amendment altered the legal foundation on which that declaration rested and expressly operated notwithstanding any judgment, decree, or order to the contrary. Applying the principle that the Legislature may remove the defect or basis of a judicial decision with retrospective effect, the Court held that the amendment validly displaced the earlier legal position and the applications had to be decided under the amended provision.

Conclusion: The retrospective amendment was held to be effective and binding, and the earlier declaration did not prevent application of the amended law.

Issue (iv): whether petitioners holding temporary sales tax eligibility certificates were entitled to limited relief

Analysis: Temporary eligibility certificates had conferred tentative entitlement up to a specified percentage of fixed capital investment and had been acted upon by some petitioners. As no specific recovery mechanism was provided for the period prior to the amendment and the certificates had operated for a substantial period, the Court found it unjust to demand tax for that earlier period. In the cases where reconsideration on final eligibility was directed, the possibility of full exemption was left open if the petitioners satisfied the earlier-determined criterion.

Conclusion: Limited relief was granted to petitioners who held temporary eligibility certificates, and a few matters were remitted for reconsideration on eligibility.

Final Conclusion: The amended statutory scheme was upheld as applicable to cotton seed oil industries, the main claims for sales tax holiday failed, but limited relief was preserved for petitioners who had acquired temporary eligibility and certain cases were sent back for reconsideration on the earlier implementation criterion.

Ratio Decidendi: A retrospective validating amendment may lawfully remove the statutory basis of an earlier judicial declaration and, when the amended text is read with the revised ineligibility list, the incentive must be denied to industries falling within that revised exclusion; equitable doctrines cannot override the resulting legal bar.

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