High Court rules in favor of petitioner on jurisdiction & tax exemption issues under Central Sales Tax Act

The High Court held in favor of the petitioner on both issues. Regarding Issue 1, the Court determined that the West Bengal Taxation Tribunal lacked jurisdiction over the matter, ruling that the petitioner was entitled to the benefits under the Central Sales Tax Act, 1956. On Issue 2, the Court upheld the petitioner's vested right to tax exemption despite the amended definition of "manufacture," granting the petitioner the remission of tax under the previous notification. The Court allowed the writ application, providing the requested declarations and directions in favor of the petitioner.

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Issues:
1. Maintainability of the writ application before the High Court in light of the West Bengal Taxation Tribunal Act, 1987.
2. Impact of the amended definition of "manufacture" on the petitioner's vested right to tax exemption.

Issue 1:
The petitioner sought a declaration regarding the inapplicability of Notification No. 2425 F.T. dated 12th August, 1999 to their industrial unit established before the notification's passing. The petitioner also requested a direction to withdraw an order refusing eligibility certificate issuance under section 41 of the West Bengal Sales Tax Act, 1994. The State-respondent contended that the remedy should be sought before the West Bengal Taxation Tribunal and argued against promissory estoppel, stating that the petitioner's entitlement ceased with the unit's change in status. The Court analyzed the jurisdiction of the Taxation Tribunal Act, determining that as the benefit was under the Central Sales Tax Act, 1956, the Tribunal lacked jurisdiction. The Court ruled in favor of the petitioner on this issue.

Issue 2:
The amended definition of "manufacture" introduced by Notification No. 2425 F.T. dated 12th August, 1999 excluded the petitioner's manufacturing activity from the definition. The petitioner contended that their vested right to tax exemption should not be affected by the amendment. The Court referred to precedents such as Pournami Oil Mills v. State of Kerala and Bakul Cashew Co. v. Sales Tax Officer, Quilon, establishing that benefits granted based on existing eligibility cannot be revoked by subsequent amendments. The Court held that the petitioner should retain the benefit available at the time of obtaining the initial eligibility certificate, ruling that the petitioner was entitled to the remission of tax under Notification No. 1324 F.T. dated April 28, 1995. Consequently, the Court allowed the writ application in favor of the petitioner, granting the requested declarations and directions.

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