Industrial incentive policy exemption cannot be curtailed by notification excluding petroleum products used as consumables.

A notification issued under section 11A of the Karnataka Tax on Entry of Goods Act, 1979 could not withdraw an exemption that the State industrial incentive policy had specifically promised to 100% export oriented units. The policy extended entry tax and sales tax relief to consumables, and that expression was treated as covering petroleum products used as consumables. Because the notification carved out petroleum products from the promised benefit, it was inconsistent with and repugnant to the policy and could not stand to that extent. The exclusion was therefore invalid to that extent, and the consequential endorsement was quashed.

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Issues: Whether the notification excluding petroleum products used as consumables for 100% export oriented units was contrary to the State industrial policy and liable to be struck down, and whether the consequential endorsement was liable to be quashed.

Analysis: The notification was issued under section 11A of the Karnataka Tax on Entry of Goods Act, 1979 to implement the State's industrial incentive policy. The policy itself extended exemption from entry tax and sales tax on consumables for 100% export oriented units, and the expression covered petroleum products used as consumables. A notification made under the Act could not deny a benefit specifically promised under the industrial policy. To the extent the notification carved out petroleum products from the promised exemption, it was inconsistent with and repugnant to the policy and therefore could not stand.

Conclusion: The exclusion of petroleum products from the exemption was invalid to that extent, and the consequential endorsement was quashed.

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