High Court Upholds Industrial Incentive Policy Promises as Binding on State

The High Court affirmed the statutory value of the Industrial Incentive Policy of Bihar, emphasizing the binding nature of promises made in such policies on State authorities. The judgment highlighted the importance of aligning notifications under various Acts with the date of Industrial Policy notification for harmonized benefits. Despite the Industrial Policy promising a concession on Central Sales Tax (CST) from 4% to 1%, the Court ruled against the petitioner seeking assessment based on 1% CST, as evidence showed collection at 4% until the CST notification. The writ was dismissed based on Industrial Policy interpretation, separate from challenging assessment or appellate orders.

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Issues:
Dispute over benefit of Central Sales Tax concession under Industrial Incentive Policy of Bihar.

Analysis:
The High Court affirmed the statutory value of the Industrial Incentive Policy of Bihar, holding that promises made in such policies are binding on State authorities. The Court emphasized the importance of synchronizing notifications under various Acts with the date of Industrial Policy notification to ensure harmonized benefits. The judgment highlighted the need for good governance in aligning all benefits from the date of Industrial Policy notification.

In this case, the Industrial Policy of 2006 promised a concession on Central Sales Tax (CST) from 4% to 1%. However, the notification by the Sales Tax Department reducing CST to 1% was issued after the Industrial Policy notification. The Court observed that the benefit promised under the Industrial Policy remained elusive until the CST notification on 12.10.2006. The petitioner argued for assessment based on 1% CST collected, citing violation of the Industrial Policy and government promise.

The Court rejected the petitioner's claim, noting that evidence showed the petitioner collected CST at 4%. The judgment emphasized that sellers must collect tax at the notified rate to avoid liabilities. The Court ruled against the petitioner, stating that seeking assessment based on 1% CST would be unfair, as the petitioner had collected tax at 4% until the CST notification. The judgment dismissed the writ, highlighting that it was decided based on Industrial Policy interpretation, separate from challenging assessment or appellate orders on merit.

The judgment concluded that the writ lacked merit and was dismissed. It clarified that challenging assessment or appellate orders would involve a different cause of action governed by separate laws and rules. The Court's decision focused on upholding the notified rates and preventing attempts to evade tax liabilities under the guise of Industrial Policy benefits.

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