TaxTMI 
TaxTMI 
2006 (3) TMI 234
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.... Industrial Policy for the period 1.4.1988 to 31.3.1997 wherein inter alia incentive by way of sales tax exemption was to be given for the industries set up in backward areas in the State. The State enacted Haryana General Sales Tax Act, 1973 (for short "the Act"). Section 64 of the Act provides for rule making power. The said provision was amended by inserting sub-section (2A) therein which reads as under: "(2A) The power to make rules under Sub- sections (1) and (2) with respect to clauses (ff) and (oo) of Sub-section (2) shall include the power to give retrospective effect to such rules i.e. from the date on which policy for incentives to industry is announced by the State and for this purpose rules 28A, 28B and 28C of the Haryana General Sales Tax Rules, 1975, shall have retrospective effect i.e. with effect from 1st April, 1988, 1st August, 1997 and 15th November, 1999, respectively, but such retrospective operation shall not prejudicially affect the interest of any person to whom such rules may be applicable." Clause (ff) of sub-section (2) of Section 64 of the Act provides for the class of industries, period of exemption and conditions of such exemption, under Secti....
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....en included in the above list for the first time shall be entitled to the sales tax benefits related to the extent of investment made upto the 3rd January, 1996. Only those assets will be included in the fixed capital investment which have been installed or erected at site and have been paid for. The anticipated cost of the project will be taken on the basis of documents furnished to a financial institution or banks for drawing a loan and which have been accepted by the financial institution or bank concerned for sanction of loan." On or about 28th May, 1997, the said rules were amended inter alia by omitting Note 2 deeming to have always been omitted. Yet again on 3rd June, 1997, in clause (a) of sub-rule (2) of Rule 28A of the Rules instead and in place of 31st March, 1997, the words "date on which new policy for incentive to industry is announced by the Government of Haryana in Industries Department" was substituted. On 26th June, 2001, in Section 13-B after the words "for such period", the words "either prospectively or retrospectively" were inserted. Mahavir Vegetable Oil Pvt. Limited (Appellant in civil appeal arising out of S.L.P. (C) No. 17730 of 2004) purchased....
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.... an additional licence was granted to it by the Central Insecticides Board. After receipt of the same, the Appellant applied to the Director of Agriculture, Haryana for addition of new items in the manufacturing licence and the Appellant commenced its commercial production in its expanded unit on 28.4.1998. By 16.12.1996, they had invested about 80% of the total project cost. The Appellants had applied for grant of exemption from payment of sales tax as on 16.12.1996 which was rejected in the case of Mahabir Vegetable Oils Pvt. Ltd. in the following terms: "The Solvent extraction plants were included in negative list with effect from 16.12.1996. The industrial unit has made 45% of total investment. In the notification it was stipulated that industrial unit in which investment has been made upto 25% of the anticipated cost of the project which has been included in the negative list for the first time shall be entitled to sales tax benefit, however, this condition has been deleted vide notification dated 28.5.1997. Committee was of the view that this condition has already been deleted and certain parties have challenged in Punjab and Harayana High Court. Director of Industries ....
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.... not be modified amended or varied during the operative period. There cannot be any restraint on the State Government to exercise the delegated legislative functions within the parameters laid down by the statute#." In the case of Bharat Rasayan Ltd., the judgment rendered in Mahabir Vegetable Oils Pvt. Ltd. was followed without considering the factual aspect therein. In the writ petition filed before this Court, it has been prayed: "(a) issue an appropriate writ, order or direction especially in the nature of certiorari quashing the draft notification dated 03.01.1996, final notification dated 16.12.1996 modifying the industrial policy of 1988 and the notification dated 28.05.1997 modifying the Haryana Sales Tax Rules, 1975 as ultravires the constitution being arbitrary, malafide, unjust unreasonable, unworkable, illegal and against the principles of public policy; (b) issue an appropriate writ, order or direction especially in the nature of Mandamus directing the respondents to grant the benefit of sales tax exemption to the petitioners as per the State's Industrial Policy of 1988; (c) pass any such further order or orders as this Hon'ble Court may deem fit and pro....
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....as the requisite jurisdiction to make amendments with retrospective effect. (e) In any event, the right of the entrepreneurs being not an indefeasible right, the same could be withdrawn before commencement of production. It is not in dispute that when the Appellants herein started making investments, Rule 28A was operative. Representation indisputably was made in terms of the said Rules. The State, as noticed hereinbefore, made a long term industrial policy. From time to time it makes changes in the policy keeping in view the situational change. The State intended inter alia to grant incentive to include industrial units by way of waiver and/ or deferment of payment of sales tax wherefor Rule 28A was made. The sales tax laws enacted by the State, as noticed hereinbefore, contain a provision empowering the State to grant such exemption. The relevant provisions of the Act and the Rules framed thereunder indisputably were made keeping in view the industrial policy of the State. Such industrial policies by way of legislation or otherwise, subject, of course, to the provisions of the statute have been framed by several other States. It is beyond any cavil that the doctrin....
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....n this point is the case of M.P. Sugar Mills. On the other hand, reliance has been placed on behalf of the State on a judgment of this Court in Bakul Cashew Co. v. STO. In Bakul Cashew Co. case this Court found that there was no clear material to show any definite or certain promise had been made by the Minister to the concerned persons and there was no clear material also in support of the stand that the parties had altered their position by acting upon the representations and suffered any prejudice. On facts, therefore, no case for raising the plea of estoppel was held to have been made out. This Court proceeded on the footing that the notification granting exemption retrospectively was not in accordance with Section 10 of the State Sales Tax Act as it then stood, as there was no power to grant exemption retrospectively. By an amendment that power has been subsequently conferred. In these appeals there is no question of retrospective exemption. We also find that no reference was made by the High Court to the decision in M.P. Sugar Mills' case. In our view, to the facts of the present case, the ratio of M.P. Sugar Mills' case directly applies and the plea of estoppel is unanswerab....
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....8- 1986." The question came up for consideration before this Court recently in State of Punjab v. Nestle India Ltd. and Another [(2004) 6 SCC 465] wherein this Court surveyed the growth of the said doctrine. In that case the State, pursuant to its promise, did not issue any notification. The High Court, in the writ petition filed by the Respondent therein was of the opinion that the State was bound by its promise to abolish purchase tax and as the Respondent acted on the representation made, absence of a formal notification which was no more than a ministerial act would not make the Respondents therein to pay purchase tax with effect from 1.4.1996 to 3.6.1997. The learned counsel appearing on behalf of the State, however, has placed strong reliance on the judgment of this Court in State of Rajasthan and Another v. J.K. Udaipur Udyog Ltd. and Another [(2004) 7 SCC 673], wherein the question which fell for consideration was as to whether in absence of any specific promise, the scheme of grant of exemption of sales tax payable by all the existing units as also the new industrial units would constitute a promise. It was held: "In this case the Scheme being notified under th....
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....a decision in certain matters, can also be taken subject to certain conditions. [See Union of India Through Govt. of Pondicherry and Another v. V. Ramakrishnan and Others, (2005) 8 SCC 394, para 23 and 24] The promises/representations made by way of a statute, therefore, continued to operate in the field. It may be true that the Appellants altered their position only from August, 1996 but it has neither been denied nor disputed that during the relevant period, namely, August, 1996 to 16.12.1996 not only they have invested huge amounts but also the authorities of the State sanctioned benefits, granted permissions. Parties had also taken other steps which could be taken only for the purpose of setting up of a new industrial unit. An entrepreneur who sets up an industry in a backward area unless otherwise prohibited, is entitled to alter his position pursuant to or in furtherance of the promises or representations made by the State. The State accepted that equity operated in favour of the entrepreneurs by issuing Note 2 to the notification dated 16.12.1996 whereby and whereunder solvent extraction plant was for the first time inserted in Schedule III, i.e., in the negative list. ....