TaxTMI 
TaxTMI 
2003 (4) TMI 493
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.... issued an office memorandum vide, No. EA/1/2/96, dated 24-12-1997 announcing the new industrial policy and other concession in the North Eastern Region. The aims and objects of the said policy are explained in paragraph 1 of the said office memorandum which reads as follows : "Annexure-C No. EA/1/2/96- Government of India Ministry of Industry, Department of Industrial Policy and Promotion 24th December, 1997 OFFICE MEMORANDUM Subject : New Industrial Policy and other concession in the North Eastern Region. In view of the continuing backwardness of North East Region, the need for a new and synergetic incentive package was widely felt to stimulate development of industries (Hon'ble Prime Minister made statement at Guwahati on October 27th, 1996 that...initiatives would be announced for the industrial development of the North Eastern Region). Expert Groups/Committees were constituted by the Ministry of Industry and Planning Commission to the initiatives." 4. The Fiscal incentives to new Industries units and their substantial expansion are explained in paragraph of the office memorandum which is a....
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....ts at Byrnihat in the District of Ri-Bhoi, Meghalaya and the unit started production from 16-1-1998. 8. The petitioner in W.P. (C) No. 66 (S.H.) 2000 having its registered office and factory at Byrnihat, Meghalaya carrying on the business of manufacturing of M.S. Ingots and started production from 1-1-1998. 9. The petitioner in W.P. (C) No. 69 (S.H.) 2006 started its industrial unit at Byrnihat in Ri-Bhoi District of Meghalaya and started manufacturing M.S. Ingots and started production from 12-2-1999. 10. The petitioner in W.P. (C) No. 227 (S.H.) of 1999 started its industrial unit for manufacturing of PSC Poles and Steel Fabricated structure at Byrnihat in Ri-Bhoi District of Meghalaya. Subsequently, the company has also started the production of M.S. Ingots, Runners etc. w.e.f. 14-7-1999. 11. The petitioner in W.P. (C) No. 188 (S.H.) 2000 started its industrial unit at 13th Mile, Tamulikuchi, Byrnihat, Meghalaya for manufacturing of M.S. Ingots. The company started its production with effect from 1-8-1997. 12. The petitioner in W.P. (C) No. 189 (S.H.) 2000 started its industrial unit at Byrnihat in Ri-Bhoi District of Meghalaya for manufac....
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....certificates were also issued to the petitioners by the Central Excise authorities. 18. In the said office Memorandum dated 24-12-1997 it is also mentioned that "Ministry of Finance etc. are requested to amend the rules/ notifications etc. and issue necessary instructions for giving effect to these decisions." 19. Pursuant to the said request to the Finance Department in the said memorandum, the Ministry of Finance (Department of Revenue) issued the Notification No. 23/99 dated 8th July, 1999 whereby the benefits as provided in the office memorandum were granted to the NER units in the areas mentioned in the annexure annexed to the said notification. The said notification reads as follows : "(a) The manufacturer shall submit a statement of the duty paid from the said account current to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, as the case may be, by the 7th of the next month in which the duty has been paid from the account current. (b) The Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, after such verification, as may be deemed necessary shall ....
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....l of paragraph C(1) of the office memorandum provides for exemption from Income Tax, Excise for the period of ten years from the commencement of production. There is no provision that the exemption is to be made from the date of issue of amendment of rules/notifications as requested to the Finance Ministry in the office memorandum. The exemption granted under the office memorandum is simple i.e., from the date of commencement of commercial production. Therefore, the question is whether the notification issued by the Ministry of Finance is in-consonance with the said provision made in paragraph C(1) of the office memorandum. 22. In the office memorandum dated 24-12-1997 of the Government of-India, Ministry of Industry, Department of Industrial Policy and Promotion, the Government clearly announced and declared that the Government has approved for converting, the course centre and IIDCs into a total tax free zone for the next ten years from the date of commencement of production. This announcement was made in the opening page of the office memo­randum that there was a need for a new and synergetic incentive package to stimulate development of industries in the approved ar....
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.... under the said office memorandum. 24. In order to appreciate the materials available on records I may look into the Office Memorandum dated 24-12-1997 as quoted above and examine the new Industrial Policy and concessions made by the Central Government in the North Eastern Region. The preamble to the Office Memorandum clearly indicates that the intention of the Government to promulgate the New Industrial Policy was made after the Hon'ble Prime Minister has made a statement at Gauhati on 27th October, 1996 that new incentives would be provided for the industrial development of the North Eastern Region. The new industrial policy was announced after the matter was examined by the expert groups/committees constituted by the Ministry of Industry and Planning. Thereafter the policy was approved by the Union Cabinet. 25. While issuing the said Office Memorandum dated 24-12-1997 the Ministry of Finance, etc. were, also, requested to amend the rules/notifications etc. and, issue necessary instructions for giving effect to these decisions. The Ministry of Finance (Deptt. of Revenue) in pursuant thereof has issued the impugned Notification No. 32/99 dated 8-7-1999 whereby the ....
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....999 introduced by the State of Bihar and the Notification dated 2-4-1994 issued by the Govt. of Bihar, Deptt. of Finance whereby the conditions imposed by the Bihar Finance Act, 1981 were extended only to those industrial units who have not availed any facility on the earlier incentive policy and in that case the Notification was struck down by the Apex Court. In paragraph 7 of the judgment the Apex Court has held as follows :- "....The industrial incentive policy is issued by the State Government after such policy is approved by the Cabinet itself. The issuance of the notification under Section 7 of the Bihar Finance Act is by the State Government in the Finance Department which notification is issued to carry out the objectives and the policy decisions taken in the industrial policy itself. In this view of the matter, any notification issued by Government order in exercise of power under section 7 of the Bihar Finance Act, if is found to be repugnant to the industrial policy declared in a government resolution, then the said notification must be held to be bad to that extent. In the case in hand, the notification issued by the State Government on 4-4-1994 has been examined by ....
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....on has been laid down not only in Clause 7 but in other clauses as well which have been reproduced by me in the earlier part of my judgment i.e. para 3. In my considered opinion, it is too much for the State now to contend that sales tax exemption would be available to an industrial unit to that extent only to which expansion was made by an industrial unit, after having held out a promise in the year 1991 that sales tax exemption shall be available to both new and existing industrial units. It would not be out of place to mention at this stage that it is the specific case of the appellants that they neither paid sales tax on the purchase of materials nor charged sales tax on finished goods. Not only that even implementing agency, admittedly, issued eligibility certificates to all the appellants granting them exemption from payment of sales tax for a period of seven years. No condition whatsoever was laid down in the certificates that the exemption would be available only on the increased introduction resulting from the expansion, modernisation or diversification and in fact, no provision in the Industrial Policy of 1991 contemplated about the increase in production for availaing th....
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....other connected writ appeals. In the said writ appeals the Division Bench of this Court has dealt with the case where the benefit was already enjoyed by the party, but the same was withdrawn at a later stage. But in the instant case it may be mentioned that this Court has to deal with the matter which relates to the availing of the concessions from the date of commencement of production by the units/petitioners. However, the doctrine of Promissory Estoppel was already observed by the Division Bench by holding that the finding of the learned single Judge that the Government is bound by the principles of Promissory Estoppel. 31. The contention raised by the learned counsel for the respondents that the Notification was issued as per Section 5(a) clause 5 of the Central Excise Act, 1944 that the Notification shall come into force from the date of publication in Official Gazette cannot be accepted as such Notification cannot be against the industrial policy which was duly approved by the Union Cabinet. The Notification ought to have been in accordance with the industrial policy laid down by the Central Government after due approval by the Cabinet and it cannot be undermined by i....