TaxTMI 
TaxTMI 
2015 (11) TMI 262
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.... incorporated in the Assam Value Added Tax Rules, 2005. Rule 57A reads as under: "57A. Activities which are not to be treated as manufacture.-The following activities shall not be treated as manufacture for the purposes of the Act retrospectively with effect from October 1, 2008, namely:- (a) saw mill, (b) Tea industry, (c) Galvanization, corrugation of sheet or both, (d) Marble and decorative stone cutting from slabs/sheets and polishing unit, (e) Paper cutting from roll paper, (f) Coal to washed coal, sized coal, (g) Conversion of plain rod to tor rod, (h) Refining and packaging of mustard oil, (i) Refining of engine oil, (j) Purification and/or packaging of drinking water, (k) Production of cooked food, sweet meats and namkeens, if the investment in plant and machinery in a unit is less than rupees five crores, (l) Conversion of coal to coke." 2. The petitioners aggrieved by the said amended rule, have filed this writ petition challenging its application to their units and its validity. 3. Section 2(30) of the Assam Value Added Tax Act, 2003, defines "manufacture" as follows: "'manufacture' means any activity that brings ou....
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....the existing Rules. (c) As on the date of final notification, the appellants did not commence commercial production, they did not acquire any legal right to obtain any exemption. (d) The State has 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 (e) In any event, the right of the entrepreneurs being not an indefeasible right, the same could be withdrawn before commencement of production. 22. 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. 23. 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. 24. The relevant provisions of the Act and the Rules framed thereunder indisputably were made keeping in view the industrial policy....
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....t implication. See West v. Gwynne [1911] 2 Ch 1. 43. A retrospective effect to an amendment by way of a delegated legislation could be given, thus, only after coming into force of sub-section (2A) of section 64 of the Act and not prior thereto. 44. By reason of Note 2, certain rights were conferred. Although there lies a distinction between vested rights and accrued rights as by reason of a delegated legislation, a right cannot be taken away. The amendments carried out in 1996 as also the subsequent amendments made prior to 2001, could not, thus, have taken away the rights of the appellant with retrospective effect." 6. The Supreme Court, in paragraph 24 of the decision rendered in Chairman, Railway Board v. C.R. Rangadhamaiah [1997] 6 SCC 623, has made the following observations: "24. In many of these decisions the expressions 'Vested rights' or 'accrued rights' have been used while striking down the impugned provisions which had been given retrospective operation so as to have an adverse effect in the matter of promotion, seniority, substantive appointment, etc., of the employees. The said expressions have been used in the context of a right flowing un....
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....tution which are relevant to the subject-matter of the law.' 21. A law cannot be held to be unreasonable merely because it operates retrospectively. Indeed even judicial decisions are in a sense retrospective. When a statute is interpreted by a court, the interpretation is, by fiction of law, deemed to be part of the statute from the date of its enactment. The unreasonability must lie in some other additional factors. The retrospective operation of a fiscal statute would have to be found to be unduly oppressive and confiscatory before it can be held to be so unreasonable as to violate constitutional norms: 'Where for instance, it appears that the taxing statute is plainly discriminatory, or provides no procedural machinery for assessment and levy of the tax, or that it is confiscatory, courts would be justified in striking down the impugned statute as unconstitutional. In such cases, the character of the material provisions of the impugned statute is such that the court would feel justified in taking the view that, in substance, the taxing statute is a cloak adopted by the Legislature for achieving its confiscatory purposes.'(See Rai Ramkrishna v. State of Bihar [196....
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....ubsequently transpired, it would be inequitable to hold the Government to the promise made by it, the court would not raise an equity in favour of the promisee and enforce the promise against the Government. Where public interest warrants, the principles of promissory estoppel cannot be invoked. The Government can change the policy in public interest. However, it is well-settled that taking cue from this doctrine, the authority cannot be compelled to do something which is not allowed by law or prohibited by law. There is no promissory estoppel against the settled proposition of law. Doctrine of promissory estoppel cannot be invoked for enforcement of a promise made contrary to law, because none can be compelled to act against the statute. Thus, the Government or public authority cannot be compelled to make a provision which is contrary to law. .......... 35. A critical analysis of the abovequoted passage makes it evident that the two-Judge Bench in Sant Steels' case [2008] 2 SCC 777 was of the view that the notification issued under section 49 of the Act of 1948 can be revoked/modified only if express provision was made for the revocation/modification of the said notifica....
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....missions, we find that rule 57A framed by way of delegated legislation is beyond the competence of the State. The definition of "manufacture" in the Act clearly discloses that the process of manufacture would mean that the process of change in the product and bringing out a new product or combination of products in the process to bring out a new product would amount to manufacture. The process of making coal from coke will bring a new product from the coal; therefore, it amounts to manufacture within the definition of section 2(30) of the Act. Under the guise of the rule-making power, the State could not have amended the definition of "manufacture" to omit or to alter the activities, which come within the definition of "manufacture", that apart, the decision of the Supreme Court in Mahabir Vegetable Oils (P.) Ltd. (supra) succinctly makes a distinction between the legislation and subordinate legislation and the limitation of subordinate legislation. Paragraphs 41 to 44 in SCC, paras 40 to 43 in 145 STC of Mahabir Vegetable Oils (P.) Ltd. case (supra) makes it clear that a delegated legislation cannot take away the right that is vested or accrued by way of retrospective amendment. T....