TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 861
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....ited company registered under the Companies Act,1956 and is engaged in manufacture and sale of rubber. Petitioner is a registered dealer under the TVAT Act as well as the Central Sales Tax Act, 1956. 3. For industrial development of the State of Tripura, said scheme was formulated. Detailed provisions were made in the said scheme under which subject to fulfilment of certain conditions new industries would receive certain incentives. We would take note of relevant provisions of the said scheme in detail at a later stage. Suffice it to record at this stage that Clause 9 of the said scheme pertains to reimbursement of Commodity Taxes. As per Clause 9.1 subject to the notification to be published by the State Government certain categories of the industrial enterprises commencing commercial production in Tripura would be eligible for reimbursement of the commodity taxes, including Tripura Value Added Tax, Central Sales Tax and Purchase Tax paid by the enterprise either for purchase of inputs or for finished products as per applicable provisions in accordance with the details provided in Clauses 9.2 and 9.3 of the said scheme. 4. Attracted by the said announcement of the State Govern....
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....e the ground for not honouring the promise and commitment made by the State Government. The petitioner was attracted by the said incentive scheme. A new industry was set up within the State at considerable capital investment on the premise that there shall be certain tax waivers for a specified period. The petitioner having fulfilled all the conditions for receiving the incentive, the same ought to have been released by the respondents. On the principle of promissory estoppel the respondents cannot deny the petitioner's legitimate claims. But for the offer of incentive the petitioner would not have set up the industry. The petitioner had thus on the basis of the promise held out by the Government changed its position. 8. In support of his contentions, counsel relied on certain decisions reference to which would be made at an appropriate stage. 9. On the other hand, learned panel counsel Mr. Arijit Bhowmik appearing on behalf of the respondents opposed the petition contending that Clause 9 of the said scheme clearly provided that the benefits would be available only upon issuance of notification by the Government. No such notification has been issued. The petitioner had no veste....
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....tate Government. 12. Clause 6 laid down the eligibility of an industrial enterprise for the incentives under the said scheme. Sub clause 4 thereof reads as under:- "6.4. The eligibility of enterprises for incentive under any Clause of Scheme-2007 shall, unless otherwise be specified, be limited to the amount calculated as per the respective Clause of Scheme-2007 reduced by the amount of incentive, subsidy or grant under any operative Scheme outside the Scheme-2007- including either under the NEIIPP-2007, or under any scheme operated by a Ministry or Department of Government of India or its agencies/boards/authority, or under any scheme operated by the North-Eastern Council, for promotion of industrial projects/investments-for which the enterprise is eligible. For the purpose of Scheme-2007, enterprises shall have to compulsory apply for the incentive, subsidy or grant under the appropriate operative Scheme outside the Scheme-2007; and indicate the claimed amount thereby while claiming the relevant incentive under Scheme-2007." 13. Under Clauses 7 to 14 different incentives were prescribed. For example, Clause 7 pertains to Incentive on Fixed Capital Investment for Land and C....
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....t shall be available to such transferee or the new owner only for the unexpired portion of the said eligibility period of five years; and Provided further that the benefit of reimbursement of commodity tax will continue to be available to a particular enterprise till the expiry of the eligibility period of five years from the date of commencement of commercial production of that enterprise, even beyond the thirty first of March,2012. 9.3 For the finished goods sold in Tripura: In relation to the TVAT realized from the consumer and deposited in Tripura by the enterprise against such sale of finished goods, the following shall operate: (a) In respect of raw materials or inputs sourced from within Tripura by payment of TVAT at that stage, as full input tax credit would be admissible to the enterprise under the TVAT Act and the net TVAT incidence of the enterprise would be nil, no reimbursement under the Scheme 2007 would be admissible. (b) In respect of raw materials or inputs sourced from within Tripura by payment of Purchase Tax at that stage and where full input tax credit for purchase tax is not admissible to the enterprise at the stage of sale as finished product, the....
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....the competent tax authority for any reason. 9.7 The reimbursement of commodity tax shall be made only after necessary verification and corroboration from tax authorities of the involved states and the eligibility of the enterprise shall be subject to their furnishing the requisite documentary evidence and such other information as may be asked for by the competent authorities in the Industries & Commerce Department. 9.8 All benefits under this Clause 9 are subject to policy changes that may be necessary, from time to time due to amendments in Tripura Value Added Tax Act 2005, Purchase Tax Act or CST Act, or other related statutory provisions, if any." 14. Clause 17 is repeal and saving clause under which the previous incentives scheme of 2002 came to be repealed by promulgation of the scheme of 2007. 15. We have referred to the booklet published by the Industries Department of the State of Tripura which contains not only the scheme but also the statistical and other details of the State along with a message of the Hon'ble Minister in order to show that the scheme was formulated and published with funfair. It was aimed at drawing fresh investments and enterprises, who woul....
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....nation in so far as the prospective entrepreneurs were concerned. In clear terms by promulgation of the said scheme the State Government invited entrepreneurs to make investments in the State by setting up new industries which upon fulfillment of the conditions contained in the scheme would receive certain incentives such as tax waivers. It would be too late in the day for the Government thereafter to backtrack on such firm promise made only on the ground that necessary notification in this regard was not issued by the Finance Department. It would be a classical example of the Government going back on its promise held out to an industry on the basis of which entrepreneurs were persuaded to make investments in the State. Had the respondents cited reasons for non issuance of the notification making out the grounds of larger public interest, the question of the principle of promissory estoppel yielding to the larger public interest would undoubtedly arise. In the present case, however, the respondents in their affidavits have cited no reason whatsoever for the failure of the Government to issue such notification. Merely citing non issuance of notification, in our opinion, in the prese....
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....to the Court what are the facts and circumstances on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether those facts and circumstances are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from its liability. In the present case no public interest has been pleaded, much less established enabling the Government to withdraw from the promise of tax waiver. 20. In case of Manuelsons Hotels Private Limited Vrs. State of Kerala & Ors., reported in (2016) 6 SCC 766 the Supreme Court reiterated that it is not the law that there can be no promissory estoppel against the Government in exercise of its Governmental, public or executive powers. That would be in complete contradiction of the decisions of the Supreme Court. It was further observed that the taxation is a sovereign or a Governmental function, but no distinction can be made between the exercise of a sovereign or Governmental function and a trading or business activity of the Government so far as the doctrine of promissory estoppel is concerned. It was ....
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....he Kerala Buildings Tax Act, 1975. The non-exercise of such discretionary power is clearly vitiated on account of the application of the doctrine of promissory estoppel in terms of this Court's judgments in Motilal Padampat and Nestle (supra). This is for the reason that non-exercise of such power is itself an arbitrary act which is vitiated by nonapplication of mind to relevant facts, namely, the fact that a G.O. dated 11.7.1986 specifically provided for exemption from building tax if hotels were to be set up in the State of Kerala pursuant to the representation made in the said G.O. True, no mandamus could issue to the legislature to amend the Kerala Buildings Tax Act, 1975, for that would necessarily involve the judiciary in transgressing into a forbidden field under the constitutional scheme of separation of powers. However, on facts, we find that Section 3A was, in fact, enacted by the Kerala legislature by suitably amending the Kerala Buildings Tax Act, 1975 on 6.9.1990 in order to give effect to the representation made by the G.O. dated 11.7.1986. We find that the said provision continued on the statute book and was deleted only with effect from 1.3.1993. This would make it ....