TaxTMI 
TaxTMI 
2025 (2) TMI 797
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....e for the Petitioners :Mr. A. Saraf, Senior Advocate assisted by Mr. N.N. Dutta, Advocate. Advocate for the Respondents :Mr. S.C Keyal, Standing Counsel, CGST Mr. B. Chowdhury, Standing Counsel, SGST. JUDGMENT AND ORDER(CAV) This bunch of writ petitions can be clubbed into two separate groups. 2. W.P(C) No. 5133/2018; W.P(C) No. 5139/2018; W.P.(C) No. 5141/2018; W.P.(C) No. 5143/2018 and W.P(C) No. 5136/2018 are the writ petitions filed by the petitioners aggrieved by the rejection of their respective eligibility certificates which they had applied for under the relevant provisions of the Industrial Policy of 2008. The petitioners are aggrieved that without due and proper appreciation of the facts and materials available before the respondent-Department of Industries, their claim for eligibility certificates were rejected. Consequently they being aggrieved, they have approached this Court praying for appropriate Writ Direction or Order for setting aside their respective rejection orders for grant of eligibility certificates as well as consequential order to the respondents to issue the eligibility certificates and/or otherwise consider them eligible for availing the ben....
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....ibility certificate under the Industrial Policy of Assam, 2008 as the said industrial unit was presently found to be "non-functioning" assigning the reason that the Government provides tax exemptions and other fiscal incentives to encourage industrial units for their contribution in economic development of the State in general and employment generation in particular and a non-functioning unit neither contributes in economic development nor in employment generation and as such the same is not entitled for grant of eligibility certificate. W.P(C) No. 5141/2018 (Raj Coke Industries) This writ petition has been filed challenging the order dated 05.05.2018 issued by the Commissioner of Industries & Commerce, Udyog Bhawan, Assam holding the industrial unit of the petitioner firm to be ineligible for grant of eligibility certificate under the Industrial Policy of Assam, 2008 as the said industrial unit was presently found to be "non-functioning" assigning the reason that the Government provides tax exemptions and other fiscal incentives to encourage industrial units for their contribution in economic development of the State in general and employment generation in particular and a n....
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....ty Certificate W.P(C) No. 1828/2019 (Raj Coke Industries) This writ petition has been filed challenging the order of assessment dated 22.02.2019 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2014-15 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate W.P(C) No. 5932/2018 (Shiva Coke Industries) This writ petition has been filed challenging the order of assessment dated 31.03.2018 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2013-14 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certi....
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....uance of Eligibility Certificate. W.P(C) No. 5960/2018 (Raj Coke Industries) This writ petition has been filed challenging the order of assessment dated 22.03.2018 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2013-14 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate. W.P(C) No. 2111/2019 (Ganesh Met Coke Industries) This writ petition has been filed challenging the order of assessment dated 22.02.2019 passed by the Superintendent of Taxes, Central VAT Audit Team and the Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2014-15 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for is....
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....lication for issuance of Eligibility Certificate. W.P(C) No. 1860/2019 (Sethi Coke Industries) This writ petition has been filed challenging the order of assessment dated 14.02.2019 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2014-15 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the application for issuance of Eligibility Certificate. W.P(C) No. 5980/2018 (Sheo Shakti Coke Industries) This writ petition has been filed challenging the order of assessment dated 29.06.2018 passed by the Assistant Commissioner of Taxes, Guwahati, Zone-B and Notice of Demand issued in pursuance thereof whereby tax has been levied for the year 2013-14 during which the petitioner was entitled to the benefit of exemption from payment of tax by way of remission as per the Industrial Police of Assam, 2008 read with Assam Industries (Tax Remission) Scheme, 2005 and also during the pendency of the a....
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....thrust areas. Under the said Industrial Policy of 2003, the State of Assam offered various fiscal incentives which included the State Capital Investment Subsidy, Interest Subsidy on Working Capital, Power Subsidy, Subsidy on Captive Power Generation, Subsidy on Feasibility Study costs, Subsidy on Quality Certification/Technical knowhow, Subsidy on Marketing Assistance, Subsidy on Drawal of power Line etc. 8. Initially when the policy was announced, exemption from Sales Tax was not part of the said Industrial Policy. Subsequently, the Assam Industries (Tax Remission) Scheme, 2005 was notified in the Assam Gazette (Extraordinary) No. 165 dated 02.05.2005. Under the said Assam Industries (Tax Exemption) Scheme, 2005, the eligibility criteria for enjoying the benefits by an industrial unit will be available if that industrial unit was considered to be an industrial unit eligible for the benefits available under the Industrial Policy of Assam 2003. Section 3 of the Scheme of 2005 provided for the Tax Exemption/Remission for the eligible unit. Under the said scheme, if an eligible unit registered under the Scheme manufactures any goods in Assam, the said eligible unit shall be entitle....
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....ndustries and Commerce, Government of Assam by a communication dated 04.04.2009 to set up Coke Industries subject to compliance of the directives of the Government of India as per notification No. 1533 dated 14.09.2006 and subject to obtaining environment clearance of projects falling under category-A and category-B from the Ministry of Environment and Forests, Government of Assam. A communication from the Pollution Control Board, Assam was also enclosed therewith whereby the Assam Pollution Control Board expressed no objection in granting consent to establish Coke units provided that there is compliance to directives of the Government of India as per Notification No. 1533 dated 14.09.2006 and subject to clearance from necessary authorities. The petitioner thereafter applied for and was granted provisional consent to establish a Low Ash Metallurgical Coke and Breeze Coke manufacturing unit by the Pollution Control Board, Assam. The Pollution Control Board also gave consent to the petitioner to operate its business of the petitioner industry for the periods 2009-10, 2010-11 and 2011-12. License was also applied for and was granted by the Chief Inspector of Factories under the Factor....
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....questing the department to process its pending claims in respect of interest subsidy, transport subsidy, capital investment subsidy and eligibility certificate. It was also informed by the petitioner that the Coke Industry of the petitioner was not in operation because of the ban of coal by National Green Tribunal (NGT) and once the ban imposed by NGT is withdrawn, the petitioner will start its operation in the industrial unit. 11. That during the pendency of the process of examination of the eligibility of the petitioner to claim its benefit for exemption under the industrial policy which the Department of Industries was examining in terms of the judgment and order dated 12.05.2015 passed in W.P.(C) No. 2900/2011 directing the authorities to do so, the Department of Finance and Taxation initiated the assessment proceedings under the Central Sales Tax Act in respect of the writ petitioner for the period 2012-13 under section 36 (1) of the Assam Value Added Tax Act 2003 read with Rule 9(2) of the Central Sales Tax Act. According to the petitioner, since it was eligible for exemption from payment of tax by way of remission and the eligibility certificate in respect thereof was not....
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....he department dated 31.03.2018. 15. These facts which are narrated above are common for both the series of writ petitions. W.P(C) No. 5133/2018; W.P(C) No. 5139/2018; W.P.(C) No. 5141/2018; W.P.(C) No. 5143/2018 and W.P(C) No. 5136/2018 have been filed by the petitioners putting to challenge the respective orders passed by the Department of Industries rejecting their claim for eligibility as an "eligible unit" under the Industrial policy of 2008 and thereby denying them the benefits and tax incentives available under the said industrial policy. 16. W.P.(C) No. 1828/2019; W.P(C) No. 2138/2019; W.P(C) No. 5954/2018; W.P(C) No. 5937/2018; W.P.(C) No. 5957/2018; W.P.(C) No. 2111/2019; W.P.(C) No. 1843/2019; W.P(C) No. 2096/2019; W.P(C) No. 6027/2018; W.P(C) No. 5960/2018; W.P(C) No. 5917/2018; W.P(C) No. 1860/2019; W.P(C) NO. 5980/2018; W.P(C) No. 5932/2018 and W.P(C) No. 5931/2019 have been filed by the petitioners whereby the assessments made by the Department of Finance and Taxation have been assailed as the same were completed during the pendency of the consideration of the claims of the petitioners to be eligible units by the industries department and by ignoring their claim....
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....AT Remission. Various other incentives announced under the industrial policy of 2008 were also claimed and submitted before the appropriate authority. In view of the insertion of Rule 57A in the Assam VAT Rules of 2005, the process of conversion of coal to coke was held to be "not manufacture" and the eligibility certificate to the petitioner industrial unit was not issued. Nevertheless, the petitioner started its commercial production with effect from the dates mentioned in the chart. Because of the ban imposed by the National Green Tribunal in the State of Meghalaya, the commercial production had to be stopped as the coal which was sourced from the State of Meghalaya could not be obtained because of the ban imposed by the NGT. It is submitted that first, in view of the offer made by the state of Assam by virtue of industrial policy, the petitioner altered its position by making huge investments in purchase of land and setting up of the industrial unit. It is submitted that when the commercial production of the industrial unit started as far back as the dates mentioned in the chart given and continued thereafter, the respondent authorities could not refuse to issue eligibility cer....
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....nor under the provisions of the Assam Industries (Tax Exemption) Scheme 2009 is there any provision to the effect that if the industry closes down before completion of the entire period of eligibility, the said industrial unit shall not be entitled to the benefits of the industrial policy of Assam 2008 for the period the said industrial unit was in operation. It is submitted that that the activity carried on by the petitioner industrial units which was considered to be "not manufacture" in terms of rule 57A of the Assam VAT Rules having been declared ultra vires by this Court, there was no hurdle on the part of the respondents to issue the eligibility certificate in favour of the petitioner. However, the same was denied by treating the petitioner industrial unit to be "non-functional" which is contrary to the facts on the ground. It is submitted that ordinarily an eligibility certificate is issued immediately after commencement of commercial production and once the commercial production commences, the benefits available under the industrial policy of 2008 is required to be conferred on such an industrial unit during the entire period of the industrial policy. It is submitted that t....
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....se of transport subsidy. The writ petition was finally disposed of on the basis of the averments made by the industries department therein that the entitlement of the petitioner for transport subsidy has to be ascertained on the basis as to whether the materials were actually transported or not. The Co-ordinate Bench accordingly held that the rejection of the claim of the benefit of transport subsidy was improper and consequential orders were issued by this Court. 21. The learned Senior counsel also referred to the judgment of the Tripura High Court rendered in Sukhumoy Paul Vs State of Tripura and others reported in (2021) SCC online (Tri) 273 to buttress his arguments that once the industrial unit commences its production, subsequent closure will not deprive the benefits which accrue to the industrial unit merely because the unit was non-functional subsequently. The learned counsel for the petitioners further submits that the fact that the petitioner industrial unit was functional and had commenced commercial production with effect from date of commercial production is evident from the fact that for the relevant period, the Department of Finance and Taxation had completed its ....
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....ective industries department, the petitioners who although had fulfilled all the criteria prescribed under the industrial policy and had commenced its commercial production with effect from the respective dates of the respective industrial units, because of none issuance of the eligibility certificates by the respondent industries department, the petitioners were deprived from filing the annual/monthly returns by the online mode. Since they were not issued the eligibility certificates by the industries department at the time they were required to furnish their returns, they had to file their returns in the physical form by mentioning therein that they are eligible for the exemptions and that their eligibility certificates have not yet been issued by the Industries department as the matters were under consideration of the State Authorities. However, the respondent Tax department refused to accept the plea of the respective Industrial units that the eligibility certificates were under active consideration by the designated authorities and thereby refused to grant the benefits attributable to the respective industrial units under the Industrial policy of 2008 read with the Assam Indus....
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.... (8) State of Punjab versus Nestle India Limited reported in 2004 6 SCC 465. (9) Kashinka Trading versus Union of India reported in 1995 1 SCC 274; (10) MRF limited versus assistant CST reported in 2006 8 SCC 702; (11) State of Jharkhand versus Brahmaputra Metallics reported in 2023 10 SCC 634." 25. Relying on all the judgments referred above learned senior counsel submits that the actions of the respondent authorities in denying the petitioner unit its eligibility certificate to claim the benefits it is eligible to under the industrial policy of 2008 read with Tax Remission Scheme is wholly irrational, opposed to public policy, contrary to the very object and purpose of the industrial policy and the same is contrary to the facts available on record and therefore perverse inasmuch as the tax department concluded its assessments by holding that the industrial unit had completed its sales from the said industrial unit, the impugned orders, whereby the eligibility certificate was rejected needs to be interfered with, set aside and quashed. 26. The learned counsel appearing for the industries department submits that an affidavit has been filed on beha....
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....ustrial Centre (DICC) as an enquiry officer in the format prescribed. From the communication of the General Manager dated 06.03.2017, which is enclosed to the affidavit, the enquiry report, as required, could not be submitted as the concerned unit was found to be within "non-functional". Under such circumstances where the scheme itself prescribes for furnishing of an enquiry report by the General Manager, DICC and the same could not be furnished by the Enquiry officer for the reasons mentioned, namely, for the unit being "non-functional", the State Level committee had no option but to reject the claim of the petitioner for eligibility certificate. It is therefore submitted that there is nothing available on record to show that these industrial units were functional at the relevant point in time and a field enquiry as required to be conducted could not be conducted by the industries department as the unit itself was "non-functioning". Under such circumstances, there is no infirmity in the order impugned the present writ petitions rejecting the claims of eligibility by the industries department. He therefore submits that there is no merit in these writ petitions and the same should t....
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....submitted that there is no provision for cancellation of the eligibility certificate with retrospective effect. The learned senior counsel submits that since under Rule 57A of the Rules of 2009 manufacture of coke was excluded from the term "manufacture", during the currency of that provision, there was no question of the petitioner units claiming any benefits under the industrial policy for the exemption. These Rules were held to be ultra vires and struck down on 12.05.2015 and thereafter, the petitioner unit, having become eligible to make a claim under the industrial policy, submitted its application for being considered as an eligible industry. It was for these reasons that notwithstanding the initiation of commercial production in 2009, the petitioner applied for eligibility certification in the year 2016. He further submits that if the unit was indeed found to be "non-functional", there was no question of any manufacture and consequent sales of its goods, therefore, there ought not to have been any imposition of sales tax by the respondent Finance department. It is submitted that if there is no manufacture, then there is no question of sales leading to imposition of sales tax....
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.....P(C) No. 1860/2019 (Sethi Coke Industries) and W.P(C) No. 5980/2018 (Sheo Shakti Coke Industries), the petitioners are assailing their respective orders of assessments passed by the jurisdictional assessing officer under the State Taxes Department and the consequential notice of demand issued in pursuance whereof Taxes for the year 2014-15 has been levied on the petitioners notwithstanding that the petitioner had applied for and had claimed entitlement to the benefits of exemption from the payment of tax by way of remission as per the Industrial Policy of Assam, 2008 read with the Assam Industries (Tax Remission Scheme), 2005 and without taking into consideration the fact that the application for issuance of eligibility certificate was pending consideration before the competent authority. The challenge is made on the ground that the petitioners cannot be deprived of its due exemption which the petitioner claims to be entitled to under the Industrial Policy as well as the Tax Remission Scheme for no fault of the petitioners but only because the competent authority took time for disposal of the applications for issuance of the respective eligibility certificate. Since this fact was ....
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.... a period of five years i.e. up to 30th September, 2008 unless modified/terminated earlier. It may be relevant herein to mention that various sectors of Industrial activities in the Industrial Policy of Assam, 2003 were identified as thrust areas and amongst many, industries based on locally available minerals were identified as thrust area. It may be relevant herein to mention that amongst various other minerals which are available in the State of Assam 'coal' is one of the main minerals available in Assam. 37. As per the said Industrial Policy of Assam, 2003, the State of Assam promised and assured the people that various fiscal incentives would be provided which inter-alia were State Capital Investment Subsidy, Interest Subsidy on Working Capital, Power Subsidy, Subsidy on Captive Power Generation, Subsidy on Feasibility Study Costs, Subsidy on Quality Certification/Technical Know How, Subsidy on Marketing Assistance, Subsidy on Drawal of Power Line, etc. It may be relevant herein to mention that initially in view of the change to be brought into effect as regards the tax system, the exemption from sales tax was not mentioned in the Industrial Policy of Assam, 2003 but subseq....
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....e mean time, the Petitioner applied for a No Objection Certificate from the Pollution Control Board. However, the concerned officials of the Pollution Control Board rejected the issuance of the No Objection Certificate on the ground that there existed a letter from the State Government, Department of Industries and Commerce dated 16.05.2005. The Petitioner filed Writ Petition being W.P.(C) No. 4084/2007 challenging the communication dated 16.05.2005 issued by the Joint Secretary to the Government of Assam, Industries and Commerce Department directing all the General Managers, District Industries and Commerce Centre not to issue temporary/permanent Registration Certificate for establishment of Coke Industries and further directing not to allow Coke Industries to start their industries which have obtained license but have not started operating to commence their operation. The aforementioned Writ Petition was disposed off vide an order dated 10.8.2007 by which the communication dated 16.5.2005 was set aside with a direction to the Pollution Control Board to consider the request of issuance of No Objection Certificate to the petitioner without being influenced by the directions contain....
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....ntioned that the Pollution Control Board, Assam has no objection in granting consent to establish Coke Units provided there is compliance to directives of the Government of India as per Notification No. 1533 dated 14.09.2006 and subject to clearance from the necessary authorities. 45. The Petitioner further applied for the Provisional Consent to Establish a Low Ash Metallurgical Coke and Breeze Coke manufacturing unit before the Pollution Control Board, Assam which was accorded on 04.04.2009. 46. The Petitioner also applied before the Chief Inspector of Factories under the Factories Act, 1948 for approval, licensing for registration of Factories under the Provisions of Factories Act, 1948. The Chief Inspector of Factories, Assam on 18.02.2009 granted the license bearing License No. KAM/1117 for setting up the Factory. The Pollution Control Board also gave the consent to operate the business of the Petitioner Industry for the period 2009-10, 2010-11 and 2011-12. 47. Subsequently, the Additional Director, Directorate of Industries and Commerce by a Communication dated 06.05.2009 intimated the General Manager, District Industries and Commerce Centre about the decision of the ....
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.... as interest subsidy on term loan, power subsidy, subsidy of quality certification/technical knowhow and subsidy on drawal of power line were given. 51 The Government of Assam, in the meantime amended the Assam VAT Rules, 2005 by the insertion of Rule 57A in the Assam Value Added Tax Rules whereby various activities of manufacture mentioned therein was treated as not amounting to manufacture within the meaning of Section 2(30) of the Act. Amongst various activities, the activity of conversion of coal to coke was included as an activity not amounting to manufacture within the purview of the Act. It may further be relevant herein to mention that the said Rule 57A was made retrospectively effective from 01.10.2008. The Assam Industries (Tax Exemption) Scheme, 2009 was also notified on 3.11.2009. 52. The validity of the said Rule 57A was challenged before this Hon'ble Court in a bunch of writ petitions. In those proceedings, it was contended that the Petitioner had on the basis of the various promises and assurances given by the Government of Assam in its Industrial Policy Resolution of 2003 had set up its Industrial Unit by altering its position and thereby it was not permissibl....
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....the ban of coal by N.G.T is withdrawn, the petitioner shall start its operation in its industrial unit. 56. The petitioner was, however, surprised to receive an order from the Commissioner of Industries & Commerce, the Respondent No.3 herein being order no. CI&C(II)US/EC/2003/ 203/2017/332/916 dated 05.05.2018 holding the industrial unit of the petitioner firm to be ineligible for grant of eligibility certificate under the Industrial Policy of 2008 on the ground that the State Level Committee in its meeting held on 28.03.2018 had decided to reject the application for grant of eligibility as the status of the Unit was indicated as "non-functioning" by the Respondent No.2. The Respondent No.3 in the said order observed that the Government provides tax exemptions and other fiscal incentives to encourage industrial units for their contribution in economic development of the State in general and employment generation in particular and a "non-functioning" unit neither contributes in economic development nor in employment generation. 57. The Government of Assam announced the Industrial Policy of 2008 for encouraging industries to establish the units in the State of Assam by providin....
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....y the Industrial Policy 2003. However no application for Eligibility Certificate claims under the 2003 policy will be entertained after 31-3-2009. 4.5 DEFINITIONS 1) EXISTING UNIT means a unit, which is or was in commercial production in the State of Assam prior to 1/10 /2008. 2) SUBSTANTIAL EXPANSION means a unit, which has commenced commercial production in the State of Assam during the validity period of Industrial Policy 2008. 3) SUBSTANTIAL EXPANSION means increase in value of fixed capital investment in plant and machinery of an existing unit by at least 25% as well as increase of employment by at least 10% and at least 25% increase in production compared to average annual production of previous three years. Prior to going for expansion, the unit should be operating at least at a minimum of 80% capacity during the period of three previous years and prior intimation to the concerned implementing agency. 4) NON-ELIGIBNLE UNIT: Non-eligible unit means those industries, which are declared as Non-eligible under this policy. 5) MANUFACTURE means any activity that brings out a change in an article or articles as a result of some ....
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....er this Industrial Policy. g) In case a new unit is promoted in the premises of an existing unit; it should be distinctly identifiable and be located in the open spaces available in the premises. The earlier unit in the premise should not be closed nor any plant & machinery be dislodged from the earlier unit. The following tax incentives were also offered: TAX INCENTIVES 7.1 VAT EXEMPTION All eligible units, which manufacture goods in Assam, will be entitled to exemption of 99% of the tax payable under the Assam Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956 subject to the limit mentioned below. Category Micro Small Medium & Large New Seven years subject to maximum of 200% of fixed capital investment Seven years subject to maximum of 150% of fixed capital investment Seven years subject to maximum 100% of fixed capital investment Substantial Expansion Seven years subject to maximum of 150% of additional fixed capital investment Seven years subject to maximum of 100% of additional fixed capital investment Seven years subject to maximum of 90% of additional fixed capital investment. Fixe....
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....tatement on the machinery and equipment etc. 60. The affidavit filed by the Industries Department in so far as the writ petitions challenging the rejection of the eligibility certificates are concerned, revealed that the rejection was made on the basis of the report furnished by the General Manager. The Minutes of the meeting of the State Level Committee held on 28.03.2018 in respect of grant of eligibility certificate under the Industrial Policy 2008 in so far as Shiva Coke Industries is concerned, was rejected on the basis of information furnished by the Member Secretary as intimated by the General Manager, District Industrial Centre vide letter dated 06.03.2017 that the unit was 'non-functioning' and pursuant to the committee meeting, the respective units were informed about their ineligibility. 61. Under such circumstances, the respondents were permitted to place before the Court the materials on the basis of which the General Manager, DICC submitted its report of 'non-functioning' unit. The Court considered it apposite to permit the respondent authorities to place such materials to show the relevant date(s) when the physical inspection was made and the said unit was foun....
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....Department as to whether it is a necessity of the Transport Subsidy Scheme that the industry concerned has to be functioning as on the date on which the amount is to be released, or it is necessary to make verification as to whether such raw materials or finished goods were actually transported or not. Upon submissions made by the learned counsel appearing on behalf of the Industries Department in that matter that though it is the requirement of the Scheme that the Transport Subsidy is to be released without any delay, at the same time it is also required to be looked into as to whether the raw material and finished products in respect of which the Transport Subsidy has been claimed, were actually transported within the framework of the said Scheme and further that the entitlement of the Petitioner was to be ascertained on the basis of the materials as to whether the Petitioner actually transported the raw materials as well as the finished products, or not. The Co-ordinate Bench on being satisfied that the unit was duly functioning on the date when the claims were made. It concluded that the State Level Committee ought not to have rejected the claims of the petitioners on the groun....
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.... certificate issued by the General Manager, District Industries and Commerce Centre, Dibrugarh, stating that the petitioner unit was physically verified on 17.11.2016 and it was found functioning as on date. Even the affidavit-in-opposition filed by the respondents on 16.03.2022 reveal that the petitioner unit had to be closed down sometime in January, 2018 due to financial crisis and shortage or raw materials. Under such circumstances, it is the opinion of this Court that the respondent authorities, more particularly, the State Level Committee ought not to have rejected the claims of the petitioner on the ground that with effect from January, 2018 the petitioner unit was not functioning." 63. In Sukhamoy Paul Vs. State of Tripura & Ors., 2021 SCC OnLine Tri 273 while dealing with a similar situation with regard to the Transport Subsidy Scheme, the Tripura High Court held as under : "15. ..........The eligibility period for claiming subsidy may be 5 years, the scheme nowhere provides that only if a new industrial unit continues such manufacturing activity for a period of 5 years that it can claim the transport subsidy. Therefore, even if, as pointed out by the responden....
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....uced in the industrial unit would not arise and thereby the question of levy of tax on such sale on goods produced in the industrial unit also does not arise. 67. The orders passed by the Assessing Authority levying tax clearly shows that the industrial unit was fully in operation during the period before its closure and in the absence of any provisions to the contrary in the Industrial Policy, closure of the industrial unit prior to the expiry of the period of the eligibility cannot a ground for denial of the eligibility certificate to an industrial unit for the period the industrial unit was in operation. 68. The contention of the Industries Department that the application for the eligibility certificate has to be made within six months from the date of its commercial production cannot be accepted in view of the fact that the Petitioner could not have applied for the eligibility certificate immediately after the commencement of the production as an amendment was made under Section 57(A) in the Assam Value Added Tax Rules providing that the conversion of coal into coke shall not be manufacture. It is only after the said Rules were declared ultra-vires by this Hon'ble Court, ....
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.... given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting's and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself." Orders are not like old wine becoming better as they grow older." Thereby the submissions advanced by the Industry Department to support the order of rejection of the application for eligibility certificate were not at all the ground on which the application for issuance of eligibility certificate was rejected and thereby the same cannot be considered while examining the validity of the order dated 05.05.2018. 70. It is further case of the petitioner that the petitioner having established its industrial unit on the basis of the various incentives and concessions announced in the Industrial Policy of the Government of Assam by making huge investments and having altered its position on the basis of the same, the respondent authorities cannot be allowed to resile from the promises and the refusal to grant eligib....
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....te." "The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. The Apex Court further in the said judgment in paragraph 33 observed as under: "Whatever be the nature of the function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it." 71. In so far as the limitation of the Doctrine of Promissory Estoppel is concerned the Apex Court in the said judgment, Motilal Padampat (Supra), held as under: "1) Since the doctrine of promissory estoppel is an equitable doctrine,....
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.... the gazette on 21-10-1980, the State of Kerala withdrew the exemption relating to the purchase tax and confined the exemption from sales tax to the limit specified in the proviso of the said notification. While quashing the subsequent notification, it was observed: "If in response to such an order and in consideration of the concession made available, promoters of any small-scale concern have set up their industries within the State of Kerala, they would certainly be entitled to plead the rule of estoppel in their favour when the State of Kerala purports to act differently. Several decisions of this Court were cited in support of the stand of the appellants that in similar circumstances the plea of estoppel can be and has been applied and the leading authority on this point is the case of M.P. Sugar Mills [Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409 : 1979 SCC (Tax) 144]. 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 [(1986) 2 SCC 365 : 1986 SCC (Tax) 385]. In Bakul Cashew Co. case [(1986) 2 SCC 365 : 1986 SCC (Tax) 385] this Court found that there was no clear materia....
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....ithdrawal could be done without offending the rule of promissory estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule. If the Government grants exemption to a new industry and if on the basis of the representation made by the Government an industry is established in order to avail the benefit of exemption, it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that promissory estoppel cannot be claimed against a statute." 75. Answering the question as to whether the Board can be restrained from withdrawing the rebate prematurely before the completion of three/five years' period by virtue of the doctrine of promissory estoppel, the Apex Court in Pawan Alloys & Casting (P) Ltd. v. U.P. SEB [(1997) 7 SCC 251] held in paragraphs 10 & 24 as under: "10. It is now well settled by a series of decisions of this Court that the State authorities as well as its limbs like the Board covered by the sweep of Article 12 of the Constitution of India being treated as 'State' within the meaning of the said article, ca....
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....te defence in equity was held to found a cause of action against the Government, even when, and this needs to be emphasised, the representation sought to be enforced was legally invalid in the sense that it was made in a manner which was not in conformity with the procedure prescribed by statute." 78. Referring to its judgment in Motilal Padampat (Supra), the Apex Court in Nestle India Ltd (Supra) observed as under: "29. As for its strengths it was said: that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. The Government was held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made - contractual, administrative or statutory. To put it in the words of the Court: 'The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, th....
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.... was also held to be inapplicable. In the said judgment, it was held that the doctrine of promissory estoppel will also apply to statutory notifications. 81. The law relating to promissory estoppel was again reiterated and crystallized by the Apex Court in its latest judgment, State of Jharkhand vs. Brahmaputra Metallics Ltd., (2023) 10 SCC 634. 82. After elaborate discussions of the law on Promissory Estoppel as laid down by the Apex Court, it is seen that the State authorities as well as its limbs covered under the sweep of Article 12 of the Constitution of India being treated as 'State' within the meaning of the said article, can be made subject to the equitable doctrine of promissory estoppel in cases where because of their representation the party claiming estoppel has changed its position and if such an estoppel does not fall under any statutory prohibition, absence of power and authority of the promisor and/or is otherwise not opposed to public interest, and also when equity in favour of the promisee does not outweigh equity in favour of the promisor entitling the latter to legally get out of the promise. 83. Having examined the peculiar facts and circumstances enum....
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....ness for the period 2009-10, 2010-11 and 2011-12, the licence by the Chief Inspector of Factories was granted on 18.02.2009. The Entrepreneurs Memorandum available in the pleadings, containing the details of the industry to be set up including the date of commercial production reflects that the date of commercial production is shown to be 24.06.2009 and the acknowledgement to that was issued by the Office of the General Manager, DIC Centre. As such, it clearly established that the industry was set up and the various departments had granted their consent and No Objection Certificates. Therefore without proper materials being placed before the Court, a mere statement or a certificate given by the General Manager of the Industries Department that the unit is non-functional would be contrary to the established procedure prescribed under the Industrial Policy and the steps taken by the petitioner industry duly acknowledged by the concerned departments. The industry department was permitted opportunities to produce the relevant records on the basis of which the General Manager had issued the certificate that the industry was non-functioning on the date it went for physical verification. ....
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....ct that they have also been assessed to tax by the Finance Department who is also a part of the State Level Committee. It is a trite law that the Government must speak in one voice. The Industrial Policy having been announced by the Government of Assam, the various components of the State Level Committee comprising of Industries, Finance etc. must ensure that the benefits required to be given to the various industries if found to be eligible must be duly conferred and in the event any of these industries are found to be ineligible then any orders rejecting such claims must be issued by the State Level Committee upon due consideration of the views of all the respective departments. In the facts of the present case, the State Level Committee rejected the claims of the eligibility certificate by the petitioner on the basis of the certificate issued by the General Manager that the industry was non-functioning. From the pleadings and the materials placed before the Court, it is seen that State Level Committee did not consider the assessments made by the Finance Department and the demand raised in respect of the said industry before concluding that the industry was non-functional and con....
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....dilal Chemicals Ltd. Vs. State of A.P. and ors, reported in (2005) 6 SCC 292 is required to be referred to. 88. In that case, before the Supreme Court, the activity undertaken by the said industry was not held to be "manufacture" although the industry had its eligibility certificate by the concerned committee in terms of the Government order issued by the State of Andhra Pradesh granting benefits and exemptions to the industries such as the petitioner therein. The Apex Court in that case held that the grant of eligibility certificates was not the outcome of an unconsidered decision based on extraneous consideration and the matter was considered in-depth and sanctioned by the District Level Committee of which the department of Taxation was a part. No mala fides were attributed against the industry therein nor was it a case of the industry taking unfair advantage of the Government Notification. The Apex Court therefore held that State which is represented by the Departments can only speak in one voice. 89. In the context of the present case proceedings also the application for eligibility was duly submitted to the Industries Department and which was received by none other than ....
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....t petitions are therefore, allowed. The impugned orders or communications issued by the State Level Committee rejecting the eligibility of these writ petitioners vide orders dated 05.05.2018 are all set aside. The matters are remanded back to the authorities more particularly the State Level Committee to pass appropriate orders in respect of the eligibility of each of the industries or units granting them eligibility under the Industrial Policy. The industries shall be granted their respective eligibility certificates and their claims shall not be denied on the ground that the units/industries subsequently closed it's operations and/or did not operate for the entire period of the Industrial Policy and/or continued production. 92. In so far as the W.P.(C) No. 1828/2019; W.P(C) No. 2138/2019; W.P(C) No. 5954/2018; W.P(C) No. 5937/2018; W.P.(C) No. 5957/2018; W.P.(C) No. 2111/2019; W.P.(C) No. 1843/2019; W.P(C) No. 2096/2019; W.P(C) No. 6027/2018; W.P(C) No. 5960/2018; W.P(C) No. 5917/2018; W.P(C) No. 1860/2019; W.P(C) NO. 5980/2018; W.P(C) No. 5932/2018 and W.P(C) No. 5931/2019, it is seen that these writ petitions have been filed putting to challenge the assessments made by the a....