ASHOK OXYGEN Vs. STATE OF GUJARAT

JUDGEMENT

(1.) BY means of filing this petition under article 226 of the Constitution, the petitioner has prayed to issue a writ of certiorari or any other appropriate writ, order or direction to declare that the resolution dated April 29, 2000 seeking discontinuation of sales tax based incentives provided under the Industrial Incentive Policy 1995-2000 and prescription of eligibility conditions for treating industrial units as pipeline cases to enable the units to have benefits of existing commitments in respect of incentives offered by Industrial Incentive Policy 1995-2000, is illegal, unlawful, unconstitutional, violative of principles of law, equity and justice and amounting to breach of principles of promissory estoppel. The petitioner has further prayed that retrospective implementation of the resolution dated April 29, 2000 be declared as void.

(2.) WITH a view to accelerating development of the backward areas of the State and creating large scale employment opportunities, the Government of Gujarat had formulated Industrial Incentive Policy 1995-2000 which, inter alia, provided for giving capital investment subsidy and sales tax incentives. The scheme had come into operation with effect from August 16, 1996 and was to be operative for a period of 5 years, i. e. , up to August 15, 2000. In the conference of Chief Ministers and Finance Ministers of States and Union Territories which was held on November 16, 1999, the State Governments and Central Government had evolved a consensus for abolition of sales tax related incentives and concessions. It was also decided in principle to give effect to this discontinuance of incentives with effect from January 1, 2000. The Standing Committee of State Finance Ministers which was constituted to monitor sales tax reforms in its meeting held on December 20, 1999 unanimously resolved that there should be no new incentives relating to sales tax for any industry and that the industrial units in pipelines should be given incentives only if such units fulfilled certain conditions. In view of this policy decision, the Government of Gujarat issued resolution dated April 29, 2000 to give effect to the decision taken in the conference held on November 16, 1999. The resolution, inter alia, provides that sales tax based incentives for new investments as well as for expansion/modernisation/diversification, etc. , shall be discontinued with effect from January 1, 2000 which are granted earlier, but the existing commitments in respect of such incentives made/offered in respect of the industrial units eligible as on December 31, 1999 shall be continued for the period of their eligibility on fulfilment of conditions stipulated therein. The petitioner, which is a partnership firm and engaged in manufacture and sale of industrial oxygen, made application dated March 30, 2000 for obtaining provisional registration as small-scale industry. The petitioner was granted provisional registration certificate on March 30, 2000. Thereafter, the petitioner applied for permanent registration certificate which was granted on August 11, 2000. The petitioner wanted to avail of the benefits under the Industrial Incentive Policy which was in operation from August 16, 1995 to August 15, 2000 and made application accordingly. The respondent No. 2 issued a notice dated May 31, 2000, calling upon the petitioner to produce evidence to show that (i) provisional registration certificate was granted to the petitioner prior to January 1, 2000 indicating that the petitioner was a small-scale industry, (ii) the petitioner had obtained possession of the land before January 1, 2000 and (iii) the petitioner had made application prior to January 1, 2000 to the regular financial institutions for finances, to enable the respondent No. 2 to decide the question whether the petitioner-unit should be treated as a pipeline case within the meaning of resolution dated April 29, 2000. The petitioner could not produce the evidence before the competent authority and is not granted benefit of Industrial Incentive Policy 1995-2000. The petitioner has pleaded in the petition that before the date of new resolution, i. e. , April 29, 2000, the petitioner was granted provisional registration as small-scale industry on March 30, 2000 and had also obtained land on lease and, therefore, the petitioner is entitled to the benefit of Industrial Incentive Policy 1995-2000. According to the petitioner, as the petitioner-unit has satisfied all the three conditions stipulated in the resolution dated April 29, 2000, the petitioner-unit ought to have been treated as a pipeline case and should have been granted benefit of Industrial Incentive Policy 1995-2000. What is claimed in the petition is that on the basis of promise held out by the respondents in Industrial Incentive Policy 1995-2000, the petitioner had obtained provisional registration as small-scale industry as well as the land on lease and, therefore, now the respondents are estopped from refusing to grant benefit of Industrial Incentive Policy 1995-2000. The petitioner has also averred that the cut-off date prescribed by resolution dated April 29, 2000, is arbitrary and that the said resolution could not have been made applicable with retrospective effect from January 1, 2000. Under the circumstances, the petitioner has filed the present petition and claimed the reliefs to which reference is made hereinabove.

(3.) MR . Uday R. Bhatt, learned counsel for the respondents, submitted that the policy contemplated by resolution dated April 29, 2000 is neither arbitrary nor irrational and as the petitioner does not satisfy all the conditions stipulated therein to be treated as a pipeline case, the petitioner is not entitled to the reliefs claimed in the petition. The learned counsel stressed that the Government is competent to change its policy in public interest on the basis of resource crunch and as the petitioner had not obtained provisional certificate as small-scale industry prior to December 31, 1999 or obtained possession of the land before the said date, the principle of promissory estoppel would not be applicable to the facts of the present case. It was argued that the resolution dated April 29, 2000 was issued pursuant to decision taken at the conference of Chief Ministers and Finance Ministers of States and Union Territories which was held on November 16, 1999 and as the petitioner must be presumed to be aware of the said decision taken on November 16, 1999, the petition should not be entertained. In support of his submissions, the learned counsel placed reliance on the decision in Sales Tax Officer v. Shree Durga Oil Mills [1998] 108 STC 274 (SC); (1998) 1 SCC 572.