CIVIL ASBESTOS Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THIS petition raises a short issue. The petitioner is engaged in the business of manufacture of A. C. pipes and fittings and is also registered under the Gujarat Sales Tax Act, 1969. The petitioner established a new industry and commenced production in the year 1981 and it became eligible to claim the benefits under the sales tax incentive scheme. The petitioner was duly issued eligibility certificate dated January 29, 1982, for the purpose of claiming exemption from the payment of sales tax. It appears that after the petitioner became eligible on commencement of the production, by notification dated August 17, 1982, the cement based industries were included in the list of industries not eligible for claiming exemption under the sales tax incentive scheme.

(2.) ON the basis of the notification excluding the cement based industries from the eligibility of the benefit under the sales tax incentive scheme, the Sales Tax Officer II, Bharuch, informed the petitioner that he is not entitles to claim the benefit under the said scheme and ultimately issued a recovery notice dated December 5, 1986 (annexure J to the petition), demanding sales tax for the period from April 1, 1982 to March 31, 1984, with interest thereon.

(3.) HAVING heard the learned counsel for the parties, we are of the opinion that the contentions of the petitioner are well-founded. It is now well-settles that the exemption granted under the Sales Tax Act, which the State Government was entitled to grant under the statute, constitutes a promise to the entrepreneurs to avail of the benefits on fulling their part of the terms of securing benefit under such scheme. It is well established that though that Government is entitled to withdraw benefits under such scheme but that authority is operative only prospectively and does not affect the rights already vested in the entrepreneurs to claim the benefit of the scheme and that right remaining unaffected, for such benefits as envisaged under the scheme, they are entitled to claim. As there is no dispute on the facts that the petitioner became entitled to claim the benefit under the aforesaid scheme on the establishment of the new industry and the commencement of the production, before the cement based industries were included in the list of the industries not eligible for claiming the benefit under the said scheme and in fact the petitioner was issued the eligibility certificate, the petitioner is entitled to the benefits under the said scheme for the full period. A reference in this connection be made to the decision in the case of Kothari Oil Products Co. , Rajkot v. State of Gujarat AIR 1982 Guj 107; [1982] 23 (1) Guj LR 20 and Tata Metals and Strips Ltd. v. State of Gujarat [1992] 87 STC 447 of this Court and the decision of the Supreme Court in the case of Pournami Oil Mills v. State of Kerala [1987] 65 STC 1; AIR 1987 SC 590. It is pertinent to note that in Pournami's case [1987] 65 STC 1 (SC); AIR 1987 SC 590, by order dated April 11, 1979, Kerala Government had granted tax exemption to the new small-scale units with a view to boosting industrialization for a period of five years. By second notification dated September 29, 1980, the exemption was withdrawn. The precise question raised before the Supreme Court was whether the industries which were established prior to the second notification could claim the exemption under notification dated April 11, 1979, if they were entitled to such exemption, on the anvil of doctrine of promissory estoppel. In that context the Supreme Court observed as under :