PRAGNA R JAMBUSARIA Vs. STATE OF GUJARAT

JUDGEMENT

(1.) IN this group of petitions, common questions of fact and law arise for our determination and, it is, therefore, appropriate to decide all the petitions by a common judgment.

(2.) FOR appreciating the questions raised in the present group of petitions, few facts of the first petition, being Special Civil Application No. 7138 of 1988 may now be stated : The petitioner of this petition is doing business of manufacturing melemine table-wares, electrical components, switch-gears, etc. , at the Sun Electrical Components. C1-B, 3702, GIDC, Sachin, Surat. She is a dealer registered under the Gujarat Sales Tax Act, 1969 (hereinafter referred to as "the Act") having registration certificate No. 4694008 dated December 6, 1985. It is the case of the petitioner that she was tempted to establish small-scale industries in a backward area of Sachin by investing by huge amount of capital on account of being informed by the resolution dated August 27, 1980 issued by the Industries, Mines and Power Department of respondent No. 1, that a scheme of the sales tax incentive from June 1, 1980 for a period of five years has been introduced and the sales tax exemption incentive has been granted by entry No. 118, vide notification dated February 5, 1981 issued under the provisions of section 49 (2) of the Act. The petitioner took steps to obtain shed of the Gujarat Industrial Development Corporation, the Government of Gujarat undertaking ("gidc", for short) at Sachin on April 4, 1984 and obtained possession of a shed being C1-B 3702 from GIDC by incurring cost of Rs. 2,97,760. Thereafter she invested huge amount towards construction of factory building, plant and machinery with electrical installations by investing more than Rs. 10 lacs. It is her case that the area of the factory shed is beyond 10 kms. of the municipal limit of Surat and as such she is entitled to benefit of the Government resolution. She complied with all the requirements and conditions to make herself eligible for sales tax exemption incentives envisaged by the Government resolution read with entry No. 118 of the notification issued under section 49 (2) of the Act. She made an application to respondent No. 2, General Manager, District Industries Centre, Surat, on December 17, 1985 for granting eligibility certificate. She also submitted necessary certificate issued by the GIDC showing that the shed of the petitioner was situated beyond 10 kms. from Surat. After receiving the application of the petitioner necessary inquiries were made by the authorities, the facts were verified by respondent No. 2 and eligibility certificate was granted in favour of the petitioner by granting sales tax exemption of 50 per cent to the extent of Rs. 5,43,827. 50 (50 per cent of Rs. 10,87,655 ). It was granted on February 12, 1987. It is asserted by the petitioner that it was made effective from April 4, 1987. It is her case that in spite of the fact that everything was in accordance with law and the petitioner had rightly got exemption certificate as per Government policy, without assigning any ground, without issuing notice and applying principles of natural justice and without there being any earthly reason by an order dated April 27, 1988 the second respondent reduced sales tax exemption limit to the extent to 25 per cent, i. e. , from Rs. 5,43,827. 50 to Rs. 2,71,913. 75. It is this action which is challenged by the petitioners in the present petition.

(3.) IT appears that a petition being Special Civil Application No. 3823 of 1989 was filed by one Khukri Packaging Private Ltd. and another. That petition was admitted and it was ordered to be heard along with this group of petitions, namely, Special Civil Application Nos. 7738 to 7741 of 1988. That petition (Special Civil Application No. 3823 of 1989) came up for hearing before us and by a judgment and order dated April 4, 1995 [khukri Packaging Private Ltd. v. State of Gujarat [1998] 109 STC 117 (Guj)], it was allowed and rule was made absolute by quashing revised eligibility certificate and holding that action of tax incentive benefit was illegal and unlawful.