RNB MINERALS AND CHEMICALS (P) LTD, SHRI GAURAV BAJAJ Vs. STATE OF MEGHALAYA, COMMISSIONER AND SECRETARY TO GOVT OF MEGHALAYA, DEPARTMENT OF INDUSTRIES AND ORS

JUDGEMENT

(1.) These six writ petitions involving a common question of law are heard together and are being disposed of by this common judgment. Ms A Paul, the learned Counsel for the Petitioners in all the writ petitions, Mr AS Siddique, the learned Counsel for the State Respondents in WP(C) Nos. 255(SH) to 259(SH) of 2008 and Mr B Bhattacharjee, the learned Counsel appearing for the State Respondents in WP(C) No. 342(SH) of 2008 have been heard. It is the common ground of the learned Counsel appearing for the rival parties that these writ petitions are squarely covered by my decision dated 13.8.2010 in M/s Meghalaya Bitchem Private Limited. -vs- State of Meghalaya & Anr, in WP(C) No. 113(SH) of 2007. Nevertheless, for the sake of clarity, it will be more beneficial for all concerned to highlight the salient features of the instant writ petitions.

(2.) All the Petitioners are large and medium industries. According to them, the State-Respondents in the Meghalaya Industrial Policy, 1997 assured to provide them sales tax exemption for their finished goods for a period of seven years from the date of their commercial production. In furtherance of the Industrial Policy, the State Government had issued the Notification dated 12.4.2001 notifying the Meghalaya Industries (Sales Tax Exemption Scheme) 2001 declaring that the eligible units were entitled to Sales Tax exemption on sales of finished products manufactured by such eligible units within the State of Meghalaya and in the course of inter-State trade and commerce. In exercise of the powers conferred under Sec. 8(5) of the Central Sales Tax Act, 1956, the State Government issued another Notification on 12.4.2001 stating therein that no tax under the Central Sales Tax Act, 1956 shall be payable by an eligible industrial unit to whom an exemption certification in the form of Certificate of Authorization has been granted by the Commissioner of Taxes with the prior approval of the Taxation Department in respect of sale of goods manufactured by such units in the course of inter-State trade or Commerce during the period of validity of that certificate subject to the condition that such sale to any person outside the State of Meghalaya is supported by proper document of sale. This Notification came into force with effect from 12.8.1997. There is no dispute at the bar that all the Petitioners obtained the Eligibility Certificates under the Meghalaya Industrial Policy from the Managing Director, Meghalaya Industrial Development Corporation Limited (Respondent No. 4) certifying that they are eligible for claiming the incentives provided for in the Industrial Policy. Thus, the Petitioners have become eligible for the sales tax exemption.

(3.) The case of the Petitioners is that whereas the Notification dated 12.4.2001, the benefit of sales tax exemption was made available to all sales made in the course of inter-State commerce, the impugned Notification has restricted the benefit of sales tax exemption only to sales in the course of inter-State trade or commerce only to registered dealers or Government. The further case of the Petitioners is that even after the enactment of Meghalaya Value Added Tax Act, 2003, in terms of Sec. 116 thereof, the sales tax exemption as promised in the Industrial Policy is continued in the form of Scheme of 2006. It is submitted by the Petitioners that the impugned Notification withdrawing the said sales tax exemption granted under the earlier Notification dated 12.4.2001, which had earlier been superseded by the Notification dated 5.9.2005 and directing that all industrial units eligible to 99% remission of VAT under para 3(2) of the Meghalaya Industries (Tax Remission) Scheme, 2006 shall pay CST @ 1% provided the sale is made to a registered dealer outside the State or to the Government while sales to others will attract normal rates of CST are contrary to the Meghalaya Industrial Policy, 1997 and the Meghalaya (Sales Tax Exemption) Scheme, 2001 formulated thereunder and are also hit by the doctrine promissory estoppel. According to the Petitioners, on the promise made by the State Respondents in the said Industrial Policy, each of them had taken steps for establishment of their industries by incurring huge amounts. Dealing with the same contentions, this is what I said in M/s Meghalaya Bitchem Private Ltd. (supra) at paragraph 13 and 14 of my judgment: