MARUTI TEA INDUSTRIES Vs. STATE OF ASSAM

JUDGEMENT

(1.) THE petitioner No. 1 is a partnership firm having its place of business at Dibrugarh. The Government of Assam announced the Industrial Policy of Assam, 1991 and pursuant to the said policy certain notifications were issued, providing certain incentives to the new industrial undertakings and to the existing undertakings also. Pursuant to the benefits provided by the said notifications, the petitioner established an industrial unit at Jyoti Nagar in the district of Dibrugarh and the production commenced on September 21, 1993. The petitioner was granted eligibility certificate by the appropriate authority, which was valid from January 21, 1993 to September 20, 2000. The petitioner was using tea as a raw material and the tax on such raw material was included under the said concession scheme. The petitioner approached the sales tax authorities for grant of the benefits, as the item black tea was included in the eligibility certificate. It may, however, be mentioned that with effect from August 16, 1995 tea was excluded for use as raw material for production of the finished products. The Superintendent of Taxes however, refused to include tea in the list of raw materials in the authorisation certificate issued to the petitioner.

(2.) THE case of the petitioner is that once the Government of Assam promised sale tax exemption on the finished products as well as on the raw material to new industrial units established after April 1, 1991 and the petitioner having acted on the said policy, established the said industry, the respondent-State is bound under the law on the basis of doctrine of promissory estoppels and the petitioner cannot be denied the benefits of the said scheme. The broad facts of the case as stated above, are not in dispute. The respondent-State has not filed any affidavit-in-opposition, although sufficient opportunity was given to them.

(3.) IN a recent case of State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258; (1999) 1 SCC 31 the apex Court took a similar view and held that it is not open for the Government to issue notifications which may override the incentive policy itself. In this case we find that although the Director of Industries had granted the exemption to the petitioner in the light of the Industrial Policy, 1991, the sales tax authorities refused to comply with the same and tried to override the policy decision in view of the subsequent notification of 1995, whereby tea was excluded in the list of raw material available for sales tax exemption. This Court had the occasion to examine the Assam Industries (Sales Tax Concessions) Scheme, 1995 in the case of Manjushree Extrusions Limited v. State of Assam [2001] 123 STC 366; (2001) 2 GLR 218. Although the two learned Judges of the division Bench differed on certain aspects of the matter, there was consensus on promissory estoppels. The learned Judges held as follows (see para 42 in STC; para 43 in GLR) :