NEZONE TUBES LIMITED Vs. STATE OF ASSAM

JUDGEMENT

(1.) IN this application under article 226 of the Constitution of India, the petitioner has prayed for quashing the order dated September 21, 1990, of the Superintendent of Taxes, Guwahati, Panbazar, Unit-A, and for a mandamus on the respondents not to assess and realise from the petitioner any Assam finance sales tax for the period August 2, 1984 to August 1, 1989 and to refund the amount of Assam finance sales tax paid by the petitioner on purchase of raw materials for the period from August 2, 1984 to August 1, 1989.

(2.) THE facts of the case are that by resolution dated August 12, 1982, the Government of Assam, Department of Industries, decided upon a package of incentives to be given to eligible industrial units in the State of Assam. One of the incentives to be given under the said package of incentives (for short "the 1982 Scheme") was sales tax exemption. Paragraph 5 of the said resolution declared that a new industrial unit will not be required to pay sales tax payable under local sales tax laws on purchase of raw materials and on sales of finished products for 5 years from the date of commencement of production. Paragraph 3 of the said resolution stipulated that the 1982 Scheme would be implemented by Udyog Vikash through AIDC in respect of large and medium scale industries and paragraph 4 of the resolution provided that eligible units under the 1982 Scheme are to register themselves with AIDC in case of large and medium scale units and apply for an eligibility certificate and the implementing agency will issue the eligibility certificate on the basis of documentary evidence produced by the eligible unit.

(3.) BUT it was only in 1986 that the 1982 Scheme was given legislative sanction by the enactment of the Assam Industries (Sales Tax Concessions) Act, 1986 (for short "the 1986 Act"), which came into force on August 1, 1988 by a notification dated July 30, 1988 issued under sub-section (3) of section 1 of the 1986 Act. The 1986 Act was followed by the Assam Industries (Sales Tax Concession) Rules, 1988 (for short "the 1988 Rules") made by the State Government under the 1986 Act and notified vide notification dated June 24, 1988, which came into force on August 1, 1988. Pursuant to the 1986 Act, Notifications Nos. FTX. 28/87/pt. II/37, 38, 39, 40 and 41 dated July 30, 1988, were also issued and under the scheme of the 1986 Act and the 1988 Rules and the notifications, persons undertaking to manufacture in the State of Assam goods could make an application to the Superintendent of Taxes for an authorisation certificate and if he was granted an authorisation certificate, any sale of goods to him for use by him as raw materials in the manufacture of goods in the State for sale for a period of 5 years from the commencement of production was not liable to tax with effect from the commencement of the Act. For the period from October 15, 1982 up to the commencement of the Act, any tax paid by such a person was also to be refunded subject to the conditions specified in the notification made in that behalf. Similarly, a person holding a certificate of eligibility issued by the appropriate authority and the authorisation certificate was also not liable to tax under the local sales tax laws on its sale of finished goods for a period of five years from the date of commencement of production. The 1988 Rules further provided that an application for an authorisation certificate was to be accompanied by a certificate of eligibility in Part II of form I prescribed by the said Rules issued by the prescribed authority as well as a certificate obtained from the Directorate of Employment, Government of Assam, to the effect that the number of local people employed on the date of the application in the new industrial unit including those in the management cadre is not less than 80 per cent of the total number of persons employed in the unit.