SAINSONS PAPER INDUSTRIES LTD Vs. STATE OF HARYANA

JUDGEMENT

(1.) In this petition, the petitioner has made the following substantive prayers :

(2.) The petitioner was incorporated as a private limited company in 1989. After six years, it got a fresh incorporation as public limited company. It is engaged in manufacturing of craft and packing papers in the unit set up at Village Bakhli, Tehsil Pehowa, District Kurukshetra. After the commencement of commercial production, the petitioner applied for exemption under Section 13-A of the Haryana General Sales Tax Act, 1973 (for short, "the 1973 Act") read with Rule 28-A of the Haryana General Sales Tax Rules, 1975 (for short, "the 1975 Rules"). Additional Director, Industries, Haryana, issued eligibility certificate, annexure P3, under Rule 28-A(1) of the 1975 Rules entitling the petitioner to claim exemption from payment of tax for a period of seven years from January 1, 1998 to December 31, 2004 subject to the ceiling of Rs. 11,85,41,000. The grievance of the petitioner is that during the currency of the period of exemption State of Haryana has enacted the Haryana Value Added Tax Act, 2003 (for short, "the 2003 Act") under which the benefit of exemption has been indirectly withdrawn. It has challenged the constitutionality of Section 61(1)(d)(i) of the 2003 Act and Rule 68 of the Haryana Value Added Tax Rules, 2003 (for short, "the 2003 Rules"). It has further prayed for issuance of a writ of mandamus directing the respondents to modify the exemption certificate so as to entitle it to claim exemption for a period of nine years commencing from January 1, 1998 on the ground that the area of Pehowa has been declared to be industrially backward area vide notification dated March 5, 1999 issued under Rule 28-A of the 1975 Rules.

(3.) Shri Narender Hooda argued that even though the impugned enactment is not beyond the legislative competence of the State, the same should be struck down because the provisions contained therein have the effect of depriving the petitioner of its right to continue to avail of the benefit of exemption from payment of tax granted under Rule 28-A of the 1975 Rules. He submitted that the petitioner had spent huge capital in anticipation of getting the benefit of exemption and, therefore, the respondents are estopped from withdrawing the exemption granted vide certificate, annexure P3. He then argued that Section 61(1)(d)(i) of the 2003 Act under which the petitioner has been made eligible to opt for deferment of tax is arbitrary, irrational and is violative of Article 14 of the Constitution of India. In the end, he argued that even if the court is not inclined to strike down Section 61(1)(d)(i) of the 2003 Act, the respondents may be directed to amend the eligibility certificate so as to entitle the petitioner to avail of the benefit of exemption for a period of nine years because the industrial unit set up by it falls in a backward area. He submitted that his client may be allowed to make a representation to the competent authority for grant of exemption for a total period of nine years commencing from January 1, 1998.