GOVERDHAN OIL MILLS Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) AS per the facts mentioned in the memo of writ petition, the petitioner is a partnership firm carrying on the business of oil extraction at Bharatpur. The State of Rajasthan in exercise of powers conferred by subsection (5) of section 8 of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act of 1956") vide notification dated May 23, 1987 notified Sales Tax Incentive Scheme for Industries, 1987 and exempted the industrial units from payment of tax on sales made in the course of inter-State trade or commerce, of the goods manufactured by them, within the State. The said scheme came into operation w. e. f. March 5, 1987 and was to remain in force till March 31, 1992. Again on July 6, 1989, in exercise of powers conferred by sub-section (2) of section 4 of the Rajasthan Sales Tax Act, 1954 (hereinafter referred to as "the Act of 1954"), the State Government notified the Sales Tax New Incentive Scheme for Industries, 1989 and exempted the industrial units from payment of tax on the sales of goods manufactured by them within the State in the manner and to the extent and for the period as covered by this notification. It was further mentioned that operation of this new incentive scheme shall be deemed to have started w. e. f. March 5, 1987 and shall remain in force up to March 31, 1992. These incentive schemes were intended to give protection to certain industries by giving them tax concession and to encourage new industries in the State of Rajasthan.

(2.) THE petitioner, believing the unequivocal promise given by the Government, obtained an industrial plot No. A-6 in Bharatpur, which is developed by RIICO and obtained possession thereof on February 16, 1989. THE petitioner deposited the development charges and lease money to RIICO and invested a sum of Rs. 8 lakhs in the construction of building for running the oil industry and also invested a sum of Rs. 19 lakhs approximately on the machines. THE petitioner finally set up a totally automatic plant by March, 1990 and could start its production only on and from May 11, 1990. THE petitioner moved an application on May 16, 1990 in the prescribed form along with relevant documents for exempting the petitioner's product from sales tax under the Sales Tax New Incentive Scheme for Industries, 1989 but the Commercial Taxes Officer, Bharatpur, refused to accept the said application and stated that now oil industries are not covered under the said scheme. On enquiry, the petitioner came to know that the notification had been issued on May 7, 1990 by way of amendment providing that the new scheme will not be applicable to oil extraction or manufacturing industries and thereafter, the petitioner has filed the present writ petition on May 28, 1990 seeking to get the amendment notification dated May 7, 1990 quashed. Notices were issued on June 12, 1990 to show cause as to why this writ petition should not be admitted and disposed of. An interim stay order was also passed to the effect that the non-petitioners were directed to continue the exemption under the Sales Tax New Incentive Scheme for Industries to the petitioner provided the petitioner famishes a bank guarantee in the sum of Rs. 1 lakh and on the condition that the petitioner maintains regular accounts on the basis of which sales tax will be calculated. THE said stay order was confirmed by this Court vide order dated June 10, 1991. After hearing the parties, the court observed that the provisions of notification dated May 7, 1990 shall not be applicable so far as the petitioner-industry is concerned provided it furnishes solvent security in the sum of Rs. 1 lakh.

(3.) IN this view of the matter, this writ petition is allowed, the notification dated May 7, 1990 (annexure 3) is hereby quashed and it is held that the petitioner is entitled to the benefit of Sales Tax INcentive Scheme for INdustries, 1987 and 1989. No order as to costs. Writ petition allowed. .