SHEELA FOAM PVT. LTD Vs. STATE OF SIKKIM

JUDGEMENT

(1.) THE petitioner, a company engaged in the business of manufacture and sale of mattresses and other foam products, has filed this writ petition under Article 226 of the Constitution of India seeking, inter alia, the following reliefs: -

(2.) THE respondents in the writ petition are State of Sikkim represented by the Commissioner-cum- Secretary, Department of Commerce and Industries (R-1), Commissioner of Commercial Taxes (R-2), Deputy Commissioner of Commercial Taxes (R-3) and Secretary, Law Department, Government of Sikkim (R-4). As pleaded, the case of the petitioner is that the State of Sikkim is one of the least industrially developed States in the country and, therefore, it had made all round efforts for the growth of industries and generation of employment to bring it at par with other States of the country. With this purpose, the State Government introduced various policies/schemes/ notifications etc. from time to time granting benefits, concessions, subsidies and other reliefs to industrial units. A notification bearing No. G.O./2/DI/96-97 dated 18.12.1996 (referred to as Industrial Policy of 1996) was issued by the first respondent launching an industrial policy of the Government of Sikkim. Under this policy major steps were taken for the promotion of the industries in the State and Annexure P-2 is a copy of the above policy. Under the above policy as a strategy for attracting new industries to the State, the Government made an "announcement of attractive package and fiscal incentives" to the entrepreneurs. According to the petitioner, for generating the entrepreneurial spirit and encourage investment in the industry, the Government announced an attractive package of incentives and facilities. Petitioner submits that the Industrial Policy of 1996 was later replaced by a fresh scheme in the shape of an Act (Annexure P-3), by name "The Sikkim Industrial Promotion and Incentives Act, 2000". It is submitted that under the provision of that Act also various specific benefits have been provided to the entrepreneurs and Section 13(2) of that Act provides that the sanctioning authority may with the approval of the Government from time to time notify additional benefits and concessions to industrial units. It is then submitted that the first respondent issued Annexure P-4 notification on 03.10.2000 exempting new industrial units other than negative industries set up after enactment of Incentive Act from payment of sales tax for a period of 5 years from the date of going in for commercial production. Copy of this notification is referred to as exemption notification and produced as Annexure P-4.

(3.) ACCORDING to the petitioner, the Incentive Act, 2000, exemption notification 2000 and Annexure P-7 Scheme will clearly show that the State Government had clearly promised, held out and provided for exemption from payment of both State and Central Sales Tax. The petitioner submits that they completed setting up their unit for production of foam and foam products by investing more Rs.1.00 crore in the leased premises at Baghey Khola, West Pendam, East Sikkim by October, 2003 and commercial production started with effect from October, 2003. The main reason for installation of the unit in Sikkim was the exemption being available to the petitioner and as per the clear representations made to it by the various policies etc. of the Government. Had it not been for such representation the petitioner would not have undertaken the huge investment and extra expenses due to the location.