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Judgment
D.N. Chowdhury, J.—This writ application under Article 226 of the Constitution has arisen out of and directed against two communications sent by the Superintendent of Taxes, Guwahati. The first communication bearing No. D-6/FF/Circle-6A/621 dated 12.4.90 (Annexure-III) reads as follows:.
With reference to the subject mentioned above I would like to inform you that only new Industrial Unit will get the benefit of sales tax concession.
The new Industrial Unit defined u/s 2(2) of the Assam Industries (Sales Tax Concession) Act 1987 as follows:
New Industrial Unit'' means an industrial Unit for the setting up of which all the effective steps have been completed on or after the 15th October, 1982 but before 31st March, 1990.
Since,your industry is inoperative w.e.f 1.10.61,1 do not see any legal provision as per Assam Industries (Sales Tax Concession) Act, 1987 to accept your claim to exempt you from paying sales tax.
So, you are liable to pay sales tax on your sales of own manufactured medicines.
By the other communication, bearing No. D-6/FT/Circle -6A/7098 dated 28.7.90 (Annexures-IV), the Petitioner/Company was intimated by the Supdt. of Taxes that the industry was not eligible to get sales tax exemption as per the provisions of the Assam Industries (Sales Tax Concession) Act, 1987. By that communication, the Petitioner was intimated that the industry of the Petitioner being established in 1962-63, it does not fall within the category of "new industrial unit" by mere installation of new machineries against the old ones. It was further communicated that as per definition of "New Industrial Unit" u/s 2 of the aforesaid Act, 1987, it means the industrial unit for the setting up of which all the effective steps have been completed on or after the 15th of October, 1982 but before 31st March, 1990.
The Petitioner/Company is a Small Scale Industry and registered as such under the Directorate of Industries, Bamunimaidan, the Respondent No. 5. It was established in the year 1961 and has been marketing its products in the entire North Eastern Region. The Petitioners stated that there were about fiftyeight employees besides the sharholders and Directors and all of the employees were local people. The Petitioners referred to the Industrial Policy formulated in the years 1982 and 1986. On 24th of December, 1986 laid down the Industrial Policy of Assam, 1986 on reviewing and revising the Industrial Policy, 1982. The new Industrial Policy aimed at encouraging growth and promotion of all Industries based on local resources, local demands, local scarcity condition and local environment. Part II of the Policy dealt with the definitions and criteria whereas Part III indicated about the incentives. The relevant portions of the aforesaid Policy, are qouted below:
Eligible Unit;
Only new units set up on or after 1.1.87 and existing units undertaking expansion, modernisation or diversification at the same location or at other place in the State of Assam will be eligible for incentives under 1986 Scheme provided that:
2.1 A unit under small scale Sector shall have 100 percent employment of local people.
2.2 A unit in the medium and large Sector shall have employment of 88% local people in the managerial cadre and 90% of local people in the non-managerial cadre and that over a period of 5 years from the commencement of production such medium and large units would take all effective steps to ensure 100% employment of local people in non- managerial and atleast 90% in managerial posts. They would further give the undertaking that if these conditions are violated, the State Govt. subsidies/incentives so availed by them would be fully refunded.
New Units:
An industrial unit which has taken one or more of the effective steps on or after 1.1.87 would be considered as a new unit.
Existing Unit:
A unit which is or was in commercial production at any time prior to 1.1.87 will be considered as an existing unit for the purpose of the 1986 Scheme.
Expansion/Modernisation/Diversification:
Expansion/Modernisation/Diversification of an existing industrial unit will also be eligible for the incentives if the total capital investment on plant and machinery in the expansion/modernisation or diversification, as the case may be is more than 25 percent of the total fixed capital investment of the existing unit. For the purpose of calculation, depreciated book value of all the capital investments made on land, building plant and machinary of an existing unit will be taken into consideration.
The fact that the existing unit has availed itself of incentives will not disqualify the expansion/modernisation/diversification project to get incentives for the extra investment made.
Eligibility Certificate:
Eligibility Certificate is the certificate which will be issued by the Udyog Sahayak of the Directorate of Industries/the District Industries Centre for the SSI Sector and Assam Industrial Development Corporation Ltd. (AIDC LTD) for the medium and large sector. This will be issued after ensuring that all the norms for eligibility have been fulfilled.
Part III INCENTIVES
Sales Tax exemption:
Sales Tax will be exempted on purchase of raw materials and sales of finished products for a period of five years as may be decided by the Govt. from time to time.
Petitioners also referred to the eligibility Certificate issued by the Office In-Charge Udyog Sahayak, District Industries Centre on 29.5.89. The above Certificate is issued for an existing unit, which was valid upto 31.3.90 and was revalidated upto 31.3.91. The Eligibility Certificate disclosed exemption of sales tax with effect from 1.4.88 to 31.3.93. The Petitioner/Company filed an application for grant of Authorisation Certificate on 7.3.90 and the Respondent No. 4 Superintendent of Taxes, Circle-6A, Panbazar, Guwahati issued the impugned letter dated 12.4.90 which, as indicated earlier, expressed inability of the Superintendent to give tax exemption as the industrial unit of the Petitioners was not a " new industrial unit" as per provisions of the Act. The Petitioners thereafter, again made an application on 10.7.90 before the Respondent No. 5, Director of Industries, clarifying its position and the Respondent No. 5 by its letter dated 28.7.90, as indicated earlier, informed the Petitioners that the Petitioner/Co. was not eligible to get sales tax exemption. According to the Petitioners, on the basis of the promises made in the Industrial Policy, the Petitioner/Company stopped realising taxes from the customers with effect, from 6.6.89 and, therefore, the Petitioners invoke the jurisdiction of this Court under Article 226 of the Constitution basing its claim mainly on the Industrial Policy on 1986. According to the Petitioners, as per the Policy, a promise was held out to the Petitioners and as per that promise, the Petitioners undertook modernisation/diversification and expansion of the industry and having altered its position to its detriment, the Respondents cannot now rescind from giving tax benefits to the Petitioner/Company. Hence this writ petition.
Mr. G.N. Sahewalla, learned Counsel for the Petitioners , contended that the Policy laid down by the State Government unequivocally made a promise for exempting the industries covered by the policy from sales tax. The Petitioners acting on the basis of the above promise, changed its position, did not realise the sales tax and, therefore, the Respondents cannot now resile from its promise and refuse the Petitioners the tax benefits. In support of his contention, Mr. Sahewalla, the learned Counsel, referred to the decisions of the Supreme Court in the cases of Amrit Banaspati Co. Ltd. and another Vs. State of Punjab and another, : and M/s. Pawan Alloys and Casting Pvt. Ltd., Meerut etc, etc. Vs. U.P. State Electricity Board and others,
Mr. K.H. Choudhury, learned Addl. Sr. Govt. Advocate, appearing on behalf of the Respondents, on the other hand supported the stand of the Respondents and contended that the exemption or remission of the sales tax can only be granted under the provisions of the Act. Mr. Choudury, in support of his contention referred to the provisions of Assam Industries (Sales Tax Concession) Act, 1987. The learned Govt. Advocate submitted that as per the provisions of the Act, exemption can be granted only to persons specified u/s 3 of the Act on the strength of the Authorisation Certificate granted u/s 4 of the aforesaid Act, 1986. Mr. Choudhury, therefore, submitted that on the face of the Statutory provisions as stated herein above, no such tax exemption can be granted.
Mr. G. N. Sahewalla, the learned Counsel for the Petitioners, contended that as per the Scheme announced by the State Government, the Petitioner/Company was entitled to exemption from payment of sales tax. The Scheme constituted a definite promise and assurance that industrial units like that of the Petitioners, would be entitled to sales tax exemption and the Petitioners ,as stated earlier, acted as per assurance and changed its position. The nature and degree as also the extent of alteration of the position was , however, not indicated in the writ petition. The exemption from payment of sales tax was relied on the plea of promissory estoppel.
It was never in dispute that the Assam Industries (Sales Tax Concession) Act, 1987 provided sales tax concessions. The validity of the Act was not in question. At any rate, the act of the Respondents cannot be faulted on the face of the Statutory provisions. The principle of Promissory estoppel is a principle based on fairness and equity. The application of promissory estoppel will depend on the facts and circumstances of the cases. There cannot be any estoppel against legitimate exercise of statutory powers. Similarly, estoppel cannot bind any promise or undertaking which is contrary to the Statute. Estoppel cannot stand in the way of the Government in formulating policy and the Legislature from making any statutory provisions. Principle of promissory estoppel cannot estop public authorities from discharging its statutory duties and the doctrine cannot hinder operation of law.
The facts and circumstances of this case are not analogous to the cases of Amrit Banaspati (supra) and Pawan Alloys (supra).
I have already referred to the nature of the pleadings relied on by the Petitioners, which only contained bald expressions without being supported by material facts. The doctrine of promissory estoppel cannot be applied in vacuity. The Petitioners basically focussed against the assessment of sales Tax, which is regulated by a Statute, and co-laterally based its claim on the principle of promissory estoppel.
On overall consideration of the matter, I do not find any merit in the writ petition and accordingly, the same is dismissed, with a cost of Rs. 2000/-.
Interim orders, if there be any stands vacated.