TMI Blog2013 (12) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... any started commercial production from 09.10.2003. We do not find any difficulty to accept the argument of learned Additional Advocate General as the petitioner’s industry was established after the repeal of Industrial Policy, 1996 and during the currency of the SIPI Act, 2000. The petitioner-company cannot aspire for the benefit and concession extended to the entrepreneurs under the policy of 1996. Under the notification dated 03.10.2000 concessions of State Excise Duty has been granted for 3 (three) years and for State Sales Tax for 5 (five) years for both existing and new industrial units as classified in paragraph 1 of the above notification. The argument of the learned Addl. Advocate General that the petitioner-company will be entitled only benefits and concessions granted under Annexure R-3 notification is sound and only to be accepted. On a plain reading of the clauses it is clear that the exemption and benefit in the above notification is provided only in respect of State Excise Duty and State Sales Tax. If Sales Tax is interpreted to mean to include Central Sales Tax then the rate of exemption would be much higher than the CST levied. The rate of CST is only 4% where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaration that Section 12(A) of the Sikkim Industrial Promotion and Incentive Act, 2000 (Act No. 18 of 2000) as amended by the Sikkim Industrial Promotion and Incentive (Amendment) Act, 2007 (produced as Annexure P-15 in the writ petition) by section 4 thereof as ultra vires the Articles 14 and 19 (1) (g) of the Constitution of India and violative of the doctrine of promissory estoppel and quash the same. (ii) A writ of certiorari striking down the Assessment Order dated 08.02.211 for the period of April 2003 to March 2005 issued by third respondent. (iii) A writ of certiorari striking down order dated 25.04.2011 issued by third respondent on the Review Petition filed by the petitioner holding that the amount of sale declared in Form-C is a primary information received from party of transaction while the amount of sale declared in the return is only report of the actual sale, therefore, in case of any variation, the former should prevail over the purpose of assessment of tax. (iv) A writ of certiorari striking down impugned Notice of Demand No. 115/CT dated 04.07.2011 issued by third respondent to the petitioner directing the petitioner to pay a sum of ₹ 46,00,657/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so 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, inspired by the Industrial Policy of 1996, the Incentive Act, 2000 and Annexure P-4 exemption notification, the petitioner found it feasible to set up an industry in the State of Sikkim and started investing money for the purpose of establishing the petitioner s company in the State of Sikkim in the year 2001 itself. Annexure P-5, Lease Deed dated 21.09.2011 was entered into by the petitioner company with the State of Sikkim for the above purpose. Thereafter, the petitioner obtained the requisite regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (3) Exemption of Central Sales Taxes and Central Excise Duties will be governed by various Notifications/Orders issued by Government of India in this regard. A copy of the amendment Act, 2003 is produced as Annexure P-8. 6. The petitioner claims that even after the amendment Act, 2003, the exemption under the Central Sales Tax Act, 1956 which was granted to the industries by way of the Incentive Act, 2000 read with Exemption Notification, 2000 and State Scheme of Incentives for Industries, 2003 continued to be in operation. In this connection, it is pointed out that the said amendment Act, 2003 did not specifically repeal the earlier Exemption Notification, 2000 or state that the Central Sales Tax shall not be exempted. According to the petitioner even after the amendment in the absence of any contradictory notifications of the Government of India, it has to be presumed that the Exemption Notification, 2000 and the State Scheme of Incentives for Industries, 2003 will continue to be in operation. The petitioner has pointed out that even after the commencement of the Incentive Act, 2003 the official web-site of the Government continued to represent that Central Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submitted by the petitioner. According to the petitioner it is State Government which has been vested with the power for granting exemption from Central Sales Tax. No action was taken for granting exemption to the petitioner from Central Sales Tax even after the petitioner had started commercial production. 8. The petitioner annexed Annexure P-12 letter dated 04.05.2005 to the second respondent informing the second respondent that the petitioner had already exempted to collect and deposit Sate Sales Tax as well as Central Sales Tax as per Sikkim Industrial Policy and therefore they are not collecting or charging any VAT/CST from their customers. Pursuant to Annexure P-12 some of the officials of the second respondent visited the petitioner s factory premises and asked the petitioner to furnish certain documents. The petitioner submitted Annexure P-13 letter in response and requested that necessary Exemption Certificate be issued at the earliest. The petitioner points out that by Annexures P-13A and P-13B the second respondent granted exemption from payment of Central Sales Tax under section 8(5) of the Central Sales Tax Act, 1956 for the period from 11.03.1999 to 14.11.2000 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales made upto 31.12.2007. The petitioner submits that Annexure P- 17 notice dated 21.01.2008 was the first letter written by the second respondent to the petitioner regarding issue of Central Sales Tax. To Annexure P-17, the petitioner sent Annexure P-18 letter dated 31.01.2008 to the first respondent. Thereafter, the petitioner submitted Annexure P-19 letter dated 27.03.2008 to the Chief Minister of the State demanding justice in the matter of withdrawal of Central Sales Tax Exemption by the Government. To Annexure P-19 letter the first respondent gave Annexure P-20 reply. Thereafter, vide notice dated 06.06.2009, the third respondent informed the dealers engaged in inter-State trade and commerce that all dealers engaged in sale in course of inter-State trade or commerce are required to obtain separate declaration Form-C from the buying dealers of other States for all the sales effected during each quarter of a financial year. 11. It was further informed that in pursuance of Rule 12 (5) of the Central Sales Tax (R T) Rules, 1957 separate declaration Form-F is to be obtained from consignee for stock transfer effected during each month. The petitioner on 23.06.2009 requested t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forming the petitioner that unless the petitioner submits declaration Form-C and F and proof of sale of goods across custom frontier of India, the petitioner s return will be treated as invalid. Thereafter, Annexure P-33 Assessment Order was issued by the third respondent imposing on the petitioner ₹ 49,61,781/- towards non-payment of Central Sales Tax together with one-tenth of tax assessed as CST and penalty. According to the petitioner Annexure P-33 is illegal. Annexure P-33 is followed by Annexure P-34 final hearing notice. The petitioner filed application for review under section 9(2) of the Central Sales Tax Act read with section 21 of the Sikkim Sales Tax Act praying therein for review of the Assessment Order. Annexure P-35 is a copy of the application for review. The third respondent sent hearing notice Annexure P-36 in respect of review application. The petitioner submitted Annexure P-37 for time extension application for hearing on review application. To that the third respondent sent Annexure P-38 finally fixing time for hearing of review application. The petitioner vide Annexure P-39 once again seeking extension of time for hearing. At last on 25.04.2011 the revie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me day (19.9.2011) the third respondent issued Annexure P-52 notice to the petitioner directing the petitioner to appear for hearing on 27.09.2011 regarding the assessment of Central Sales Tax on disposal of inter-State trade effected during the period from 01.04.2005 till 31.03.2011 along with account books etc, failing which assessment case would be decided ex-parte. 15. On receiving Annexure P-52 the petitioner informed the third respondent vide Annexure P-53 letter dated 21.09.2011 that the Hon ble Chief Minister had been moved and that the matter may be kept in abeyance till the Chief Secretary takes decision pursuant to the direction given to him by the Chief Minister. The petitioner then submitted that on 27.09.2011 there was a fire incident in the premises of the petitioner wherein the entire stock of finished and semi finished goods which are kept in the finished storage area, and even account documents were destroyed in this fire incident. The information regarding this was sent by the petitioner to the third respondent vide Annexure P-54 letter dated 27.09.2011. On the same day petitioner sent another letter to the third respondent seeking for further time for hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner was aware at least from 17.05.2004 that they are required to pay the Central Sales Tax and the instant writ petition has been filed only on 18.11.2011 i.e. almost after a period of 7 years is liable to be throw out on the grounds of delay and laches. (iii) It is then contended by way of preliminary objection the petitioner cannot claim parity with other two companies who are exempted from paying Central Sales Tax as the petitioner does not fall within the same footing of those companies. 19. Along with the counter affidavit a copy of State Scheme of Incentives of for Industries, 1996 is produced as Annexure R-1 also produced as Annexure R-2 is a copy of the Government Gazette dated 07.07.2000 notifying the Sikkim Industrial Promotion and Incentive Act, 2000 (Act No. 18 of 2000). Section 13 (1) of the above Act is also highlighted in the counter affidavit. A copy of Government notification dated 03.10.2000 notifying concession or exemption towards State Excise Duty and Sales Tax is produced as Annexure R-3. 20. Also produced along with the counter affidavit is the notification by which the Sikkim Industrial Promotion and Incentive (Amendment) Act, 2003 incorporat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with the counter affidavit are Annexures R-14 and R-15, copies of letters dated 07.04.2006 and 21.01.2008 by which it has been clarified that the petitioner is liable to pay Central Sales Tax. Copies of letter dated 27.03.2008, 22.08.2009 and 14.09.2009 are marked collectively as Annexure R- 16 and are produced to show that the government has never accepted the petitioner s request for issuance of notification granting Central Sales Tax exemption. 24. Each and every allegation, averment and claim of the petitioner in the writ petition has been strongly repudiated in the counter affidavit, wherein parawise replies to the averments in the writ petition are given. To the above counter affidavit, the rejoinder affidavit which was later amended, has been filed by the petitioner. In the rejoinder affidavit the petitioner has reiterated the contentions raised by them earlier and along with the same Annexure P-61. Copy of the notification bearing No. G.O./2/DI96-97 dated 18.12.1996 announcing the industrial policy of the Sikkim Government from the official web-site of the first respondent is also produced. 25. We have heard the submissions of Mr. B. R. Pradhan, learned senior c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be granted Central Sales Tax as well as State Tax exemption for a period of 9 years from the date of commencement of commercial production i.e. 09.10.2003. Acting on the promise held out the petitioner did not burden its customers with CST liability and have informed the State Government time and again about the same vide Annexure P-18 and P- 59. Mr. Pradhan placed strong reliance on the Supreme Court judgment in State of Bihar vs. Kalyanpur Cement Ltd. (supra) in this context. He also relied on Supreme Court judgment in Assistant Commissioner (CT) LTU vs. Amara Raja Batteries Ltd : (2009) 8 SCC 209. 29. Mr. Pradhan also argued on malice in law and malice in fact. As regards, malice in law, Mr. Pradhan submitted that the petitioner was lured to establishing its factory in an industrially under developed State and investing huge amounts of monies by making a promise of exemption from Central Sales Tax and State Sales Tax for specific period and having thereafter enjoyed benefits from its investments not only failed to keep its promise but in spite of repeated requests and reminders declined to grant such exemption and instead, first sought to wriggle out of its promise by issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt. Enquiry Report further reveals that the enquiry has not been held with all seriousness as required by the Government Department. It seems an attempt is being made to withhold information from this Court. However, this aspect shall be considered at the time of final hearing and the Court is at liberty to draw adverse inference taking into consideration the relevant facts placed on records by the parties. The learned senior counsel further stated that the State is guilty of suppression of materials documents and also of misleading this Court by making false statements. Adverse inference against the State under section 114(g) of the Indian Evidence Act must be taken. In the context of the above averments Mr. Pradhan relied on judgment of the Supreme Court in S.R. Venkataraman vs. Union of India : (1979) 2 SCC 491 and Punjab SEB Ltd. vs. Zora Singh : (2005) 6 SCC 776. 31. Mr. Pradhan advanced arguments on the principle of doctrine of parity also and referred Annexures R-7, R-8 and R-6. Mr. Pradhan submitted that M/s Denzong Laboratories Pvt. Ltd. and M/s Mount Distilleries Ltd. were issued with exemption order under section 8(5) of the Central Sales Tax Act even after the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of State Excise Duty and State Sales Tax and not in respect of Central Sales Tax as argued by the petitioner s counsel. 35. Learned Addl. Advocate General would submit that the above position is clarified by subsection (3) of Section 12 (a) of the SIPI Act, 2003, wherein it is provided that the exemption of Central Sales Tax and Central Excise Duty is governed by various notifications/ orders issued by the Government of India in this regard. Learned Additional Advocate General has submitted that the petitioner-company was well aware of the above position of law and the learned counsel referred to Annexure R-10 letter dated 30.03.2004 issued by the petitioner-company to the Special Secretary, Department of IT ST, Government of Sikkim in this regard. The learned Additional Advocate General submitted that even after undertaking through the above letter that they would avail sales tax exemption as per Annexures R-2, R-3 and R-4 notifications, wherein it is clearly stated that the Central Sales Tax and Central Excise Duty will be governed by notifications issued by the Government of India, the petitioner is now taking a completely contrary stand of being exempted under the 1996 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner under Section 20 of the CST Act, 1956 and the petitioner is also not entitled to seek such a relief in the constitutional jurisdiction of this Court. 39. We have given our anxious consideration to the rival submissions addressed at the bar. We have carefully gone through the pleadings raised by the parties in the form of affidavit, counter affidavit and rejoinder affidavit. We have scanned the various materials placed on record on either side. We have considered the principles emerging from the decisions cited at the bar. We find ourselves unable to grant any reliefs to the petitioner. 40. The petitioner is seeking relief on principles of promissory estoppel on the ground that after perusing the Industrial Policy of 1996 of the Government of Sikkim notified in the web-site of the Department of Commerce and Industries, under the caption Concession on State and Central Sales Tax wherein it was provided that Central and State sales tax shall be exempted for a period of 9 (nine) years, from the date of commencement of actual commercial production , the petitioner made a huge investment of ₹ 7.00 crore to establish his industry in East Sikkim. The petitioner is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 (three) years and for State Sales Tax for 5 (five) years for both existing and new industrial units as classified in paragraph 1 of the above notification. The argument of the learned Addl. Advocate General that the petitioner-company will be entitled only benefits and concessions granted under Annexure R-3 notification is sound and only to be accepted. Clauses 1 to 5 of Annexure R-3 notification ought to be perused and analyzed for appreciating the rival contentions in this regard. Those clauses are quoted below: - 1. For the purpose of concessions and incentives existing units are classified as those industrial units set up prior to 18.12.1996 and the period of concession beings from the date of prior approval accorded for their expansion/diversification/ modernization programmes by the Industries Department whereas the new industrial units are classified as industrial units set up after 18.12.1996 and the period of concessions begins from the date of going into commercial production. 2. Concessions on State Excise Duty would be for a period of 3 (three) years and for Sales Tax would be for 5 (five) years for both existing and new industries units as classified in parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General was that the petitioner-company was well aware of the above position of law is clear from Annexure R-10 letter dated 30.03.2004, which contains an undertaking that they would avail the sales tax exemption as per the notifications Annexures R-2, R-3 and R-4, wherein it has been clearly stipulated that Central Sales Tax abd Central Excise Duty would be governed by notification issued by the Government of India. The present stand taken by the petitionercompany that they are entitled for exemption by virtue of Industrial Policy, 1996 is in conflict of stand taken by them in Annexure R-10, letter of undertaking. Interestingly after having submitted the Annexure R-10 letter, the petitioner on 24.07.2006 submitted Annexure P-14 letter, wherein the petitioner requested that the State Government may issue a suitable notification under Section 8(5) of the Central Sales Tax Act exempting the petitioner s unit from the levy of Central Sales Tax located in the State of Sikkim. The stand taken in this letter is also in conflict with the petitioner s present stand that he is also exempted from Central Sales Tax by virtue of 1996 policy. 44. The contention of the petitioner-company that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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