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2013 (7) TMI 121 - KARNATAKA HIGH COURTLevy of MAT (minimum alternate tax) on SEZ - removal of exemption from MAT - Promissory estoppel - Judicial review - petitioners have prayed to declare the newly inserted proviso to Section 115JB(6) and 115-O(6) of the Income Tax Act in the second schedule to the Special Economic Zones Act 2005 as ultra vires, arbitrary, unfair and violative of Article 14 of Constitution of India. - Held that:- scope of judicial review power of this court under Article 226 of the Constitution is subject to certain conditions - Power of judicial review is to be exercised very rarely and in exceptional circumstances - Courts can invalidate the law made by the legislature only when the legislature lacks the competency to do and the law enacted is violative of any of the constitutional provisions - It will be wholly unwise for the court to encroach into the domain of the executive or legislative in economic and social spheres since they are essentials adhoc, experimental, extremely complicated and they are made under special situations. Jurisdiction of Ministry of Finance - Impugned amendments in the Schedule-II to the SEZ Act is made by the Ministry of Finance, Government of India through a money bill - Held that:- Government of India (Allocation of Business) Rules are not applicable to the proceedings and the business of parliament - These Rules are only applicable to the Government of India and not to the Parliament - A perusal of the Rules of Loksabha do not bar the Finance Minister from moving a bill for amendment to SEZ Act - reading of the Rules specifies that Finance Minister includes any minister and as such he is competent to move a bill seeking amendment of SEZ Act which comes under the domain of Ministry of Commerce - Following the decision of Madurai District Central Cooperative Bank Ltd. vs. Third ITO [1975 (7) TMI 4 - SUPREME Court] - Deceided in against assessee. Removal of exemption to SEZ units - amendments violation of Article 14 - Held that:- It is settled position of law that every tax exemption and incentive shall have a sunset clause - In the instant case by introducing sub-section 6 to Section 115JB and sub-section 6 to Section 115O of Income Tax Act a permanent exemption was given to SEZ establishments/units - Realizing this lapse on the part of the Government the impugned provisos were introduced restricting the exemption only for a particular period - On account of various concessions, exemptions and allowances under different statues companies started arranging their tax affairs in such a way as to become zero tax companies - This situation has lead to discrimination amongst SEZ establishment/units and other companies - Realizing this discrimination among the companies the legislature in their wisdom brought the impugned amendments to remove the discrimination - Decided against assessee. Removal of exemption to SEZ units - Promissory estoppel - Held that:- The concept of Promissory Estoppel and Legitimate Expectancy are not defined in any law - These two concepts are fashioned by the courts while reviewing the administrative acts in the field of administrative law - The Doctrine of Promissory estoppel and Legitimate expectation are the offsprings of equity and they are flexible in nature - Legislature can never be precluded from exercising its legislative power by resort to the Doctrine of Promissory Estoppel - Following the decisions of Motilal Padampat Sugar Mills Co. Limited. vs State Of Uttar Pradesh And Others [1978 (12) TMI 45 - SUPREME Court], Union of India vs. Godfrey Philips India Ltd [1985 (9) TMI 90 - SUPREME COURT OF INDIA] and Sales Tax Officer vs. Shree Durga Oil Mills STC [1997 (12) TMI 114 - SUPREME COURT OF INDIA] - Decided against assessee.
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