Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + SC VAT and Sales Tax - 2017 (5) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 496 - SC - VAT and Sales TaxDoctrine of Promissory Estoppel - Investment in Backward area - constitutional validity of the MVAT Act, 2009 which amended certain provisions in the MVAT Act, 2002 with retrospective effect from April 01, 2005 - case of Revenue is that the effect and consequence of this amendment was that, with retrospective effect from April 01, 2005, industrial units which had made capital investments in very backward areas in the State of Maharashtra and which were earlier entitled to claim VAT exemption benefit on the entire production of their respective industrial units, had their exemption benefit substantially curtailed, being limited to, only a portion of the total production of the unit due to the aforesaid retrospective amendment - whether retrospective amendment in the MVAT Act stands the test of constitutionality and is valid in law? Held that: - It would be of relevance to emphasise that at the time of insertion of Section 41BB by amendment vide Amendment Act 22 of 2001, the Statement of Objects and Reasons accompanying the introduction of the Bill specifically stated that the purpose of the amendment was ‘to restrict grant of incentives in proportion to goods manufactured in the expansion units located in the backward areas of the States’. Thus, the legislative intent was manifest by inserting the said provision to provide the incentives to the eligible units on proportionate basis. Section 93(1) follows providing for proportionate incentives. Once we find that from the very beginning the statutory scheme itself provided for proportionate incentive and this legislative intent was expressed even in the Objects and Reasons, it cannot be said that there was no provision of this nature prior to 2009 and such a provision was inserted for the first time in the year 2009. Reliance was placed in the case of Epari Chinna Krishna Moorthy and Another Versus The State of Orissa and Others [1964 (3) TMI 55 - SUPREME COURT OF INDIA], where it was held that Section 2 in substance declares that the intention of the delegate in issuing the notification granting exemption was to confine the benefit of the said exemption only to persons who actually produce gold ornaments or employ artisans for that purpose. In any event, we do not think that in the circumstances of this case it would be possible to hold that by making the provision of section 2 of the Orissa Sales Tax Validation Act, 1961 retrospective the Legislature has imposed a restriction on the petitioners' fundamental right under Article 19(1)(g) which is not reasonable and is not in the interest of the general public - there is no substance in the argument that the retrospective operation of S.2 of the impugned Act is invalid. The impugned amendment is upheld - appeal dismissed - decided against appellant.
|