TMI Blog1992 (1) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... and started commercial production on 8th February, 1982. By that time, it had invested about Rs. 19,70,177. The Industries Commissioner granted eligibility certificate on 27th January, 1983. In view of the Notification dated 5th February, 1981, whereby exemption from payment of purchase tax payable under section 15 of the Gujarat Sales Tax Act, 1969, only has been granted, the petitioners, apprehending that the Government was trying to back out of its promise by not extending similar benefits with respect to the tax payable under section 18 of the Act, have filed Special Civil Application No. 103 of 1985. In Special Civil Application No. 2033 of 1985, the first petitioner is a partnership firm. It came into existence on 21st July, 1980. It invested about Rs. 26,02,701 and started commercial production on 15th January, 1981. The Industries Commissioner granted eligibility certificate on 25th November, 1982. As the petitioners of this petition are having similar apprehension as was entertained by the petitioners in Special Civil Application No. 103 of 1985, they have filed this petition. The petitioner in Special Civil Application No. 6038 of 1986 is also a partnership firm. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd equipment, raw materials, packing materials and processing materials, utilised by them for the purpose of manufacturing goods for sale on their obtaining eligibility certificate from the Commissioner of Industries or any officer so authorised by him and sales tax exemption certificate from the Commissioner of Sales Tax or an officer authorised by him. ....................." The relevant part of the resolution dated 27th August, 1980, reads as under: ".............. (6) Sales tax incentives: Under this scheme all the industrial units eligible as per paras 2 and 3 will have an option to choose one of the following two sales tax incentives: (i) Sales tax exemption incentives; (ii) Sales tax deferment incentives. Benefits available under each of these two incentives are as specified below: (A) Under sales tax exemption incentive a unit will be entitled to purchase free of sales tax, raw materials, packing materials and processing materials utilised for the purpose of manufacturing goods. In addition to this it will also be exempted from payment of sales tax on sale of goods manufactured by it. The quantum of sales tax exemption will be as under: ............... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive policy declared by the Government. It was submitted that the Government wanted industrial development of the State and also wanted development of the industries in rural areas and backward areas, to achieve a more balanced growth and also to have decongestion of industries from developed areas and cities, like Ahmedabad, Baroda and Surat. Thus, the industrial incentive policy was evolved for the purpose of encouragement of industry in the State and it was for that reason that benefits like cash subsidy, exemption from sales tax, giving of interest-free sales tax loans and deferment of sales tax were declared by the Government from time to time. The declarations, which were made in this behalf were to the entrepreneurs and this fact should also be considered while trying to interpret the words "raw materials" and finding out what was the representation made by the Government. It was submitted that if benefit of exemption from payment of purchase tax in respect of purchase of sugarcane is denied to the industrial units manufacturing khandsari from sugarcane, then the very object of establishing such industries in the backward areas would be defeated because no such industry woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect from 1st June, 1980..........." The cash subsidy scheme was retained and the scheme of sales tax benefit came to be modified. Earlier, it consisted of exemption from sales tax or interest-free sales tax loan. By that resolution, sales tax benefits in terms of exemption from sales tax was retained, with suitable modifications. It was found necessary that the said benefit was not to be extended to medium and large scale industries also. The benefit of interestfree sales tax loan was discontinued and instead of that, incentive by way of sales tax deferment was introduced. The areas of applicability and list of growth centres remained the same. The list of excluded industries also remained the same. So also, the definitions and other details remained the same as under the old scheme. Therefore, though the scheme declared by the resolution dated 27th August, 1980, is described as a new scheme, it was not altogether new and, therefore, it will not be proper to read the said resolution, for finding out the representation made therein, ignoring or disregarding what had happened earlier. In fact, the Government had introduced a scheme of exemption from sales tax to new industrial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whereas under the earlier scheme, benefit of sales tax exemption was available to all the new industrial units commissioned on or after 1st April, 1970, except those which were specifically excluded in July, 1971, under the 1977 Scheme, the benefit of sales tax exemption was confined to new small-scale industrial units. So far as new medium and large scale industrial units were concerned, they were given the benefit of interest-free sales tax loan. The list of excluded industries for the purpose of exemption from sales tax remained the same. While declaring the exemption from sales tax in almost the same words, it was further stated in the resolution that necessary notification in that regard would be issued by the Finance Department. Thereafter, the Government, in its Finance Department, did issue a notification dated 26th June, 1978, exercising its powers under section 49 of the Act and introduced entry 94 in the Schedule to the parent notification dated 29th April, 1970. By that notification, exemption from payment of tax was also granted in respect of sales of machinery and equipment, raw materials, packing materials and processing materials by a registered dealer to a specifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or packing materials from a person, who was not a registered dealer, from whole of purchase tax under section 15 of the Act. 20th January, 1992: From what is stated above, it becomes clear that the Government, at all material times, thought that the representation, which was made under the different schemes with respect to exemption from sales tax, was only in regard to payment of purchase tax payable under section 15 of the Act. Till 1985, no entrepreneur had claimed any benefit of exemption from payment of purchase tax under section 18 of the Act. Thus, till then, the persons engaged in the khandsari industry also believed the representation to be that the benefit, which was available in that behalf, was only in respect of payment of tax under section 15 of the Act. None of the petitioners had sought for any clarification between 27th August, 1980 and 5th February, 1981, as to whether any benefit of exemption was to be available from payment of purchase tax. Even after issuance of the notification dated 5th February, 1981, no enquiry was made as to why similar notification for exemption from payment of purchase tax under section 18 was not issued by the Government. So far as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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