TMI Blog2022 (4) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the petitioner as out of the purview of section 10, hence withdrawing to avail the benefit of exemption from tax by virtue of notification 06.06.1995. But the respondents have not withdrawn the notification which was valid for the period mentioned in it. Due to the insertion of section 10-B, the petitioner has been brought from section 10 hence any notification issued for granting charging of tax under section 9 and 10 will apply to the petitioner from the date of issuance of notification prospectively. The petitioner has established the soybean extraction plant in the backward area of the State on the incentive in the form of exemptions from the tax for a fixed period under the Adhiniyam, 1994. The Apex court in MAHABIR VEGETABLE OILS (P) LTD. AND ANR. VERSUS STATE OF HARYANA AND ORS. [ 2006 (3) TMI 234 - SUPREME COURT ] has held firstly the doctrine of promissory estoppel operates even in the legislative field, secondly, the attempt to take away the benefit of exemption already granted for fixed period, is not only highly arbitrary, unjust and unreasonable but hits the principles of legitimate expectation and thirdly the exemption from payment of tax in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of tax under section 10- B of the Adhiniyam,1994. The facts of the case in short are as under :- (1) The petitioner is a Private Limited Company incorporated under the Companies Act, 1956. The petitioner is engaged in the business of production and sale by way of export of Soybean in the solvent extraction plant situated at Gram Siya, Durgapura, District Dewas. The annual production capacity of the petitioner Unit is 400 Metric Tons per day and the petitioner unit is a prominent exporter of De-oiled Cakes. (2) The Government of Madhya Pradesh issued notification No.A-3 (1)-95-ST-C-(43) dated 06.06.1995 to grant exemption to the extent of 250% of capital investment in fixed assets for a period of 11 years to the NRI/100% EOU and exporting units. The petitioner being an Exporting Industrial Unit (EIU) has been issued an Eligible Certificate dated 30.10.2001 availing exemption from payment of Commercial Tax payable under Section 9 and from payment of Purchase Tax Act and payable under section 10 of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (in short the Adhinyam,1994) . (3) The State Government vide notification No.A3-4-2001-STV( 25) by way of the amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of tax under section 10-B of the Adhiniyam,1994. Respondent No.2 after the above amendment and in pursuant to the impugned notification has issued notice to the petitioner with direction to appear on 20.09.2005 for the assessment of the tax for the first quarterly period from January 2005 to March 2005. The aforesaid notice gave the cause of action to the petitioner to approach before this Court by way of the present petition. (5) The petitioner has assailed the impugned notification dated 13.12.2004 and the impugned notice dated 13.09.2005 without challenging the validity and competence of amendment in Section 10 and newly insertion of section 10-B on the ground that State Government has breached of promissory estoppels by imposing the tax on Soybean Seeds by back door entry by amending the existing provisions of section 10 and inserting a new section 10-B. The respondent can levy purchase tax under section 10 of the Adhiniyam,1994 therefore, the issue of notification under section10-B is unwarranted. Notification No.43 dated 06.06.1995 and Eligibility Certificate are still in force as notification No.25, 26 dated 13.12.2004 have not been withdrawn, therefore, the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Repealed Act and Section 9 and 10 of the Adhiniyam,1994 and the Central Act for the class of dealers specified in column (2) of Schedule 1 and column (1) Schedule II subject to the restrictions and conditions specified in column (4). Industrial Unit specified in (iii) of Chapter -6 which are eligible for the facility of the exemption from payment of tax under this notification. Petitioner falls in the category of Industry all type of oil mill solvent extraction plant''. Hence, applied for an exemption certificate being a 100% export-oriented unit. Directorate of Industries M.P. has issued a certificate dated 06.04.2000 in form III to the petitioner declaring eligible for availing of the facility of exemption of payment of tax under the CTD notification No. A-3(1)-95-ST-V (43) dated 06.06.1995 as a dealer. The period of eligibility certificate was extended from time to time and finally, it was extended up to 31.02.2007. The notification under Section 17 of the Adhiniyam, 1994 has also been extended for oil seed from 01.04.2001 to 31.03.2005. In column 4 of Chapter 6, the dealer is specified in serial No.1,2 and 3 of Schedule-I and Schedule-II shall have the option to avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (Sanshodhan) Adhiniyam, 2004 No.19 of 2004, therefore, there is no question of examining the validity of aforesaid notification. (10) Earlier exemption notification dated 06.06.1995 was issued giving the benefit of exemption from payment of tax payable under sections 9 and 10 of the Adhiniyam,1994 and pursuant to the aforesaid notification, the Director of Industry has issued a certificate of eligibility for availing the facility of exemption of tax under notification dated 06.06.1995, therefore, a notification from exemption was issued only for those dealers and manufacturers who are liable to pay tax under section 9 and 10 of Adhiniyam,1994. Now by way of section 10-B, a new charging section has been introduced for every dealer who in the course of his business purchases any goods as may be notified by the Government. After the insertion of Section 10-B and issuance of notification classifying Soybean as a class of goods, the respondents are treating the petitioner as out of the purview of section 10, hence withdrawing to avail the benefit of exemption from tax by virtue of notification 06.06.1995. But the respondents have not withdrawn the notification which was valid for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in a case where the right to the exemption of tax for a fixed period accrues and the conditions for that exemption have also been fulfilled, the withdrawal of that exemption cannot affect the already accrued right. Legitimate expectation 132. We may also notice the emerging doctrine in this behalf viz. legitimate expectation of substantive benefit. Ordinarily, the said principle would not have any application where the legislature has enacted a statute. As, according to us, the legislature in this case allowed the parties to take benefit of their existing rights having regard to the repeal and saving clause contained in Section 20(1) of the 2003 Act, the same would apply. If, thus, principle of promissory estoppel would apply, there may not be any reason as to why the doctrine of legitimate expectation would not. 133. Legitimate expectation is now considered to be a part of the principles of natural justice. If by reason of the existing state of affairs, a party is given to understand that the other party shall not take away the benefit without complying with the principles of natural justice, the said doctrine would be applicable. The legislature, indisputably, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court of India has held as under:- 22. It is not in dispute that when the appellants herein started making investments, Rule 28-A was operative. Representation indisputably was made in terms of the said Rules. The State, as noticed hereinbefore, made a long-term industrial policy. From time to time it makes changes in the policy keeping in view the situational change. 23. The State intended inter alia to grant incentive to include industrial units by way of waiver and/or deferment of payment of sales tax wherefor Rule 28-A was made. The sales tax laws enacted by the State, as noticed hereinbefore, contain a provision empowering the State to grant such exemption. 24. The relevant provisions of the Act and the Rules framed thereunder indisputably were made keeping in view the industrial policy of the State. Such industrial policies by way of legislation or otherwise, subject, of course, to the provisions of the statute have been framed by several other States. 25. It is beyond any cavil that the doctrine of promissory estoppel operates even in the legislative field. Whereas in England the development and growth of promissory estoppel can be traced from Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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