TMI Blog2023 (3) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued by the learned Senior Counsel for the petitioner does not arise as it is not a case of claiming exemption from liability. This Court is of the considered view that the State action in the case on hand cannot be said to be arbitrary. The learned Tribunal rightly observed that no right accrued in favour of the petitioners to claim remission of tax. The Tribunal was also right in observing that the unit was granted benefit as a special case. This Court accordingly holds that the impugned order passed by the learned Tribunal do not suffer from any infirmity. Therefore, no interference with the said order is called for. The issue that fell for consideration in K.M. Refineries [[ 2019 (9) TMI 522 - BOMBAY HIGH COURT] ] was whether the Commissioner of Sales Tax had the power to curtail the validity period for enjoyment of incentives and other benefits under the relevant Incentive Scheme and also whether such reduction could have been made in the name of the policy of GST. On such facts it was held that no authority was given to the Commissioner to modify, enlarge or curtail the validity period and also that the benefits under the Incentive Scheme cannot be curtailed in the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertook expansion of the unit from time to time and became eligible for remission of sales tax under various Incentive Schemes of the State. It is the further case of the writ petitioners that the actual investment made up to 31.03.2005 including the expansion programs undertaken by the unit stood at Rs. 250.88 cores i.e., Rs. 251 crores. The petitioners claim to have made a further investment of Rs. 23 crores during the period from 01.04.2005 to 31.12.2005 taking the total investment till 31.12.2005 at Rs. 274 crores. The petitioners claim that the Gross Value of Fixed Capital Assets (for short GVFCA ) was determined at Rs. 194 crores. Petitioners prayed for enhancement of GVFCA by Rs. 80 crores to include the investment made by the petitioner till 31.12.2005. The Standing committee of the industries of the State Cabinet in its meeting held on 18.03.2006 enhanced the Fixed Capital Investment (for short FCI ) by Rs. 57 crores instead of 80 crores as prayed for by the petitioner. The Special Secretary to the Government of West Bengal by a letter dated 20.06.2006 informed the petitioner that the investment of Rs. 23 crores made after 31.03.2005 will not be counted. 3. Challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the State Government in its incentive scheme and it is not open to the State to back out from the said promises and deny remission of sales tax with regard to the GVFCI of Rs. 23 crores. 7. In support of his contention Mr. Mitra relied upon the following decisions. (i) State of Jharkhand and Ors. vs. Brahmputra Metallics Ltd., Ranchi and Anr. reported at (2020) SCC Online SC 968. (ii) Indian Oil Corporation Ltd. vs. Shashi Prabha Shukla reported at (2018)12 SCC 85 (iii) K.M. Refineries and Infraspace Pvt. Ltd. vs. State of Maharashtra and ors. reported at 2020(1) MH.L.J.904. 8. By referring to Section 44 of the 1994 Act, Mr. Mitra contended that the State Government has the power to relax certain provisions of the 1994 Act relating to deferment of payment of taxes or remission of taxes and allow remission of sales tax to the petitioner in respect of the GVFCA to the tune of Rs. 23 crores. He further submitted that after the coming into force of the WB VAT Act, a registered dealer holding eligibility certificate under the 1994 Act and who was enjoying benefit of remission of tax under Section 41 of the 1994 Act for a specified period or a specified am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) An existing unit for its approved project of expansion shall be eligible for deferred payment of sales tax dues for payments by it or alternatively for remission of sales tax due for payment by it for the period and subject to a ceiling limit depending on the location of the expansion project. (c) In respect of group B area remission sales tax due for payment by the unit shall be 7 years and the percentage ceiling in terms of the GVFCA of the approved project shall be 75%. (d) Notwithstanding the percentage ceiling specified at various clauses of sub-paragraph 10.1 of the scheme, the maximum limit of deferment of sales tax due for payment by unit is Rs. 75 crores. Whenever, the aggregate amount of sales tax due for payment for which deferment/ remission has been allowed, exceeds the percentage ceiling of Rs. 75 crores, whichever is less, the deferment or remission will be discontinued even before the specified period. 13. One limb of the argument of Mr. Mitra is based on the doctrine of promissory estoppel to the effect that the writ petitioners having altered their position on the representation of the State to allow remission of sales tax on the investments made i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject to a maximum of Rs. 145 crore after taking into account the total investment of Rs. 194 crores. The unit was further allowed to enjoy deferment up to 31.08.2001 and then was allowed to switch over to remission with effect from 01.09.2001. However, at that point of time the Standing Committee did not accept the demand of the unit for clubbing of all investments. 17. However, the unit submitted representations even thereafter for clubbing of the investments. Pursuant to such representations being made the Cabinet modified its earlier decision and decided to allow the unit remission at the rate of 75% of the GVFCA amounting to Rs. 194 crores invested in the 5 expansion programme with a rider that maximum amount of remission should be limited to Rs. 145 crore. This modified decision was taken by the Cabinet with the concurrence of Finance Department as would be evident from the memo dated 25.06.2004. 18. The decision to allow remission on the FCI amounting to Rs. 194 crore subject to the maximum amount of remission of Rs. 145 crore was duly accepted by the writ petitioners. On the basis of such settled position the registration certificate was accordingly modified by issuanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect to Mr. Mitra, this Court is unable to accept such contention for the reasons assigned hereinafter. 24. The object and purpose behind framing the said scheme is to promote industries in the State of West Bengal. From a bare reading of the scheme it is evident that the State promised to allow remission of sales tax on condition that an investment is made on Fixed Capital Assets which may be either by setting up a new unit or by way of expansion of an existing unit. The real object behind the scheme is to attract investors and encourage them to invest in the State. The said scheme, however, had a limited duration of 5 years with effect from 01.04.1999 till 31.03.2004. Mr. Mitra, would contend that the duration of the scheme or the last date of 31.03.2004 is of no relevance. The terms and conditions of the scheme is to be interpreted harmoniously to make the said scheme a workable one so that none of the clauses becomes otiose. The amount of remission of sales tax allowable under the scheme is dependant on the investment made in Fixed Capital Assets. The right to claim remission of sales tax under the Scheme accrues only upon an investment being made on Fixed Capital Assets. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stage to refer to the said provision under the WB VAT Act 2003 and for such purpose the same is extracted herein below- Sec 118. Notwithstanding anything contained elsewhere in this Act,- (a) .. (b) (c) where a registered dealer was enjoying benefit of remission of tax under section 41 of the West Bengal Sales Tax Act, 1994 (West Ben. Act XLIX of 1994), for a specified period or a specified amount determined with respect to gross value of the fixed capital assets, and who would have continued to be so eligible on such appointed day under that Act had this Act not come into force, may be allowed remission of output tax under this Act by the Commissioner for the balance unexpired period or balance eligible amount with respect to gross value of fixed capital assets, whichever expires earlier, in such manner and subject to such terms and conditions as may be prescribed. 27. The aforesaid provision starts with a non obstante clause and provides that where a registered dealer was enjoying benefit of remission of tax under the 1994 Act for a specified period or a specified amount may be allowed remission of output tax under the WB VAT Act 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .12.2005 amounting to Rs. 23 crores. 31. State Government has been vested with the power to relax certain provisions of the Act relating to remission of tax under Section 44 of the 1994 Act. However, such power of relaxation is to be exercised by the State in its discretion as would be evident from the term MAY used in Section 44. State, therefore, has the discretion to exercise the power of relaxation in cases where the State considers it necessary so to do in the public interest after due consideration of certain factors as specifically mentioned in Section 44. Merely because the power of relaxation has been vested upon the State Government by the statute, no right has been conferred upon the writ petitioners to compel the State to exercise the power of relaxation so that the unit can enjoy the benefit of remission of tax on the investment of Rs. 23 crores. This Court therefore, holds that the unit has also failed to demonstrate any right to claim relaxation of the conditions for enjoying remission. 32. In D.L. Vasanthakumar alias Veervasanthakumar vs. Chief Secretary Government of Tamil Nadu, Chennai reported at (2019) 7 Mad LJ 869 cited by Mr. Ghosh, the Hon ble Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t cannot be said that the validity period for enjoyment of the Incentive Scheme has been curtailed or that the unit was deprived from enjoying the benefits of remission of tax for the investments made on Fixed Capital Assets within 31.03.2004. Thus, the reported decision in K.M. Refineries (supra), being distinguishable on facts, do not have any manner of application to the case on hand. 38. In Indian Oil Corporation (supra), the award of dealership was in issue. A factual finding was recorded therein that the dealership was awarded at the fanciful discretion of the Departmental Minister. On such factual background, the Hon ble Supreme Court observed that the public authority in its dealings has to be fair, objective, non arbitrary, transparent and non discriminatory. The said reported decision being distinguishable on facts is of no assistance to the petitioner. 39. In Brahmputra Metallics (supra), the curtailment of the validity period as promised by the State was in issue. It was found on facts that though the State made a representation in the relevant Industrial Policy that a rebate/ deduction in electricity duty would be offered for a specified period, the units were de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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