7. State of Uttar Pradesh & Anr. vs. Birla Corporation Limited [(2020) 72 GSTR 1 (SC)]
FACTS
A notification dated 27th February, 1998 was issued by the
State Government of U.P. u/s 5 of the UP Trade Tax Act, 1948 granting rebate on
the tax levied under the Act to industrial units set up in notified districts
within the State for ten years from the date of commercial production, subject
to certain conditions in respect of goods manufactured using fly ash procured
from thermal power stations within the State. This notification was challenged
before the High Court on the ground that the conditions specified in the
notification resulted in causing discriminatory treatment to the producers and
suppliers of the same product imported from neighbouring States as opposed to
goods manufactured and produced in the State of U.P. The High Court upheld the
challenge and the Supreme Court in appeal confirmed the decision of the High
Court declaring that the notification would also apply to cement manufacturing
units of neighbouring States who used fly ash as raw material.
After the decision of the High Court, a notification dated 14th
October, 2004 was issued rescinding the notification dated 27th
February, 1998. This notification was also challenged on the ground that the
same could not be enforced against industries which had already commenced
commercial production after 27th February, 1998 but before 14th
October, 2004 and taking any other view would result in giving retrospective or
retroactive effect to the notification dated 14th October, 2004. Giving
such effect was not permissible in law. The High Court allowed the Writ
Petition based on the principle of promissory estoppel. The State of
Uttar Pradesh filed an appeal; however, the Supreme Court dismissed the same.
HELD
The Apex Court observed in its judgment that it was evident from section
5 of the UP Trade Tax Act, 1948 that there was no express authority given to
the executive to issue notifications for withdrawing or rescinding the rebate
facility from a date prior to the date of notification. Thus, the
respondent-unit and similarly placed persons would be entitled to rebate for
the relevant period prescribed in the notification dated 27th February,
1998 which would continue to remain in vogue until the expiry of the specified
period, that is, ten years. It is well established that the Court is obliged to
insist on a highly rigorous standard of proof in the discharge of the burden
and the onus is upon the State to justify its action as supervening
public interest.
8. Ultra Readymix Concrete Private Ltd. vs. State of Tamil Nadu &
Ors. [(2020) 72 GSTR 62 (Mad.)]
FACTS
The petitioner used to make inter-State purchases of high speed diesel
oil at a concessional rate @ 2% by way of ‘C’ forms. However, the ‘C’ forms
could not be downloaded after the introduction of the GST Act. After due
inquiry with the Department, the petitioner was informed that after the
introduction of the GST Act with effect from 1st July, 2017, the
petitioner was not entitled to make purchases of high speed diesel oil from
other States at a concessional rate of tax, i.e., 2% and thus the Department’s
site had been blocked to deny access to the petitioner and other similarly
placed persons from downloading ‘C’ forms.
HELD
The Madras High Court, allowing the petition, held that the amendment
restricting the definition of ‘goods’ u/s 2(d) of the GST Act to six petroleum
products did not affect the provisions entitling the dealers to a concessional
rate of tax after the GST regime came into force. Thus, the petitioner was
entitled to make purchase of high speed diesel from other States on a
concessional rate of tax even after introduction of the GST Act.
9. K.M. Refineries and Infraspace Pvt. Ltd. vs.
State of Maharashtra & Others[(2020) 72 GSTR 94 (Bom.)]
FACTS
The New Package Scheme of Incentives, 1993 was introduced by the State
which allowed monetary and other incentives in the matter of tax subsidy or tax
exemption at the rates prescribed in the Scheme and other benefits. The
incentives could be availed of only on the industries qualifying in terms of
the eligibility conditions prescribed in the Scheme. The industries were
required to obtain an eligibility certificate from the District Industries
Centre. Thereafter, the Commissioner of Sales Tax shall endorse the eligibility
certificate issued by the implementing agency and it shall be his duty to
specify the date of effect of the eligibility certificate under the Incentives
Scheme. There is no authority given to the Commissioner of Sales Tax to modify,
enlarge or curtail the validity period decided by the implementing agency.
The petitioner-dealer made an application to the District Industries
Centre for issuance of an eligibility certificate under the 1993 Scheme. The
dealer was found eligible and by a final order dated 20th March,
2017, the General Manager, District Industrial Centre, issued an eligibility
certificate which was valid for nine years. However, when the eligibility
certificate reached the Commissioner of Sales Tax, the latter prescribed the
effective date but, while doing so, curtailed the validity period by about
three years by his order passed on 10th August, 2017.
HELD
The Bombay High Court held that the curtailment was beyond the powers of
the Commissioner of Sales Tax. The dealer had acted upon a promise given by the
State. The principle of promissory estoppel would thus apply and would
forbid the Government from taking any decision of not implementing the
Incentive Scheme. The Scheme had been framed ostensibly to achieve one of the
Directives contained in Article 39(C) of
the Constitution for ensuring equal distribution of wealth and means of
production. Thus, the order of the Commissioner of Sales Tax was quashed and
set aside.
