- (1.) By this writ petition, the petitioner has challenged the order dated February 11, 1991 and the minutes of the meeting dated November 22, 1991 and has further sought direction to the District Level Screening Committee to grant eligibility certificate to the petitioner-company under the Sales Tax Incentive Scheme for Industries, 1987. The petitioner-company has also prayed for a direction to the effect that clause 7(e) inserted by notification dated May 28, 1991 is not retrospective. Briefly stated, the facts of the case are that the petitioner-company is a manufacturer of hydrogenated vegetable oil (vanaspati) and refind oil and is registered under the provisions of the Rajasthan Sales Tax Act and Central Sales Tax Act. The respondent-State announced Sales Tax Incentive Scheme for Industries, 1987 (in short, "The Incentive Scheme") by notification dated May 23, 1987. In view of the aforesaid notification dated May 23, 1987, the petitioner-company made expansion by installing new plant and machinery and also invested in construction of buildings. In view of the increased capacity of production, the petitioner-company was entitled to exemption of sales tax under the Incentive Scheme, 1987, for which the petitioner-company submitted an application on December 5, 1987. When the said application was pending, a notification was issued by the respondents on May 28, 1991 whereby clause 7(e) was inserted in the notification dated May 23.1987, according to which an industrial unit covered by the Scheme shall not be entitled to claim any benefit under it if it has been penalised for avoidance or evasion of tax or any case of avoidance or evasion of tax is pending against it, at any forum of hearing. The application filed by the petitioner-company was rejected by the District Level Screening Committee in the meeting held on November 22, 1991 on the ground of tax evasion which was ultimately compounded which makes the company ineligible under clause 7(e) of notification dated May 28, 1991. In pursuance to the said meeting dated November 22, 1991, an order was passed on November 30, 1991 whereby the eligibility certificate was denied on the ground of ineligibility and communication in this respect was issued to the petitioner-company on December 11, 1991.
(2.) Respondent Nos. 1 and 2 filed reply to the writ petition and stated therein that since case of evasion of tax was pending against the petitioner-company, therefore, its application had been rightly rejected in view of clause 7(e) inserted vide notification dated May 28, 1991 in the notification dated May 23, 1987.
(3.) Submission of counsel for the petitioner-company is that the alleged case of evasion of lax was compounded on January 5, 1991, i.e., much prior to the aforesaid rejection dated December 11, 1991 and therefore, the compounding of tax would not entail the consequences as referred to in clause 7(e). Counsel for the petitioner-company further submits that clause 7(e) was inserted in the notification dated May 23, 1987 vide notification dated November 28, 1991 and the same is not retrospective in nature and would not apply to the pending application of the petitioner-company. In support of the said submission, counsel for the petitioner-company placed reliance on paras 7, 8 and 9 of the judgment of this court in District Level Screening Committee, Kota v. Vardhman Industries,2008 20 TaxUpdate 3.;