- (1.) This writ petition has been filed with a prayer that it may be declared that the petitioner is entitled to the grant of eligibility certificate for exemption from sales tax-to a limit of Rs. 4 crores in respect of expansion in case of any expansion/diversification made by the petitioner.
(2.) The petitioner, a public limited company, manufactures polyproplyene spinning filament yarn. It is stated in the petition that the Government of Rajasthan had promulgated Sales Tax Incentive Scheme for Industries, 1987 (for brevity, 'Scheme, 1987) vide notification dated May 23, 1987 (Anx. 1), under the Rajasthan Sales Tax Act and the Central Sales Tax Act, with a view to promote industrial growth in the State of Rajasthan, particularly in the industrially backward areas. This was done with a view to attract entrepreneurs for setting up new industries and expanding the existing unit/diversification in the products. As per Clause (2) of the said Scheme, Units have been divided into three different categories viz. (i) New Industrial Units; (ii) New Industrial Units covered by 1985 dispensation; & (iii) Sick Industrial Units. The different Districts of Rajasthan were also divided into two categories with different ceiling limits to be allowed under the Sales Tax incentive Scheme as per Anx. 'C of the said Scheme (Anx. 1). It is submitted that the petitioner unit is covered by 1985 Dispensation as defined in the Scheme, 1987 (Anx. 1), which came into force retrospectively from March 5, 1987.
(3.) It is pointed out by Mr. Mehta, learned Counsel, that in Anx. 'C of the Scheme, 1987, limits have been prescribed for different categories of districts. Note 3 of the said Anx. 'C lays down that "Sales Tax exemption will be subject to an over all limit of Rs. 4 crores in each/any case. The over all limit in case of pioneering industry will be Rs. 6 crores and in case of prestige unit Rs. 8 crores. It is further pointed out that the petitioner commenced its commercial production on April 1, 1986 and exceeded the target as per project report. The petitioner was granted eligibility certificate under the Scheme, 1987 w.e.f. 16.4.88 to 15.4.89, which was renewed from time to time upto April 15, 1991, subject to the provisional limit of Rs. 1 crore and the final demand of the limit was arrived at subsequently. It is also pointed out that under the bona fide and earnest belief concession/incentive/benefits/exemption will be available to the petitioner under the Scheme, 1987, subject to the limit of Rs. 4 crores in each/every case of expansion/ diversification. The petitioner took active steps for substantial expansion of the Unit. During the first half of the year, 1988, the petitioner spent lacs of rupees for expansion. However, the State Government vide its Notification dated August 6, 1988 (Anx. 2), reduced the original exemption limit from Rs. 4 crores to Rs. 1 crore, for large scale industries by adding note 5 in Anx. 'C of the original notification. It is contended that the promulgation of this Amendment Notification adversely affects the petitioner as under the original Scheme, 1987, the petitioner was entitled to get an exemption of Rs. 4 crores, whereas, by notification, the sale was reduced to Rs. 1 crore only. Thus, the notification of 1988 is arbitrary illegal and the State Government is estopped from going back of the assurances given in the original Scheme, 1987, on the basis of doctrine of promissory estoppel. It is further contended that the petitioner acted on the clear assurance given by the respondents under the Scheme, 1987, for grant of over all exemption of Rs. 4 crores in each/any case of expansion/diversification and acting under the said assurance, the petitioner started expansion/diversification and has already spent Rs. 20 crores, on the same. It is also contended that the petitioner intends to expand further in two phases by investing Rs. 271/2 crores in each phase. Therefore, the Government cannot be permitted to back out its assurance and reduce over all limit exemption to Rs. 1 crore. It is pointed out that the petitioner is entitled to get exemption certificate for a period of seven years to an over all limit of Rs. 24 crores in each/any case of expansion/diversification and the same cannot be reduced to Rs. 1 crore, which is detrimental to the petitioner. Thus, the notification dated 6.8.88 (Anx. 2) is arbitrary and violative of Article 14 of the Constitution.;