Case: M/S Dugar Tea Industries Pvt.Ltd Vs. State Of Assam

2. The facts giving rise to the present litigation, in a nutshell, are as under:As the legal issues involved in all of the aforesaid appeals are same, for the purpose of convenience, we have taken facts from Civil Appeal No.2806 of 2009.3. The appellant is a private limited company engaged in the business of blending and packing of tea. After some modernisation, it commenced its production in April, 1988. The case of thewas with regard to availing sales tax concession declared by theBefore going through the relevant provisions, we may record the fact that thehad notified its Industrial Policy in 1982, which had thereafter been revised in 1986. The said Policy had been framed so as to increase economic and industrial growth in the State.4. In pursuance of the aforestated Policy, theenacted Assam Industries (Sales Tax Concession) Act, 1987 (hereinafter referred to as. By virtue of the provisions of the Act, certain new industries, subject to certain conditions, were to be given exemption from payment of sales tax but the exemption was not to be given in respect of certain commodities.5. The case of thewas that the Company was made eligible for certain concessions in pursuance of the Industrial Policy framed by the government, which had been declared in 1982, but ultimately the benefits had been denied to the company under the Act.6. The reason for not giving the benefits under the Act, as stated by thewas a raw material, in respect of which no exemption was to be given and thewas merely blending and packing tea and was not having any manufacturing activity.7. As the sales tax exemption had been denied to theny filed petitions before the High Court challenging denial of the tax exemption but the petitions had been rejected by a common Judgment dated 9th September, 2003 and being aggrieved by the rejection of the petitions, thehad also filed writ appeals, which have been dismissed by a common Judgment dated 14th November, 2006, and the said judgment has been challenged in these appeals.

Court's reasoning:
In view of the aforestated Rule, it is crystal clear that tea is not to be included innd therefore, no exemption could have been claimed by the Appellant Company in respect ofas a raw material for purchase as well as sale of tea. It is also pertinent to note that the appellant had earlier preferred Civil Rule No.4162 of 1991 before the High Court challenging validity of the aforestated Rule. The learned Single Judge, while rejecting the petition, vide order dated 17th August, 1988 held that Rule 2(f) of the 1988 Rules was legal and valid and the plea of promissory estoppel raised by the appellant was also not accepted. Against the said judgment, no appeal was filed by the appellantand therefore, thesaid issue had attained finality.18. Another important thing is with regard to certificate of authorisation.19. It is an admitted fact that so as to avail the benefit as per Section 4 of the Act, certificate of authorisation is a must. The said Section reads asCertificate of authorisation –(1) A person undertaking to manufacture in the State such goods, as may be prescribed, may make an application in the prescribed form to the prescribed authority and within the prescribed time for a certificate of authorisation for the purposes of(1) of section 3.(2) If the authority to whom an application is made under(1) is satisfied that the application is in conformity with the provisions of the Act and the rules made there under it shall grant to the applicant a certificate of authorisation in the prescribed form which shall specify the class or classes of goods for purposes of(1) of section 3 and the period for which it shall remain valid.(3) A certificate of authorisation granted under this section shall remain valid for a period of five years from the date of completion of effective steps for setting up the industrial unit in respect of which the certificate is granted.(4) No certificate of authorisation shall be granted under(2) except in respect of such raw materials as may be prescribed.(5) A certificate of authorisation granted under this sectionbe amended by the authority granting it if he is satisfied either on the application of the holder or, where no such application has been made, after due notice to the holder, that by reason of the holder having changed the name, place or nature of his business or the class or classes of goods bought, sold or manufactured by him or for any other reason the certificate of authorisation granted to him required to be amended; or(b) be cancelled by the authority granting it, where he is satisfied after due notice to the holder that the holder has ceased to carry on business or for any other sufficient reason.As stated hereinabove, it is an admitted fact that no certificate of authorisation, as provided under the Act, had ever been granted to theand therefore, in our opinion, the courts below were absolutely right to the effect that the appellant was not entitled to any sales tax exemption.21. So far as the averments with regard to estoppel are concerned, it is a settled legal position that there cannot be any estoppel against law. When there is a legal provision to the effect that when tea is used as raw material, no tax exemption would be available under the provisions of the Act, none can claim tax exemption in respect of sales tax payable on purchase or sale of tea. It is true that an eligibility certificate had been issued to thein pursuance of the 1986 Incentive Scheme of Government of Assam but when the said Scheme was given a statutory form under the Act,had been excluded from the definition of raw material and therefore, on the basis of the eligibility certificate issued under the 1986 Incentive Scheme of Government of Assam, the appellant cannot claim any benefit.22. It is also pertinent to note that thehave rightly held that the appellant was not in the business oftea but was merely blending and packing tea, which does not amount toof tea. We find substance in the said stand taken by theas the said view has been fortified by a decision of this Court in Commissioner of Income Tax, Kerala v. Tara Agencies 2007 (6) SCC 429.