LLOYD ELECTRIC AND ENGINEERING LIMITED versus STATE OF HIMACHAL PRADESH AND OTHERS

Citation: [2015] 10 S.C.R. 362 · Decided: 03-09-2015 · Supreme Court of India · Bench: ANIL R. DAVE · Disposal: Appeal(s) allowed
Cited by 3 judgment(s) · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

[2015] 10 S.C.R. 362 
A 
LLOYD ELECTRIC AND ENGINEERING LIMITED 
B 
v . 
. STATE OF HIMACHAL PRADESH AND OTHERS 
(CivilAppeal No.6838 of2015) 
SEPTEMBER 3, 2015 
[ANIL R. DAVE, KURIAN JO~EPH AND 
· ADARSH KUMAR GOEL, JJ.) 
Taxation - Central Sales Tax - On inter-State sales -At 
C concessional rate of 1% - Permissibility -
The assessee 
enjoying the concessional rate upto 31.3.2009 - Policy 
decision taken by Council of Ministers to extend the period 
of concession upto 31.3.2013 or till the CST is phasedout-
D Statutory Notification to that effect issued by the Excise and 
Taxation Department on 18. 06. 2009 - Revenue denying tax 
concession to the assessee from 1.4.2009 to 18.6.2009 
holding that assessee was entitled to the concession only 
from the date of issuance of the Notification i.e. 18. 6. 2009 -
E Held: Once the Council of Ministers takes a policy decision, 
the implementing Department cannot issue a notification 
contrary to that policy decision - It was not an introduction of 
a new policy under the notification, but was an extension of 
the benefits under the extended policy -
The State 
F Government is bound by the policy decision - The assessee 
is entitled to concessional rate of tax@ 1% w.e.f. 1.4.2009 till 
31.3.2013-CentralSales TaxAct, 1956-s. 8(5)(b). 
G 
H 
Allowing the appeal, the Court 
HELD: 1. Once the Cabinet takes a policy decision 
to extend its 2004 Industrial Policy in the matter of Central 
Sales Tax (CST) concession to the eligible units beyond 
31.03.2009, upto 31.03.2013, merely because the Excise 
362 
LLOYD ELECTRIC AND ENGINEERING LIMITED v. STATE 363 
OF HIMACHAL PRADESH 
and Taxation Department took some time to issue the A 
notification, it cannot be held that the eligible units are 
not entitled to the concession, till the Department issued 
the notification i.e.18.06.2009. [Para 10] [369-G; 370-C] 
2. No doubt, the statutory notification issued by the B 
Excise and Taxation Department u/s. 8(5)(b) of the Central 
Sales Tax Act on 18.06.2009, has stated that the eligible 
units will be entitled to the concession with immediate 
effect. Merely because such an expression has been 
used, it cannot be held that the State Government can C 
levy the tax against its own policy. The State Government 
is bound by the policy decision taken by the Council of 
Ministers and duly notified by the Department concerned. 
[Para 1 O] (370-D-E] 
D 
3. The High Court has gone wrong in not 
appreciating the background of the case and the 
decision of the Council of Ministers to extend its own 
Industrial Policy announced in 2004 and the tax 
concession beyond 31.03.2009. Once the Council of E 
Ministers takes a policy decision, the implementing 
Department cannot issue a notification contrary to the 
policy decision taken by the Government. The High Court 
also erred. in analyzing and understanding the 
Notification dated 18.06.2009 as if it introduced the CST F 
concession @ 1 per cent with effect from the date of 
issuance of notification. It is not the introduction of a new 
policy but an extension of the. benefits under the 
extended policy. The appellant shall be entitled to the 
concessional rate of CST @ 1 per cent with effect from G 
01.04.2009 till 31.03.2013 until it is duly varied by the State 
Government. [Paras 13 and 14] [371-E-G; 372-B] 
State of Bihar and others v. Suprabhat Steel 
Limited and Ors. (1999) 1 SCC 31: 1998 (2) 
H 
364 
SUPREME COURT REPORTS 
[2015) 10 S.C.R. 
A 
Suppl. SCR 699; State of Jharkhand and Ors. v. 
B 
Tata Communications Limited and Anr. (2006) 4 
sec 57: 2006 (3) SCR 443 - relied on. 
Case Law Reference 
1998 (2) Suppl. SCR 699 
2006 (3) SCR 443 
relied on. 
Para 9 
relied on. 
Para 13 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
C 6838 of 2015 
D 
E 
From the Judgment and Order dated 24.05.2013 of the 
High Court of Himachal Pradesh, Shimla in CWP No. 8170/ 
2012-G. 
M.P. Devanath, Vivek Sharma,Ambarish Pandey for the 
Appellant. 
Suryanarayana Singh, AAG, Varinder Kumar Sharma for 
the Respondents. 
The Judgment of the Court was delivered by 
KURIAN, J. 1. Leave granted. 
F 
2. Whether the appellant is liable to pay Central Sales Tax 
(hereinafter referred to as "CST")@ 2 per cent on the inter-
state sales for the period 01.04.2009 to 17.06.2009 or@ 1 
per cent in view of the Industrial Policy of the state, is the dispute 
arising for consideration in this case. It is not in dispute that as 
G per the Industrial Policy of the State of Himachal Pra
Excerpt shown. Read the full judgment & AI analysis in Lexace.