STATE OF GUJARAT versus ARCELOR MITTAL NIPPON STEEL INDIA LIMITED

Citation: [2022] 12 S.C.R. 720 · Decided: 21-01-2022 · Supreme Court of India · Bench: M.R. SHAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2022] 12 S.C.R.
   [2022] 12 S.C.R. 720
720
 STATE OF GUJARAT
v.
ARCELOR MITTAL NIPPON STEEL INDIA LIMITED
(Civil Appeal Nos. 7710-7714 of 2021)
JANUARY 21, 2022
[M. R. SHAH AND SANJIV KHANNA, JJ.]
Gujarat Sales Tax Act, 1969: s. 49(2), 45 – Exemption from
payment of sales tax – ESL-assessee dealer, a steel manufacturing
unit made investments in the Scheme – ESL granted exemption from
payment of purchase tax on raw materials for Naphtha and Natural
Gas as per Entry No. 255 of the Notification dated 05.03.1992,
subject to fulfilling certain conditions – Amendment to Entry No.
255 vide two notifications – Under the said three Notifications, main
requirements was that the eligible unit furnishes to the selling dealer
a certificate in Form No. 26 declaring that the goods shall be used
by it as raw materials, processing materials or consumable stores in
its industrial unit for which it has obtained the eligibility certificate,
for the manufacture of goods in its industrial unit as per the
conditions provided under the three notifications – Said exemption
made available to steel manufacturing units and the units/entities
engaged in generating electricity placed in the list of industries
“Not Eligible” for this incentive – Natural Gas and Naphtha
purchased by the ESL, against declarations in Form No.26 were
sold to EPL and EPL utilized the Natural Gas and Naphtha
purchased from ESL for the purpose of generating/manufacturing
electricity, which came to be sold to the ESL by the EPL – Assessee
dealer seeking exemption from payment of the purchase tax as per
the original Entry No.255(2) vide notification dated 05.03.1992 –
Entitlement to – Held: As per the declaration furnished in Form
No.26, the eligible unit-ESL was required to actually use the goods
by him within the State of Gujarat as raw materials, for manufacture
of goods by him – Power producing companies were specifically
put in the list of ‘ineligible’ industries for any exemption from sale/
purchase tax on procurement of raw materials – Transfer of Naphtha
and Natural Gas by the eligible unit ESL to EPL, after availing the
exemption from payment of purchase tax and not using the raw
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material for its own use is in violation of the eligibility criteria/
condition mentioned in the Original Entry No. 255(2) – Basic
eligibility condition that the eligible unit “shall actually use the
goods” remain the same in amended Entry No.255(2) vide
notifications dated 14.11.2002 and 16.01.2002 – Subsequent
amended Entry can be said to be clarificatory and expanding the
scope of eligibility as it was – It cannot said to be taking away the
rights available to the eligible unit under the original Entry
No.255(2) dated 05.03.1992, or in anyway in conflict with the first/
parent notification/Entry No.255(2) – Thus, there was breach of
the declaration given in Form No.26 (Entry No.255) by the assessee
dealer – Demand of the purchase tax on and after 14.11.2000, not
hit by the principle of promissory estoppel – ESL not entitled to the
exemption from payment of the purchase tax as per the original
exemption notice – It was a case of false and wrong claim of
exemption, thus, levy of penalty justified – Assessee dealer, liable
to pay the penalty not exceeding one and one-half times.
Interpretation of statutes: Exemption notifications under
taxing statutes – Construction /Interpretation of – Held: Exemption
notification should be strictly construed and given meaning
according to legislative intendment – It is not open to the court to
ignore the conditions prescribed in industrial policy and the
exemption notifications – If any of the conditions laid down in the
notification is not fulfilled, the party is not entitled to the benefit of
that notification – Gujarat Sale Tax Act, 1969
Doctrines: Doctrine of promissory estoppel – Applicability
of, in taxing statutes – Held: Doctrine of promissory estoppel is an
equitable remedy and has to be moulded depending on the facts of
each case and not straitjacketed into pigeonholes – There cannot
be any hard and fast rule for applying the doctrine of promissory
estoppel but the doctrine has to evolve and expand itself so as to do
justice between the parties and ensure equity between the parties –
In taxing matters, the doctrine of promissory estoppel as such is not
applicable and the Revenue can take a position different from its
earlier stand in a case with established distinguishing features

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