M/s. K.B. Tea Product Pvt. Ltd. & Anr. vs Commercial Tax Officer, Siliguri & Ors.

Court

Supreme Court of India

Date

12 May 2023

Case No.

Civil Appeal No. 2297 of 2011

Bench

M.R. Shah, Krishna Murari

Citation

[2023] 8 S.C.R. 828 : 2023 INSC 530

Headnote

Doctrines/Principles – Doctrine of legitimate expectation – West Bengal Sales Tax Act, 1994 – ss.2(17), 17(3)(a)(xi), 39 – West Bengal Finance Act, 2001 – West Bengal Sales Tax Rules, 1995 – r.52 – Bengal Finance (Sales Tax) Act, 1941 – s.2(dd) – Whether despite s.2(17) of the 1994 Act which was amended w.e.f. 01.08.2001, omitting “tea blending” from the definition of “manufacture”, the appellants shall still be entitled to the exemption from payment of sales tax – Held: Per M.R. Shah, J. Nobody can claim the exemption as a matter of right – To grant/continue/withdraw the exemption is a policy decision – Unless withdrawal is found to be so arbitrary, the Court would be reluctant to interfere – Prior to 2001, as per s.2(17), 1994 Act, the activity of “tea blending” was included in the definition of “manufacture” – Therefore, being in the activity of “tea blending”, the appellants were entitled to the exemption from payment of sales tax as manufacturers – However, consequent to the amendment, when the activity of “tea blending” was excluded from the definition of “manufacture”, the appellants ceased to be the manufacturers and thus, on and from 01.08.2001, they were not entitled to the exemption – There cannot be any promissory estoppel against the statute – This is not a case of “vested right” but of “existing right”, which can be varied or modified and/or withdrawn – View taken by the Tribunal and the High Court agreed with – Per Krishna Murari, J. [Dissenting (on the applicability of the doctrine of legitimate expectation)] The tax holiday granted by way of an amendment to small scale industries involved in the manufacture and blending of tea, created a legitimate expectation in favour of the appellants – This legitimate expectation was broken when a subsequent amendment was brought removing “blending of tea” from the definition of “manufacture” – To justify such a shift in policy, and snatch away the legitimate expectation created in favour of the appellants, the public authority must demonstrate the reasons for such a shift – However, no such appropriate justification was provided – A mere claim of change of policy not sufficient to discharge the burden of proof vested in the government – Respondents to extend the benefits of the original amendment to the appellants, till the expiry of such benefit as per the original amendment – In view of divergence of opinion, matter to be placed before the Hon’ble the Chief Justice of India for appropriate orders – State Scheme of Incentives for Cottage and Small-Scale Industries, 1993 – West Bengal Incentive Scheme, 1999.

The Judgments of the Court were delivered by M. R. SHAH, J. 1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Calcutta at Calcutta in respective writ petitions by which the Division Bench of the High Court has dismissed the said writ petitions preferred by the appellants herein – original writ petitioners, the original writ petitioners have preferred the present appeals. 2. As common question of law and facts arise in this set of appeals, all these appeals are being decided and disposed of together by this common judgment and order. For t

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