Case Law Details
K.B. Tea Product Pvt. Ltd. Vs Commercial Tax Officer (Supreme Court of India)
Supreme Court held that amendment to section 2(17) of West Bengal Sales Tax Act, 1994 by omitting the word ‘blending of tea’ from definition of ‘manufacture’ stopped the benefit of exemption from payment of sales tax. Enactment of such amendment without appropriate justification by the Government brings in play doctrine of legitimate expectation.
Facts- The appellants enjoyed the benefit of exemption from payment of sales tax as provided under Section 2(17) and Section 39 of the Act, 1994 for a period of two years till Section 2(17) came to be amended by the West Bengal Finance Act, 2001. Section 2(17) of the Act, 1994 came to be amended by the West Bengal Finance Act, 2001 w.e.f. 01.08.2001, whereby the words “blending of tea” were omitted from the definition of “manufacture” provided under section 2(17) of the Act,1994. Consequently, the exemption from payment of sales tax, which was granted to the appellants came to be stopped and even the eligibility certificate was required to be modified.
The aforesaid action / order was challenged before the Tribunal first and thereafter before the High Court. The Tribunal dismissed the application, which has been confirmed by the High Court by the impugned judgment and order. The impugned judgment and order passed by the High Court is the subject matter of present appeals, claiming the exemption from payment of sale tax as per earlier 1999 Scheme.
Conclusion- In the present case at hand, while perusing through the subsequent amendment, it can be clearly seen that no such appropriate justification has been provided by the government. No appropriate reason for the enactment of the amendment, nor the considerations of the affected party have been discussed. In my opinion, a mere claim of change of policy is not sufficient to discharge the burden of proof vested in the government. The government must precisely show what the change of policy is, and why such a change of law is in furtherance of public policy, and the public good.
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