2024 Taxo.online 480
In a landmark judgment, the court has reaffirmed the pivotal role of the Doctrine of Promissory Estoppel in resolving disputes arising from tax incentive schemes. The case, rooted in a factual matrix surrounding an incentive scheme floated by the respondent authorities, witnessed a clash of legal interpretations between the petitioner and the respondents.
The petitioner, having duly opted for the incentive scheme and obtained Registration Certificates (RC-I and RC-II), found themselves embroiled in a standoff when the respondent authorities refused to disburse the remaining amount of the scheme, citing the altered GST regime as justification. The crux of the legal battle revolved around the interpretation of Clause 19.2 of the scheme, which explicitly stated the continuity of benefits despite changes in relevant legislation.
Drawing strength from a precedent set in Prime Cold Stores Pvt. Ltd. case and invoking Clause 19.2, the petitioner vehemently argued for the enforcement of their entitlement under the scheme. On the contrary, the respondents contended that the GST Act had subsumed all pre-existing indirect tax statutes, including VAT, thereby rendering the scheme inapplicable.
However, after a meticulous examination of the legal arguments and the scheme's provisions, the court sided with the petitioners, highlighting the irrevocable promise made under Clause 19.2. The court emphasized that the respondents' attempt to invalidate the petitioner's claim based on technicalities regarding the nature of the product and the applicability of promissory estoppel was untenable.
Crucially, the court underscored the respondents' acknowledgment of the petitioner's entitlement by issuing RC-I and RC-II and disbursing a substantial portion of the dues even after the implementation of the GST regime. This, coupled with the principle of promissory estoppel, cemented the petitioner's right to claim the remaining benefits under the scheme.
In a resounding verdict, the court not only set aside the impugned order but also invalidated any subsequent actions based on it, including the notice issued to the petitioners. Furthermore, the respondents were directed to expeditiously disburse the balance amount owed to the petitioners under the scheme, underscoring the court's unwavering commitment to justice and equitable relief.
This judgment serves as a beacon of hope for taxpayers navigating the complex terrain of tax incentives, reaffirming the sanctity of contractual promises and the pivotal role of judicial intervention in upholding fairness and equity in matters of taxation.
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