High Court of Bombay Considers Constitutional Validity of Section 41D of Bombay Sales Tax Act Inserted by Maharashtra Act XVI of 1995. Petitioners Challenge Retrospective Withdrawal of Sales Tax Deferral Incentives Under Package Scheme of Incentives, 1983, as Ultra Vires Constitution and Violative of Promissory Estoppel.

Writ petition under Article 226 of the Constitution of India challenging the constitutional validity of section 41D of the Bombay Sales Tax Act, 1959 and Rule 31AAA of the Bombay Sales Tax Rules, 1959, and seeking to quash a notice seeking to revise assessment and restrict sales tax incentives.

Declaration that section 41D and Rule 31AAA are ultra vires, void, and of no legal effect; alternatively, to read them down; to quash notice Annexure 'S' dated 3.10.1997; and to restrain respondents from enforcing the notice.

The retrospective insertion of section 41D by Maharashtra Act XVI of 1995 and the issuance of notice proposing to revise assessment to restrict sales tax incentives previously allowed under the Package Scheme of Incentives, 1983.

Assessment order dated 31.3.1995 under section 33(3) allowed sales tax incentives; appeal order dated 18.3.1996 partly allowed the appeal but did not reverse the findings on incentives; thereafter, notice dated 3.10.1997 was issued proposing to revise the assessment.

Petitioners made application for industrial licence in 1986; approval for expansion in 1988 and 1991. Government of Maharashtra introduced Package Scheme of Incentives, 1983 on 4.5.1983. Petitioners applied and received eligibility certificate on 6.6.1990 and certificate of entitlement on 12.6.1990. Assessment for period 1.4.1991 to 31.3.1992 completed on 31.3.1995 allowing incentives. Appeal partly allowed on 18.3.1996. Section 41D inserted retrospectively by Maharashtra Act XVI of 1995. Notice in Form 40 issued on 3.10.1997 under section 57 read with Rule 62. Writ petition filed thereafter. Affidavit in reply filed. Judgment reserved on 12.4.2016 and pronounced on 20.8.2016.

• Constitution of India: Article 226, Article 14, Article 19(1)(g), Article 265, Article 300A
• Bombay Sales Tax Act, 1959: Section 41D, Section 33(3), Section 57, Section 36(3)(b), Section 36(2)(c)
• Bombay Sales Tax Rules, 1959: Rule 31AAA, Rule 62
• Central Sales Tax Act, 1956: Section 9(2)
• Industries (Development and Regulation) Act, 1951:
• Maharashtra Tax Laws (Levy and Amendment) Act, 1995: