Judgment

Mrs. Sujata V. Manohar, J.-At all material times the respondent was an industry engaged in the business of oil extraction and manufacture in the State of Rajasthan.

2. By a notification dated 23rd of May, 1987 issued in the exercise of its powers under Section 4(2) of the Rajasthan Sales Tax Act, 1954, the appellant-State of Rajasthan notified a Sales Tax Incentive Scheme for Industries, 1987 (hereinafter referred to as the “Incentive Scheme”) under which it exempted (inter alia) new industrial units from payment of tax on the sale of goods manufactured by them for sale within the State of Rajasthan in the manner and to the extent and for the period as specified in that notification. The operative period of the scheme under that notification was from 5th of March, 1987 to 31st of March, 1992. It was subsequently extended to 31st March, 1997. The incentive scheme was applicable, inter alia, to new industrial units set up in areas mentioned in Annexure-A to the notifications. Annexure-B sets out a list of industries which were not eligible for the benefit of the said notification. Oil extraction or manufacture was not listed in appendix-B. Hence this industry was eligible for benefits under the scheme of 23rd of May, 1987.

3. By another notification dated23rd of May, 1987 issued under Section 8(5) of the Central Sales Tax Act the State Government notified anoth­er sales tax incentive scheme for industries excempting (inter alia) new industrial units from payment of central sales tax on the inter-state sale of goods manufactured by them within the State of Rajas­than. Under this notification also it was provided that industries listed in appendix-B would not be eligible for the benefit of the scheme. Oil extraction or manufacture was not listed in appendix-B to this notification. Hence oil extraction units were eligible for exemption from central sales tax in respect of inter-state sale of their goods.

4. By a notification dated 6th of July, 1989 issued under Section 4(2) of the Rajasthan Sales Tax Act, 1954 the appellants notified Sales Tax New Incentive Scheme for Industries, 1989, to exempt industrial units from payment of tax on sale of goods manufactured by them within the State of Rajasthan in the manner and to the extent and for the period covered by that notification. The new Incentive Scheme of 1989 was deemed to have come into operation with effect from 5th of March, 1987 and was to remain in force upto 31st of March, 1992. A similar notifi­cation of the same date was issued in respect of the central sales tax exemption for the said units under Section 8(5) of the Central Sales Tax Act. Under this notification also appendix-B contained a list of industries not eligible for benefits under the said notification. Once again oil extraction or manufacture was not listed in appendix-B in either of the two notifications.

5. By two notifications dated 7th of May, 1990-one issued under the Rajasthan Sales Tax Act, 1954 and the other issued under the Central Sales Tax Act, the notifications of 23rd of May, 1987 were amen­ded. As a result, by amendment of Annexure-B, oil extracting or manufacturing industry was added as an entry, thus withdrawing the benefits of the incentive scheme from oil extracting and manufacturing industries both in respect of Rajasthan Sales Tax as also Central Sales Tax. Thereafter by further notifications dated 10.9.1990 issued under the Rajasthan Sales Tax Act, 1954 and the Central Sales Tax Act, it was further notified, inter alia, that whenever an industry is included on any date during the period of operation of the scheme in Annexure-B, the units of such industry which have started commercial production and whose applications for benefit under the scheme are pending on the said date before the appropriate screening committee will be entitled to claim full benefits of the scheme.

6. Thus by reason of the notifications issued on 7.5.1990 the benefit of the incentive scheme was withdrawn from oil ex