1. A batch of two writ petitions has been filed by two petitioners questioning the legality of the Notification dated 15.9.2005 issued by the Principal Secretary to the Government of Meghalaya, Excise, Registration, Taxation and Stamps Department, (respondent No.2), which has the effect of withdrawing/cancelling the exemption of sales tax payable for sale of goods, manufactured by the petitioners, in the course of inter-State trade or commerce and confining such exemption only to registered dealers or the Government.

2. To simplify the matter, I will at first confine myself to the facts of the case in WP(C) No. 113(SH)/2007 and on the basis of my decision thereon, I will then attempt to dispose of the other writ petition. The facts giving rise to WP(C) No.113(SH)/2007, as projected in the writ petition, are that the Government of Meghalaya in the Industries Department, in the year 1997, in order to take advantage of the liberalized economic scenario in the country and also to keep pace with the development in the National Industrial Sector framed a new Industrial Policy with the following objectives: -

(a) To generate employment opportunities for the local people in the industries and allied sectors.

(b) To encourage the setting up of selective medium and large scale industries by utilizing the resource base of the State but compatible and, hence, encourage positive efforts towards the regeneration of the environment.

(c) To encourage need based development of local entrepreneurial skills through investment and training programmes in District, sub-divisional and block levels.

(d) To simplify rules and procedures by providing a single window clearance facility at the District Levels for the small scale sector and at the State Level for medium and large scale industries.

(e) To promote and encourage high value, low volume products in view of the transportation bottlenecks in the State.

3. It appears that as per this Industrial Policy, the State of Meghalaya, assured to provide subsidies, incentives and assistance to the small scale as well as medium and large scale categories of industries in the State. The petitioner's company is admittedly an industry falling within the ambit of large and medium scale industry. This Industrial Policy, among others, assured that sales tax exemption would be given on sales of finished products for a period of seven years from the date of commercial production. It is the case of the petitioner that the State of Meghalaya, in furtherance of this promise/declaration, in exercise of the powers conferred by sub-section (1) of section 3(6) of the Meghalaya Sale Tax Act and sub-section (1) of section 3(6) of the Meghalaya Finance (Sales Tax) Act and under section 8(5) of the Central Sales Tax Act, 1956, issued the Notification dated 12.4.2001 notifying the Meghalaya Industries (Sales Tax Exemption Scheme) 2001 ('the scheme'). Under the scheme, it was provided that all eligible units, would be entitled to Sales Tax Exemption, on sales of finished products manufactured by such eligible units within the State of Meghalaya and in the course of inter-State trade and commerce in conformity with the provisions of the Industrial Policy. The scheme defined the criteria of eligibility for availing the benefits. Clause 3(1) of the scheme defines any unit to mean Industrial or Tourism unit which had taken all initial effective steps on or after 15.8.1997. Clause 2(3)(i) of the scheme defines initial effective steps as follows: -

Units would be deemed to have completed initial effective steps if all of the following have been achieved.

(a) Effective possession of land.

(b) Registration of the firm/company/society/trust with the appropriate authority.

(c) Provisional registration with the appropriate authority.

(d) Preparation of project report.

(e) Sanction of power connection.

(f) Settlement of means of finance for the project including sanction of terms loans.

Clause 3(3)(ii) defines a unit to be deemed to have completed a fina

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