Gauhati High Court Grants Major Relief to Assam Industrial Units

GUWAHATI– In a major relief to industrial units across Assam, the Gauhati High Court, led by Mr. Justice Soumitra Saikia, delivered a landmark verdict directing the state government to reconsider the tax exemption extension claims of units affected by the post-GST policy shift.

The case centered around industrial units that had been availing remission of VAT and CST under the Assam Industries Tax Exemption Schemes of 2009 and 2017. With the implementation of the Goods and Services Tax (GST), those schemes were scrapped, and a new 2017 reimbursement scheme was introduced.

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While the scheme originally allowed an extension of the eligibility period by up to five years under certain conditions, a 2020 amendment by the Assam government revoked this extension power and deemed all pending applications rejected—prompting a series of writ petitions by aggrieved industrial units.

Appearing on behalf of the petitioners, Senior Advocate Dr. Ashok Saraf, supported by Mr. Pritam Baruah and Mr. Prabin Kr. Bora, argued that the sudden withdrawal of benefits for units with pending applications was arbitrary and violated Article 14 of the Constitution, which ensures equality before the law.

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The Court agreed, stating that the state was obligated to apply a consistent standard to all eligible units. It found the non-consideration of applications without justified reason to be discriminatory and unconstitutional.

Justice Saikia ordered the Finance (Taxation) Department to review all pending claims using the same criteria applied to other similarly placed industrial units that were previously granted extensions. If the facts of the petitioners match those of the beneficiaries, the same tax exemption extension must be granted.

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Representing the state were Advocate General Sri Devajit Saikia and Mr. B. Choudhury, Standing Counsel for the Finance and Taxation Department.

The judgment sets a strong precedent for equal treatment under industrial policy and safeguards businesses from retrospective withdrawal of benefits, ensuring fair implementation of post-GST industrial incentives.