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1988 (11) TMI 341 - HC - VAT and Sales Tax
Issues:
1. Reduction of the period of exemption from five years to three years for a small-scale industrial unit. 2. Application of the doctrine of promissory estoppel in the context of government orders and notifications. Detailed Analysis: Issue 1: The petitioner, a proprietorship concern, established a small-scale industrial unit for the manufacture and sale of blended tea. The petitioner was initially granted a five-year exemption from sales tax by the State Government. However, the period of exemption was later reduced to three years by an order dated 10th September, 1987. The petitioner challenged this reduction, citing the initial promise made by the State Government for a five-year exemption. The respondents argued that the petitioner's investment in the unit was less than the required amount for a five-year exemption. The Court examined the relevant government orders and notifications to determine the entitlement to the exemption period. Issue 2: The Court delved into the application of the doctrine of promissory estoppel in this case. Referring to previous judgments, including the case of Pournami Oil Mills v. State of Kerala, the Court emphasized that once a representation is made by the government and acted upon by the party, the doctrine of promissory estoppel comes into play. In this instance, the petitioner had set up the industrial unit based on the representation made by the State Government regarding the five-year exemption. The Court found that the petitioner was entitled to the benefit of the initial representation and that the reduction of the exemption period was not permissible under the principles of promissory estoppel. In conclusion, the Court allowed the writ petition, quashing the order reducing the exemption period and confirming the petitioner's entitlement to a five-year exemption from sales tax. The Court invoked the doctrine of promissory estoppel based on the representations made by the State Government, aligning with previous legal precedents on similar matters.
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