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TMI Blog1980 (4) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1948. In 1973, the State Government changed its policy. It confined the exemption from sales tax to exercise books manufactured from paper purchased within the State of Uttar Pradesh. Other kinds of exercise books were made liable to sales tax at the rate of 5 per cent. This included exercise books imported from outside Uttar Pradesh. The levy of sales tax on exercise books was challenged in a group of writ petitions. Laxmi Paper Mart, Agra v. State of Uttar Pradesh[1975] 35 S.T.C. 164; 1974 U.P.T.C. 474. held that the levy of sales tax on exercise books imported from outside Uttar Pradesh violated article 301 of the Constitution and since similar goods manufactured or produced in the State were not similarly taxed, the imposition was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cally purchased paper. Thus the hardship likely to be caused to the dealers in this respect was considerably wiped out. The present petitioners have come to this Court to challenge the validity of this amending Act of 1976. Its validity has been challenged on the following grounds: (i) the doctrine of promissory estoppel invalidates this Act; (ii) the Act violates article 19(1)(f) and (g) of the Constitution; (iii) the amending Act was confiscatory in nature and so violates article 31 of the Constitution. In our opinion the doctrine of promissory estoppel has no application. In 1973 the State Government issued notifications under the relevant provisions of the Sales Tax Act exempting exercise books made from locally purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there can be no promissory estoppel against the exercise of legislative power. The legislature can never be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel. In the present case, the levy of sales tax has been brought about by legislative enactment. The amending Act of 1976 bodily changes the relevant entries in the notifications issued by the State Government. It, by these changes, levied sales tax with retrospective effect from 1st December, 1973, onwards. The learned counsel for the petitioners submitted that the levy of sales tax continues to be by virtue of the notifications issued by the State Government and so the principle that the doctrine of promissory estoppel cannot be invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the State Government remains, it cannot be said that the State Government is responsible for the levy of sales tax on exercise books at 5 per cent. It is the State Legislature which is solely and exclusively responsible for it. Hence the doctrine of promissory estoppel cannot be invoked. The Supreme Court has ruled that there can be no promissory estoppel against the exercise of legislative power. The legislative power can be exercised by the legislature. It can, on being delegated within constitutionally permissible limits, be also exercised by the executive, namely, the Government. In the exercise of such delegated functions the Government frames rules which are legislative in character. Such notifications are not tantamount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directing the sales tax authorities to adjust the tax paid on sale of paper between 1st December, 1973, to 20th May, 1976, against tax leviable for that period on sale of exercise books. This considerably ameliorated the hardship likely to be felt by the dealers in exercise books. Of course, it did not put the dealers completely on a par, because the sale price of paper is less than the sale price of exercise books. It was conceded by the learned counsel that the relief would extend to somewhere between two-third to three-fourth of the tax liability on exercise books. We fail to see how can then this levy be called "confiscatory". Retrospective levy of tax with a view to validate past levy and collection of tax has never been per se held co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanpur[1973] 31 S.T.C. 178 (S.C.) A.I.R. 1973 S.C. 1034., the Supreme Court observed: "A feeble attempt was made to show that the retrospective levy made under the Act is violative of article 19(1)(f) and (g). But we see no substance in that contention...............Further the retrospective amendment became necessary as otherwise the State would have to refund large sums of money. The contention that the retrospective levy did not afford any opportunity to the dealers to pass on the tax payable to the consumers, has not much validity. The tax is levied on the dealer; the fact that he is allowed to pass on the tax to the consumers or he is generally in a position to pass on the same to the consumer has no relevance when we consider the le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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