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TMI Blog1990 (9) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... ral tiny industrial units, set up on or after the date of publication of this notification, whose capital investment on machinery and equipment did not exceed Rs. 1,00,000 were exempted from payment of tax under the Act, subject to their obtaining certificate of genuineness issued by the Industries Department, Haryana, and the exemption was for a period of two years. The grant of this benefit for development of rural industries was given wide publicity through the Government media. It was to promote rural economy and employment opportunities for the ruralists. Influenced by the said policy of grant of incentives in the shape of exemption of taxes, the petitioners installed rural tiny industrial units in village Chandi and Madina in district Rohtak for the manufacture and delinting of cotton seed. On applications made by the petitioners, exemption certificate was issued in their favour in terms of the notification. The petitioners gave the following details of the dates on which they were granted exemption certificates: ----------------------------------------------------------------------------- S. Name of petitioner Date w.e.f. exemption No. certificate granted ------- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners have pleaded that they were khadi and village industries and that they had been exempted from payment of tax for the promotion of the same. This exemption was claimed under Notification dated 10th August, 1973, annexure P2, and the tax exemption was allowed. Under the impugned notification dated 30th December, 1987, the previous notification was superseded and it was provided as follows: "...............the Governor of Haryana, being satisfied that it is necessary and expedient so to do, in the interest of cottage industries hereby exempts with effect from 1st day of January, 1988,- (a) all classes of co-operative societies and persons, excepting the Khadi Ashram, Panipat, and its decentralised units functioning within the State of Haryana, the co-operative societies and persons running brickkilns or hydraulic sulphur sugar plants, so long as their turnover does not exceed rupees five lakhs in a year; (b) the co-operative societies and persons, running brick-kilns or hydraulic sulphur sugar plants, so long as their turnover remains below seventy-five thousand rupees in a year; and (c) the Khadi Ashram, Panipat, and its decentralised units functioning within the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest of rural industries hereby exempts, with effect from the first of January, 1988, all rural tiny industrial units, set up on or after the 22nd June, 1979, whose capital investment on machinery and equipment, does not exceed rupees one lakh and in whose favour certificates of genuineness is issued by the Industries Department of Haryana State, from the payment of tax under the Haryana General Sales Tax Act, 1973............" The further conditions for availing of the concession were to obtain an exemption certificate; the exemption was for two years and the exemption was on the turnover not exceeding Rs. 5,00,000 in a year. The validity of this notification has been challenged on the basis that the petitioners having acted upon the promise made in annexure P2, the State Government was bound by the rule of promissory estoppel and the period of exemption could not be curtailed, nor could the restriction over the total turnover be fixed. The impugned notification also has retrospective effect and it virtually amounted to withdrawal of all concessions. The respondent-State has not challenged the case of the petitioners on facts, but it has been claimed that the State Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by article 299 of the Constitution....... If it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the court would not raise an equity in favour of the promisee and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case because on the facts, equity would not require that the Government should be held bound by the promise made by it.......... If the Government wants to resist the liability, it will have to disclose to the court what are the subsequent events on account of which the Government claims to be exempt from the liability and it would be for the court to decide whether those events are such as to render it inequitable to enforce the liability against the Government.... There can also be no promissory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be exercised in violation of the rule of promissory estoppel. The Government could withdraw the exemption granted by it earlier only if the same could be done without offending the rule of promissory estoppel and depriving the industries to claim exemption from the payment of the said tax. In Bindra's Interpretation of Statutes (7th Edition, Chapter XXIX, at page 810) "Committee on Ministers" Power Report, commenting on the powers delegated by the Parliament, as subordinate power, recorded as follows: ".............The power to legislate, when delegated by Parliament, differs from Parliament's own power to legislate. Parliament is supreme and its power to legislate is, therefore, unlimited. It can do the greatest things; it can do the smallest It can make general laws for vast Empire, it can make a particular exception out of them in favour of a particular individual. It can provide-and has in fact provided-for the payment of old age pension to all who fulfil the statutory conditions; it can also provide-and has in fact provided-for boiling the Bishop of Rochestern's cook to death. But any power delegated by Parliament is necessarily a subordinate power, because it is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cations, annexures P1 and P2, had acted in exercise of his powers under section 13 of the Act and this was only a subordinate legislation and could not be equated with a statute framed by Legislature. We are, thus, of the considered view that the judgment of the learned single Judge in Satgur Oil Mills' case [1989] 73 STC 341 (P H); ILR [1989] 1 P H 175, lays down the correct law and the exemption of tax allowed under the Act to the tiny industries vide notification, annexure P2, could not be withdrawn by means of the impugned notification, annexure PI, and the Haryana Government was estopped from withdrawing the concession to the tiny industrial units by the rule of promissory estoppel. The case of the khadi and village industries stands on a different footing. The rule of promissory estoppel is not attracted to the facts of those cases. It was a concession allowed to them and it could be withdrawn by the State Government at any time. The impugned notification annexure P1 in the cases relating to khadi udyog is legal and within the powers of the Governor of Haryana. In view of the above discussion, we quash the notification, annexure P1, dated 30th December, 1987; allow ..... 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