TMI Blog1991 (4) TMI 384X X X X Extracts X X X X X X X X Extracts X X X X ..... utions passed on 22nd December, 1977. By the first resolution, it framed a scheme called the State Cash Subsidy Scheme for Industries. By the second resolution, it framed a scheme for sales tax exemption and grant of loan in respect of amount of sales tax paid on sales of finished products. Under the scheme, exemption from sales tax was to be granted to all new small-scale industrial units commissioned on or after 1st November, 1977. Interest-free sales tax loan benefit was to be extended to medium and large scale industrial units commissioned during the period of the scheme and for expansion and diversification of the existing units. All the three schemes became effective from 1st November, 1977. On 27th August, 1980, the Government reviewed the package of incentives introduced by the said two resolutions and decided to introduce a new scheme of sales tax benefits in lieu of the then existing sales tax exemption/loan scheme with effect from 1st June, 1980. The cash subsidy scheme of the earlier package was retained as it was. The new scheme was called "The New Sales Tax Incentive Scheme for Industries". It became effective from 1st June, 1980 and was to remain in force for a peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would be up to an upper limit of Rs. 4 lacs with effect from 31st March, 1982 to 30th March, 1988. It then applied on 30th April, 1982, to the Assistant Commissioner of Sales Tax for deferment certificate for the period and up to the limits mentioned in the eligibility certificate; but the said request was rejected by him and instead the sales tax deferment certificate effective for the period between 31st March, 1982 and 14th September, 1982, only was issued, in view of the Government resolution dated 15th September, 1982, whereby cold rolled steel strip industry was included in the list of prohibited or ineligible industries. Thus, it was illegally deprived of the full benefit to which it was entitled to under the sales tax deferment scheme. It has, therefore, filed this petition and wants this Court to quash the resolutions dated 7th January, 1982 and 15th September, 1982 to the extent they include cold rolled steel strips industry therein, and to direct the respondents, i.e., the State of Gujarat and the Assistant Commissioner of Sales Tax to issue deferment certificate effective for the period between 31st March, 1982 and 30th March, 1988 and up to the upper limit of Rs. 40 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court, applying the equitable doctrine of promissory estoppel, should restrain the State from doing so. So far as the first two contentions are concerned, in our opinion, they are misconceived inasmuch as notwithstanding the Government resolution dated 7th January, 1982, sales tax deferment benefit has been given to the petitioner till 14th September, 1982. As it started commercial production on 31st March, 1982, admittedly, it was not entitled to any benefit before that period. Moreover, the benefit which has been granted for the period up to 14th September, 1982, is not sought to be taken away by the respondents and it is not their contention that it was wrongly granted to the petitioner. It is, therefore, not necessary to consider the effect of the resolution dated 7th January, 1982, nor the effect of the resolution dated 18th March, 1982, which did not mention cold rolled steel strip industry as one of the prohibited or ineligible industries. In support of his contention that equitable doctrine of promissory estoppel would apply to the facts of this case, the learned counsel has heavily relied upon the decisions of the Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uffer any detriment. What is necessary is only that the promisee should have altered his position in reliance on the promise. The Supreme Court has further observed that the doctrine of promissory estoppel has also been applied against the Government and the defence based on executive necessity has been categorically negatived. Where the Government makes a promise knowing or intending that it would be acted upon by the promisee and, in fact, the promisee, acting in reliance on it, alters 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. It is elementary that in a republic governed by the rule of law, no one, howsoever high or low, is above the law. Every one is subject to the law as fully and completely as any other and the Government is no exception. It is also observed therein that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. As the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceable in a court of law." The learned Advocate-General submitted that in this scheme itself it is declared by the Government that the list of industries excluded from the purview of the scheme would be reviewed by it from time to time, and that it might remove, amend, or add any item from and to the said list. The Government also made it clear that the scale of incentives for any industry, the areas of applicability and the list of growth centres were also likely to be reviewed from time to time. Over and above that, the Government had also made it clear that the incentives were given under the discretionary powers of the State Government and they would not create any claim against the Government enforceable in a court of law. Thus, the Government had made it known that the benefit which was to be available to the new industrial units could be taken away any time. The assurance was thus a conditional assurance and not an unqualified one. Moreover, in view of the declaration made by the Government that the incentives were given under its discretionary powers and that those incentives were not intended to create any claim against it enforceable in a court of law, it should be held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7] 64 STC 304; AIR 1987 SC 142 are not of any help to him. In that case, the Government notification issued under section 49(2) of the Act exempting wholly or partly from payment of sales tax or purchase tax, certain specified classes of sales and purchases described in the entries at Sr. Nos. 1 to 52 in the Schedule, did not provide any period of exemption. The notification did not stipulate as to how long the exemption was to remain in operation. In that context, the Supreme Court observed that the exemption granted under the notification was to have operative force only till such time that the exemption was allowed to remain before being withdrawn by a subsequent notification. It was further observed that the State Government was under no obligation to grant exemption from sales tax. Under the circumstances, the persons who got the benefit, could not have insisted upon the State Government to grant exemption to them from payment of sales tax. Thus what is held in that case is that the exemption, which was granted by the Government, was only by way of concession and that a concession can be withdrawn at any time and no time-limit can be insisted upon before the concession is with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent benefit under the scheme for the full period, if other conditions were satisfied by it. The 2nd respondent was, therefore, clearly in error in granting sales tax deferment certificate effective for the period between 31st March, 1982 and 14th September, 1982, only. In the view that we have taken, the petitioner will be entitled to the refund of the amount paid by it by way of sales tax in respect of the finished goods manufactured by it between 31st March, 1982 and 14th September, 1982.
In the result, this petition is allowed. A writ of mandamus shall issue directing respondent No. 2 to issue sales tax deferment certificate to the petitioner effective for the period between 31st March, 1982 and 30th March, 1988. We are granting this relief even though the said period has expired because the petitioner can, even now, get certain benefits made available under the scheme. The respondents shall refund a sum of Rs. 6,57,853 (subject to verification) which the petitioner has paid by way of sales tax on the sales of finished goods made by it between 31st March, 1982 and 14th September, 1982. Rule is made absolute accordingly with no order as to costs.
Petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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