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TMI Blog2013 (6) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner that on the basis of the exemption granted, it altered the position to its disadvantage. It was suggested that the petitioner had not passed on burden of the differential duty for the intervening period. Even if it was so, this can hardly bind the Government into granting the exemption for such period. In any case, the petitioner’s stand that the differential duty was not collected from the purchasers due to ignorance of withdrawal of exemption also appears to be one of doubtful proposition. We may recall, soon after the exemption was withdrawn, the Gujarat Co-operative Milk Market Federation Ltd., an apex body of the milk producing co-operatives had, on 10.06.2006, made a detailed representation before the Government to reintroduce the exemption. The stand of the petitioner that they were not aware about the withdrawal of the exemption, therefore, is not borne out from the record. The decision in case of M/s. Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and others (1978 (12) TMI 45 - SUPREME Court) is of course well known judgement in the field of promissory estoppel. Since we have held that this is not a case where such principle can be applie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons, milk powder-whole or skimmed and vitaminaized infant milk foods, invited sales tax at the rate of 2%, instead of, as we are informed 4%, which was otherwise applicable to other commodities of like nature. 1.5 Undisputedly, such exemption continued right upto the year 2006, when on 31.03.2006, the Government of Gujarat issued a notification in exercise of powers conferred under Section 8(5) of the Central Sales Tax Act read with Section 21 of the Bombay General Clauses Act, 1904 rescinding as many as 70 different exemption notifications issued under the Central Sales Tax Act. At serial No. 64, we find exemption notification No. GN-7/CST dated 01.04.1997. Thus, on 31.03.2006, partial exemption granted on milk powder-whole or skimmed and vitaminised infant milk foods sold in sealed container, stood withdrawn. 1.6 In the said notification dated 31.03.2006, it is stated that the Government of Gujarat having been satisfied that it is necessary to do so in public interest, the Government rescinded notifications mentioned in the schedule. The said notification was issued in view of the fact that the State Sales Tax Acts were replaced by the whole new tax regime under the Value Add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 21.11.2006. It was followed by series of subsequent representations. Finally, under impugned communication dated 28.10.2010, it was conveyed that such request cannot be accepted. Hence, the petition. 2. Respondents have filed replies and opposed the petition contending interalia that the exemption was rescinded in public interest for creating uniform tax policy on the value added tax system coming into force. It was pointed out that as the rates of central sales tax were being gradually phased out, it was thought fit to withdraw all concession/exemption notifications under the Central Sales Tax Act so that such taxes may remain uniform. It was pointed out that the Cabinet Sub Committee comprising of Ministers, on representations made by the Gujarat Co-operative Milk Market Federation Ltd., recommended in July 2006, to grant the concessional benefits, which ultimately resulted into the notification dated 02.08.2006 being issued. It is stated that: 6. I say and submit that such type of concessions does not confer any right upon the beneficiary, and these cannot be allowed to continue for all times to come. Circumstances may sometime and for some period warrant grant of exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, since no such public interest is demonstrated, the action of the respondents must be held to be wholly unreasonable and arbitrary. 4. In this respect, reliance was placed on the decision of the Supreme Court in case of W.P.I.L. Ltd. Vs. Commissioner of Central Excise, Meerut, U.P. reported in 2005 (181) ELT 359 (S.C.) wherein, it was observed as under:- 16. In view of the consistent policy of the Government of exempting parts of power driven pumps utilized by the factory within the factory premises, it could not be said that while issuing notification No.46/94 of March 1, 1994, the exemption in respect of said item which was operative was either withdrawn or revoked. The action was taken only with a view to rescinding several notifications and by issuing a composite notification. The policy remained as it was and in view of demand being made by the Department, a representation was made by the industries and on being satisfied, the Central Government issued a clarificatory notification No.95/94 on April 25, 1994. It was not a new notification granting exemption for the first time in respect of parts of power driven pumps to be used in the factory for manufa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Shree Sidhbali Steels Ltd. Vs. State of Uttar Pradesh and ors. reported in (2011) 3 SCC 193. 2. In case of State of Haryana and ors. vs. Mahabir Vegetable Oils Pvt. Ltd. reported in (2011) 3 SCC 778 wherein the Apex Court observed that withdrawal of exemption in public interest is a matter of policy and the courts should not bind the Government and its policy decisions. 3. Reliance was also placed on the decision of the Apex Court in case of State of Rajasthan and anr Vs. M/s. Mahaveer Oil Industries and ors. reported in AIR 1991 SC 2302 wherein, in the context of principle of promissory estoppel, it was observed that though the State may be held bound by the promise held out, it does not preclude the State from withdrawing the benefit prospectively even during the period of a scheme if public interest so requires. 10. Having thus heard learned counsel for the parties, we find that the facts are virtually undisputed. Previously, by virtue of notification dated 01.04.1997, the products in question enjoyed partial exemption from payment of sales tax. Such exemption was granted by the Government of Gujarat in exercise of powers under Section 8(5) of the Central Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch exemption was offered for a long period of time upto 31.03.2006 and when the same was reintroduced quickly thereafter by notification dated 02.08.2006, a strong presumption would arise that public interest existed during the period falling between the said dates also. It is therefore contended that the withdrawal of the exemption notification itself was illegal and not in public interest. We would like to examine this contention more closely. 14. As we have recorded, exemption notification dated 01.04.1997 providing concession on payment of tax was rescinded by virtue of notification dated 31.03.2006. This notification rescinded not only the above noted exemption notification but several other exemption notifications. This was necessary in view of repeal of the Gujarat Sales Tax Act and its substitution by the Gujarat Value Added Tax Act. It is pointed out that rescinding of the notification was for creating uniform tax policy in the country on the basis of value added tax system. Such uniform tax policy was found in the interest of public at large. It is pointed out that the rates of central sales tax were being gradually phased out. It was therefore, thought fit to withdraw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submissions made before us would arise. In the present case, however, we notice that such withdrawal was also based on public interest. 19. In case of In case of Shree Sidhbali Steels Ltd. Vs. State of Uttar Pradesh and ors. (supra) the Apex Court observed as under: 41. By virtue of Sections 14 and 21 of the General Clauses Act, when a power is conferred on an authority to do a particular act, such power can be exercised from time to time and carries with it power to withdraw, modify, amend or cancel the notifications earlier issued, to be exercised in the like manner and subject to like conditions, if any, attached with the exercise of the power. It would be too narrow a view to accept that chargeability once fixed cannot be altered. Since the charging provision in the Electricity (Supply) Act, 1948 is subject to the State Government's power to issue notification under Section 49 of the Act granting rebate, the State Government, in view of Section 21 of the General Clauses Act, can always withdraw, rescind, add to or modify an exemption notification. No industry can claim as of right that the Government should exercise its power under Section 49 and offer rebate and it is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or concession is a right that can be taken away under the very power in exercise of which the exemption was granted. 21. In case of Union of India and ors Vs. M/s. Jalyan Udyod and anr. reported in AIR 1994 SC page 88 it was observed as under: 21. The above analysis of sub-section (1) shows inter alia that an exemption granted may be an absolute one or subject to such conditions, as may be specified in the notification and further that the conditions specified may relate to a stage before the clearance of goods or to a stage subsequent to the clearance of goods. Section 25(1) is a part of the enactment and must be construed harmoniously with the other provisions of the Act. The power of exemption is variously described as conditional legislation [see Jalan Trading Co. Pvt. Ltd. v. Mill Mazdoor Sabha, AIR 1967 SC 691 and Hamdard Dawakhana v. Union of India, AIR 1960 SC 554] and also as a species of delegated legislation. Whether it is one or the other, it is a power given to the Central Government to be exercised in public interest. Such a provision has become a standard feature in several enactments and in particular, taxing enactments. It is equally well settled by now that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, is not borne out from the record. 23. The decision of this court in case of Kishorkumar Prabhudas Tanna and anr Vs. State of Gujarat Through Secretary and ors. (supra) and the observations made therein were in the background of applicability of principle of promissory estoppel. In the present case, no such issue arises. Furthermore, in the facts of that case the Court had come to the conclusion that the exemption was rescinded without any justification or reason. Only argument or submission or justification offered was that the sales tax act to be repealed and replaced by value added tax act. In any case, neither the decision of the Supreme Court in case of Union of India and ors Vs. M/s. Jalyan Udyod and anr. (supra) was cited nor the decision in case of State of Haryana and ors. vs. Mahabir Vegetable Oils Pvt. Ltd. (supra) and Shree Sidhbali Steels Ltd. Vs. State of Uttar Pradesh and ors.(supra) were available for the benefit of the Bench. 24. Decision in case of V.V.F. Ltd. and anr Vs. Union of India and anr reported in 2010 (2) GLR 1166 is based on the principle of promissory estoppel. It was the case wherein Central Government granted excise duty exemption to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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