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TMI Blog1997 (11) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ugar during the initial period of five years for new sugar mills, (b) exemption from payment of purchase tax on sugar during the first five years from the date the new sugar mills go into production. 5.. The Government of Tamil Nadu accepted the above recommendations of Sampath Committee and issued G.O. Ms. No. 1294, Industries, dated October 24, 1975 granting relief from payment of purchase tax for a period of five years to the new sugar mills set up in the co-operative and public sectors. 6.. The petitioner established a sugar mill at Pallipalayam, Tiruchengode Taluk, in Salem District. In the affidavit it is stated that the petitioner was the first to be established in the State of Tamil Nadu in private sector. After finding that the benefits of G.O. Ms. No. 1294, Industries, dated October 24, 1975 are restricted to sugar industries in the co-operative or public sector, the petitioner made a representation on December 6, 1984 to the Government of Tamil Nadu to grant exemption from payment of purchase tax for a period of five years commencing from 1983-84, in pari materia with co-operative and public sector. In the said representation the petitioner made mention of the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.I) Department dated December 26, 1984 reading as follows: "In the Government order No. 1414, Industries, dated November 30, 1984, the Government ordered that M/s. Ponni Sugars and Chemical Ltd., be granted relief in the form of annual subsidy equivalent to the quantum of purchase tax on sugarcane due from it for a period of two years from the date of its going into production. However, M/s. Ponni Sugars and Chemicals Ltd., in their letter dated December 5, 1984, have represented to the Government that the subsidy may be given for a period of five years. The Government have carefully examined the request of M/s. Ponni Sugars and Chemicals Limited and decided to accept it. Accordingly in partial modification of the orders issued in G.O. Ms. No. 1414, Industries (MID-1) dated November 30, 1984, the Government direct that M/s. Ponni Sugars and Chemicals Limited be granted relief in the form of a subsidy equivalent to the quantum of purchase tax of sugarcane due from it for a period of five years from the date of going into production." 9.. The learned Senior Counsel on the above backdrop of facts submits that it was the policy of the Government of Tamil Nadu to encourage new in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 1, 1988 effective from April 1, 1988 the petitioner would cease to have the benefit of purchase tax subsidy for the period subsequent to April 1, 1988 since by April 1, 1988 the petitioner had crossed the ceiling of 300 lakhs. The learned Senior Counsel submits that while the earlier G.O. Ms. No. 1497, Industries, dated December 26, 1984 as well as G.O. Ms. No. 1414, Industries, dated November 30, 1984 did not impose any mandatory outer-limit for grant of subsidy, the later order in G.O. Ms. No. 989, Industries, dated August 1, 1988 imposed a monitary limit. The same has adversely affected the petitioner and has deprived it of the benefits conferred by G.O. Ms. No. 1414, Industries, dated November 30, 1984 and G.O. Ms. No. 1497, Industries, dated December 26, 1984. The submission of the learned Senior Counsel is that, after having held out that the benefit of subsidy would enure for a period of five years from the date of commencement of production, the first respondent is prevented by the theory of promissory estoppel. 12.. The learned Senior Counsel further submits that for the period subsequent to April 1, 1988 the respondent has collected from the petitioner a sum of Rs. 92 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the State that the doctrine of promissory estoppel had no application because the appellant had not suffered any detriment by acting on the representation made by the Government, the Supreme Court accepting the proposition of law laid down by Lord Denning in Central London Property Trust Ltd. v. High Trees House Ltd. case [1947] KB 130 held: "We do not think that in order to invoke the doctrine of promissory estoppel it is necessary for the promisee to show that he suffered detriment as a result of acting in reliance on the promise. But we may make it clear that if by detriment we mean injustice to the promisee which would result if the promisor were to recede from his promise, then detriment would certainly come in as a necessary ingredient. The detriment in such a case is not some prejudice suffered by the promisee by acting on the promise, but the prejudice which would be caused to the promisee, if the promisor were allowed to go back on the promise." It was also held that: "Whatever be the nature of the function which the Government discharges the Government is under the rule of promissory estoppel and by this essential ingredient rule, the Government is com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Bench of the Madras High Court held as follows: "As long as it is permissible in law and there is no prohibition contained either under any Act or under the Constitution or under any other law prohibiting the State Government to offer such an incentive as the one under consideration, the representation made by the State Government through G.O. Ms. No. 500 dated May 14, 1990 to the industrialists to take advantage of those concessions and establish industries can in unequivocal terms be construed as a lawful promise made by the State Government to the industrialists. It is also not in dispute that the industrialists acting upon such promise, established new industries and also commenced production before April 24, 1991. There is no illegality, no lack of bona fides on the part of industries. Everything has been fair and proper. If that be so, the State Government cannot turn back and cannot withdraw the concession or restrict it." 17.. The petitioner submits that in the instant case it is not pleaded that the issue of G.O. Ms. No. 1414, Industries, dated November 30, 1984 and G.O. Ms. No. 1497, Industries, dated December 26, 1984 is contrary to law or is in violation of cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of five years from the date of commencement of production and when that benefit would enure till January 26, 1989, it is not open to the respondent to recede from that promise and restrict the benefit only till April 1, 1988 and also subject to a monetary ceiling of Rs. 300.00 lakhs. 20.. The learned Government Advocate for Taxes submits that G.O. Ms. No. 989, Industries, dated August 1, 1988 was issued only by the Industries Department and it is not an order issued under the provisions of the Tamil Nadu General Sales Tax Act and therefore, this Tribunal would have no jurisdiction to go into this question of promissory estoppel pleaded by the petitioner. This submission of the Government Advocate is rejected on the ground that even though the said G.O. is issued by the Industries Department, it has a direct and immediate effect on the liability for payment of purchase tax under the Tamil Nadu General Sales Tax Act. Secondly, the learned Government Advocate relies on the decision of the Supreme Court reported in [1986] 62 STC 122, viz., Bakul Cashew v. Sales Tax Officer. In that case by a notification dated April 29, 1970 new industries set up in areas far away from cities we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts it was found that no particulars were furnished by the petitioner as to when land was purchased and as to when plant and machinery for industries were procured. Further it was found that in the petitioner's case the petitioner had set up industries at Junagadh. It is a very large city whereas the notification dated November 11, 1970 granted exemption to new industries which had been set up beyond 24 kms., from the Obviously it refers to Shri Bakul Oil Industries v. State of Gujarat [1987] 64 STC 304 (SC).-Ed. municipal cities of Ahmedabad and Baroda and 16 kms. from the cities of Surat and Jamnagar, etc. In conclusion the court observed as follows: "The appellant has been entirely unable to make out any factual basis for a case of promissory estoppel. The appellant cannot claim that merely because it had set up its industrial unit at Junagadh at a certain point of time, the fiscal laws of the State must remain unaltered from that date. The appellant has not been able to show that some definite promise was made by or on behalf of the Government and the appellant had acted upon that promise to its detriment and thereafter the changes effected by the notification dated July 17, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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