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TMI Blog2002 (1) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... in a position to raise the price of its product above that of the competitors as price hike would virtually affect its existence. In the initial stage, the margin of profit was very low because the petitioner had to pay huge interest on the loans which it had availed from various financial institutions. Therefore, sales tax exemption is necessary for its very existence and if such concession by way of sales tax exemption is not granted, the petitioner's unit would not be viable. The industrial policy of the State Government taken from time to time extends various concessions including the exemption of sales tax. On July 6, 1997 the petitioner's unit went into commercial production. The Industrial Finance Corporation of India Limited on November 3, 1997 recommended to the State Government for sales tax exemption on the ground that if no such concession was made available, the viability of the project would be jeopardised and would affect its over all operation. The State Government did not take any decision on the recommendation and kept the matter hanging. The petitioner had to make repeated representations and ultimately by the Finance Department notification dated January 25, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unreasonable and is hit by the principle of promissory estoppel. After hearing was concluded and the matter was reserved for judgment, he has filed a written note of submission on December 21, 2001. We have duly considered the same. Shri Ray, learned Advocate-General, on the other hand submitted that there can be no estoppel against a statute and the exemption granted to the petitioner in exercise of powers under section 6 of the Act can be withdrawn which is permissible under the very provision. He justified the withdrawal of exemption in public interest. 5.. It is the admitted case of both parties that the sales tax exemption granted to the petitioner was not as per the Industrial Policy Resolution of 1992 or of any other year. There is no dispute that the sales tax exemption allowed to the petitioner was in exercise of power conferred by section 6 of the Act. It is, therefore, necessary to extract the notifications extending the sales tax exemption and the impugned notification withdrawing the same which are respectively at annexures 8 and 9. By Finance Department notification dated January 25, 1999 published in the Orissa Gazette dated January 27, 1999, sales tax exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in exercise of the powers conferred by section 6 of the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947), the State Government, having been satisfied that it is necessary so to do in the public interest, do hereby make the following amendments to the notification of the Government of Orissa, in the Finance Department No. 20206-CTA-14/76-F, dated the 23rd April, 1976, as amended from time to time, and direct that the said amendments shall come into force on the 1st day of August, 1999, namely: AMENDMENTS.-In the Schedule to the said notification,(i) serial numbers 26, 26-A, 26-D, 26-F, 26-FF, 30-FF, 30-FFF, 30-FFFF, 30-FFFFF, 30-FFFFFF, 35-I and 35-J along with the entries appearing against them shall be omitted. (ii).............. (No. 33558-CTA-71/99-F) By order of the Governor S.K. Mishra Deputy Secretary to Government." 6.. On careful reading of the notification dated January 25, 1999, it may be seen that Sl. No. 35-J came to be inserted to the list of goods exempted from Orissa sales tax by virtue of which sales tax exemption was granted to the petitioner and by the impugned notification, the aforesaid Sl. No. 35-J of the list stands omitted. 7.. May it be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is evident from the impugned notification at annexure 9. It is, therefore, necessary to examine what supervening public interest compelled the State Government to issue the impugned notification. In this regard, the averments made in Here italicised. the affidavit dated November 19, 2001 which has been affirmed by the Deputy Secretary of the Finance Department are relevant for our purpose. It has been stated therein that the State Government has been running under acute fiscal pressure for last few years. While the revenue expenditure of the State Government has been rising at a fast rate, the growth of revenue receipts has not been commensurated. As a result, the gap between the revenue receipts and revenue expenditure has increased to alarming proportions. The revenue deficits of the State has been rising over time and reached an alarming level of Rs. 2,265 crores during the year 1998-99 which is at 16.30 per cent of the State's Gross Domestic Products was clearly unsustainable. The persistent revenue deficit has compelled the Government to divert the borrowed fund meant for developmental work for meeting revenue expenditure liabilities. This resulted in the borrowing rising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue deficit and unless timely steps are taken to correct the same, the imbalance will deteriorate to further leading eventually to a situation when the State will not be in a position to implement any development and welfare programmes. In consideration of the imperative need for additional revenue generation for fiscal stabilisation, withdrawal of sales tax incentives in exercise of powers conferred by section 6 of the Act was felt essential in the supervening public interest. In the new and demanding situation, the State Government had to change its earlier policy in the greater public interest with the sole aim of improving the fiscal situation. 11.. On careful consideration of the facts mentioned above, we have no hesitation to hold that the State Government is fully justified in withdrawing the concession in public interest. After all public interest must override the consideration of private loss or gain. From what has been stated above, we also do not find any valid reason for the petitioner to contend that the impugned notification suffers from the vice or arbitrariness or discrimination. In the result, the writ petition merits dismissal. We order accordingly. P.K. ..... 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