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TMI Blog2003 (10) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... d wheat, wheat products for a period of five years, from payment of sales tax. 2.. That exemption under that G.O. is now rescinded through the present impugned G.O. even before the expiry of five years period covered thereunder. 3.. Earlier to the issuance of the rescinded G.O., the Andhra Pradesh Roller Flour Mills Association had by its best attempts and through incessant persuasions obtained the exemption from sales tax through the said G.O. In fact, there were proceedings, in Writ Petition No. 12391 of 1989 dated February 2, 1990, that even preceded the issuance of the rescinded G.O. 4.. The impugned G.O. dated June 23, 1993 is sought to be assailed by invoking, mainly, (1) the doctrine of promissory estoppel, (2) the doctrine of legitimate expectation, (3) principles of natural justice, (4) want of enabling provision in the statute to withdraw the exemption granted, (5) implicit waiver of right to rescind the beneficial exemption before the lapse of fixed period, etc. 5.. Now, adverting to the contentions, we shall first take up the question whether the impugned G.O. is hit by the doctrine of promissory estoppel. It is submitted by the learned counsel, Sri E. Manohar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri K. Chandramouli, Under Secretary to Government of India [1984] 55 STC 162 (Delhi) [FB]. There, it is held by the Full Bench of the Delhi High Court that where a law is made by legislation, the same is of legislative character and a subordinate legislation made by virtue of the power conferred under the taxing statute is also legislative in nature, once they are required to be published in the gazette. In the present case, the impugned G.O. was published in the gazette as per the provisions of the Andhra Pradesh General Sales Tax Act. Therefore, it is to be held that passing of impugned G.O. is a legislative act. When once it is of legislative nature, the doctrine of promissory estoppel is not applicable. 8.. In Narinder Chand Hem Raj v. Lt. Governor, Administrator, Union Territory, Himachal Pradesh [1972] 29 STC 169, the Supreme Court held that the power to impose a tax is a legislative power, that that power can be exercised by the Legislature directly or it may delegate that power to some other authority, and that exercise of that power either by the Legislature or by its delegate is also of legislative character. Therefore, it could be held that power to grant exemption by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vora v. Board of Trustees of the Port of Bombay AIR 1991 SC 14, the Supreme Court held as under: "There may be no promissory estoppel against exercise of legislative functions. Legislature can never be precluded from exercise of its legislative functions by resorting to doctrine of promissory estoppel." 14.. In view of the above rulings and in the background of the fact position, we see no force in the contention advanced on the basis of doctrine of promissory estoppel while assailing the validity of the impugned G.O. 15.. Now turning to the second aspect of the challenge on the ground of legitimate expectation, it is to be noted that the earlier G.O. presently rescinded spelt out a period of five years being covered in the matter of exemption from payment of sales tax and that was withdrawn, as contended by Sri E. Manohar, without affording any opportunity or notice to the petitioners before issuance of the impugned G.O., and therefore it is invalid being hit by the above doctrine. 16.. The learned Government Pleader, on the other hand, submitted that the rescinded G.O. was not issued in relation to any particular individual and therefore the question of issuance of any n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defeat the 'legitimate expectation' without some overriding reason of public policy to justify its doing so." 20.. In the present case, pursuant to the policy of the State to implement prohibition of arrack in the State and thereby to fill up the paucity of funds, the present impugned G.O. was issued. Thus, the above decision is of no help to the petitioners. 21.. The learned counsel also relied on a decision in Union of India v. Hindustan Development Corpn. (1993) 2 Scale 506. In that case, the Supreme Court referring to a number of earlier decisions, has elaborately discussed the doctrine of legitimate expectation and held: "The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise... A case of legitimate expectation would arise when a body by representation or by past practice aroused expectation which it would be within its powers to fulfill. The protection is limited to that extent and a judicial review can be within those limits. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said to have the effect of imposing any new tax on the petitioner but had merely removed the ban that had been placed on the levy of the tax which the statute had already imposed under section 3(1). The power of removing the ban was co-extensive with the power granted by section 6(1) to impose the ban and therefore the second notification was not ultra vires the powers of the Government." 25.. In K. Parthasarathy Mudaliar v. State of Madras [1957] 8 STC 632 (Mad.) a notification under section 6(1) of the Madras General Sales Tax Act dated March 25, 1954 was issued exempting all sales of flowers, vegetables and fruits (other than potatoes, onion, nuts, coconuts, dehydrated vegetables, canned, preserved, dried or dehydrated fruits), from the tax payable and later by a notification dated December 16, 1954 the earlier notification was modified excluding the sales of sweet potatoes, yam and tapioca, garlic, ginger, green chillies and other similar varieties of vegetables from exemption and the latter notification was challenged. The Madras High Court held that the power of granting exemption conferred on the Government was not exhausted when the first notification was issued and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deemed to be notification withdrawing the earlier exemption and imposing higher tax for which the State has got power. Thus, it is held that though exemption is granted, the same can be withdrawn and higher rate of tax can be imposed. These decisions fortify our view that power to grant exemption includes the power to rescind the same. 30.. Therefore, we hold that the power to grant exemption under section 9 of the General Sales Tax Act includes the power to rescind the same, and that the Government has got power in rescinding the exemption granted earlier and therefore the present contention advanced that the withdrawal of the earlier exemption through the present impugned G.O. is bad for the reason that there is no empowering provision in the statute for the State Government to rescind the earlier exemption, is not sustainable. 31.. In so far as the contention that there is no change in the position of the industry in wheat and wheat products in the few years after granting of exemption through the rescinded G.O. is concerned, it is to be seen that even according to some of the petitioners themselves they have been making good profits subsequent to 1991 and that the State ..... X X X X Extracts X X X X X X X X Extracts X X X X
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