9911796707
TMI Blog2005 (9) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... is satisfied in the public interest that it is necessary to be so exempted to grant tax holiday wholly or in part. The moment it becomes necessary in the interest of public then such tax holiday, which does not confer any vested right on the assessee so exempted, can be withdrawn. According to him the very section itself indicates the exercise of the power to be made only in public interest and not otherwise. At the same time, he had also argued on the question of prejudice and in his usual fairness pointing out that the amendment and the notification cannot be retrospective but prospective and as such would not prejudice the assessee since the assessee could pass on the tax and he would not suffer any loss therefor. He had also sought to make a distinction between the right to enjoy the exemption and the eligibility to the exemption. He also contends that this distinction is an entitlement which is subject to the law governing the field namely the revenue legislation where no estoppel could be pleaded. He also contends that in the facts and circumstances of the case and by reason of the amendment in the legislation there could be no case of promissory estoppel or estoppel. Inas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods made by him on the day when such sale is made as it appears in column 3 against item No. 3 of the table prescribed under the said notification. According to him the tax holiday referred to in section 39 had nothing to do with the prospectivity of the amendment brought about which would affect the prospective sales and would be applicable in respect of the entitlement. According to him the entitlement has not been taken away but it has been restricted by imposing the condition that only the sales made to the registered dealer and the Government would entitle the assessee to tax holiday and the rest are not. This would not create any prejudice as already argued by him. Erudite argument was made by Mr. Gupta and Mr. Chakraborty had also laboured hard to make out his point. The question boils down to a very short score namely as to whether the subsequent amendment and the notification having prospective application could effect the exemption already granted to the assessee under the notification dated July 9, 1996 on the basis of section 8(5) as it stood prior to its amendment effective from July 1, 2002. In fact the notification dated July 9, 1996 was also issued under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, it dealt with a question whether a notification could affect retrospectively when the provisions of the statute was amended to empower the Government to issue a notification either prospectively or retrospectively in the context of which this ratio was laid down which we do not think would be of any help to answer the present question. So far as the decision in Godhawani Brothers [1997] 11 SCC 173 is concerned, the principle laid down therein is an established proposition of law. In that case the court was deciding a question with regard to the availability of plea of promissory estoppel to a party against issuance of a notification in exercise of the statutory powers superseding the exemption from duty or tax granted earlier for a specified period. It was held to be settled by the decision in Kasinka Trading v. Union of India AIR 1995 SC 874 wherein such a plea of the assessee was rejected. This decision in Kasinka Trading v. Union of India AIR 1995 SC 874 dealt with the question with which we are now supposed to answer in paragraph 27 in a different context in relation to an exemption granted under section 25 of the Customs Act in relation to import of PVC resins for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of these cases, the appellants cannot invoke the doctrine of promissory estoppel to question the withdrawal notification issued under section 25 of the Act. Mr. Gupta had relied on paragraph 9 of Kasinka Trading AIR 1995 SC 874 which reads as follows: The power to grant exemption from duty, wholly or in part, on the plain language of section 25 (supra) is contingent upon the satisfaction of the Government that it would be in 'public interest' to do so. Thus, 'public interest' is the guiding criteria for exercising the power under section 25 (supra). Admittedly the question of grant of exemption is definitely contingent upon the satisfaction of the Government that it would be in the public interest to do. There is no doubt that the notification dated August 2, 2002 was issued in public interest. But it has to be read in the context in which it has been issued and whether this prospective application would also affect the assessee in respect of the unexpired period of the tax holiday or not is the question which we are to answer. This is answered in Pournami Oil Mills [1987] 65 STC 1 (SC) in the following language where the exemption could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swerable. It is not disputed that the first order, namely, the one dated April 11, 1979, gave more of tax exemption than the second one. The second notification withdrew the exemption relating to purchase tax and confined the exemption from sales tax to the limit specified in the proviso of the notification. All parties before us who in response to the order of April 11, 1979, set up their industries prior to October 21, 1980, within the State of Kerala would thus be entitled to the exemption extended and/or promised under that order. Such exemption would continue for the full period of five years from the date they started production. New industries set up after October 21, 1980, obviously would not be entitled to that benefit as they had notice of the curtailment in the exemption before they came to set up their industries. In the unreported decision of this court where the court was concerned with a question as to whether an exemption applied for under the existing rule for a tax holiday for a period of two years could be claimed to be extended for a period of five years on the ground that such exemption was granted after the amendment extending the period of five years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the conditions in relation to the goods specified in the respective items. At the same time we may note that the notification dated August 2, 2002 has not prescribed that it was issued in supersession or suppression of the earlier notification. The application of the amendment and the notification being prospective and the earlier notification, which was dealing with newly set up industries alone, having not been superseded or suppressed, it is very difficult to reconcile the two notifications so as to make the subsequent notification applicable to a case where exemption has been granted under the earlier notification in respect of the unexpired period of tax holiday. When an exemption has been granted pursuant to a special notification meant for the newly set up industries alone granting five years' tax holiday subject to the conditions mentioned therein, the same can be said to have created a right as was held in the decision of Health Guard Laboratories [WPTT No. 2 of 1999 disposed of on May 12, 1999 Calcutta High Court] which cannot be affected by reason of a subsequent amendment and the notification which are of general application. For all these reasons though we ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
