TMI Blog2013 (9) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... ositions by the petitioners on the strength of promise made - It was the convenience of the visitors, which was taken care of by the cinema owners, when they provided better facilities and infrastructures or when they screen big budget films, which will obviously gave better revenue to the petitioners as well - Therefore, it cannot be said that the petitioners have altered their position to their detriment on the basis of speech of the Finance Minister proposing the reduction of the entertainment tax. Mere payment of entertainment tax in lump sum by the petitioners will not create any equity in favour of the petitioners nor can the respondents be said to be bound by the principle of promissory estoppel on the basis of such representation - Such proposal cannot acquired the status of law, so as to be treated as a deemed abolition of entertainment tax imposed under the Punjab Entertainment Tax (Cinematograph Shows) Rules, 1954 - The proposal in the Budget Speech had not travelled to the stage of law nor the representation was categorical that entertainment tax, if paid in lump sum, would be at reduced rate - The representation was only of “proposal” and not the decision. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s incorporated in the annual budget for the year 2003-04 presented before the Legislative Assembly on 24.03.2003. The relevant extract from the budget proposal reads as under: (v) Cinema owners are proposed to be allowed an option either to pay tax in lump sum or to opt for payment of tax on actual basis. The rate of lump sum tax is proposed to be reduced by 33% from the existing level and that of the entertainment duty from 125% to 50%. The petitioners have allegedly deposited the lump sum entertainment tax in pursuance of such budget proposal. It was later somewhere in September, 2004, the demand was raised against the petitioners on the ground that the petitioners have deposited entertainment tax availing rebate of 33%, whereas no notification has been issued by the Punjab Government. In the afore-mentioned writ petition, the petitioner has pleaded that in view of the representation of the State, the petitioner has altered its position. It is averred to the following effect: 8. That the petitioner got encouragement on account of modified tax structure as decided by the Cabinet, which formed the part of the budget for the fiscal year and was announced by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stle India Ltd. another (2004) 6 SCC 465. It is contended that the State is bound by such representation given by the highest functionary of the State. Reference is also made to the judgment reported as Mahabir Vegetable Oils (P) Ltd. another Vs. State of Haryana others (2006) 3 SCC 620. We have heard learned counsel for the parties and find no merit in the present bunch of writ petitions. In M/s Motilal Padampat Sugar Mills Co. Ltd. case (supra), the Supreme Court has dealt with doctrine of promissory estoppel. It has been held that it is a principle evolved by equity to avoid injustice and though commonly named promissory estoppel , it is neither in the realm of contract nor in the realm of estoppels. The true principle of promissory estoppel seems to be that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been made and that if a citizen acting in reliance on the terms has altered his position, it did not release the Government from its obligation to honour the promise made by it. The doctrine of promissory estoppel in such a case is applicable against the Government and it could not be defeated by undertaking the defence of executive necessity. It was pointed out that the doctrine of promissory estoppel must yield when the equity so requires. If it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promisee and enforce the promise against the Government. Still further, it was held that if the Government wants to resist the liability, it will have to disclose to the courts what are subsequent events on account of which, the Government claims to be exempted from the liability and it would be for the court to decide whether those events are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nveying the decision of the State Government in principle to abolish the purchase tax; (iv) A circular was issued by the Excise and Taxation Commissioner on 18.05.2006 pursuant to memo dated 26.04.1996, to all the Deputy and Assistant Excise Taxation Commissioners and the Deputy Directors (Enforcement) in the State in relation to abolition of purchase tax; (v) The representatives of the petitioner and others were informed of the decision of the State Government exempting milk and milk products from purchase tax: (vi) On 27.06.1996 in a meeting held under the Chairmanship of the Chief Minister attended by the Finance Minister, the Excise Taxation Commissioner and various Financial Commissioners, the decision to abolish purchase tax on milk was reiterated and it was decided to issue a formal notification; (vii) On 18.07.1996/24.07.1996, the Finance Minister made an announcement that with a view to encourage milk producers and for granting relief to the common people, traders and industrialists, the Government had abolished tax on milk; (viii) The milk producers did not pay the purchase tax along with their returns with a note that purchase tax on milk and milk product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the overall benefit to the state s economy and the public would be greater if the exemption were allowed. The respondents have passed on the benefit of that exemption by providing various facilities and concessions for the upliftment of the milk producers. This has not been denied. It would, in the circumstances, be inequitable to allow the State Government now to resile from its decision to exempt milk and demand the purchase tax with retrospective effect from 1st April 1996 so that the respondents cannot in any event re-adjust the expenditure already made. The High Court was also right when it held that the operation of the estoppel would come to an end with the 1997 decision of the Cabinet. In the present case, there is no unequivocal statement made by any Government functionary in respect of reducing the entertainment tax. The Budget Speech, the reference of which has been made above, is to the effect that there is a proposal for demand of reducing the entertainment tax. Such proposal cannot acquire the status of law, so as to be treated as a deemed abolition of entertainment tax imposed under the Punjab Entertainment Tax (Cinematograph Shows) Rules, 1954. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken in public interest since the industry is in the category of polluting industry. It has never been the case of the respondent that the solvent extraction plant is a non-polluting industry. There is also no allegation that the decision to put the solvent extraction plant in the negative list was actuated by fraud or that the said decision was not bona fide. 27. In cases where the Government on the basis of material available before it, bona fide, is satisfied that public interest would be served by granting, withdrawing, modifying or rescinding an exemption already granted, it should be allowed a freehand to do so. The withdrawal of exemption in public interest is a matter of policy and the courts should not bind the Government in its policy decision. The courts should not normally interfere with fiscal policy of the Government more so when such decisions are taken in public interest and where neither fraud nor lack of bona fides is alleged, much less established. The issue; whether entertainment tax can be permitted to be paid in lump sum or not; is a matter of policy. Such policy could be given effect to only by amending Punjab Entertainment Tax (Cinematograph Shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormer class of cases, the courts have expanded the scope of judicial review when the actions are arbitrary, mala fide or contrary to the law of the land; while in the latter class of cases, the scope of such judicial review is far narrower. Nevertheless, unreasonableness, arbitrariness, unfair actions or policies contrary to the letter, intent and philosophy of law and policies expanding beyond the permissible limits of delegated power will be instances where the courts will step in to interfere with government policy. In view of the above, we find that the petitioners are not entitled to raise the plea of promissory estoppel. One of the essential ingredient so as to invoke doctrine of promissory estoppel is altering of position by a person. However, the averments, as reproduced above, do not show that the petitioners have altered their position on the basis of representation of the functionaries of the State. The petitioners were running cinemas and continued to run cinema even after the speech of the Chief Minister / Finance Minister. If the petitioners have provided better facilities and infrastructure though in the absence of any material, such fact cannot be taken into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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