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2022 (7) TMI 918 - HC - VAT and Sales TaxLevy of Sales Tax - deemed export to DTA - units in SEZs registered under the Kerala General Sales Tax Act 1963/VAT - entitlement to exemption from levy of sales tax because of the policy decision of the State Government declared for units established in SEZs in the State of Kerala - Sl. No.68 to the First Schedule of notification no. GO (P) No.179/99/TD dated 31.12.1999 - Doctrine of promissory estoppel - HELD THAT:-The writ petitioner, based on a promise in the form of a Policy document, did not establish the industry in CSEZ. On the contrary, in its pleading, it is averred that the writ petitioner established the industry in CSEZ in December 2002, i.e., prior to the Policy in Ext.P3. The Policy document and the exemption are dated 17.06.2003 and 13.02.2004. Between 01.04.2005 and 06.10.2008, there was no order of the State Government enabling the petitioner or similarly situated units to continue to claim the exemption granted from payment of sales tax by Ext.P3. The claim is invigorated with the amended Policy dated 06.10.2008 in Ext.P9. In this background, the petitioner claims declaratory relief. In Kasinka Trading v. Union of India [1994 (10) TMI 64 - SUPREME COURT] and Shabi Construction Co. v. City & Industrial Development Corporation [1995 (4) TMI 318 - SUPREME COURT], it has been considered whether promissory estoppel, which is based on a ‘promise’ contrary to the law, can be invoked. The decision laid down that the rule of promissory estoppel cannot be invoked for the enforcement of a ‘promise’ or a ‘declaration’ which is contrary to law or outside the authority or power of the Government or the person making that promise. Ext.P9 Policy grants exemption from payment of sales tax/VAT and the said Policy by itself is not an enforceable document since Ext.P9 envisages issuance of a notification for giving effect to the Policy decisions borne out by Ext.P9. It is at this juncture, that the absence of power for issuing exemption notification comes in the way of the declaratory relief sought by the petitioner. To say that the Government has the power to grant exemption from payment of VAT, and different departments in the Government have not acted in tandem and notification was not issued either for the continuation of benefit or extension of benefit, the State Legislature preferred to exercise discretion through legislation than by any mode in the matters of fiscal relaxation to units established in SEZ - The logic appears to be simple from the present mechanism, namely, to enable an SEZ located in the State to purchase raw materials etc., without the incidence of sales tax for achieving competitive prices for the products manufactured in the SEZ established in the State of Kerala. The declaratory relief as prayed for, on the Principle of Promissory Estoppel, is not made out or available to the petitioner. Appeal allowed - decided in favor of appellant.
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