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TMI Blog1980 (4) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... was challenged in a group of writ petitions. Laxmi Paper Mart, Agra v. State of Uttar Pradesh[1975] 35 S.T.C. 164; 1974 U.P.T.C. 474. held that the levy of sales tax on exercise books imported from outside Uttar Pradesh violated article 301 of the Constitution and since similar goods manufactured or produced in the State were not similarly taxed, the imposition was not saved by article 304(a). In consequence the term "importer" occurring in the relevant notification dated 1st December, 1973, was quashed. The decision was rendered by this Court on 21st August, 1974. On 20th May, 1976, the State Legislature enacted the U.P. Sales Tax (Amendment and Validation) Act (23 of 1976). Section 16 of this amending Act is material for our purposes. By it the exemption of exercise books, if made from paper purchased within Uttar Pradesh, was repealed. All exercise books were liable to sales tax at the rate of 5 per cent. The amendment in the relevant notifications effected by section 16 was made retrospective with effect from 1st December, 1973, and the imposition of the tax was made valid notwithstanding any judgment, decree or order of any court to the contrary as if the notifications as ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d he would not be permitted to go back upon it, if it would be inequitable to allow him to do so, having regard to the precedent and attendant circumstances. The doctrine applies against the Government. (1) It cannot be invoked for preventing the Government from acting in discharge of its duty under the law, i.e., it cannot be applied in teeth of an obligation or liability imposed by law; (2) it cannot be invoked to compel the Government or even a private party to do an act prohibited by law; and (3) there can be no promissory estoppel against the exercise of legislative power. The legislature can never be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel. In the present case, the levy of sales tax has been brought about by legislative enactment. The amending Act of 1976 bodily changes the relevant entries in the notifications issued by the State Government. It, by these changes, levied sales tax with retrospective effect from 1st December, 1973, onwards. The learned counsel for the petitioners submitted that the levy of sales tax continues to be by virtue of the notifications issued by the State Government and so the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry estoppel. For this reason also, it cannot be said that when the State Government issued the notifications on 1st December, 1973, exempting exercise books made from locally purchased paper, it held out any promise on which the doctrine of promissory estoppel could validly rest. This point has no substance. It was then submitted that the amending Act of 1976 violates article 19 as well as article 31 because its provisions are in their true nature confiscatory and constitute unreasonable restriction on the fundamental right to carry on business. We see no substance in this submission. Previously, sale of paper which was used as raw material in manufacturing exercise books was liable to sales tax at 5 per cent. At that time the sale of exercise books made from locally purchased paper was exempt. When the levy of sales tax on other kinds of exercise books was quashed by this Court because of violation of article 301 of the Constitution, the State Government changed its policy. It took a policy decision to levy sales tax on exercise books and exempt sale of raw materials for manufacture of exercise books, i.e., paper. Thenceforward raw materials were exempt. The finished products, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttan Lal v. Sales Tax Officer, Section III, Kanpur[1973] 31 S.T.C. 178 (S.C.) A.I.R. 1973 S.C. 1034., the Supreme Court observed: "A feeble attempt was made to show that the retrospective levy made under the Act is violative of article 19(1)(f) and (g). But we see no substance in that contention...............Further the retrospective amendment became necessary as otherwise the State would have to refund large sums of money. The contention that the retrospective levy did not afford any opportunity to the dealers to pass on the tax payable to the consumers, has not much validity. The tax is levied on the dealer; the fact that he is allowed to pass on the tax to the consumers or he is generally in a position to pass on the same to the consumer has no relevance when we consider the legislative competence. " In Assistant Commissioner of Urban Land Tax, Madras v. Buckingham and Carnatic Co. Ltd.[1970] 75 I.T.R. 603 (S.C.) A.I.R. 1970 S.C. 169., the Supreme Court observed that as a general rule it may be said that so long as a tax retains its character as a tax and is not confiscatory or extortionate, the reasonableness of the tax cannot be questioned. It is not possible to put the tes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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