TMI Blog1984 (12) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... of by a single judgment. 2.. The petitioner by this petition submits that the petitioner is a partnership concern in the State of Jammu and Kashmir. The State of Jammu and Kashmir, to encourage, allure and attract entrepreneurs from within and outside the State of Jammu and Kashmir to set up industrial units in the State, took a decision as early as in 1971 to grant various incentives including exemption from tax as leviable on the raw material and finished goods of such units. The first of such orders is No. 276 of 1972 issued on 11th April, 1972. By this order, besides other things assured to such entrepreneurs, exemption from the State sales tax and levy of additional toll tax for the initial period of five years from the date the unit goes in production was also ensured. Vide Government SRO No. 267 dated 15th May, 1978 the incentives announced for small-scale manufacturing units was further extended even to the existing and new small-scale industries established or to be established in the State. Vide Government Order No. 391-Ind of 1972 announced the package of incentives in the nature of grant of land, financial assistance, exemption from payment of toll tax and sales tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned an exemption licence was to be granted in favour of the petitioner for a particular financial year, which was renewable after every financial year, the petitioner submits that they fulfil the basic requirement and exemption licence was granted in favour of their unit in form No. SC-1 by the assessing authority, Sales Tax Circle 'G', Jammu for the year 1983-84. While the petitioners were enjoying the benefits of incentives the Government issued yet another notification being SRO No. 434 of 1983 issued on 22nd August, 1983 which purported to supersede SRO No. 671 of 1979 referred to above and withdrew the exemption from payment of tax on the finished goods manufactured by the petitioner-unit. Thereafter another notification was issued as SRO No. 118 of 1984 dated 31st March, 1984 which further superseded SRO No. 671 of 1979 and withdrew the exemption of sales tax on the finished goods manufactured by the petitioners' small-scale industrial units and the said SRO included among other items "spices", the finished goods manufactured by the petitioners' industry. SRO No. 434 of 1983 is also a subject-matter of a different writ petition which according to the allegations of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the industries, the exemption is withdrawn as in the case of the industry of the petitioners regarding "spices" the action of the respondents is also discriminatory and hence ultra vires the provisions of article 14 of the Constitution of India. It is emphatically argued that by withdrawing the exemption and grant of incentives on the basis of which the petitioners were induced and attempted to establish their industry by the said withdrawal and exemption, the petitioners will financially ruining and forced to close down their units, it shall be highly inequitable and unjust to permit the Government to do so. The statutory power under the Jammu and Kashmir General Sales Tax Act, 1962 cannot be arbitrarily used by the State to deprive the petitioners of rights already vested in it whether any equity or in law. No opportunity has been granted to the petitioners to oppose such withdrawal. There is no prior notification proposing the abovesaid withdrawal of incentives and exemption, thus it is violative of principles of natural justice. In support of his contention, learned counsel for the petitioners with reference to his arguments regarding promissory estoppel rely on the author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of the present petitions, are reproduced hereby in seriatim: (i) Government Order No. 391-Ind of 1972 dated 21-6-1972: "In supersession of Government Order No. 206-Ind of 1968 dated 5-7-1968, 213-Ind of 1968 dated 1-8-1968, 499-Ind of 1971 dated 4-6-1971 and 179-Ind of 1972 dated 28-4-1972 and Government Order No. 346-Ind of 1969 dated 28-8-1969, 302-Ind of 1972 dated 14-6-1972 the following package scheme of incentives will now be applicable to, the existing and new small-scale industrial units established or to be established by entrepreneurs, including technocrats (diploma/degree holders in any branch of engineering) and unemployed graduates in any Science or Art: * * * * * * * * * * * * 16. Taxation. (a) * * * * * * * * (b) State sales tax: The existing units and new units will be exempted from payment of State sales tax, paid on end-products for three years from the date of this order and five years from the date of production respectively. This exemption will be applicable to industries notified from time to time." "(ii) SRO No. 267: In exercise of the powers conferred by section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (XX of 1962) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t open to itself to reduce the period also. The similar words are used in clause (vii) of SRO No. 267 referred to above. 9. The impugned notification, annexure P-5, SRO No. 118 dated 31st March, 1984 is also reproduced as under: "SRO-118.-In exercise of the powers conferred on it under section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (Act No. XX of 1962) and in supersession of Notification SRO-671 dated 18-12-1979 the Government hereby direct that goods manufactured by a dealer operating old or new small-scale industrial unit, having its place of business in the State and registered with the Department of Industries and Commerce, Directorate of Handicrafts or Jammu and Kashmir Handloom Development Corporation, shall subject to the conditions specified below, be exempt from payment of tax to the extent and for the period specified in columns (2) and (3) of the Schedule forming annexures 'A' and 'B' to this notification." The relevant annexure for the purpose of the present petitions is annexure 'D' to the following effect: "Annexure 'D' to SRO No. 118 dated 31-3-1984. 1. Repacking of any goods. 2. Spices. 3. Corrugation of sheets. 4. Indian made forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impose taxes are set by the power that is qualified to do so under the constitutional law. In a democratic system this power is with the Legislature. In India the doctrine is embodied in article 265 of the Constitution. Subject to the provisions of the Constitution, the Legislature is omnipotent in the exercise of the taxing prerogative. Exemption notifications are issued under a general grant of authority by the Legislature." I am in respectful agreement of the proposition laid down above by their Lordships of the Delhi High Court and find that the present controversy stands resolved on a simple reason that the power of exemption in the present case is derived by the Government in exercise of its legislative function under section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 that being a provision relating to tax laws, the doctrine of promissory estoppel is not applicable to the case of the petitioners' units and SRO No. 118 of 1984 issued on 31st of March, 1984 does not suffer from any infirmity either on the doctrine of promissory estoppel or on the basis of discrimination as argued by the learned counsel for the petitioner. It is manifest from the words of exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
