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TMI Blog2013 (6) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... d the vitaminised infant milk foods from a part of the tax payable on such commodities for the period between 01.04.2006 to 01.08.2006. The petitioner has, prayed for a direction to the respondent authorities to exercise power under Section 49 or Section 8(5) of the Gujarat Value Added Tax Act, 2003. The petitioner has also challenged a communication dated 28.10.2010 under which, the representations for granting exemption for the said period came to be turned down. The petitioner has also challenged a demand notice dated 13.09.2010. 1.3 Under a notification dated 01.04.1997, issued by the Government of Gujarat, in exercise of powers under sub-section (5) of Section 8 of the Central Sales Tax Act, 1956, the Government of Gujarat had provided that on the commodities mentioned in the said notification, which included whole milk powder and skimmed powder, there shall be a tax of 2% to be paid by the dealer having his place of business in the State of Gujarat in the course of inter-state trade of commerce. Such description (whole milk powder or skimmed milk powder) came to be substituted by a notification dated 13.06.1997 by the following description: "A. Milk Powder-Whole or Skimmed; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arat issued a fresh notification in exercise of powers in Sub-section (5) of Section 8 of the Central Sales Tax Act,1956 and reintroduced concessional rate of duty at 2% on whole milk powder or skimmed milk powder. In the notification, it was stated that the Government of Gujarat having been satisfied that it is necessary to do so in public interest, such exemption was granted. 1.9 On 11.08.2006, the Gujarat Co-operative Milk Market Federation Ltd. requested the Government to include, milk powder-whole or skimmed and vitaminised infant milk foods sold in sealed container in the exemption notification 02.08.2006 to avoid any confusion in future. Such request was accepted by the Government and a fresh notification was issued on 18.10.2006 suitably substituting the description of goods in the exemption notification dated 02.08.2006 to include: "A. Milk Powder-Whole or Skimmed; B. Vitaminised Infant Milk Foods sold in sealed container" 1.10 In absence of any exemption notification, for the period between 01.04.2006 and 01.08.2006 the petitioner would have to pay duty at full rate. Several representations were therefore made by the Gujarat Cooperative Milk Market Federation Ltd. req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rates of Central Sales Tax are being gradually phased out, it was a conscious decision of the Government to do away with the exemptions. Concessions, that were being given under the said Act." 3. On the basis of such facts, learned senior counsel Shri K.S.Nanavati for the petitioner vehemently contended that the action of the respondents, not covering the period between 01.04.2006 and 01.08.2006 for exemption, is wholly arbitrary. He submitted that previously partial exemption was granted in public interest. The Government, therefore, had issued notification in exercise of powers under Section 8(5) of the Central Sales Tax Act way back in 1997. This exemption continued right upto 01.04.2007 till it was rescinded by the notification of the even date. Upon representation of the petitioner, such concession was reintroduced vide notification dated 02.08.2006. If there was public interest in granting exemption prior to 01.04.2006 and such public interest was found to be existing from 02.08.2006, upon representation made by the petitioner, it is difficult to appreciate how it can be stated that no such public interest existed in between the said period. The thrust of the argument wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pport withdrawal of that concession. 7. In case of Kishorkumar Prabhudas Tanna and anr Vs. State of Gujarat Through Secretary and ors. reported in 2009 (1) GLR 683 wherein, Division Bench of this Court had held that recession of the concession/exemption notifications cannot be stated to be in public interest only on the ground that such steps were taken in view of introduction of the Gujarat Value Added Tax Act. We may however, notice that said observations were made in the background of the question of applicability of the principles of promissory estoppel which had arisen in the said decision. 8. On the other hand, learned AGP, Ms. Mehta opposed the petitions contending that concession cannot be claimed as a matter of right. The Government had previously granted such concession after due consideration in public interest. However, when the entire tax basis had to undergo material changes, it was necessary to revisit the exemption notifications. Subsequently, representations of the apex body of the milk producing co-operative were taken into consideration and exemption was reintroduced. However, the petitioner cannot insist that the same should be done with the back date. 9. Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted. 11. Short question therefore, is whether the petitioner can insist that such exemption must be provided also for intervening period between 01.04.2006 to 01.04.2008, when there was no exemption granted by the Government. In this context, it would be necessary to examine the petitioner's contention that the withdrawal of the exemption by notification dated 31.03.2006 itself was illegal and invalid. 12. By now it is well settled that the courts recognize considerable latitude in framing fiscal policies in the field of tax collection. In particular, the courts do not interfere especially when the wisdom of certain tax policy is questioned before the Court. The fact that the Government did have the power to grant exemption partial or complete from payment of tax is not in dispute. Equally, by virtue of Section 22 of the General Clauses Act, such power would also include the power to withdraw any exemption already granted, was never doubted. The question therefore is, was such power exercised bona fide and reasonably? If answer to this question is in the affirmative, surely the petitioner cannot claim any vested right in getting exemption from payment of tax. 13. Before us, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge number of exemptions granting total or partial waiver of tax, the logic was to make the tax rates as uniform as possible across the country. In furtherance of such object, individual exemptions granted by the State to various categories of goods were withdrawn. 17. After due consideration and prompted by representations from the apex body of the petitioner co-operative society, if the State Government yielded to the belief that such exemption in the present case was required to be reintroduced, in our opinion that does not imply that the withdrawal of the notification was not in public interest. The Government having bestowed its attention to the relevant facts if found that it would be in public interest to reintroduce such partial exemption, it was open for the Government to do so with effect from a suitable date. In the present case the same was done and from 02.08.2006. Such concession granted or as in the present case reintroduced does not create any vested right in the petitioners to insist that the same should also be done with retrospective effect. 18. If the partial exemption enjoyed by the petitioner was withdrawn mechanically and reintroduced shortly thereafter, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ana and ors. vs. Mahabir Vegetable Oils Pvt. Ltd. (supra) the Apex Court observed as under: "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 free hand 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 no fraud nor lack of bona fide is alleged, much less established. 28. An exemption is nothing but a freedom from an obligation which an assessee is otherwise liable to discharge. In a fiscal statute, an exemption has been held to be a concession granted by the State so that the beneficiaries of such concession are not required to pay the tax or the duty they are otherwise liable to pay under such statute. The beneficiary of a concession has no legally enforceable right against the Government to grant a concession except to enjoy the benefits of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at exemption should be granted only subject to certain conditions it can provide such conditions. Then again if the public interest demands that conditions specified should relate to a stage subsequent to the date of clearance it can do so. The guiding factor is the public interest." 22. We fail to see how the petitioner can bring in the element of promissory estoppel. It is not the case of the petitioner that on the basis of the exemption granted, it altered the position to its disadvantage. It was suggested that the petitioner had not passed on burden of the differential duty for the intervening period. Even if it was so, this can hardly bind the Government into granting the exemption for such period. In any case, the petitioner's stand that the differential duty was not collected from the purchasers due to ignorance of withdrawal of exemption also appears to be one of doubtful proposition. We may recall, soon after the exemption was withdrawn, the Gujarat Co-operative Milk Market Federation Ltd., an apex body of the milk producing co-operatives had, on 10.06.2006, made a detailed representation before the Government to reintroduce the exemption. The stand of the petitioner that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the first time. 26. In case of State of Rajasthan and anr Vs. Mahaveer Oil Industries (1999) 4 SCC 357 (supra), the Apex Court confirmed the decision of the High Court quashing the withdrawal of exemption observing that the Government was unable to support the action on the ground of the public interest by producing any material to support the action and to indicate that the withdrawal of the benefit was in public interest. 27. The decision in case of M/s. Motilal Padampat Sugar Mills Co. Ltd. Vs. State of Uttar Pradesh and others (supra) is of course well known judgement in the field of promissory estoppel. Since we have held that this is not a case where such principle can be applied, we do not find it necessary to discuss the issue any further. 28. In the result, for the reasons stated above, petitions are dismissed. Rule is discharged. I.R. stands vacated. In view of dismissal of main petition, civil application does not survive. The same stands dismissed. 04.03.2013 29. At this stage, learned counsel for the petitioner prayed for extension of interim relief, previously granted in these matters, for a reasonable period to enable them to file further appeal. At his requ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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