TMI Blog1986 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... 973, was ineffective. It was also not shown that relying upon the notification during the period between October 12, 1973 and November 9, 1973, the appellants had done any act which attracted the rule of estoppel. The authority which can issue a notification may cancel it also. Section 10(3) of the Act confers such power of cancellation expressly. The State Government did so and cancelled the earlier notification as there was a public hue and cry that the State Government had shown undue favour to the Kerala cashew nut factory owners at a time when the State was passing through grave and difficult financial position. Moreover the transactions in question related to the past period. Hence the appellants are not entitled to any relief either on the principle of promissory estoppel or on the basis of the earlier notification issued under section 10 of the Act. Appeal dismissed. - Civil Appeal No. 1725 of 1977, - - - Dated:- 12-3-1986 - Judge(s) : E. S. VENKATARAMAIAH., M. P. THAKAR JJ. P. Govindan Nair, Senior Advocate (Mrs. A.K. Verma, S. Sukumaran and D.N. Misra, Advocates, with him), for the appellants. T.S. Krishnamurthy Iyer, Senior Advocate (Karunakaran Nambiar an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in the writ petition for the purposes of this case since the only point urged before us relates to the right of the appellants to secure the exemption as stated in the notification dated October 12, 1973, by virtue of the rule of promissory estoppel. The appellants urged two contentions before the High Court in support of their plea: (i) that the Government was precluded by the rule of promissory estoppel from claiming the purchase tax in respect of cashew nuts imported from African countries, and (ii) that the exemption that had been granted on October 12, 1973, could not be withdrawn by the subsequent notification issued on November 9, 1973. In support of the first limb of their argument, the appellants depended upon the representation which was alleged to have been made on behalf of the Government by the Chief Minister, the Industries Minister and the Revenue Minister at a meeting held on April 25, 1971, and in support of their second contention, they depended upon section 10 of the Act. The Government contested the case of the appellants on both these points. The High Court upheld the case of the State Government and rejected the said contentions. It, however, directed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'B'withdrawing the said exemption." In the counter-affidavit filed on behalf of the State Government, it is stated in paragraphs 18 and 19 thus: " 18. The averments in para. 11 are denied. The Cashew Corporation of India wrote to the Government by memorandum dated May 3, 1971, that cashew industry may be exempted from payment of tax under the Kerala General Sales Tax Act on their purchases of imported raw cashew nuts. The Ministry of Foreign Trade also addressed a communication to the State Government dated March 4, 1972, that the matter may be sympathetically considered. The cashew manufacturers and exporters' associations also moved the Government in this behalf by memorandum dated March 6, 1972. The Government directed the Board of Revenue (Taxes) to submit a report in this matter. The matter was engaging the attention of the Board of Revenue and the State Government for some time. In view of very heavy stakes involved in the matter, the Government had to analyse the entire situation, especially with reference to the very high amount of the revenue involved. It was reported that the grant of exemption will involve loss of revenue of at least one crore of rupees per annum. Af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... davit on behalf of the appellants also does not say that he was present at the meeting or that he had any personal knowledge about what transpired at the meeting. He does not give any material details about what actually transpired there. In cases of this nature, the evidence of representation should be clear and unambiguous. It " must be certain to every intent ". The statements that are made by ministers at such meetings, such as, " let us see we shall consider the question of granting of exemption sympathetically ", " we shall get the matter examined ", It you have a good case for exemption " etc., even if true, cannot form the basis for a plea of estoppel. Moreover, the events that have taken place subsequently belie the fact of any such promise by the ministers. It is seen that the Cashew Corporation of India had made a representation to the Government of India on May 7, 1971, and the Government of India wrote to the State Government on March 4, 1972, urging that the exemption prayed for by the cashew manufacturers may be favourably considered by the Government of Kerala. The Government of Kerala, however, rejected the said request. Then on further pressure being put upon it, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he liability to pay sales tax arose at the point of time when the purchases were made. The power of exemption in the instant case was exercised through a retrospective notification which was a piece of subordinate legislation. It has been held by this court that an authority which has the power to make subordinate legislation cannot make it with retrospective effect unless it is so authorised by the Legislature which has conferred that power on it. The law on the above point is neatly summarised in ITO v. M. C. Ponnoose [1970] 75 ITR 174 (SC); [1970] 1 SCR 678 at page 177 of ITR thus : " Now it is open to a sovereign Legislature to enact laws which have retrospective operation. Even when Parliament enacts retrospective laws, such laws are in the words of Willes J. in Phillips v. Eyre [1870] 40 Law J. Rep. (N.S.) QB 28 at p. 37 ' ...no doubt prima facie of questionable policy and contrary to the general principle that legislation by which the conduct of mankind is to be regulated ought, when introduced for the first time, to deal with future acts, and ought not to change the character of past transactions carried on upon the faith of the then existing law.' The courts will not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le State or to any specified area or areas therein, (b) may be subject to such restrictions and conditions as may be specified in the notification. (3) The Government may, by notification in the Gazette, cancel or vary any notification issued under sub-section (1). " (emphasis added) By the addition of the words " either prospectively or retrospectively by the aforesaid amendment, the State Legislature has now conferred the necessary power on the State Government to grant exemption with retrospective effect. This amendment also suggests that earlier the Government had no such power to grant exemption with retrospective effect. Hence the impugned notification which granted exemption on October 12, 1973, for the earlier period between September 1, 1970, and September 30, 1973, was ineffective. It was also not shown that relying upon the notification during the period between October 12, 1973 and November 9, 1973, the appellants had done any act which attracted the rule of estoppel. The authority which can issue a notification may cancel it also. Section 10(3) of the Act confers such power of cancellation expressly. The State Government did so and cancelled the earlier notific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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