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TMI Blog1986 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10 of the Kerala General Sales Tax Act, 1963 (15 of 1963) (hereinafter referred to as " the Act ") by which the State Government had restrospectively granted an exemption in respect of the tax payable under section 5 of the said Act by the cashew manufacturers in that State on the purchase turnover of cashew nuts imported from outside India through the Cashew Corporation of India for the period between September 1, 1970, and September 30, 1973, after quashing the subsequent Notification bearing G. 0. Ms. No. 143/73/TD, dated November 9, 1973, issued under section 10(3) of the Act cancelling the abovesaid notification dated October 12, 1973. The appellants and the other persons who had filed the writ petition before the High Court are cashew processors owning and/or working cashew factories wherein nearly about 80 per cent. of the raw nuts processed were being imported during the relevant time from African countries. The import of raw nuts was canalised through the Cashew Corporation of India and they were allotted to the appellants and various other factory owners, who were engaged in the business of processing cashew nuts. It appears that there was delay in making the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said Act as was the case under the open general licence scheme. The then Chairman of the said Corporation, Shri M. C. Sarin, as also its Managing Director, Shri Z. K. Joseph, assured the members of the cashew industry that such purchases would not be exigible to tax under the said Act. In a meeting held on April 25, 1971, where Shri Z. K. Joseph of the said Corporation was also present, the representatives of the industry were assured by the Chief Minister, Shri Achuta Menon, the then Industries Minister, Shri N. E. Bellaram, and the then Revenue Minister, Baby John, that no tax would be levied under the said Act on the turnover of African raw nuts." 11. Subsequently, for three years, the respondents did not initiate assessment proceedings against the allottees like the first petitioner and gave the allottees to believe that no tax would be levied on such purchases, relying upon which the allottees have quoted prices for exports and made huge commitments. If such imports were to be regarded as taxable purchases by the respondents, the allottees, like the first petitioner, would not have made commitments with the foreign buyers. In fact, as late as on October 12, 1973, a notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e criticism about the grant of exemption especially in the context of the grave and difficult financial position of the State. After mature consideration, by notification dated November 9, 1973 (exhibit B), the earlier Government order dated October 12, 1973 (exhibit A), was cancelled. 19. The allottees were not given to believe that no tax would be levied on such purchases .......... .." In the reply affidavit filed on behalf of the appellants, the above allegations made in the counter-affidavit are denied. The allegations in the appeal do not contain any information about who was present at the so-called meeting, what representation was actually made, whether any of the appellants acted on the basis of the said representation and how he was prejudiced thereby. No material in the form of documents in support of their plea that they altered their price structure relying upon the alleged representation was also produced by the appellants. The appellants were owners of existing factories. None of them is shown to have established any new factory relying on the assurances of any of the ministers. They were carrying on the business in their factories already. It is not their case th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toppel. Hence the whole case of promissory estoppel lacks the necessary factual foundation. It is, therefore, unnecessary to consider the question of law whether the plea of promissory estoppel can be raised against a legislation which levies tax and whether an assessee can claim exemption from a tax levied by the Legislature merely on the basis of a representation of minister. We shall now proceed to consider the plea relating to the power of the Government to cancel the notification issued under section 10(1) of the Act. During the relevant period, section 10 of the Act read thus " 10. Power of Government to grant exemption and reduction in rate of tax.The Government may, if they consider it necessary in the public interest, by notification in the Gazette, make an exemption or reduction in rate in respect of any tax payable under this Act: (i) on the sale or purchase of any specified goods or class of goods, at all points or at a specified point or points in the series of sales or purchase by successive dealers, or . (ii) by any specified class of person in regard to the whole or any part of their turnover. (2) Any exemption from tax, or reduction in the rate of tax, notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect. But where no such language is to be found, it has been held by the courts that the person or authority exercising subordinate legislative functions cannot make a rule, regulation or bye-law which can operate with retrospective effect (see Subba Rao J. In Dr. Indramani Pyarelal Gupta v. W. R. Natu [1963] 1 SCR 721-the majority not having expressed any different opinion on the point ; Modi Food Products Ltd. v. Commissioner of Sales Tax [1955] 6 STC 287 (All); AIR 1956 All 35; India Sugars Refineries Ltd. v. State of Mysore, AIR 1960 Mys 326 and General S. Shivdev Singh v. State Punjab [1959] PLR 514 [FB] ". In the instant case, on the date on which the notification was issued, the Kerala Government had no such power under section 10 of the Act as it stood then to issue a notification granting exemption with retrospective effect. Such power was actually conferred on it later on by the Kerala Legislature only by way of amendment in 1980 by the Kerala Act 19 of 1980. Now section 10 of the Act reads thus : " 10. Power of Government to grant exemption and reduction in rate of tax.-(1) The Government may, if they consider it necessary in the public interest by notification in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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