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TMI Blog1986 (11) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ory Estoppel? 2. In order to achieve dispersal of industries to rural areas and to provide fillip to accelerate development of industries the Government of Gujarat ('Government' in short) issued a Notification on 29-4-1970 in exercise of its powers under Section 49(2) of the Act exempting wholly or partly from payment of sales tax or purchase tax, as the case may be, certain specified classes of sales and purchases described in the entries 4 at Serial Nos. 1 to 52 in the Schedule. The said Notification was subsequently amended by another Notification dated 11-11-1970 and a new Entry, Entry No. 53, was added in the Schedule below Entry at Serial No. 52. The new entry consisted of two parts, one part giving exemption from purchase tax and the other, from sales tax. The Notification provided that subject to the conditions specified therein a manufacturer who establishes a new industry would be given exemption of "the whole of purchase tax under Section 15 of the Act" in respect of "purchase of raw materials, processing materials, machinery or packing materials from a person who is not a registered dealer". It was similarly provided that subject to the conditions prescribed in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending the Explanation contained in the Notification dated November 11, 1970. The amendment provided inter alia that "new industry" shall not include "any of the industries, whether so commissioned or not, mentioned in the table appended hereto". The table set out some 14 industries of which the twelfth was "decorticating, expelling, crushing, roasting, parching, frying of oilseeds and colouring, decolouring and scenting of oil". It would appear that the effect of the exemption was reviewed by the Government and on such reconsideration "the Government was satisfied that certain industries and the oil industries in particular were sufficiently dispersed in rural areas, in respect of which the existing capacity of the existing industries was also more than adequate" and "the Government reached the conclusion that certain industries required to be excluded from the purview of the Act". As the oil mill commissioned by the appellants fell within the denotified industries the appellants obtained the leave of the court and amended their petition suitably in order to contend that the Notification dated July 17, 1971 would have no effect on the eligibility already acquired by them to claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax exemption for the full period of claim. 7. Elaborating the first two contentions Mr. Desai argued that the Government by virtue of the first and second Notifications had irretrievably committed itself to grant exemption from payment of sales tax and purchase tax to the notified industries commissioned at any time after 1-4-1970 and before 31-3-1975 at places beyond the prescribed distances. from the Municipal limits of the cities named in the Notification. In as much as the appellants had established their oil mill at a place more than 24 kilometers away from the Municipal limits of Ahmedabad City and had commissioned the plant on 17-5-1970. Mr. Desai argued that the appellants had acquired a vested right of exemption and it was not, therefore, open to the Government under law to nullify the exemption by issuing the Notification dated 17-7-1971 in exercise of its delegated powers. 8. The merit of these contentions has to be determined with reference to the date to commissioning of the appellants oil mill as well as the dates of the Notifications and their contents. Admittedly, the appellant's oil mill was commissioned on 17-5-1970 and, therefore, it follows that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under no obligation, in any manner known to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent Notification. This is an additional factor militating against the contentions of the appellants. 10. Much of the arguments of the appellants' counsel proceeded on the assumption that the appellants had acquired a vested right under the Notification issued by the Government on 11-11-1970 to claim exemption from payment of sales tax for a period of five years and consequently the Government had no right to take away the appellants' vested right. The contentions are untenable because of the fallacy contained in them viz. the wrong assumption that the appellants had acquired a vested right. The High Court has rightly repelled the plea that the appellants had acquired a vested right and were, therefore, entitled to claim exemption from payment of tax for a period of five years not withstanding the revocation of the exemption under the Notification dated 17-7-1971. The High Court has further taken the view that the earlier Notifications granting exemption of tax only created existing rights and such existing rights can always be withd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. In order to claim the benefit of Promissory Estoppel the appellants must establish:- (i) that a representation was made to grant the exemption for a particular period to a new industry established in view of the representation held out by the State Government; and (ii) that the appellants had established the new industry acting upon the representation made by the State Government. The facts in the present case do not go to establish that the appellants had put up the new industry in question subsequent to and in pursuance of the promise held out by Notification dated 29-4-1970 granting exemption. Putting it differently the appellants have not proved that but for the concession offered in the first Notification, they would not have established the industry in question and that the entire venture was attributable only to the inducement offered by the Government. From the facts set out supra it may be seen that the first Notification was made on 29-4-1970 while the oil mill constructed by the appellants came to be commissioned on 17-5-1970 itself. It is not the appellants' case and indeed it can never be so contended that they launched the project and commenced the constructio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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