TMI Blog1997 (12) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ch should have been sufficient for dismissing the respondent's case based on the doctrine of promissory estoppel. Public interest demanded modification of the earlier I.P.R. Appeal allowed - Civil Appeal No. 3784-3786 of 1988, - - - Dated:- 15-12-1997 - Suhas C. Sen and Sujata V. Manohar, JJ. Vinoo bhagat, Advocate, for the respondents. R.K. Mehta Advocate, for the appellants. [Judgment per : Suhas C. Sen, J.]. - M/s. Shree Durga Oil Mills, respondent herein, was assessed to tax by the Sales Tax Officer for the assessment years 1979-80, 1980-81 and 1981-82 for purchase of groundnut from unregistered dealers. There is no dispute that groundnut was purchased from time to time by the respondents and utilised for manufacturing oil. The assessment orders were challenged by a writ petition on the ground that in view of the Industrial Policy Resolution (I.P.R.) dated 18-7-1979 issued by the Industries Department of the Government of Orissa, sales tax was not payable by a new industry on the purchase of raw material for the period prescribed in the I.P.R. 2.It was contended on behalf of the writ petitioner that it had applied for a licence setting up an industry at Betno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which production had commenced. Both these notifications require that in order to avail this exemption the manufacturer should furnish declarations in Form `D'. 5.The exemptions granted by the two earlier notifications were abrogated by notification dated 20-5-1977. The State Government again restored the earlier two notifications by another notification dated 9-9-1977. However, in that notification dated 9-9-1977, the exemption was limited only to the industries which had started production prior to 1-4-1977. Since the industry set up by the writ petitioner had commenced production on 19-3-1980, it was not eligible for the exemption given by the notification dated 9-9-1977. The case of the respondent in the writ petition was that the I.P.R. was effective for the period 1979-83. The petitioner had set up its industry pursuant to and in terms of this Resolution. Exemption from tax had been granted by the two notifications issued on 11-11-1969 and 23-4-1976. The State Government could not change these notifications to the detriment of the assessee after the assessee had set up its plant and had taken a huge loan from the bank for carrying on its business. A prayer was made to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal cannot be shut out on the preliminary ground that no appeal was preferred against the two earlier two (sic) decisions of the High Court which were followed in the instant case. It is for the Court to decide whether to entertain an appeal or not. In our view, the point of law raised in this case is of general public importance and this appeal cannot be dismissed in limine on the preliminary issue of maintainability. On behalf of the appellant, it has been pointed out that in the High Court itself, there has been a change in the perception of law in this regard. 10.On the merit of the case, it has been contended on behalf of the respondent that the State cannot be allowed to first grant exemption and induce industries to be set up on the basis of the promise held out in its I.P.R. and thereafter back out from the promise after it had been acted upon. Reliance was placed on a decision of this Court in Pournami Oil Mills v. State of Kerala Anr. - 1987 (27) E.L.T. 594 (SC) = (1987) 1 SCR 654 for the proposition that for granting exemption from sales tax an I.P.R. was sufficient by itself. A statutory notification was not necessary to implement that policy. Persons who had acte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he exemptions, it cannot be argued that because the Government had promised to give tax exemption, which was revocable under the statute, the Government cannot resile from its stand however disastrous it may turn out to be for the State's economy. 12.The crux of the matter in this case is whether the Government had made any promise to the respondent and if so, can it depart from the promise made by it in the I.P.R. which was stated to be effective from 1977-1983. 13.There are several reasons why we are unable to uphold the contention based on the principle of promissory estoppel raised by the respondents in this case. No particulars have been given by the respondents as to when the decision was taken to set up the industry, the date when the loan was obtained from the bank, and exactly when land was purchased or the plant and machinery were acquired for setting up of the small scale industrial unit. The I.P.R. on which reliance has been placed by the respondent was issued on 18-7-1979. A provisional registration certificate in respect of the respondent's industry was issued on 28-11-1979. The respondent has not given factual details of how in the short span of about four months ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue a notification granting exemption from sales tax, also empowers the State Government to withdraw, amend or modify any such notification as and when it thinks necessary to do so. Section 6 of the Orissa Sales Tax Act is as under : "6.Tax-free Goods. - The State Government may, by notification, subject to such conditions and exceptions, if any, exempt from tax the sale or purchase of any goods, or class of goods and likewise withdraw any such exemption." 16.When the respondent set up its oil mill and was granted exemption from sales tax, it should have known that the notification granting exemption of tax under Section 6 could be withdrawn at any point of time. Therefore, the case of promissory estoppel is without any basis. There cannot be any estoppel against statute. 17.Moreover, it is well settled that any I.P.R. can be changed if there is an overriding public interest involved. It has been stated on affidavit by the State of Orissa that after a package of incentives was given to the industries, the Government was faced with severe resource crunch. On a review of its financial position, it was felt that for the sake of the economy of the State, it was necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f equity or public interest. In case there is a supervening public equity, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Once public interest was accepted as the superior equity which can override individual equity, the aforesaid principle should be applicable even in cases where a period had been indicated for operation of the promise. In that case, a notification was issued exempting customs duty on PVC. By a second notification the exemption was withdrawn. The Court held that the facts of the case revealed that there was a supervening public interest and the Government was competent to withdraw the first notification without giving any prior notice to the respondent. 23.In the instant case, it has been stated on behalf of the State that various notifications granting sales tax exemptions to the dealers resulted in severe resource crunch. On reconsideration of the financial position, it was decided to limit the scope of the earlier exemption notifications issued under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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