PINE CHEMICALS LIMITED K C VANASPATI KASHMIR VANASPATI LIMITED Vs. ASSESSING AUTHORITY:STATE OF JAMMU AND KASHMIR:STATE OF JAMMU AND KASHMIR

JUDGEMENT

(1.) Civil no. 2309 of 1989 arises out of an order made by the High court of Jammu and Kashmir in Writ Petition No. 87 of 1981 dismissing the writ petition filed by M/s Pine Chemicals Ltd. , which is a public limited company manufacturing rosin, turpentine and rosin derivatives and carrying on business at Bari Brahmana, Jammu Tawi. The appellants had prayed in the writ petition for quashing the order of assessment dated 20/01/1981 made by the Assessing Authority, Incharge Sales Tax Circle, Jammu under the central Sales Tax Act, 1956 for the year ending 30/06/1980 and the penalty order made on 2/02/1981 under S. loofthe central Sales Tax Act in respect of the same period. They had also prayed for a declaration that they are entitled to exemption from payment of tax under the central Sales Tax Act and the Jammu and Kashmir General Sales Tax Act, 1962, on the finished goods produced by them for a period of five years com- mencing from 8/11/1979, when the Company went into commercial production. This main relief had been prayed for on the grounds that the appellants were exempt from payment of sales tax in terms of the government Order No. 159-lnd. dated 26/03/1971 as amended by government Order No. 414-lnd. dated 25/08/1971 read with Section 8 (2-A) of the central Sales Tax Act. Their further case was that the government represented and announced a package of incentives for large and medium scale industries including grant of exemption from sales tax both on the raw materials purchased by the industries and the sale of their finished products, that acting upon such representations and assurances, appellants set up their factory at Bari Brahmana on the land allotted by the State Industrial Development Corporation and that therefore the government is estopped from charging sales tax on the doctrine of promissory estoppel. The High court was of the view that the two government orders referred to above were only declarations of anintention to exempt from payment of sales tax and that they are not exemption notifications under S. 5 of the General Sales Tax Act. The High court was also of the view that the appellants have failed to prove the necessary factual foundation for invoking the principle of promissory estoppel and that, therefore, they are not entitled to any relief under that doctrine. In that view the writ petition was dismissed.

(2.) It may be mentioned that civil no. 2310 of 1986 is against an order made in a Civil Misc. Petition No. 2519 of 1988 which was also dismissed on 23/09/1988 along with the writ petition. This miscellaneous petition was filed after the judgment in the writ petition was reserved for permission to file reply affidavit on the ground that the assessment files produced at the time of hearing contained certain documents needing certain explanation by the appellants. Both on the ground that it was belated and on the ground that the judgment in the writ petition was delivered only relying on the materials placed on record and therefore there was no need for giving an opportunity to the writ petitioners to file a reply statement, the learned Judges dismissed this miscellaneous petition also.

(3.) Civil Appeals 3140-50 of 1989 have been filed by M/s K. C. Vanaspati, a firm of partnership manufacturing vanaspati ghee at Bari Brahmana, Jammu Tawi. They filed Writ Petition No. 52 of 1982 praying to quash a sales tax assessment order dated 16/01/1982 assessing them to sales tax for the period from 2/09/1981 till the end of the month under the Jammu and Kashmir General Sales Tax Act. They also prayed for a mandamus directing the government and the Assessing Officer not to assess them to sales tax or recover any amount on account of sales tax from them for a period of five years from 2/09/1981 when their industry started commercial production. This relief was prayed again on the ground that government Order 159-Ind. dated 26/03/1971 as amended by Government Order 414-Ind. dated 25/08/1971 exempted the sales of their finished product of vanaspati ghee from sales tax and also on the ground that in any case the government is estopped from collecting tax on the principle of promissory estoppel. When this writ petition was pending an assessment order was made on 14/11/1984 for the assessment year ending 30/09/1982 including the period September 2 to September 30, 1981 which was the subject matter of the earlier assessment order and which was questioned in Writ Petition No. 52 of 1982. The validity of this assessment order was the subject matter of Writ Petition No. 822 of 1984 filed by the appellants. The relief prayed for and the grounds on which the relief prayed for were almost identical as that in Writ Petition No. 52 of 1982 except that on the question of promissory estoppel, more detailedfacts were mentioned in this writ petition. The respondents filed their counter-affidavits contending that the said government orders were not exemption orders under S. 5 of the General Sales Tax Act and that there is no factual foundation for the plea of promissory estoppel. Since we will be dealing with contentions in detail at the appropriate place we are not setting out contentions of the petitioners and the replies of the government in the writ petitions in detail. During the pendency of the writ petitions certain other government orders came to be passed and certain assessment orders for the subsequent periods were also sought to be made and questioning these actions M/s K. C. Vanaspati filed Writ Petition No. 711 of 1987 for a writ of prohibition restraining the Assessment Officer and the government from recovering any sales tax at any point of sale in the series of sales in respect of vanaspati ghee manufactured by them for a period of 10 years from 2/09/1981 when their factory went into commercial production and also for a declaration that SRO 448 dated 22/10/1982 issued by the government of Jammu and Kashmir (which will be referred to later) was illegal and unconstitutional. They had also prayed for a mandamus directing the respondents to refund the sales tax already recovered from them with interest and damages. In this writ petition also they contended that Government Order No. 159-Ind. dated 26/03/1971 and government Order 414-Ind. dated 25/08/1971 were exemption orders referable to S. 5 of the General Sales Tax Act. They have also referred elaborately to the representations, declarations and promises of the government in support of the plea of promissory estoppel. The respondents had filed a counter-affidavit refuting these contentions of the appellants. The High court dismissed all these three writ petitions by a common order dated 22/02/1989. civil nos. 3148-50 of 1989 have been filed against this common order.