PARSONAL BABULAL Vs. STATE OF U P

JUDGEMENT

(1.) Challenge in this writ petition is to the order dated 30th May/1st June, 1987 (annexure 4) passed by the Joint Director of Industries, Agra Region, Agra, respondent No. 2, whereby the five years period of exemption from payment of sales tax previously granted to the petitioner has been reduced to 3 years. The petitioner No. 1 is a registered partnership firm of which petitioner No. 2 is one of the partners. It is registered as a small-scale industry with the Director of Industries vide registration certificate dated 26th March, 1984 (annexure S.A. 1) and it is noted in the copy of the certificate of registration that the date of commencement of production was 14th March, 1984. It established the new unit and constructed the factory at 11-A/2-A, Ram Nagar Katra Wazir Khan, Hathras Road, Agra, for production of oil and oil-cakes. According to the petitioner, it set up the aforesaid new unit acting on the specific and clear representation by the State Government providing for exemption from payment of sales tax for a period of five years as per terms and conditions contained in Government Notification No. 8244 dated 30th September, 1982 and that its total investment in the project is Rs. 3,09,000 in respect of land, building, plant and machinery. Annexure 1 to the writ petition is a copy of the certificate dated 2nd April, 1984 granted by the General Manager, District Industries Centre, Agra, that the investment of the petitioner is Rs. 3,09,005.22. As the petitioner fulfilled all the requirements for the grant of eligibility certificate for exemption from payment of sales tax under Section 4-A of the U. P. Sales Tax Act, 1948 (hereinafter referred to as "the Act"), the Joint Director of Industries, respondent No. 2, granted the eligibility certificate on 30th April, 1984, annexure 2, and exemption was granted for a period of five years with effect from 12th March, 1984. Subsequently, an objection having been raised, information was sought for from the petitioner as to its investment in the new unit. In this context respondent No. 2 submitted a report on 7th March, 1987, annexure 3, to the Director of Industries to the effect that the petitioner's investment in the new unit was more than Rs. 3 lacs. However, the petitioner was served with the impugned order dated '30th May/1st June, 1987, and informed that its eligibility certificate dated 30th April, 1984, annexure 2, had been modified and the period of exemption reduced from five years to three years on the basis of Government Notification No. 6468 dated 27th August, 1984, as it was found on enquiry that the petitioner's investment in the unit was less than Rs. 3 lacs. Being aggrieved by the aforesaid order the petitioner has moved this Court for issuance of a writ to quash the aforesaid order.

(2.) In the counter filed on behalf of respondent No. 2, it is admitted that the petitioner had originally been granted exemption from payment of sales tax under Section 4-A of the Act for a period of five years under Notification No. 8244 dated 30th September, 1982, but by virtue of Government Notification No. 6468 dated 27th August, 1984, the period of exemption was reduced to three years in respect of units with capital investment not exceeding Rs. 3 lacs in the district Agra, and as on enquiry it was found that the petitioner's investment was less than Rs. 3 lacs, the period of exemption has been reduced to three years.

(3.) The impugned order dated 30th May/1st June, 1987, annexure 4, has been challenged on two grounds. The first is that as the petitioner had established its unit on the specific and clear promise made by the State Government for grant of exemption for a period of five years by virtue of Notification No. 8244 dated 30th September, 1982, on the principle of promissory estoppel it was not open to the State Government to withdraw the exemption subsequently under Notification No. 6468 dated 27th August, 1984. The second ground is that the authorities have wrongly and without any basis arrived at the finding that the petitioner's investment in the unit is less than Rs. 3 lacs.