SHASHI KANT VOHRA Vs. STATE OF HARYANA

JUDGEMENT

(1.) SINCE common question of law is involved herein, the judgment will dispose of the present writ petition and Civil Writ Petitions Nos. 1026, 1120, 1123, 1244, 1338, 1396, 1553, 2204, 2292, 2794, 2795, 3449, 3480, 3573, 3574, 3580, 3631, 3644, 3681, 3756, 3921, 3924, 3925, 4146, 4213, 4375, 4753, 4987, 5216, 5285, 5513, 6802, 7265, 7524, 10125 and 10335 of 1988 and 1784 and 2708 of 1989 relating to tiny industries and khadi udyog in the State of Haryana. With respect to tiny industries, we will refer to the facts contained in Writ Petition No. 757 of 1988. The petitioners have challenged the validity of Notification dated 30th December, 1987, annexure P1. According to the facts mentioned, the Governor of Haryana, in exercise of his powers under section 13 of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as "the Act"), issued Notification dated 2nd June, 1979, annexure P2, whereby all rural tiny industrial units, set up on or after the date of publication of this notification, whose capital investment on machinery and equipment did not exceed Rs. 1,00,000 were exempted from payment of tax under the Act, subject to their obtaining certificate of genuineness issued by the Industries Department, Haryana, and the exemption was for a period of two years. The grant of this benefit for development of rural industries was given wide publicity through the Government media. It was to promote rural economy and employment opportunities for the ruralists. Influenced by the said policy of grant of incentives in the shape of exemption of taxes, the petitioners installed rural tiny industrial units in village Chandi and Madina in district Rohtak for the manufacture and delinting of cotton seed. On applications made by the petitioner, exemption certificate was issued in their favour in terms of the notification. The petitioners gave the following details of the dates on which they were granted exemption certificates : S. Name of petitioner Date w. e. f. exemption No. certificate granted

(2.) IN case of those units in whose favour the exemption certificates have already been granted by the Assessing Authorities, such exemption certificates shall be deemed to have been modified in accordance with the terms of this notification as if such certificates were issued under this notification. " The turnover of Rs. 5 lacs is attained by the petitioners' units every month, but since the units installed have the capacity of producing 6 tonnes of cotton seeds every day this target is also required to be achieved in order to make the units economically viable, as prescribed by the banks and various institutions, including the Haryana Financial Corporation. The impugned notification, as in force, will give exemption to the petitioners only for one month in a year. The respondent-authorities contested the writ petitions by way of filing written statements. The facts were not disputed, but it was pleaded that there could be no rule of estoppel against a statute and there could be no restriction placed on the powers of the State Government of collect the tax. The exemption was in the form of concession and it could be withdrawn without violating the rule of promissory estoppel. In C. W. P. 3644 of 1988 the petitioners have pleaded that they were khadi and village industries and that they had been exempted from payment of fax for the promotion of the same. This exemption was claimed under Notification dated 10th August, 1973, annexure P2, and the tax exemption was allowed. Under the impugned notification dated 30th December, 1987, the previous notification was superseded and it was provided as follows :

(3.) THE further conditions for availing of the concession were to obtain an exemption certificate; the exemption was for two years and the exemption was on the turnover not exceeding Rs. 5,00,000 in a year. The validity of this notification has been challenged on the basis that the petitioners having acted upon the promise made in annexure P2, the State Government was bound by the rule of promissory estoppel and the period of exemption could not be curtailed, nor could the restriction over the total turnover be fixed. The impugned notification also has retrospective effect and it virtually amounted to withdrawal of all concessions.