AMARJIT SINGH Vs. STATE

JUDGEMENT

(1.) THE seminal issue involved in this petition is whether the petitioner was entitled to exemption from the sales tax. The petitioner is an engineering graduate. He says that he was allured by various incentives offered by the Government and proceeded to establish a Small Scale Unit -M/s Titanic Industries for manufacturing Storage Batteries. His unit was provisionally registered by the Industries Department on 21 -9 -1977 and was thereafter formally registered on 19 -4 -1980. It went into production on 20 -2 -1980. The petitioner is resisting the recovery of Sales Tax charged from him through various assessment orders passed by the concerned assessing authority. He believes that he is not liable to pay the Sale Tax, because of the alleged exemption granted by the Government and accordingly prays for quashment of the assessment order passed against him and also for a direction to the respondentâ„¢s No. 1 to 3 to incorporate the industrial units of his type in the exemption list.

(2.) THE petitioners case is that the Government had the power to grant exemption on payment of Tax to any class or dealers on any goods or class or distribution of goods under section 5 of the J&K General Sales Tax Act 1962. Pursuant thereto it passed Govt. Order No. 391 -Ind of 1972 dated 21 -6 -72 offering incentive to the excisting and new small scale units established by entrepreneurs including technocrats and unemployed graduates, and allegedly granted them exemption on payment of Sales Tax for five years from the date of production. Thereafter it passed SROs No. 387 of 1972, 308 of 1974.267 of 1978, 391 of 1972 and 671 of 1979. He further claims that the units engaged in the manufacture of Storage Batteries figured in the exception list of these notifications except SRO No. 671 of 1979 which deleted Storage Batteries from the list. It is accordingly made out that he had set up his unit on the promises extended to him by the Govt. for exemption of Sales Tax as contained in the afore -said SROs except SRO No. 671/79 and had altered his position to his detrament by making investment in the unit. He consequently invokes the doctrine of promissory estoppel and wants the Govt. to exempt him from payment of Sales Tax. He also assails the deletion of Storage Batteries from the exemption list from SRO No. 671/79 and challenges this action as arbitrary and discriminatory and seeks direction to the Govt. to include the manufacture of Storage Batteries in the exemption list of SROS providing for exemption from payment of Sales Tax to certain Industrial Units.

(3.) IN the objections filed by the respondents it is contended that the Govt. is competent to grant exemption from the payment of Sales Tax only through a notification issued under section 5 of the J&K General Sales Tax Act and that since Govt. Order No. 391 -Ind of 1972 dated 21 -6 -1972 on which the petitioner basis his case had not been passed in exercise of the powers under the afore -said section and as such it could not be treated as an order to grant exemption from Sales Tax and was of no help to the petitioner. Nor could the petitioner claim or seek any benefit of SROs No. 387 of 1972, 787 of 1972, 391 of 1972, 308 of 1974 and 267 of 1978, as these notifications were issued and passed prior to the coming into existence of the petitioners Unit. It is pointed out that when the Unit was set up, SRO No 671 of 1971 was in force but this did not exempt the units manufacturing ËœStorage Batteries from payment of Sales Tax and therefore, the petitioner could not claim any benefit from this SRO, nor could he assail the deletion of Storage Batteries from the exemption list of this SRO as the granting of exemption was a policy decision of the Govt. which had the power and prerogative to allow or disallow the exemption. It is denied that any promise was ever extended to the petitioner relating to such exemption or that the deletion of Storage Batteries from the exemption list was arbitrary or discriminatory in any manner or violative of Articles 14 & 16 of the Constitution