PINE CHEMICALS Vs. ASSESSING AUTHORITY

JUDGEMENT

(1.) PETITIONERS have prayed for the issue of a writ of certiorari besides mandamus to quash the orders of respondent No. 1 assessing it to the sales tax for the period 1979-1984 claiming exemption, inter alia, on the grounds : (i) that the State Government has by issuing Order No. 159-Ind. of 1971 dated 26th March, 1971 and amended by Government Order No. 414-Ind. of 1971 dated 25th August, 1971, manifestly represented that large and medium scale industries will be granted exemption from sales tax both on raw material and finished products for a period of five years from the date the unit goes into production; (ii) that this representation which contains a package of incentives was acted upon by the petitioner in setting up the factory at Bari Brahmana on the land allotted by the State Industrial Development Corporation in terms of the representation; (iii) that the petitioner is exempt from the payment of sales tax in terms of the Government order aforesaid and the orders of assessment impugned in the petition are non est being illegal and invalid in view of the exemption granted under it; (iv) that the respondents are even otherwise estopped from charging sales tax on the doctrine of promissory estoppel though the Government order amounts to grant of exemptions; and (v) that the State Government having provided every other incentive to the petitioner for setting up the unit and in case the order aforesaid is not construed as an exemption from payment of sales tax which, in fact, it is, the State cannot be allowed to resile from the promises it made to the industrialists including the petitioner granting exemption from sales tax both on raw material and finished products. All other averments being based on facts alone were given up at the Bar while arguing the petition and need not be referred to or commented upon in view of the concession.

(2.) CONTROVERTING the averments, the respondents' plea is that the order containing package of incentives relied on by the petitioner is not an order of exemption under section 5 of the Sales Tax Act but was required to be followed by the issue of notification under section 6 of the Sales Tax Act on a consideration and assessment of the facts of each case on merits. It is also denied that the petitioner ever acted upon the representation made by the Government while setting up the factory as would be evident from the contents of various communications addressed by the petitioner to the respondents. Besides the petitioner having collected sales tax on behalf of the respondents, it is pleaded, cannot be allowed to pocket it and was rightly assessed by respondent No. 1 because in the absence of a notification under section 5 of the Sales Tax Act (hereinafter referred to as "the Act"), no exemption could be claimed and even when it could, having charged the sales tax no writ would lie because the burden of sales tax having already passed on to the consumer, grant of such a relief would only enrich the petitioner at the expense of the consumer and it would be inequitable to allow the petitioner to retain the sales tax already charged by it.

(3.) ALTERNATIVELY , his argument is that in case this order is not construed as an exemption from payment of sales tax the State is estopped from realising the same because of the promise held out by it to exempt the prospective industrialists and the petitioner being one such industrialist, cannot be dealt with differently than manifested by the aforesaid Government order because the doctrine of promissory estoppel is clearly attracted; that the 1971 Order containing package of incentives, including exemption from payment of sales tax is a clear representation made by the respondents followed by allotment of land and the petitioner having already set up the factory on such land being made available, has I not only acted on the representation but acted in the manner required by the terms of the 1971 Order and is, therefore, entitled to the exemption claimed.