KASHMIR VANASPATI PVT LTD Vs. STATE OF J&K

JUDGEMENT

(1.) ESSENTIALLY , it is the doctrine of promissory estoppel which is pressed into aid by the petitioners for seeking exemption from pay ­ment of sales tax under the Jammu & Kashmir General sales Tax Act, 1962. The circumstances giving rise to the filing of the petition in brief are as under :

(2.) IN an affort to strengthen the industrial base of the State, the. Government of Jammu & Kashmir came out with Govt. Order No. 129 -Ind of 1971 dated 26 -3 -1971 as amended by Govt. Order No. 414 -Ind of 1971 dated 25 -8 -1971, sanctioning grant of some "incentives and facilities" for promoting industrial development. The package of incentives and facilities, inter alia, provided for grant of exemption from payment of sales tax to the large and medium scale industries -set up in the state, both on the raw material procured and their finis ­hed products for a period of five years from the date such units go into production. Petitioners case is that the promise to sanction grant of package of incentives and facilities by the State Government were given wide publicity by the Directorate of Industries and Commerce in the leaflet dated 23 -12 -1975 titled "MAKING JAMMU & KASHMIR FOR BEA ­UTIFUL VENTURE" and two others with the title reading "THE STATE MARCHES TOWARDS INDUSTRIAL DEVELOPMENT" published on 6 -3 -1978 and 7 -9 -1978 respectively and that the represen ­tations and promise contained in these publications were reiterated to a gathering of industrialists by the then Chief Minister in Bombay and Delhi on 22 -12 -1975 and 18 -1 -1976 respectively. That even in his budget speach, the then Finance Minister referred to the proposal for granting certain concessions, including exemption from payment of sales -tax.

(3.) THAT encouraged and induced by the incentives promised by the Government, the petitioner company was incorporated in January 1979 mainly with an object to set up a vanaspati manufacturing unit at Jammu, for which as per the promised incentives and facilities, land was allotted to the petitioners by the states Industrial Development Corporation in March 1979, after it had approved the project report submitted by the petitioners to set up a vanaspati manufacturing med ­ium scale unit in Jammu, factory was thereafter built by the petitioners after making huge investments and the unit went into com ­mercial production in January, 1982. The petitioners submitted the first quarterly sales tax return in April 1982, claiming exemption as promised and plea was repeated in the subsequent returns for July and October, 1982. It is averred by the petitioners that but for the promises held out in the publications, speeches and the Government Order referred to above, they would not have set up their manufa ­cturing unit after making huge investments and altering their position. That approval of the project report and allotment of land was a proof of the reiteration of the promise by the State Government to act as per the Govt. Order referred to above.