G.S. Singhvi, J.
1. Whether the petitioners are entitled to avail the benefit of special sales tax incentives including deferment of the payment of sales tax announced by the State Government in the form of press note annexure P1 issued by the Industries Department, Government of Haryana is the main question which arises for determination in these petitions filed for quashing notices issued to the petitioners by the concerned assessing authorities.
2. For the sake of reference, I may refer to the pleadings of C.W.P. No. 3581 of 1984 in detail and briefly notice the averments made in other petitions.
C.W.P. No. 3581 of 1984 :
3. Petitioner-M/s. Mangla Rice and General Mills, Pillu Khera Mandi, District Jind, is a registered partnership firm. It started business with effect from January 12, 1983. This date has been taken from para 2 of affidavit annexure A dated May 23, 1983 filed by Shri Ram Niwas Mangla, son of Banarsi Das, resident of Pillu Khera one of the partners of the firm. In April and May, 1983, the petitioner purchases goods worth Rs. 1,20,000 (approximately), However, it did not file return as required by the provisions of the Haryana General Sales Tax Act, 1973 (for short, 'the Act') read with the Haryana General Sales Tax Rules, 1975 (for short, 'the Rules'). This led to the issuance of notices dated May 7, 1984 and May 10, 1984 by deputy Excise and Taxation Commissioner-cum-Assessing Authority, Jind. On receipt of the two notices, the petitioners partner submitted representation annexure P2 dated May 21, 1984 to justify non-filing of return and payment of tax by claiming that it was entitled to the benefit of policy announcement made by the Industries Department of the Government of Haryana for deferment of payment of purchase/ sales tax for a period of five years. The assessing authority rejected the representation of the petitioner and issued notice annexure P3 dated June 4, 1984 requiring it to deposit the amount of tax due with a stipulation that failure to do so would lead to initiation of proceedings under Section 47 of the Act. He also issued show cause notice annexure P4 dated July 11, 1984 proposing levy of penalty on account of non-payment of tax. This prompted the petitioner to invoke the jurisdiction of this Court under article 226 of the Constitution of India for quashing notices dated June 4, 1984 and July 11, 1984. The plea of the petitioner is that in view of the policy decision taken by the State Government to give special sales tax incentives including deferment of sales/purchase tax, the impugned notices are liable to be quashed. The further case of the petitioner is that the impugned notices are violative of its fundamental rights guaranteed under articles 14 and 19(1)(g).
4. The case set up by the respondents is that the package of incentives announced by the Industries department of the State Government cannot be made basis for granting benefit of sales tax deferment to the petitioner because no corresponding amendment was made in the Act and the Rules. According to them, in the absence of appropriate amendment in the Act and the Rules, the assessing authority was bound to make assessment in accordance with the relevant provisions. The respondents have averred that Section 25A was added by Haryana Act, No. 11 of 1984 (the same was published in Haryana Gazette dated April 18, 1984) empowering the State Government to defer the payment of tax by specified class of industries either prospectively or retrospectively, but the petitioner can not get the benefit of that section because the Rules had not been amended to provide for deferment of the payment of sales tax.
C.W.P. No. 520 of 1985 :
5. In this petition, the petitioner has averred that it had set up the unit keeping in view the sales tax incentives promised by the Government and, therefore, the respondents are estopped from initiating proceedings for levy and recovery of sales tax.
6. In the written statement, the respondents have averred that the petitioner had applied for registration under the Act and the Central Sales Tax Act, 1956 on August 3, 1983 and the certificates were issued on September 20, 1983 making it liable to pay tax, w.e.f. August 1, 1983. They have further averred that the petitioner cannot claim benefit of incentives announced by the industries department because the so-called promise was not translated into reality by making appropriate amendment in the Act and the Rules. The other pleas raised in the written statement are similar to those contained in the written statement filed in C.W.P. No. 3581 of 1984.
C.W.P. No. 1319 of 1985 :
7. Petitioner M/s. Jagdamba Rice and General Mills has referred to the clause relating to special sales tax incentives enshrined in the package of incentives announced by the State Government and averred that the action initiated by the assessing authority for levy of tax is per se illegal and violative of its fundamental right guaranteed under article 19(1)(g) of the Constitution of India. In paragraphs 10 to 12, the petitioner has made the following averments to show that it has set up the industry with a view to avail the sales tax incentives and that its unit had come into production on November 1, 1983 :-
'10. That the petitioner-Mill came into production on November 1, 1983.
11. That the petitioner has spent huge amount in commissioning the project and the total investment of the petitioner towards the fixed assets is nearly 11 lakhs rupees.
12. That the petitioner planned his operation and working of the Mill for whole of the season. On the estimated basis, the petitioner prepared financial scheme regarding the quantity of paddy to be purchased, supplies of rice to the Food and Supplies Department under levy scheme, return of money and the instalment with interest to Haryana Financial Corporation, etc., was planned keeping in view one most important factor that 'the petitioners liability to pay taxes has been deferred for 5 years' and, therefore, he did not calculate this amount paid to be Government, a Government had made an express assurance and written representation in the form of incentives to give motivation to the citizens, like the petitioner, to do their best and make every effort to add to industry and help the industrial growth of the State.'
8. The respondents have not controverted the factual averments contained in the writ petition, but have pleaded that the petitioner is liable to pay purchase tax to the turn of Rs. 1,91,581 and it cannot claim deferment because the policy announced by the industries department of the State Government was not given statutory status by amending the provisions of the Act and the Rules.
C.W.P. Nos. 1318 and 1320 of 1985 :
9. The pleadings of the parties in these petitions are identical to those of C.W.P. No. 1319 of 1985.
C.W.P. No. 3894 of 1985 :
10. Petitioner, M/s. Sinhtron Electronics Panchkula, has averred that it has set up the unit keeping in view the incentives offered by the Haryana Government and, therefore, the respondents are estopped from realising the tax.
11. In their written statement. The respondents have averred that the petitioner was granted registration certification on January 24, 1983 making it liable to pay tax and, therefore, it cannot claim deferment of sales tax on the basis of the package of Incentives announced by the Industries Department.
12. Shri S.K. Pruthi, counsel appearing for the petitioners in C.W.P. Nos. 1319 and 1320 of 1985 invited my attention to the averments contained in paragraphs 10, 11 and 12 of the two petitions to show that his clients had set up industrial units with a view to avail special sales tax incentives specified in the policy announced by the Industries Department of the Government of Haryana and, therefore, the respondents cannot levy and recover tax by invoking provisions of the Act and the Rules. He submitted that after having induced the petitioners to set up their units by holding out a promise to give incentives in terms of para 3 of annexure P1, the respondents cannot compel them to pay tax or initiate proceedings of recovery thereof. Shri pruthi further argued that even though Section 25A was added to the Act in April, 1984, the respondents should be held bound by the promise made to the prospective entrepreneurs to give incentives in terms of the policy contained in annexure P1.
13. Shri Jaswant Singh, Senior Deputy Advocate General argued that the policy announcement made by the industries department cannot be construed as a binding promise made by the State Government to the prospective industries to give relief by way of deferment of the payment of sales tax because there was no provision in the Act under which the payment of sales tax could be deferred. He pointed out that Section 25A was added in the Act vide Gazette dated April 18, 1984, but corresponding provisions were made in the Rules by adding rules 17-A to 17-R vide notification dated May 9, 1986 and argued that the petitioners cannot seek a writ of mandamus directing the respondents to defer the collection of sales tax for a period of five years, w.e.f. November 1, 1983 because the amendments made in the Act and the Rule are not retrospective. He further argued that the package of Incentives contained in annexure P1 cannot be made basis for compelling the State Government not to enforce the provisions of the Act and the Rules. Shri Jaswant Singh then submitted that the promise, if any, made by the industries department of the State Government cannot be enforced against the respondents because that would result in compelling them to act in violation of the statutory provisions contained in the Act and the Rules. In the end, he submitted that most of the petitioners had set up their units before November 1, 1983 and, therefore, they cannot claim benefit of the package of Incentives announced by the Government.
14. I have thoughtfully considered the respective arguments. Section 25A which, as mentioned above, was added by Act No. 11 of 1984 (published in the Gazette dated April 18, 1984 reads as under :
'Notwithstanding anything to the contrary contained in this Act, the State Government, if satisfied that it is necessary and expedient so to do in the interest of industrial development of the State, may defer the payment of tax by such class of industries, for such period, either prospectively or retrospectively, and subject to such conditions, as may be prescribed.'
15. A reading of the above quoted provision shows that in April, 1984 the Legislature had, for the first time, clothed the State Government with the power to defer the payment of sales tax by any class of industries prospectively or retrospectively for the period to be determined by it and subject to the prescribed conditions. It is not the case of the petitioners that after April 18, 1984, the State Government had issued any order or notification to defer the payment of sales tax by the class of industries to which they belong. Rather, it is an undisputed position that Rules 17-A to 17-R were inserted in the Rules vide notification dated May 9, 1986 entitling the industries to apply for deferment of sales tax. Therefore, the petitioners cannot seek a direction for compelling the respondents to defer payment of sales tax/purchase tax payable by them in accordance with the provisions of the Act. Even after May 9, 1986, they could claim the benefit of deferment only by making appropriate application under the relevant rules. However, as the petitioners have not placed any material before the Court to show that they had applied for grant of benefit of deferment of sales tax after coming into force of Rules 17-A to 17-R, the court cannot issue any direction in that respect.
16. I am further of the view that in the absence of proper legislative measure in the form of amendment of the Act, the Government could not have given benefit of sales tax deferment to the petitioners and the court cannot command the respondents to withhold the recovery of the sales tax in accordance with the provisions of the Act.
17. The plea of estoppel raised by the petitioners deserves to be rejected because they have not placed any material on record to substantiate the assertion that they had set up their units keeping in view the promise made by the State Government to give incentives including the one by way of deferment of the payment of sales tax. The bald averments contained in the writ petitions are too vague to be relied upon for recording a finding that they were allured by the incentives specified in annexure P1 and had set up units only on the account. That apart, I am firmly of the view that no amount of promise made by the executive authorities of the Government to give benefit in the matter of exemption from or deferment of payment of sales tax to the petitioners in violation of the statutory provisions can be enforced by issuing a writ under article 226 of the Constitution of India.
18. In Kasinka Trading v. Union of India AIR 1995 SC 874, a two Judges Bench of the Apex Court declined to invoke the doctrine of promissory estoppel to sustain the claim of the petitioner for continued grant of exemption from the payment of customs duty. The appellant relied on notification dated March 15, 1979 issued by the Central Government granting exemption from payment of custom duty on polyvinyl chloride resin for a period of two years. However, before the expiry of the time specified in the first notification the Government issued withdrawal notification dated October 16, 1980. The appellant claimed that the Government could not withdraw the notification because it had placed orders for import of PVC resin on the understanding that it was totally exempt from custom duty. Their Lordships of the Supreme Court reiterated the principles laid down in earlier decisions and held as under :
'The supersession or revocation of an exemption notification, in the 'public interest', is an exercise of the statutory power of the State under the law itself as is obvious from the language of Section 25 of the Act. Under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. From the very nature of power of exemption granted to the Government under Section 25 of the Act, it follows that the same is with a view to enabling the Government to regulate, control and promote the industries and industrial production in the country. Notification No. 66 of 1979 in our opinion, was not designed or issued to induce the appellants to import PVC resin. Admittedly, the said notification was not even intended as an incentive for import. The notification on the plain language of it was conceived and issued on the Central Government 'being satisfied that it is necessary in the public interest so to do'. Strictly speaking, therefore, the notification cannot be said to have extended any 'representation' much less a 'promise' to a party getting the benefit of it to enable it to invoke the doctrine of promissory estoppel against the State. It would bear repetition that in order to invoke the doctrine of promissory estoppel, it is necessary that the promise which is sought to be enforced must be shown to be an unequivocal promise to the other party intended to create a legal relationship and that it was acted upon as such by the party to whom the same was made. A notification issued under Section 25 of the Act cannot be said to be holding out of any such unequivocal promise by the Government which was intended to created any legal relationship between the Government and the party drawing benefit flowing from the said notification. It is, therefore, futile to contend that even if the public interest so demanded and the Central Government was satisfied that the exemption did not require to be extended any further, it could still not withdraw the exemption.
19. By applying the ratio of the aforementioned decision of the Supreme Court to the facts of these cases, I hold that the petitioners have failed to make out a case for invoking the doctrine of promissory estoppel.
20. For the reasons mentioned above, the writ petitions are dismissed.