Mazhar Ali Shah, J.
1. By the abovesaid petitions under Article 226 of the Constitution of India read with Section 103 of the Constitution of Jammu and Kashmir, the petitioners herein, who were three in number have challenged the SRO Notification No. 118 dated 31st March, 1984 in so far as the same supersedes SRO No. 671 dated 18th December, 1979 regarding withdrawal of the exemption from payment of general sales tax on the goods manufactured and sold by the petitioners. With a further prayer for issuance of a writ in the nature of prohibition restraining the respondents from recovering any sales tax on the sales of goods manufactured by the petitioners in their small-scale industrial units situated in Jammu. All the abovesaid three writ petitions involve similar questions in controversy and hence all the three petitions are heard together, which are hereby disposed of by a single judgment.
2. The petitioner by this petition submits that the .petitioner is a partnership concern in the State of Jammu and Kashmir. The State of Jammu and Kashmir, to encourage, allure and attract entrepreneurs from within and outside the State of Jammu and Kashmir to set up industrial units in the State, took a decision as early as in 1971 to grant various incentives including exemption from tax as leviable on the raw material and finished goods of such units. The first of such orders is No. 276 of 1972 issued on 11th April, 1972. By this order, besides other things assured to such entrepreneurs, exemption from the State sales tax and levy of additional toll tax for the initial period of five years from the date the unit goes in production was also ensured. Vide Government SRO No. 267 dated 15th May, 1978 the incentives announced for small-scale manufacturing units was further extended even to the existing and new small-scale industries established or to be established in the State. Vide Government Order No. 391-Ind of 1972 announced the package of incentives in the nature of grant of land, financial assistance, exemption from payment of toll tax and sales tax on import of raw material and sale of finished goods for a period of five years from the date the unit goes into production issued on 21st June, 1972. The order is issued under the authority of the Government of Jammu and Kashmir, which is annexed as annexure P-1 with the petition. Subsequent to that the Industries Department of the Government published pamphlets on 6th March, 1978 and 9th September, 1978 granting exemption from sales tax and toll tax for a period of ten years.
3. The petitioner further alleges that by virtue of the representations, promises and commitments made by the Government and by virtue of the orders referred to above and repeated from time to time regarding various incentives by the Chief Minister and the Industries Minister on various occasions in the meeting with the industrialists and entrepreneurs, the petitioners were encouraged and allured by the said promises particularly the exemption from the payment of sales tax on the finished goods. The petitioners prepared a scheme/project report for setting up a small-scale industrial unit at warehouse for grinding of spices, the feasibility of the scheme was examined by the Industries Department of the State and the unit was finally approved and registered, vide their registration certificate issued on different dates in 1982 and the units went into production. The petitioners invested huge amount on the land, raising of building, purchase of machinery, furnitures, tools and implements, etc., with the completion of infrastructures and installations of machinery and started the sale of the finished goods manufactured by the petitioners.
4. That in the year 1979, the Government through its Finance Department came out with SRO No. 671 dated 18th December, 1979 assuring exemption from payment of sales tax on the finished goods manufactured by small-scale units in the State, which are registered with the Department of Industries and Commerce or with the Directorate of Handicraft and Handlooms. With the said SRO which is annexed as annexure P-4 with the petition, annexure P-1 is attached and the petitioners product unit existed in the column of Food Industry at S. No. 16 (Spices). The industry was to fulfil certain formalities to avail the incentives of exemption from payment of sales tax on the finished goods manufactured by the petitioner and after applying to the assessing authority concerned an exemption licence was to be granted in favour of the petitioner for a particular financial year, which was renewable after every financial year, the petitioner submits that they fulfil the basic requirement and exemption licence was granted in favour of their unit in form No. SC-1 by the assessing authority. Sales Tax Circle 'G', Jammu for the year 1983-84. While the petitioners were enjoying the benefits of incentives the Government issued yet another notification being SRO No. 434 of 1983 issued on 22nd August, 1983 which purported to supersede SRO No. 671 of 1979 referred to above and withdrew the exemption from payment of tax on the finished goods manufactured by the petitioner-unit. Thereafter another notification was issued as SRO No. 118 of 1984 dated 31st March, 1984 which further superseded SRO No. 671 of 1979 and withdrew the exemption of sales tax on the finished goods manufactured by the petitioners' small-scale industrial units and the said SRO included among other items 'spices', the finished goods manufactured by the petitioners' industry. SRO No. 434 of 1983 is also a subject-matter of a different writ petition which according to the allegations of the petitioners are still pending. Thus by way of the abovesaid writ petitions, the petitioners have come up before this Court challenging SRO No. 118 of 1984 in so far as the same superseded SRO No. 671 and withdrew the exemption from the payment of sales tax on the finished goods manufactured by the petitioners as illegal, unconstitutional, discriminatory and opposed to the principles of promissory estoppel.
5. The petitioners are contested by the respondents on several grounds inter alia reproducing Government Order No. 276 dated 11th April, 1972 and admitting the issuance of Government Orders issued, vide SRO No. 267 on 15th May, 1978, SRO No. 391 of 1972 and SRO No. 671 dated 18th December, 1979, SRO No. 434 of 1983 and SRO No. 118 of 31st March, 1984. They have submitted that the impugned SRO is neither illegal nor unconstitutional or discriminatory. No promise was ever made to petitioner for granting exemption, thus it is submitted that the notification impugned cannot be held as against the principles of promissory estoppel. According to the respondents, registration has a limited purpose and this fact cannot lead to the conclusion that the petitioner is given a free hand. It is mentioned that for 1983-84 exemption certificate was issued to the petitioner, but for the withdrawal of the said exemption licence, the proceedings are already initiated against the petitioners since 24th January, 1984. It is contended that the exemption is a policy matter and a legislative function of the State and the Government can change the policy from time to time in doing so, the provisions of Article 14 of the Constitution of India are not violated.
6. Heard the learned Counsel for the respective parties. Learned Counsel for the petitioner vehemently argued that the respondents by giving the incentives mentioned above enumerated in the foregoing paragraphs are estopped on the principles of promissory estoppel from superseding the previous SRO No. 671 of 1979 issued on 18th December, 1979 under which initially vide Clause (vii) of the said SRO exemption from the sales tax is granted for a period of ten years from the date of commencement of the manufacture of goods inclusive of the period in respect of which exemption was admissible before 1st April, 1977. It is further submitted that while choosing certain industries to which the exemption is continued and for some of the industries, the exemption is withdrawn as in the case of the industry of the petitioners regarding 'spices' the action of the respondents is also discriminatory and hence ultra vires the provisions of Article 14 of the Constitution of India. It is emphatically argued that by withdrawing the exemption and grant of incentives on the basis of which the petitioners were induced and attempted to establish their industry by the said withdrawal and exemption, the petitioners will financially ruining and forced to close down their units, it shall be highly inequitable and unjust to permit the Government to do so. The statutory power under the Jammu and Kashmir General Sales Tax Act, 1962 cannot be arbitrarily used by the State to deprive the petitioners of rights already vested in it whether any equity or in law. No opportunity has been granted to the petitioners to oppose such withdrawal. There is no prior notification proposing the abovesaid withdrawal of incentives and exemption, thus it is violative of principles of natural justice. In support of his contention, learned Counsel for the petitioners with reference to his arguments regarding promissory estoppel rely on the authority of their Lordships of the Honourable Supreme Court reported in Moti Lai Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh, AIR 1979 SC 621, and an authority of the High Court of Himachal Pradesh in Shri Kundan Lal Ahuja v. State of Himachal Pradesh [1981] 47 STC 135 and a recent authority of the Bombay High Court, wherein a Full Bench, their Lordships have considered the scope of promissory estoppel in the case of Tapti Oil Industries v. State of Maharashtra reported in, AIR 1984 Bom 161 (FB).
7. In reply to the arguments advanced by the learned Counsel for the petitioner, learned Counsel for the respondents have submitted that the authorities cited by the learned Counsel for the petitioner are distinguishable on the point that in the present case while dealing with the matter of taxation, it is the legislative function of the State on which the principles of promissory estoppel will not apply as well as it is further submitted that the history of the Government orders and SROs issued from time to time will reveal that the periodical exemption by giving incentives to certain new industries from the sales tax, it will be clear that by subsequent notifications issued under the authority of law, the Government has classified the units as well as the rigour of the periods is also differently dealt with in the notifications. Thus apart from the fact that the State is fully empowered to legislate under the legislative authority regarding tax without creating estoppel against itself by a subsequent Notification SRO No. 671 of 1979, under which the petitioners have claimed protection, the Government has not bound itself not to reduce the exemption period and thus by withdrawing the exemption by impugned Notification SRO No. 118 of 31st March, 1984 the State acted within its power and the said SRO is neither illegal nor unconstitutional or discriminatory. In support of their contentions reliance is placed on a Full Bench decision of the Delhi High Court in the case of Bombay Conductors and Electricals Ltd. v. K. Chandramouli, Under Secretary to the Government of India reported in, [1984] 1 ECC 1 (FB). In order to decide the matter in controversy, it will be convenient to quote certain SROs relied on by the respective parties, the context of which relevant for the purpose of the present petitions, are reproduced hereby in seriatim :
(i) Government Older No. 391-Ind of 1972 dated 21-6-1972 : 'In supersession of Government Order No. 206-Ind of 1968 dated 5-7-1968, 213-Ind of 1968 dated 1-8-1968, 499-Ind of 1971 dated 4-6-1971 and 179-Ind of 1972 dated 28-4-1972 and Government Order No. 346-Ind of 1969 dated 28-8-1969, 302-Ind of 1972 dated 14-6-1972 the following package scheme of incentives will now be applicable to the existing and new small-scale industrial units established or to be established by entrepreneurs, including technocrats (diploma/degree holders in any branch of engineering) and unemployed graduates in any Science or Art :
* * * * * ** * *16. Taxation,
(a) * * ** * *(b) State sales tax :
The existing units and new units will be exempted from payment of State sales tax, paid on end-products for three years from the date of this order and five years from the date of production respectively. This exemption will be applicable to industries notified from time to time.
(ii) SRO No. 267 : In exercise of the powers conferred by Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (XX of 1962) (hereinafter referred to as the Act), the Government hereby exempt from payment of tax all the dealers operating small-scale manufacturing units in the State which are registered with the Department of Industries and Commerce and are specified in annexure-I to this notification subject to the following restrictions and conditions, namely :--
* * ** * ** * *(vii) Notwithstanding anything contained in the foregoing clause a dealer :--
* * *The exemption hereinabove granted shall be available for a period of ten years from the date of registration with the Department of Industries and Commerce or the date of the manufacture/production of goods, whichever is earlier, and shall be deemed to have been in force from 5-8-1968.
This notification shall be and shall always be deemed to have come into force on 1st April, 1977.'
(iii) SRO No. 671 : In exercise of the powers conferred by Section 5 of the Jamrnu and Kashmir General Sales Tax Act, 1962 (XX of 1962) (hereinafter referred to as the Act) and in supersession of Notification SRO 267 dated 15-5-1978 the Government hereby exempt from payment of tax the finished goods manufactured at the units of the dealers operating small-scale manufacturing units in the State which are registered with the Department of Industries and Commerce or with the Directorate of Handicrafts and Handlooms and are specified in annexure-I to this notification subject to the following restrictions, namely :--
* * ** * ** * *(vii) No unit shall be entitled to exemption for a period exceeding 10 years from the date of commencement of manufacture of goods inclusive of the period in respect of exemption was admissible before 1st April, 1977 under Notification SRO 468 dated 1-8-1977 or any other notification in this behalf.
By order of the Government of Jammu and Kashmir.
8. On a bare reading of Clause (vii) of SRO No. 671, it is pertinent to note that the State by this notification has not said that the exemption shall be for a ten years, but the words are : 'No unit shall be entitled to exemption for a period exceeding 10 years from the date of commencement of manufacture of goods.' The words are exceeding 10 years and not for a period of 10 years and remarkable distinction is drawn by the learned Counsel for the respondents that by using the words 'exceeding 10 years', the State has kept it open to itself to reduce the period also. The similar words are used in Clause (vii) of SRO No. 267 referred to above.
9. The impugned notification, annexure P-5, SRO No. 118 dated 31st March, 1984 is also reproduced as under :
SRO-118.--In exercise of the powers conferred on it under Section 6 of the Jammu and Kashmir General Sales Tax Act, 1962 (Act No. XX of 1962) and in supersession of Notification SRO-671 dated 18-12-1979 the Government hereby direct that goods manufactured by a dealer operating old or new small-scale industrial unit, having its place of business in the State and registered with the Department of Industries and Commerce, Directorate of Handicrafts or Jammu and Kashmir Handloom Development Corporation, shall subject to the conditions specified below, be exempt from payment of tax to the extent and for the period specified in columns (2) and (3) of the Schedule forming annexures 'A' and 'B' to this notification.
The relevant annexure for the purpose of the present petitions is annexure 'D' to the following effect :
Annexure 'D' to SRO No. 118 dated 31-3-1984.
1. Repacking of any goods.
2. Spices.
3. Corrugation of sheets.
4. Indian made foreign liquor, beer, rectified spirit and methylated spirit.
5. Resin, rosin turpentine oil and their derivatives.
6. Wooden shooks and wooden planks of all sorts.
7. Sale of taxable goods for printing press.
8. Washing soap, detergent and toilet soaps.
9. Bricks.
10. Arms, their assessories and ammunition.
11. Copper utensils manufactured by mechanised units.
12. Soft drinks.
By the abovesaid SRO, the State Government in exercise of the powers conferred on it under Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (Act No. XX of 1962) in supersession of Notification No. SRO-671 dated 18th December, 1979 have withdrawn the exemption granted to the petitioners' units of 'spices' mentioned in annexure 'D' above attached to SRO No. 118 which is the subject-matter of the present writ petitions have in its legislative function withdrew the exemption of sales tax, it is not an undertaking of the type for which the principles of estoppel are attracted. It is settled law that the principle of estoppel is not applicable against law, while exercising the powers under the Sales Tax Act for imposition of tax or withdrawal of exemption under the Sales Tax Act, the State Government is fully empowered to legislate upon the subject. Their Lordships of the Supreme Court in the case of Jit Ram Shiv Kumar v. State of Haryana reported in (1981) 1 SCC 11 have held :
The plea of promissory estoppel is not available against the Government in exercise of its legislative, sovereign or executive powers or the statutory functions of the State. The doctrine cannot also be invoked for preventing the Government from discharging its functions under the law.
The Delhi High Court relying on catena of decisions on the subject in a Full Bench decision of Bombay Conductors and Electricals Ltd. [1984] 55 STC 162 (FB) is pleased to discuss and consider all the authorities in the context relating to the withdrawal of exemption of customs duty before expiry of specified period in public interest, have held that the principles of estoppel is not applicable to tax laws. To quote it is held by their Lordships of the Delhi High Court in a Full Bench decision of Bombay Conductors and Electricals Limited [1984] 55 STC 162 (FB)
The limits to the right of a public authority to impose taxes are set by the power that is qualified to do so under the constitutional law. In a democratic system this power is with the Legislature. In India the doctrine is embodied in Article 265 of the Constitution. Subject to the provisions of the Constitution, the Legislature is omnipotent in the exercise of the taxing prerogative. Exemption notifications are issued under a general grant of authority by the Legislature.
I am in respectful agreement of the proposition laid down above by their Lordships of the Delhi High Court and find that the present controversy stands resolved on a simple reason that the power of exemption in the present case is derived by the Government in exercise of its legislative function under Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 that being a provision relating to tax laws, the doctrine of promissory estoppel is not applicable to the case of the petitioners' units and SRO No. 118 of 1984 issued on 31st of March, 1984 does not suffer from any infirmity either on the doctrine of promissory estoppel or on the basis of discrimination as argued by the learned Counsel for the petitioner. It is manifest from the words of exemption and in the previous SRO No. 671 of 1979 dated 18th December, 1979 wherein the words:
No unit shall be entitled to exemption for a period exceeding 10 years' as compared to the words used in SRO No. 267 of 1978 :
The exemption hereinabove granted shall be available for a period of 10 years
are wide enough to empower the Government to withdraw the notification relating to grant of sales tax even before the period of 10 years expires.
10. On the basis of the propositions referred to above, it is held that the Government is not estopped from withdrawing the exemption to the petitioners' units by SRO No. 671 of 1979 and thus SRO No. 118 of 1984 is intra vires the powers of the State Government and it is neither unconstitutional nor illegal. The SRO is, therefore, upheld. The petitions are liable to be dismissed.
11. For the foregoing reasons, all the abovesaid three writ petitions are hereby dismissed with no order as to costs. The connected C. M. Ps. are also accordingly disposed of.