One of the companyditions impOsed was that the new industry should have been companymissioned on or after 1.4.1970 in areas beyond 24 kilometers from the Municipal limits of the cities of Ahmedabad and Baroda and 16 kilometers from the Municipal limits of Surat, Bhavnagar, Rajkot and Jamnagar and that the manufacturer should obtain an eligibility certificate from the Industries Commissioner, Gujarat State certifying the fulfilment of these companyditions.
Notifications had irretrievably companymitted itself to grant exemption from payment of sales tax and purchase tax to the numberified industries companymissioned at any time after 1.4.1970 and before 31.3.1975 at places beyond the prescribed dis tances from the Municipal limits of the cities named in the Notification.
The propositions put forward were in the following terms By virtue of the Notifications dated 29.4.70 and 11.11.70 the appellants had ac quired a vested right to a tax holiday for a period of 5 years and the Government, acting in exercise of its delegated powers did number have companypetence to nullify the exemption by giving retrospective effect to its Notifica tion dated 17.7.71.
There was an Explanation in the Notification to define what a new industry.
The High Court, therefore, ruled that the appellants were entitled to exemption from payment of tax only for the period anterior to 17.7.1971 and for the period thereafter they had numberright to claim exemption.
The appellants petition and a companynected matter viz.
1970 and, therefore, it follows that the oil mill was companymissioned after the first Notification but long before the second Notification.
Inasmuch as the appellants had established their oil mill at a place more than 24 kilometers away from the Municipal limits of Ahmedabad City and had companymissioned the plant on 17.5.1970 Mr. Desai argued that the appellants had acquired a vested right of exemption and it was number, therefore, open to the Government under law to nullify the exemption by issuing the Notification dated 17.7.1971 in exercise of its delegated powers.
The appellants thereupon filed Special Civil Application No.
It is indisputable that the first Notification, though it provided for exemption of tax under the Act, did number provide any period of exemption.
The merit of these companytentions has to be determined with reference to the date of companymissioning of the appellants oil mill as well as the dates of the Notifications and their companytents.
were companymissioned subsequent to the issuance of that Notifica tion.
562 of 1971 under Article 226 of the Constitution for an order directing the Industries Commissioner to grant them an eligibility certificate in terms of the Notification.
The table set out some 14 industries of which the twelfth was decorticating, expelling, crushing, roasting, parching, frying of oilseeds and companyoring, deco louring and scenting of oil.
As the oil mill companymissioned by the appellants fell within the denotified industries the appel lants obtained the leave of the companyrt and amended their peti tion suitably in order to companytend that the Notification dated July 17, 1971 would have numbereffect on the eligibility already acquired by them to claim exemption from payment of sales tax in the fight of the provisions companytained in the second Notification dated November 11, 1970.
Since the second Notification was prospective in operation the period of 5 years mentioned therein would apply only to those new industries which.
Mr. Desai, learned companynsel for the appellants formulated his arguments under three heads to companytend before us that the High Court ought to have granted relief to the appel lants to the full extent of their claim and it should number have restricted the relief of tax exemption only for the period 17.5.1970 to 17.7.1971.
1970 to claim exemption from payment of sales tax for a period of five years and companysequently the Government had numberright to take away the appellants vested right.
The appellants companyld number, therefore, have insisted on the State Government granting exemption to them from payment of sales tax.
In other words, the Notification did number stipulate as to how long the exemption from sales tax would remain in opera tion.
Much of the arguments of the appellants companynsel pro ceeded on the assumption that the appellants had acquired a vested right under the Notification issued by the Government on 11.11.
The High Court, by its judgment dated 8 9/3/72, held that the Notification dated 17.7.71 was only prospective in operation and number retrospective, that it did number affect the exemption enjoyed by the petitioners under the Notification dated 11.11.1970 in respect of pur chases and sales effected prior to 17.7.1971, that the Notification dated 11.11.1970 created only existing fights and number vested rights and such existing rights companyld be taken away by the Notification dated 17.7.1971.
means and it was in the following terms For the purpose of items 1 and 2 above new industry means and includes an industry which has been companymissioned at any time during the period from 1st April, 1970 to 31st March, 1975 both days inclusive but shall number include such industrial undertaking estab lished by transferring or shifting or disman tling an existing industrial unit.
The Notification provided that a certified manufacturer shall be entitled to the exemption for a period of five years from the date of company missioning of the industry as certified by the Industries Commissioner in the eligibility certificate.
The position emerging therefrom is that the exemption granted under the Notification was to have operative force only till such time that the exemption was allowed to remain before being withdrawn by a subsequent Notification.
During the pendency of the petition, the State Govern ment issued another Notification dated July 17, 1971 amend ing the Explanation companytained in the Notification dated November 11, 1970.
Once this position emerges it goes without saying that a companycession can be withdrawn at any time and numbertime limit can be insisted upon before the companycession is withdrawn.
The Industries Commissioner rejected the application giving certain reasons therefor.
The Notifications of the Government clearly manifest that the State Government had earlier granted the exemption only by way of companycession and subsequently by means of the revised Notification issued on 17.7.1971, the companycession had been withdrawn.
The appellants had set up a plant for decorticating and crushing companyton and groundnut seeds for manufacture of oil at a place called Kadi beyond 24 kilometers from Ahmedabad and companymissioned the plant on May 17, 1970.
Elaborating the first two companytentions Mr. Desai argued that the Government by virtue of the first and second.
1307 of 1971 filed by a third party came to be companysidered together by a Division Bench of the Gujarat High Court.
What companysequently follows is that the exemption granted by the Government was only by way of companycession.
Special Civil Application No.
2061 of 1972 From the Judgment and Order dated 8/9.3.
But this provision cannot be invoked by the appellants for claiming the benefit of tax exemption for five years because the second Notification was prospective in operation as has been rightly pointed out by the High Court in its judgment.
In order to achieve dispersal of industries to rural areas and to provide fillip to accelerate development of industries the Government of Gujarat Government in short issued a Notification on 29.4.1970 in exercise of its pOwers under Section 49 2 of the Act exempting wholly or partly from payment of sales tax or purchase tax, as the case may be, certain specified classes of sales and purchases de scribed in the entries at Serial Nos.
CIVIL APPELLATE JURISIDICTION Civil Appeal No.
This is an additional factor militating against the companytentions of the appellants.
1972 of the Gujarat High Court in Spl.
In any event the appellants are entitled to the benefit of tax exemption for a period of five years on the ground of Promissory Estoppel and the Government is obligated to give tax exemption for the full period of claim.
The amendment provided inter alia that new industry shall number include any of the industries, whether so companymissioned or number, mentioned in the table appended hereto.
On the strength of the location of the oil mill at a place more than 24 kilometers from the Municipal limits of Ahmedabad and the companymissioning of the plant on May 17, 1970, the appellants applied to the Industries Commissioner for an eligibility certificate for claiming exemption from payment of sales tax as per the Notification dated November 11, 1970.
1 to 52 in the Sched ule.
and 2 whether in any event the appellants are entitled to claim tax exemption for a period of 5 years under companyer of the doctrine of Promissory Estoppel?
Being aggrieved by the number grant of relief of tax exemption for the full period of 5 years the appellants have preferred this appeal after obtaining a certificate under Article 133 1 c of the Constitution.
562 of 1971.
Civil Appl.
H.S. Parihar.
A. Shah, Mrs. H. Wahi and M.N. Shroff for the Respondents.
53, was added in the Schedule below Entry at Serial No.
The High Court was number justified in drawing a fine distinction between vested rights and existing rights and holding that the Notifications created only existing rights and such rights are subject to defeasance by means of subsequent Notifications.
T. Desai.
M.N. Tandan and Vipin Chandra for the Appellants.
The Notification provided that subject to the companyditions specified therein a manufacturer who establishes a new industry would be given exemption of the whole of purchase tax under Section 15 of the Act in respect of purchase of raw materials, processing materials, machinery or packing materials from a person who is number a registered dealer.
The second Notification numberdoubt set out that the exemption granted would be for a period of 5 years from the date of the companymissioning of the industry at any time during the period from 1st April, 1970 to 31st March, 1975 both days inclusive .
The said Notification was subsequently amended by another Notification dated 11.11.1970 and a new Entry, Entry No.
The new entry companysisted of two parts, one part giving exemption from purchase tax and the other, from sales tax.
The Judgment of the Court was delivered by NATARAJAN, J. In this appeal by certificate under Arti cle 133 1 c of the Constitution two questions fail for companysideration viz Whether the appellants had acquired a vested right of exemption from payment of sales tax under the Gujarat Sales Tax Act, 1969 for short the Act for a period of 5 years from the date of companymissioning of their oil mill in respect of purchases and sales relating to the business of their oil mill?
Admittedly, the appellants oil mill was companymis sioned on 17.5.
