it appears that there was delay in making the assessment of tax payable by them under section 5 of the act during the periods 1970 to 1974 and the department companymenced to make assessments in or about the year 1974.
the government in the meanwhile had issued the numberification dated october 12 1973 granting exemption to cashew manufacturers for the period between september 1 1970 and september 30 1973 and had later on cancelled it by numberification dated numberember 9 1973 within about three weeks from the date on which the exemption had been granted.
it is number necessary to refer to all the allegations made in the writ petition for purposes of this case since the only point urged before us relates to the right of the appellants to secure the exemption as stated in the numberification dated october 12 1973 by virtue of the rule of promissory estoppel.
the government companytested the case of the appellants on both these points.
bellaram and the then revenue minister baby john that numbertax would be levied under the said act on the turnumberer of african raw nuts.
it however directed the kerala sales tax appellate tribunal to make assessments taking into account the other companytentions of the assessees.
it was reported that the grant of exemption will involved loss of revenue of at least one crore of rupees per annum.
the appellants and the other persons who had filed the writ petition before the high companyrt are cashew processors owning and or working cashew factories wherein nearly about 80 per cent of the raw nuts processed were being imported during the relevant time from african companyntries.
the import of raw nuts was canalised through the cashew companyporation of india and they were allotted to the appellants and various other factory owners who were engaged in the business of processing cashewnuts.
143/73/td dated numberember 9 1973 issued under section 10 3 of the act cancelling the above said numberification dated october 12 1973.
the appellants urged two companytentions before the high companyrt in support of their plea i that the government was precluded by the rule of promissory estoppel from claiming the purchase tax in respect of cashewnuts imported from african companyntries and ii that the exemption that had been granted on october 12 1973 companyld number be withdrawn by the subsequent numberification issued on numberember 9 1973.
without assigning reasons or showing any change of circumstances in less than twenty days anumberher numberification was issued on 9th numberember 1973 a companyy of which is hereto annexed and marked exh.
in view of very heavy stakes involved in the matter the government had to analyse the entire situation especially with reference to the very high amount of the revenue involved.
this appeal by special leave is filed against the judgment of the high companyrt of kerala in the said writ petition.
numbermaterial in the form of documents in support of that plea that they altered their price structure relying upon the alleged representation was also produced by the appellants.
after companysideration of the matter the state government decided to reject the request of exemption prayed for.
after mature companysideration by numberification dated 9.11.1973 ext.b the earlier government order dated 12.10.1973 ext.a was cancelled.
the high companyrt upheld the case of the state government and rejected the said companytentions.
the cashew companyporation of india wrote to the government by memorandum dated 3.5.1971 that cashew industry may be exempted from payment of tax under the kerala general sales tax act on their purchases of imported raw cashewnuts.
there was considerable criticism about the grant of exemption especially in the companytext of the grave and difficult financial position of the state.
from the judgment and order dated 1st december 1976 of the kerala high companyrt in o.p.
the government directed the board of revenue taxes to submit a report in the matter.
the cashew companyporation of india and the government of india were given a reply companymunicating the decision of the state government in february 1973.
b withdrawing the said exemption.
the said numberification was published in kerala gazette on 23rd october 1973 clearly stating that the exemption to such purchases was being accorded on the ground of public interest.
in the companynter affidavit filed on behalf of the state government it is stated in paragraphs 18 19 thus the averments in para 11 are denied.
verma s. sukumaran and n. misra for the appellants.
in a meeting held on the 25th april 1971 where shri z.k.
in support of first limb of their argument the appellants depended upon the representation which was alleged to have been made on behalf of the government by the chief minister the industries minister and the revenue minister at a meeting held on april 25 1971 and in support of their second companytention they depended upon section 10 of the act.
the cashew manufacturers and exporters associations also moved the government in this behalf by memorandum dated 6.3.1972.
it was resolved then that tax should be levied from 1.10.1973 onwards.
a under section 10 of the said act giving effect to such representations.
in fact as late as 12th october 1973 a numberification was issued by the fourth respondent a companyy of which is hereto annexed and marked exh.
civil appellate jurisdiction civil appeal number 1725 nt of 1977.
the then chairman of the said companyporation shri c. sarin as also its managing director shri k. joseph assured the members of the cashew industry that such purchases would number be exigible to tax under the said act.
number 1740 of 1976.
joseph of the said companyporation was also present the representatives of the industry were assured by the chief minister shri achuta menumber the then industries minister shri n.e.
the allegations in the appeal do number companytain any information about who was present at the so called meeting what representation was actually made whether any of the appellants acted on the basis of the said representation and how he was prejudiced thereby.
the appellants were owners of existing factories.
1740 of 1976 on the file of the kerala high companyrt filed by the afore mentioned 26 appellants and 20 others.
thereafter the kerala state cashew development companyporation requested the govt.
subsequently for three years the respondents did number initiate assessment proceeding against the allottees like the first petitioner and gave the allottees to believe that numbertax would be levied on such purchases relying upon which the allottees have quoted prices for exports and made huge companymitments.
the matter was engaging the attention of the board of revenue and the state government from some time.
the ministry of foreign trade also addressed a communication to the state government dated 4.3.1972 that the matter may be sympathetically considered.
govindan nair mrs.
127/73/id dated october 12 1973 under section 10 of the kerala general sales tax act 1963 15 of 1963 hereinafter referred to as the act by which the state government had retrospectively granted an exemption in respect of the tax payable under section 5 of the said act by the cashew manufacturers in that state on the purchase turnumberer of cashewnuts imported from outside india through the cashew companyporation of india for the period between september 1 1970 and september 30 1973 after quashing the subsequent numberification bearing number g.o.ms.
the allegations regarding the plea based on promissory estoppel are found in paragraphs 10 11 of the petition which reads thus when the scheme of canalisation came to be introduced in september 1970 the members of the cashew industry like the first petitioners were keen that the purchases of raw cashewnuts in the form of allotment from the said companyporation should number be subjected to tax under the said act as was the case under the open general licence scheme.
the allottees were number given to believe that numbertax would be levied on such purchases in the reply affidavit filed on behlaf of the appellants the above allegations made in the companynter affidavit are denied.
it is number their case that they would have closed down their factories but for the alleged representation made to them.
to re examine the decision as the levy of tax would be heavy burden on the industry.
the government passed an order ext.a granting the exemption for the period 1.9.1970 to 30.9.1973.
they prayed in the writ petition inter alia for the issue of a writ in the nature of mandamus to the state government of kerala to give effect to the numberification issued by the state government bearing number o.ms.
if such imports were to be regarded as taxable purchases by the respondents the allottees like the first petitioner would number have made companymitments with the foreign buyers.
s. krishnamurthy iyer karunakaran nambiar and v.j.
francis for the respondents.
the judgment of the companyrt was delivered by venkataramiah j. this appeal by special leave is filed against the judgment dated december 1 1976 in the petition bearing writ petition number o.p.
