General sales tax exemption orders can extend to inter-State sales, but a ten-year promissory estoppel claim failed.

General exemption orders issued under an enabling sales tax provision can operate as valid tax exemption orders even without a prescribed form or express statutory citation, and the benefit may extend to the relevant sales of covered industrial units under a single-point levy scheme. Where the State law grants a general exemption on specified goods or dealers, section 8(2-A) of the Central Sales Tax Act can carry that benefit to inter-State sales unless the exemption is confined by transaction-specific conditions. A claimed ten-year exemption based on promissory estoppel was not established on the materials, and the exemption remained limited to the period actually granted under the orders.

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Issues: (i) Whether Government Orders No. 159-Ind. dated 26 March 1971 and No. 414-Ind. dated 25 August 1971 were exemption orders under section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 and, if so, whether they covered the relevant sales of the assessees; (ii) Whether the benefit of exemption extended to inter-State sales under section 8(2-A) of the Central Sales Tax Act, 1956; (iii) Whether the assessees were entitled to a ten-year exemption on the basis of promissory estoppel and whether later S.R.O.s displaced the exemption.

Issue (i): Whether Government Orders No. 159-Ind. dated 26 March 1971 and No. 414-Ind. dated 25 August 1971 were exemption orders under section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 and, if so, whether they covered the relevant sales of the assessees.

Analysis: The Government Orders were issued pursuant to a Cabinet decision granting incentives to large and medium scale industries. Section 5 empowered the Government to exempt, by order, any class of dealers or goods from tax, and did not require any particular form or a specific order in favour of each unit. The language of the orders, the surrounding governmental publications, and the administrative practice showed that the orders were intended to operate as tax exemption orders. The exemption was linked to the manufacture and sale of the specified goods by industries covered by the policy and, in the scheme of single-point levy under the local Act, it extended to the relevant series of sales of those goods.

Conclusion: The Government Orders were valid exemption orders under section 5 and the exemption covered the relevant sales of the assessees.

Issue (ii): Whether the benefit of exemption extended to inter-State sales under section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: Section 8(2-A) applies where the sale or purchase of goods is exempt from tax generally under the sales tax law of the appropriate State and is not confined by specified conditions or specified circumstances relating to the transaction. The conditions in the Government Orders identified the goods and the class of industrial units entitled to the benefit; they did not amount to conditions attached to the sale so as to exclude the operation of section 8(2-A). The exemption granted under the State law therefore entitled the assessees to the corresponding benefit on inter-State turnover for the same goods.

Conclusion: The assessees were entitled to exemption under section 8(2-A) in respect of inter-State sales for the exempt period.

Issue (iii): Whether the assessees were entitled to a ten-year exemption on the basis of promissory estoppel and whether later S.R.O.s displaced the exemption.

Analysis: The materials showed representations of exemption and industrial incentives, but there was no clear governmental decision, order, or notification extending the sales tax exemption to ten years. The budget speech and brochure were not sufficient to create a legally enforceable ten-year entitlement. As to later S.R.O.s, the Court held that the exemption granted by the Government Orders was not displaced in the manner suggested by the State, but the exemption itself remained confined to the period actually granted under the orders. The question of any recovery or refund under section 8-B was left open.

Conclusion: The claim to a ten-year exemption failed, and the exemption remained confined to five years from commencement of production.

Final Conclusion: The appeals succeeded to the extent that the assessees were held entitled to the sales tax exemption under the two Government Orders for five years from commencement of commercial production, including the corresponding benefit for inter-State sales, but not for ten years.

Ratio Decidendi: A general exemption order issued under an enabling sales tax provision is effective even if it does not specify the statutory source or take the form of a notification, and where the State grants a general exemption from tax on specified goods or classes of dealers, the benefit may extend to inter-State sales under section 8(2-A) unless the exemption is only conditional in the sense contemplated by the statutory explanation.

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