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of <h1>Manufacturers denied tax benefits due to lack of clear promise in government notification.</h1> <h3>Arvind Industries and Others Versus State of Gujarat and Others & Vijay Oil Mills Co. Versus Assistant Commissioner of Sales Tax and Others</h3> The Court dismissed both Civil Appeal No. 951 of 1976 and Civil Appeal No. 1011 of 1977, ruling that the appellants, manufacturers of edible oil, were not ... Effect of notification - Held that:- Appeal dismissed. The appellant has been entirely unable to make out any factual basis for a case of promissory estoppel. The appellant cannot claim that merely because it had set up its industrial unit at Junagadh at a certain point of time, the fiscal laws of the State must remain unaltered from that date. The appellant has not been able to show that some definite promise was made by or on behalf of the Government and the appellant had acted upon that promise to its detriment and thereafter the changes effected by the notification dated July 17, 1971, have caused great prejudice to the appellant. Issues:1. Interpretation of notification granting exemption from sales tax to new industries.2. Application of the doctrine of promissory estoppel in fiscal legislation.3. Claim of estoppel based on government assurances regarding tax benefits for new industries.Civil Appeal No. 951 of 1976:In this case, the appellants, manufacturers of edible oil, claimed exemption from sales tax based on a notification issued by the State Government. The appellants argued that assurances by government officials and a notification entitled them to tax benefits for a period of five years. However, the Court found that the notification did not contain any promise of unalterable benefits or reference to specific industries. The Court noted that the government had the authority to modify industrial policies and fiscal benefits. The appellants failed to establish a factual basis for promissory estoppel as they did not prove any definite promise made by the government that led to their detriment. The Court dismissed the appeal, stating that the appellants were not entitled to the tax benefits claimed.Civil Appeal No. 1011 of 1977:Similar to the previous case, the appellant in this appeal set up a factory relying on a government notification granting tax benefits to new industries. The appellant argued for promissory estoppel based on their investment and the timing of setting up the factory. However, the Court found that the appellant failed to establish a clear promise by the government that caused detriment to the appellant. The Court noted that the factual basis for promissory estoppel was lacking, and the appellant could not prove that the subsequent notification withdrawing benefits caused prejudice. Consequently, the Court dismissed the appeal, stating that no costs were to be awarded.In both cases, the Court emphasized the importance of proving a clear promise by the government leading to detrimental reliance for the application of promissory estoppel in fiscal legislation. The Court held that mere reliance on government assurances without concrete evidence of a promise and resulting prejudice was insufficient to claim estoppel in tax matters.
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