Sales-tax exemption for industrial units turned on eligibility certificates, executive guidance, and the limits of promissory estoppel.

An exemption notification conditioned sales-tax relief on an eligibility certificate for specified new industrial units, and the Court treated the long-standing administrative exclusion of traditional industries such as dall mills as a relevant aid to interpretation. On that basis, traditional units were held not entitled to the concession or the eligibility certificates claimed. Because the notification prescribed no procedure or guidelines for issuing certificates, the State was held competent under its executive power to issue instructions regulating the grant and preventing arbitrariness. The later 3 July 1987 notification was held clarificatory, not ultra vires, and promissory estoppel was rejected because no enforceable promise or detrimental reliance was shown.

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Issues: (i) whether traditional industrial units such as dall mills were entitled to eligibility certificates and exemption from sales tax under the 1981 notification issued under section 12 of the M.P. General Sales Tax Act, 1958; (ii) whether the Government could validly issue executive instructions to lay down the procedure and guidelines for grant of eligibility certificates in the absence of such procedure in the notification; and (iii) whether the subsequent notification of 3 July 1987 was ultra vires or the State was bound by promissory estoppel.

Issue (i): Whether traditional industrial units such as dall mills were entitled to eligibility certificates and exemption from sales tax under the 1981 notification issued under section 12 of the M.P. General Sales Tax Act, 1958.

Analysis: The notification granted exemption to specified new industrial units subject to the condition that they produce an eligibility certificate from the Director of Industries or an authorised officer. The Court found that the notification did not itself lay down the procedure or guiding criteria for grant of such certificate, and the consistent governmental policy and long-standing administrative practice had excluded traditional industries such as flour mills and dall mills from the concession. The interpretation adopted by the executive authorities over a long period was treated as a reliable aid to construction.

Conclusion: The exemption was not available to traditional industries like dall mills, and the petitioners were not entitled to the eligibility certificates claimed by them.

Issue (ii): Whether the Government could validly issue executive instructions to lay down the procedure and guidelines for grant of eligibility certificates in the absence of such procedure in the notification.

Analysis: Since the notification required an eligibility certificate but prescribed no procedure or guidelines for its grant, the Court held that the matter was left to executive discretion. In the absence of statutory rules, the State's executive power under Article 162 of the Constitution of India was held sufficient to issue instructions regulating the grant of certificates and preventing arbitrariness.

Conclusion: The executive instructions were valid and could regulate the grant of eligibility certificates.

Issue (iii): Whether the subsequent notification of 3 July 1987 was ultra vires or the State was bound by promissory estoppel.

Analysis: The Court held that the later notification was only clarificatory and did not rescind any concession already available to traditional industries, since no such concession had ever been granted to them. The doctrine of promissory estoppel was held inapplicable because the petitioners were aware, from the governing instructions and their own conduct, that the exemption was not available to their units and had not altered their position on the basis of any enforceable promise.

Conclusion: The subsequent notification was not ultra vires, and promissory estoppel did not assist the petitioners.

Final Conclusion: The Court upheld the State's interpretation of the exemption scheme, sustained the administrative instructions governing eligibility certificates, and declined to interfere with the challenged notification or the refusal of exemption benefits.

Ratio Decidendi: Where an exemption notification conditions tax relief on an eligibility certificate but leaves the grant procedure unguided, the State may validly issue executive instructions under its general executive power to regulate the grant, and a long-standing consistent administrative construction excluding a class from the concession is a relevant aid to interpretation.

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