Sales tax exemption and promissory estoppel fail where government orders were only policy directions, not statutory exemption notifications.

Government Orders of 1971 did not amount to a statutory sales tax exemption under the Jammu and Kashmir General Sales Tax Act, 1962, because exemption required a specific notification under section 5. They were treated only as policy directions, and promissory estoppel was unavailable where the dealer proceeded without a notification and retained tax collected from consumers. A notification shifting the point of levy under section 4(7) was also upheld because that power had been recognised and the challenge depended on the rejected claim of exemption and estoppel. The levy and related recovery measures were sustained.

---

---

Issues: (i) Whether the 1971 Government Orders constituted an exemption from sales tax or created an enforceable promise giving rise to promissory estoppel. (ii) Whether the challenge to the notification shifting the point of levy of sales tax was sustainable.

Issue (i): Whether the 1971 Government Orders constituted an exemption from sales tax or created an enforceable promise giving rise to promissory estoppel.

Analysis: Section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 contemplates exemption by order in respect of a class of dealers or goods and requires a specific notification under the statute. The Government Orders of 1971 were held to be only policy directions and not exemption orders by themselves. The petitioner had also been informed before production commenced that no exemption was available without a notification, yet it proceeded without obtaining one. The assessing authority's finding that sales tax had been collected from consumers remained unchallenged and unrebutted, and the petitioner had retained the amounts instead of depositing them. In these circumstances, equity did not support enforcement of the alleged promise.

Conclusion: The Government Orders did not by themselves grant exemption, and promissory estoppel was not available to the petitioner.

Issue (ii): Whether the challenge to the notification shifting the point of levy of sales tax was sustainable.

Analysis: The impugned notification was issued under section 4(7) of the Jammu and Kashmir General Sales Tax Act, 1962, which authorises the Government to notify the point of levy. The validity of that power and similar notifications had already been upheld. The petitioner's attack on the notification rested on the same rejected premise that its product was exempt and that the State was bound by promissory estoppel. The petitioner also failed to establish any legally cognisable prejudice or a fresh basis to question the notification.

Conclusion: The notification fixing the point of levy was valid and the challenge to it failed.

Final Conclusion: The petitions failed on the merits, no enforceable exemption or estoppel was established, and the impugned levy and related recovery measures were sustained.

---