Sales tax exemption for existing small-scale oil mills cannot be curtailed by a later notification where eligibility procedures depended on official action.

Oil mills registered as small-scale industrial units before 1 April 1991 could not be denied sales tax exemption for the remaining period under the earlier notifications merely because S.R.O. No. 440/91 imposed a restrictive cut-off. The Court held that units already set up and otherwise eligible could not lose a promised benefit where production of eligibility proceedings before the assessing authority depended on official action beyond the dealer's control. A later notification could not arbitrarily curtail exemption already conferred under earlier schemes, and such withdrawal was held inconsistent with Article 14. The full exemption period under the earlier notifications was therefore preserved.

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Issues: Whether oil mills registered as small-scale industrial units before 1 April 1991 could be denied sales tax exemption for the period after that date on the basis of S.R.O. No. 440/91.

Analysis: S.R.O. Nos. 968/80 and 499/90 granted exemption for specified periods to eligible small-scale industrial units, subject to production of the prescribed eligibility proceedings before the assessing authority. S.R.O. No. 440/91 stated that the exemptions in the earlier notifications would not apply to oil mills crushing copra and producing coconut oil cake, except those which had produced the requisite proceedings before the assessing authority. The restrictive reading that the exemption would cease for all such units after 1 April 1991 was rejected. Units which had been set up and were existing before that date could not be deprived of benefits already promised under the earlier notifications merely because the eligibility certificates had not been produced before 1 April 1991, especially when the timing of issuance of such certificates was outside the dealer's control. The withdrawal of the benefit in that manner was held to be arbitrary and contrary to Article 14 of the Constitution of India, and the protection recognised in the earlier Supreme Court decision applied.

Conclusion: The limitation of exemption up to 31 March 1991 was unsustainable, and the petitioners were entitled to the exemption for the full period available under the earlier notifications.

Ratio Decidendi: A later notification cannot arbitrarily curtail exemption benefits already promised to existing eligible industrial units under earlier notifications, particularly where compliance with the procedural condition depends on official action beyond the dealer's control.

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