Appeal dismissed: sales-tax exemption limited to period of initial Notification; no vested five-year right or estoppel

Appeal dismissed. SC affirmed HC: appellants are entitled only to sales-tax exemption for the period the first Notification was in force; they cannot claim a five-year vested right under the later Notification because their plant was commissioned before that Notification and the second Notification operated only prospectively. Promissory estoppel not made out-appellants did not rely on a promise to their detriment nor establish they set up the industry in pursuance of the April 29, 1970 concession; revocation terminated the exemption when lawfully exercised.

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Issues Involved:
1. Vested Right of Exemption from Sales Tax
2. Doctrine of Promissory Estoppel

Detailed Analysis:

1. Vested Right of Exemption from Sales Tax:

The primary issue was whether the appellants had acquired a vested right of exemption from payment of sales tax under the Gujarat Sales Tax Act, 1969, for a period of 5 years from the date of commissioning their oil mill. The appellants argued that the Notifications dated 29-4-1970 and 11-11-1970 granted them a vested right to a tax holiday for 5 years, which could not be nullified by the subsequent Notification dated 17-7-1971. The court examined the dates and contents of the Notifications, noting that the first Notification did not specify a period for the exemption, implying it was valid only until withdrawn by a subsequent Notification. The second Notification, which specified a 5-year exemption, was deemed prospective and thus applicable only to industries commissioned after its issuance. Since the appellants' oil mill was commissioned before the second Notification, they could not claim the 5-year exemption. The court concluded that the exemption granted was a concession, not an obligation, and could be withdrawn at any time, thus rejecting the appellants' claim of a vested right.

2. Doctrine of Promissory Estoppel:

The second issue was whether the appellants were entitled to tax exemption for 5 years under the doctrine of Promissory Estoppel. The court noted that the principle of Promissory Estoppel would apply if the appellants had established the industry based on a specific representation by the Government promising exemption for a particular period. However, the court found no evidence that the appellants had set up their oil mill in response to the Notification dated 29-4-1970. The appellants' mill was commissioned on 17-5-1970, shortly after the first Notification, indicating that the construction had likely commenced before the Notification. Therefore, the court ruled that the appellants could not claim the benefit of Promissory Estoppel as they did not establish the industry based on the Government's representation. The court emphasized that the exemption was a concession, and its withdrawal did not violate the rule of Promissory Estoppel, as the appellants had not proven that their entire venture was attributable to the Government's inducement.

Conclusion:

The court affirmed the High Court's view that the appellants were entitled to tax exemption only for the period during which the concession was in force. The appeal was dismissed, and no costs were awarded.

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