TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Sales tax exemption on raw materials for new industries under Industrial Policy, promissory estoppel claim rejected after policy change</h1> The dominant issue was whether a new industry could claim exemption from sales tax on purchase of raw materials for the period stated in the State's ... Whether in view of the Industrial Policy Resolution (I.P.R.) dated 18-7-1979 issued by the Industries Department of the Government of Orissa, sales tax was not payable by a new industry on the purchase of raw material for the period prescribed in the I.P.R.? Held that:- In the instant case, it has been stated on behalf of the State that various notifications granting sales tax exemptions to the dealers resulted in severe resource crunch. On reconsideration of the financial position, it was decided to limit the scope of the earlier exemption notifications issued under Section 6 of the Orissa Sales Tax Act. Because of this new perception of the economic scenario of the State, the scope of the earlier notifications had to be restricted. They were first abrogated altogether on 20-5-1977. Thereafter, it was decided to grant exemption at a limited scale. Thus the plea of change of policy trade on the basis of resource crunch should have been sufficient for dismissing the respondent's case based on the doctrine of promissory estoppel. Public interest demanded modification of the earlier I.P.R. Appeal allowed Issues: Whether the State Government was precluded by the Industrial Policy Resolution (I.P.R.) and the principle of promissory estoppel from withdrawing or restricting sales-tax exemption granted earlier, notwithstanding the power under Section 6 of the Orissa Sales Tax Act, 1947 to grant, amend or withdraw exemptions.Analysis: The relevance and effect of the I.P.R. dated 18-7-1979 as a standalone source of tax exemption is examined in light of the statutory scheme for granting exemptions. Section 6 of the Orissa Sales Tax Act, 1947 authorises the State Government to exempt by notification the sale or purchase of goods and to withdraw such exemption at any time; hence any exemption under the sales-tax regime must conform to that statutory procedure. The I.P.R. announced policy intentions and stated that departmental orders would prescribe the mode of administering concessions and incentives; it did not itself constitute a notification under Section 6. The factual record did not establish that the respondent had conclusively relied upon the I.P.R. to the extent necessary to invoke promissory estoppel, and even where reliance exists, a supervening and overriding public interest (including severe resource constraints) can justify withdrawal or modification of exemptions granted under statutory power. Prior administrative notifications granting exemptions had been lawfully amended and withdrawn under Section 6 in response to changed fiscal circumstances; therefore reliance on the I.P.R. cannot bar the exercise of the statutory power to modify or rescind exemption notifications.Conclusion: The appeal is allowed and the High Court judgment quashing the assessment orders is set aside; the State is entitled to withdraw or restrict the sales-tax exemptions under Section 6, and the respondent's claim based on the I.P.R. and promissory estoppel fails.
TaxTMI 
TaxTMI 
