TaxTMI 
TaxTMI 
2004 (12) TMI 655
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....es Tax Tribunal, Haryana (for short, "the Tribunal") respectively in the matter of levy of tax on the sale of liquor made during 1998-99 and notice dated October 6, 2004 issued for recovery of the tax due. 2.. For the sake of convenience, we have taken the facts from C.W.P. No. 11493 of 2003. 3.. The petitioner is a private hotel situated in the State of Haryana having four-star certification from the Department of Tourism, Government of India. In the year 1998, the petitioner obtained L-4/L-5 licence under the Punjab Excise Act, 1914, as applicable to the State of Haryana for sale of IMFL in the bars run by it. During the assessment year 1998-99, the petitioner sold IMFL worth Rs. 33,71,417, but did not pay the tax in accordance with the provisions contained in section 16-A read with entry 2(iv) of Schedule "C" of the Haryana General Sales Tax Act, 1973 (for short, "the Act"). By an order dated April 10, 2000, Excise and Taxation Officer-cum-Assessing Authority, Karnal, while accepting the petitioner's claim for deduction of Rs. 31,51,317 on account of tax-free sale of IMFL, determined its liability of tax and penalty to the tune of Rs. 7,079. After two years and about nine mont....
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....n cannot be made basis for raising the plea of discrimination because it is purely an inter-departmental matter and the petitioner cannot wriggle out of its obligation to pay tax in accordance with the provisions of the Act. The respondents have controverted the petitioner's plea of estoppel by asserting that memo dated April 1, 1998 had been issued by respondent No. 3 to the Managing Director of the Corporation due to inadvertence and this was rectified vide letter dated March 9, 1999 issued to all the Deputy Excise and Taxation Commissioners in the State. According to them, there is no provision in the Act under which respondent No. 3 can grant exemption to any dealer from payment of tax and as such, the petitioner cannot rely on the contents of memo dated April 1, 1998 for claiming exemption. 6.. In other writ petitions except C.W.P. No. 15952 of 2004, the petitioners have challenged the orders passed by the revisional authorities on similar grounds. 7.. The facts of C.W.P. No. 15952 of 2004 show that by an order dated January 31, 2000 (annexure P3 in the writ petition), Excise and Taxation Officer-cum-Assessing Authority, Yamuna Nagar, held the petitioner liable to pay tax on....
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....ve of article 14 of the Constitution of India? (2) Whether memo dated April 1, 1998 written by respondent No. 3 to the Managing Director of the Corporation amounted to an inducement to other L-4/L-5 licencees including the petitioners not to pay tax on the sale of IMFL and/or beer on which excise duty had been paid at the prescribed rate and, therefore, the respondents are estopped from charging sales tax at the rate of 20 per cent on IMFL/ beer sold in the assessment year 1998-99? Re: Question No. 1: 9.. Mrs. Lisa Gill, argued that levy of tax on IMFL/beer sold by the petitioners should be declared as violative of article 14 of the Constitution of India because tax liability created against the Corporation which also holds L-4/L-5 licence has been written off by the State Government. She submitted that the petitioners and the Corporation are identically situated in the matter of sale of IMFL and/or beer and argued that in the back-drop of the decision taken by the State Government to write off the liability created by the excise authorities against the Corporation, the petitioners are also entitled to exemption from payment of tax on IMFL sold during 1998-99. Shri Ashok Aggarwa....
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....ax has been paid at the time of purchase thereof inside the State. Except when sold by a L-4/L-5 licencee. SCHEDULE C (See section 16-A) Sr. No. Description of goods Stage of levy of tax 1. ............. 2. (i) to (iii)..................... (iv) Foreign liquor/Indian-made foreign liquor. At the stage of sale by L-4/L-5 licensee). 11. A conjoint reading of sections 16-A and 27(3) of the Sales Tax Act shows that the sale or purchase of the goods specified in Schedule "C" is liable to be taxed at the stage and subject to the conditions contained therein. In terms of section 27(3), the sale or purchase of IMFL is exempt from levy of tax subject to the furnishing of certificate or declaration by the dealer in the prescribed form. However, the exemption clause is not applicable to the sale of IMFL by L-4/L-5 licensee. It is, thus, clear that all transactions involving sale or purchase of IMFL are liable to sales tax at the prescribed rates. Therefore, it must be held that the petitioners, who are L-4/ L-5 licensees and are not covered by the exemption clause contained in section 27(3), are required to pay sales tax at the prescribed rate in terms of section 16-A read with....
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....nt of tax ignoring the mandate of section 16-A read with entry 2(iv) of Schedule "C" and the plea of discrimination raised by them cannot be entertained simply because the Government has taken a decision to write off the liability of the Corporation. Such decision is purely an internal matter of the Government and no right, much less a legal right, can be claimed by the petitioners either to seek exemption from payment of tax or claim a mandamus directing the Government to write off their tax liability as well. Re: Question No. 2: 14.. Mrs. Lisa Gill submitted that even if, the Court does not accept the petitioners' plea of discrimination, it should invoke the doctrine of promissory estoppel and restrain the respondents from making recovery of tax on IMFL and/or beer sold during 1998-99 because the petitioners did not collect tax in view of memo dated April 1, 1998 sent by respondent No. 3 to the Managing Director of the Corporation. She emphasised that the subsequent clarification issued vide letter dated March 9, 1999 cannot be operated to the prejudice of the petitioners because by virtue of memo dated April 1, 1998, they had been induced not to collect tax on IMFL etc., sold ....
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....been applied against the Government and the argument based on executive necessity has been categorically negatived. Thus, where the Government makes a promise knowing or intending that it would be acted upon by the promisee and in fact, the promisee relying on it alters its position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee. However, in such matters the doctrine of promissory estoppel must yield when the equity so requires. If it can be shown by the Government that having regard to the facts of the case, it would be inequitable to bind the Government to the promise made by it, the court would not raise an equity in favour of the promise and enforce the promise against the Government. Likewise, in the cases in which Government changes its policy in larger interest and establishes before the court that it would be against the public interest to enforce the promise, the court may relieve the Government of its obligation to fulfil the promise. A promise made or assurance given by the public authorities/functionaries of the Government cannot be enforced by the Court if the same is found ....
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.... to abolish purchase tax on milk was reiterated and it was decided that a formal notification be issued in a day or two. On July 18, 1996/July 24, 1996, the Finance Minister made an announcement that with a view to encourage the milk producers and for granting relief to the common people, traders and industrialists, the Government has abolished tax on milk. The Finance Department formally approved the proposal of the Administrative Department to abolish purchase tax on milk and the Council of Ministers gave its formal approval to the decision in the meeting held on August 21, 1996. In furtherance of these decisions, the Sales Tax Authorities did not collect tax and accepted the returns filed by the writ petitioners. Later on, the Excise and Taxation Officers issued notices to the petitioners requiring them to pay tax on milk purchased during the assessment year 1996-97. In the backdrop of these facts, this Court held that the State Government was bound by its promise/representation made to the writ petitioners to abolish purchase tax on milk and that non-issuance of a formal notification was inconsequential. The appeal filed by the State of Punjab against the order of the High Co....
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.... held bound by the promise but should be free to act unfettered by it, that the court would refuse to enforce the promise against the Government. (2) No representation can be enforced which is prohibited by law in the sense that the person or authority making the representation or promise must have the power to carry out the promise. If the power is there, then subject to the preconditions and limitations noted earlier, it must be exercised. Thus, if the statute does not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government, because the Government cannot be compelled to act contrary to the statute. But if the statute confers power on the Government to grant the exemption, the Government can legitimately be held bound by its promise to exempt the promisee from payment of sales tax." 19.. In our opinion, the aforementioned decision does not support the cause of the petitioners and the doctrine of promissory/ equitable estoppel cannot be invoked in their case for restraining the respondents from making recovery of sales tax on IMFL and/or beer sold during 1998-99 because,-- (1) memo dated April ....
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.... the Departments under rules approved by the Finance Department, every order of an administrative department conveying a sanction to be enforced in audit shall be communicated to the audit authorities by the Finance Department. (5) Nothing in this rule shall be construed as authorising any department, including the Finance Department, to make re-appropriation from one grant specified in the Appropriation Act to another such grant." 20.. The petitioners have not placed any document before the Court to show that respondent No. 3 had issued memo dated April 1, 1998 after consulting the Finance Department or that it was preceded by a decision taken by the Council of Ministers to grant exemption to the sale of IMFL by L-4/L-5 licensees. Thus, the action of respondent No. 3 to issue memo dated April 1, 1998 even to the Managing Director of the Corporation was clearly an unauthorised act. In any case, the same cannot be made basis for invoking the doctrine of promissory estoppel to relieve the petitioners of their obligation to pay tax in accordance with the provisions of law because it was clearly against the mandate of section 16-A read with entry 2(iv) of Schedule C and section 27(3....