TaxTMI 
TaxTMI 
1990 (1) TMI 81
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....lant was completed and ready for production in October, 1974, the total investment of the company went up to even over Rs. 30 crores. It is averred that during the time the petitioner was setting up its project, it explained the difficulties of new units to the Government of India for considering fiscal measures to be adopted for the tyre industry to enable new units to achieve a reasonable return on their investments and to be able to compete with the existing old established tyre companies. 2. It is claimed that the Government of India, after fully investigating the relevant facts pertaining to the tyre industry found that the cost of investment in putting up a new tyre industry had gone up by four times to that of the old established ....
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..... F.No. 2221/19/75 TRU. On the basis of this letter, various Collectorates in India issued trade notices highlighting the said incentive scheme. One such notice issued by the Nagpur Collectorate has been annexed as Annexure 'C' to the petition. The opening para of that document shows that the scheme of excise duty relief had been announced to encourage higher production. The salient features of the scheme, which, as we have noticed above, was to remain in force upto 31st March, 1979, were detailed in the said trade notice of 25th June, 1976. 7. The petitioner has averred in paragraphs 19 to 27 of the petition that acting on the basis of the aforesaid scheme and with a view to achieving the maximum benefit, it made large investments for i....
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....e that taxation is a sovereign or governmental function, but, for reasons which we have already discussed, no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the Government, so far as the doctrine of promissory estoppel is concerned. Whatever be the nature of the function which the Government is discharging the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it. We are, therefore, of the view that in the present case the Government was bound to exempt the appellant from payment of sales tax in respect of sales of vanaspati effected by....
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....f promissory estoppel against the Government can be pleaded by the petitioner. 15. In Ceat Tyres of India Limited v. Union of India & Others, reported in 1987(31) E.L.T. 332(Bom.), the very question which has fallen for our consideration viz., withdrawal of rebate on excise duty on excess production of tyres and tubes, fell for decision by the Bombay High Court. After surveying the case law, that Court was of the view that the exercise of power of exemption under Rule 8 of the Central Excise Rules cannot be held to be a legislative function and the promise held by the Government can be enforced. In paragraph 18 of the reported judgment, it was held as follows : "Therefore, it is clear that when an exemption has been issued under Rule ....