w w w . L a w y e r S e r v i c e s . i n



Shree Jagannath Packers v/s State Of Orissa


Company & Directors' Information:- L C PACKERS PRIVATE LIMITED [Active] CIN = U25202DL2012PTC241798

Company & Directors' Information:- K M D PACKERS PRIVATE LIMITED [Active] CIN = U74950DL2000PTC104742

Company & Directors' Information:- PACKERS INDIA PVT LTD [Active] CIN = U99999MH1985PTC038391

Company & Directors' Information:- Q E D PACKERS PRIVATE LIMITED [Active] CIN = U74950DL2001PTC110725

Company & Directors' Information:- S S A S PACKERS PRIVATE LIMITED [Active] CIN = U21029WB2012PTC179508

Company & Directors' Information:- J. S. PACKERS PRIVATE LIMITED [Active] CIN = U36991UP1995PTC018211

Company & Directors' Information:- PACKERS (INDIA) PRIVATE LIMITED [Strike Off] CIN = U14102KA1999PTC024636

Company & Directors' Information:- PACKERS PRIVATE LIMITED [Active] CIN = U21010MH1968PTC014058

Company & Directors' Information:- K B S PACKERS PVT LTD [Strike Off] CIN = U99999UP1972PTC003540

Company & Directors' Information:- A & A PACKERS PRIVATE LIMITED [Active] CIN = U63090UP2011PTC047868

Company & Directors' Information:- S H K PACKERS PRIVATE LIMITED [Strike Off] CIN = U21000HP2013PTC000458

    Decided On, 14 September 2004

    At, High Court of Orissa

    By, THE HONOURABLE MR. JUSTICE A.M. PATNAIK & THE HONOURABLE MR. JUSTICE M.M. DAS

    For the Appearing Parties: A.K. Bisval, Ashok Mohanty, B.P. Mohapatra, B. Routray, Gangadhar Rath, N.C. Mohanty, P.K. Dhal, R. Sahu, Sovesh Roy, Y. Das, Advocates.



Judgment Text

A.K. PATNAIK, J.

This batch of writ petitions relate to withdrawal of sales tax incentives granted by the State Government of Orissa under different Industrial Policy Resolutions (in short, "ipr" ). Since common questions of fact and law arise in these writ petitions, they were heard analogously and are being disposed of by this common judgment. Facts of individual cases as stated in the writ petitions : O. J. C. No. 9967 of 1999 (Petitioner - Shree Jagannath Packers) : By IPR, 1989 the Government of Orissa declared, inter alia, that exemption will be allowed to new small-scale industrial units set up in the State of Orissa from tax on purchases of spare part's of machinery, raw materials and packing materials and on sale of finished products for a period of 7 years from the date of commencement of commercial production. This was followed up by Finance Department notifications under the Orissa Sales Tax Act, 1947 granting the said exemptions. Encouraged by the said declaration, the petitioner set up a small-scale industrial unit for manufacturing of card-board boxes and corrugated card-board boxes by investing money from his own personal resources as well as from out of the loans from the State Bank of India in the year 1991. A permanent registration certificate thereafter was granted by the General Manager, District Industries Center, Cuttack indicating therein that the date of commercial production of the small-scale industrial unit of the petitioner is September 11, 1993 and the petitioner was entitled to enjoy the aforesaid benefits of exemption from sales tax for a period of seven years up to September 11, 2000. The petitioner enjoyed the said benefits of sales tax exemption from September 11, 1993 but on July 30, 1999 Notifications Nos. 622 of 1999, 623 of 1999, 624 of 1999 and 625 of 1999 were issued by the Government of Orissa in the Finance Department withdrawing all such benefits with effect from the 1st August, 1999. Aggrieved, the petitioner has filed this writ petition praying for quashing the said notifications dated 30th of July, 1999. O. J. C. No. 13017 of 1999 (Petitioner - Larsen Toubro Co. Ltd.) : Under IPR 1989 the State Government of Orissa declared, inter alia, that pioneer industrial units set up in zone "c" will be allowed deferment of payment of sales tax collected on finished products for a period of 9 years from the date of commercial production and in lieu of such deferment such pioneer industrial unit can opt for exemption of sales tax on finished products for a period of seven years from the date of commercial production. This was followed by notifications issued by the State Government of Orissa granting deferment of payment of tax under the Orissa Sales Tax Act, 1947 and under the Central Sales Tax Act, 1956 for a period of seven years from the date of commercial production. Encouraged by the said declarations, the petitioner set up a new industry at mouza-Arda in Jharsuguda located in Zone "c" named M/s. L. and T. Cement works with a capacity of 0. 7 million tones per annum at a purchase cost of Rs. 80 crores and started commercial production with effect from September 10, 1993. Hence, the petitioner was entitled to deferment of payment of tax under the Orissa Sales Tax Act and the Central Sales Tax Act for a period of seven years up to September 9, 2000 and accordingly the petitioner applied to the Director of Industries, Orissa, for necessary certificate. But the notifications S. R. O. Nos. 623 and 624 of 1999 dated July 30, 1999 were issued withdrawing the benefit of deferment of payment of tax under the Orissa Sales Tax Act and the Central Sales Tax Act. Aggrieved, the petitioner has prayed for quashing the said two notifications issued by the State Government in the Finance Department. O. J. C. No. 2718 of 2000 (Petitioner - IFGL Refractories Ltd.) : Under IPR 1989 the State Government of Orissa declared, inter alia, that large scale industrial units would be eligible for deferment of payment of tax under the Orissa Sales Tax Act and the Central Sales Tax Act for a period of seven years from the date of commercial production. This was followed by appropriate notifications and Rules for deferment of tax under the Orissa Sales Tax Act and the Central Sales Tax Act. Encouraged by the said policy declarations and notifications, the petitioner made investment of Rs. 25,36,809 on acquisition of land and a further investment of Rs. 2,117. 35 lakhs on construction of factory buildings and installation of plant and machinery and set up an industry with an installation capacity of manufacturing 1,920 metric tonnes of continuous casting refractories and started commercial production on 1st February, 1993. The Director of Industries, Orissa, also issued a certificate of eligibility in favour of the petitioner certifying that the industrial unit of the petitioner was a large scale industrial unit and was eligible for deferment of payment of tax for a period of seven years from the date of commercial production as per IPR 1989. For availing benefit of deferment of sales tax, the petitioner executed an agreement with the Industrial Promotion and Investment Corporation of Orissa Ltd. on 23rd of August, 1993 agreeing to the various terms and conditions for availing sales tax deferment facilities for the period from 1st February, 1993 to 31st January, 1995. Thereafter the petitioner enjoyed the sales tax deferment facilities on the finished products for a period of 5 years from 1st February, 1993. The petitioner then requested the Director of Industries, Orissa, to issue the eligibility certificate for the sixth year from the date of commercial production by letter dated 23rd July, 1999, but the petitioner was informed in January, 2000 that the requisite eligibility certificate for deferment of payment of tax for the sixth and seventh years after commercial production cannot be issued in view of the Notifications S. R. O. Nos. 623, 624 and 625 dated July 30, 1999, withdrawing the benefit of deferment with effect from 1st of August, 1999. Aggrieved, the petitioner has filed this writ petition for quashing the said three notifications. O. J. C. No. 4297 of 2000 [petitioner - Kali Oil Mills (P) Ltd. ] : Under IPR 1989, the State Government announced, inter alia, that sales tax exemption on purchases of raw materials, spare parts and packing materials and on sale of finished products shall be allowed for a period of seven years from the date of commercial production to new small-scale industries. Accordingly, Notification No. 27662-CTA-560/90-F dated August 16, 1990 was issued under section 6 of the Orissa Sales Tax Act, 1947 providing such exemption for a period of seven years from the date of commercial production on the purchase of raw materials, packing materials, spare parts of machinery, etc. , as well as on the sale of finished products. Encouraged by the said exemptions, the petitioner set up a small-scale industrial unit at Jatni in district Khurda after December 1, 1989 for manufacturing of edible oil, oil cakes, groundnut kernel and went into commercial production on April 1, 1994. The Project Manager, District Industries Centre, Bhubaneswar issued eligibility certificates in favour of the petitioner certifying that the petitioner was entitled to exemption of sales tax on purchase of raw materials, spare parts of machinery and packaging materials as well as on sale of finished products under the Orissa Sales Tax Act and the Central Sales Tax Act for the period of April 1, 1994 to March 31, 2000 and the petitioner continued to enjoy the said exemptions as per the eligibility certificates, but the said exemptions were withdrawn by notifications dated July 30, 1999 and February 17, 2000. The petitioner has therefore prayed for quashing the said notifications dated July 30, 1999 and February 17, 2000. O. J. C. No. 6297 of 2000 (Petitioner - Noble Pharma Care Ltd.) : The petitioner has set up a medium scale industry for manufacture of sterilized disposable syringe at Chandaka Industrial Estate, Patia, Bhubaneswar pursuant to the IPR 1986 and commenced commercial production on May 9, 1998 and is a continuing industrial unit of IPR 1986 and was entitled under IPR 1989 to exemptions from sales tax on sale of finished products. The petitioner was accordingly issued with the eligibility certificate certifying that the petitioner was exempted from sales tax on sale of finished products for a period of five years from May 9, 1998 and the petitioner was availing such exemption from sales tax on sale of its finished products under the Notification No. 790 of 1990 dated August 16, 1990 and Notification No. 1013 of 1990 dated November 12, 1990 under the Orissa Sales Tax Act and the Central Sales Tax Act which were issued to implement the IPR 1989. Thereafter Notifications S. R. O. No. 623 of 1999 and S. R. O. No. 624 of 1999 were issued on July 30, 1999 withdrawing the said exemptions under the Orissa Sales Tax Act and the Central Sales Tax Act with effect from August 1, 1999. Aggrieved, the petitioner has filed this writ petition with a prayer to quash the said notifications dated July 30, 1999. O. J. C. No. 962 of 2001 (Petitioner – Agarwala Fabricators) : The petitioner is a proprietorship concern and has set up a small-scale industrial unit at Atabira in district Sambalpur for carrying out general and structural fabrication and manufacturing agricultural units and it was registered with the D. I. C. , Bargarh. Under the IPR 1989, small-scale industrial units undertaking expansion/modernisation/diversification after December 1, 1989 on the basis of an exclusive project report duly appraised by a financing institution were entitled to exemption from tax on purchase of raw materials, spare parts of machinery and packing material and exemption of tax on sale of finished products for a period of seven years from the date of commercial production. The petitioner undertook such expansion/modernisation/diversification and started commercial production on June 27, 1993 and was issued with a certificate of eligibility for the said exemption for seven years from June 27, 1993 by the General Manager, District Industries Center, Bargarh. The petitioner was allowed the exemption as per the said eligibility certificate on sale of his finished products up to July 31, 1999 for the assessment period 1993-94 to 1998-99 but has not been allowed exemption for the period from August 1, 1999 because of the withdrawal of the exemption by the finance department notifications dated July 30, 1999. Aggrieved, the petitioner has filed this writ petition praying for quashing the said notifications dated July 30, 1999 and the order of assessment for the period 1999-2000 made under section 12 of the Orissa Sales Tax Act in so far as it disallows the exemption for the period after July 30, 1999 and for a direction to renew the eligibility of the petitioner to exemption of tax for the period 1999-2000 to 2000-2001. O. J. C. No. 2761 of 2001 (Petitioner - Ponni Sugar and Chemicals Ltd.) : By IPR 1989 the Government of Orissa declared, inter alia, that new large scale industrial units will be allowed to defer payment of sales tax collected on their finished products for a period of seven years in zones "b" and "c" and nine years in zone "a" from the date of commercial production and in lieu of such deferment can opt for exemption of sales tax on finished products for a period of five years in zones "b" and "c" and for a period of seven years in zone "a" from the date of commercial production. IPR 1989 was followed by a notification S. R. O. No. 790 of 1990 dated August 16, 1990 effective from December 1, 1989 which indicated the restrictions and conditions under which a large scale industrial unit could either enjoy the benefit of deferment of payment of sales tax or in lieu of deferment could claim exemption from payment of tax admitted as payable in respect of sale of finished products produced by such industrial units. Encouraged by the said declarations in the IPR 1989, the petitioner set up a large industrial unit for manufacture of sugar and molasses in the district of Bolangir and commenced commercial production on 16th of February, 1994 and applied to the Director of Industries, Orissa opting for exemption from payment of sales tax in lieu of deferment of sales tax. Eligibility certificates were issued by the Director of Industries declaring that the petitioner was entitled to exemption from payment of sales tax on its finished products either sugar or molasses produced for a period of seven years from the date of commercial production. The petitioner was also granted a certificate of eligibility for sales tax concession on purchase of raw materials, spare parts of machinery and packing materials for the said period of seven years. Thereafter the petitioner availed the said benefits and in the regular assessment for years 1996-97 and 1997-98 the petitioner was allowed exemption from payment of sales tax on sale of sugar and molasses produced by the petitioner. But before completion of seven years for which the exemption was allowed, Notifications S. R. O. No. 623 of 1999, S. R. O. No. 624 of 1999, and S. R. O. No. 625 of 1999 dated 30th July, 1999 were issued withdrawing the said exemptions. Thereafter notifications were issued on February 17, 2000 by the Government of Orissa in the Finance Department directing that no exemption for payment of sales tax and no deferment of payment of sales tax shall be allowed except to existing industrial units already in receipt of exemption and deferment as on January 1, 2000 and to industrial units in pipeline as on January 1, 2000 subject to the criteria mentioned in the said notifications. Aggrieved, the petitioner has filed this writ petition praying for quashing the said notifications dated July 30, 1999 and February 17, 2000 and for declaring that the petitioner is entitled to benefit of sales tax exemption in lieu of deferment for a full term of seven years from the date of commercial production. O. J. C. No. 5122 of 2001 (Petitioners - Mahanadi Distilleries Pvt. Ltd. And another) : Under IPR 1996 effective from March 1, 1996 various incentives were allowed for setting up industries in the State of Orissa. On September 23, 1997 petitioners submitted an application to the Excise Department of the Government of Orissa for permission to set up an IMFL Bottling Plant in the State of Orissa. On September 7, 1997 the State Government in the Excise Department accorded such permission to the petitioners. The petitioners negotiated with the O. S. F. C. for purchasing the assets of M/s. Suki Industries Pvt. Ltd. at Allipur Road, Narayanpur taken over by the O. S. F. C. under section 29 of the State Financial Corporation Act, 1951 and paid a price of Rs. 23. 50 lakhs to the O. S. F. C. and invested further in land and machinery and converted the said assets into a Bottling Unit of I. M. F. L. The petitioners obtained a provisional registration certificate registering the petitioner No. 1 as a small-scale industry and also obtained registration certificates registering the petitioner No. 1 as a registered dealer under the Orissa Sales Tax Act and the Central Sales Tax Act on May 26, 1999. But by notifications dated 30th of July, 1999 issued by the Government of Orissa in the Finance Department the sales tax benefits were withdrawn with effect from August 1, 1999. On 9th of October, 2000 the unit of the petitioner started its commercial production and on November 24, 2000 the industrial unit of the petitioner granted permanent registration certificate by the General Manager, District Industries Centre, Ganjam, Berhampur. On November 28, 2000 the petitioner No. 1 company applied to the General Manager, District Industries Centre, Ganjam, Berhampur for issuing sales tax exemption as envisaged under IPR 1996, but on December 27, 2000 the General Manager, District Industrial Centre, Ganjam, Berhampur intimated the petitioner No. 1 company that it will not be entitled to any sales tax incentives in view of the aforesaid Government of Orissa, Finance Department notifications dated 30th of July, 1999. Aggrieved, the petitioner has prayed for quashing the said communications dated December 27, 2000 of General Manager, District Industries Centre, Ganjam, Berhampur to the petitioner annexed to the writ petition as annexure 15 and for a mandamus on the opposite parties to forthwith grant to the petitioner No. 1 company the various incentives granted under IPR 1996 and the Finance Department Notification No. 477 of 1996 dated July 26, 1996. Facts common to the writ petitions as stated in the counter-affidavit on behalf of the State of Orissa : For promoting industries of the State Government of Orissa, the State Government of Orissa adopted IPRs from time to time, namely, IPR 1980, IPR 1986, IPR 1989, IPR 1992 and IPR 1996. Under the aforesaid IPRs some sales tax related incentives were also to be given to new and existing industries. To give effect to the IPRs, notifications were issued from time to time by the Finance Department under section 6 of the Orissa Sales Tax Act, 1947 granting exemption from sales tax for 5 to 7 years and notifications were also issued under section 7 of the Orissa Sales Tax Act allowing deferment of payment of tax for 5 to 7 years. The fiscal position of the State Government deteriorated because of the increasing gap between the revenue receipts and the revenue expenditure. In 1998-99, the revenue deficit rose to an alarming level of Rs. 2,265 crores. Due to such fiscal deficit, the State Government Account was overdrawn and the State Government had to approach the Government of India to bail it out from the overdraft situation for help. The Government of India in the Ministry of Finance, however, agreed to provide the required help to the State Government on the condition that the State Government withdraws the fiscal incentives to industries, reduces the non-plan revenue expenditure and adopts resource mobilization measures and accordingly a Memorandum of Understanding (MOU) was signed on April 9, 1994 on behalf of the State Government and the Government of India, After the signing of the MOU, the State Government took detailed review of tax related incentives granted to industries in the State, The State Government set up a Task Force comprising of the Commissioner of Commercial Taxes, the Special Secretary to Government of Orissa, Industries Department, the Managing Director, IPICOL, and the Director of Industries and the Task Force unanimously recommended withdrawal of sales tax incentives under all IPRs up to IPR 1989 and for enlarging the list of ineligible industries under IPR 1996 keeping in view the ineligible list of the IPR 1999 and for consulting the Finance Department before sanctioning any sales tax incentives for revival of sick industries under IPR 1996. A white paper on State Finance was laid in the Orissa Legislative Assembly in July, 1999 in which the deteriorating finances of the State were depicted and fiscal corrective measures were suggested. One such fiscal corrective measure suggested was that all tax concessions/deferrals/exemptions extended under different Government Policies should be reviewed and wherever necessary abolished immediately. A self-explanatory Cabinet Memorandum on withdrawal of sales tax concessions was prepared and was vetted by the Industries Department on July 5, 1999 for being placed before the Council of Ministers. In anticipation of approval of the cabinet, however, the Chief Minister approved withdrawal of sales tax concession on July 27, 1999. Thereafter the impugned notifications S. R. O. No. 622 of 1999, S. R. O. No. 623 of 1999, S. R. O. No. 624 of 1999 and S. R. O. No. 625 of 1999 - all dated July 30, 1999 - were issued withdrawing some sales tax incentives and concession in the public interest. The Cabinet Memorandum was thereafter placed in the meeting of the Council of Ministers held on October 14, 1999 and the counsel of Ministers did not approve the incentives indicated in the Memorandum and observed that the incentives may be restored subject to the following stipulations : (a) List of ineligible industries under IPR 1992 and IPR 1996 may be expanded as has been suggested in the Memorandum; (b) Benefit under IPR 1989 should be extended to industrial units who have not already availed of the same before August 1, 1999;. . . . . . (c) Industrial units to which benefits under IPR 1989 have already been extended by July 31, 1989 should be scrutinized to ensure that only genuine cases eligible under IPR 1989 get the benefit under the said IPR. On December 21, 1999, however, the Law Department opined that after the issue of the impugned notifications dated July 30, 1999, concessions notified under IPR 1980, IPR 1986 and IPR 1989 cannot be revived and a fresh notification is necessary for revival of the sales tax incentives under the said IPRs. Accordingly, fresh draft notifications were prepared but the notifications could not be issued as the general elections intervened and the Election Commissioner did not approve the proposal for issue of the fresh notifications. In the meanwhile, the Union Finance Minister convened a Conference of Chief Ministers and Finance Ministers of all States and Union Territories on November 16, 1999 and at the said Conference the State and Union Territories were required to implement the recommended uniform floor rate of sales tax and to discontinue sales tax incentives under IPRs with effect from January 1, 2000. The Government of India also constituted a Standing Committee to monitor the implementation of the aforesaid decision and the standing Committee in their meeting held on December 20, 1999 unanimously recommended that deterrent action should be taken against the State not falling in the line with the said unanimous decisions and failure to implement the unanimous decisions was to be treated as a negative revenue measure by the Finance Commission and planning Commission. Two notifications were issued on February 17, 2000 by the Government of Orissa in the Finance Department under sections 6 and 7 of the Orissa Sales Tax Act directing that no exemption from payment of tax and no deferment of payment of sales tax shall be allowed except to existing industrial units already in receipt of the exemption and deferments as on January 1, 2000 and to industrial units in pipeline as on January 1, 2000 subject to their fulfilling the criteria mentioned in the notifications. After the elections, the new Government assumed office on March 5, 2000 and the Cabinet of the new Government in its meeting held on April 22, 2000 annulled the decisions of the Council of Ministers taken on October 14, 1999 and ratified the four impugned notifications S. R. O. Nos. 622, 623, 624 and 625 of 1999 dated 30th July, 1999. Submissions of learned counsel for the petitioners : Mr. Yasobant Das, learned counsel for the petitioner in O. J. C. No. 9967 of 1999 submitted that relying on the exemption from sales tax on purchase of spare parts of machinery, raw materials and packing materials and on sale of finished products granted pursuant to the IPR 1989, the petitioner has set up its industry and has expanded the same and the Government cannot withdraw the sales tax exemption at this stage as it is bound by the principle of promissory estoppel laid down by the Supreme Court in various decisions to keep its promise of exemption. In support of this contention, Mr. Das cited the decisions of the Supreme Court in Union of India v. Anglo Afghan Agencies AIR 1968 SC 718, Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 44 STC 42; AIR 1979 SC 621, Union of India v. Godfrey Philips India Ltd. AIR 1986 SC 806, Pournami Oil Mills v. State of Kerala [1987] 65 STC 1 (SC), Amrit Banaspati Co. Ltd. v. State of Punjab [1992] 85 STC 493; (1992) 2 SCC 411, Dr. Ashok Kumar Maheshwari v. State of U. P. (1998) 2 SCC 502 and Dai-Ichi Karkaria Ltd. v. Union of India (2000) 119 ELT 516 (SC ). Mr. Das further submitted that the sales tax incentives pursuant to the IPR 1989 were granted in the public interest and the State Government can withdraw such incentives only on the ground of supervening public interest. He further submitted that "public interest" has to be defined in the light of the aims and objectives of the scheme of the IPR and any definition of "public interest" without taking into account the aims and objectives of the IPR should not be accepted by the court. He submitted that the IPR 1989 was formulated by the State Government after approval of the State Cabinet and the issuance of the notification under the Orissa Sales Tax Act granting the exemptions by the Finance Department was with a view to carry out the objects and the policy decisions in the IPR itself and the impugned notifications issued under the Orissa Sales Tax Act by the Finance Department withdrawing the exemption are repugnant to the IPR of the State Government and must be held not to be in public interest and to that extent bad. He submitted that augmentation or loss of revenue cannot constitute supervening public interest for withdrawal of the exemptions. In support of this contention, Mr. Das cited the decisions of the Supreme Court in Shri Digvijay Cement Co. v. State of Rajasthan [1997] 106 STC 11; (1997) 4 JT 340 (SC), State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258; (1998) 8 JT 2 (SC), State of Rajasthan v. Mahaveer Oil Industries [1999] 115 STC 29; (1999) 3 JT 212 (SC), Commissioner of Sales tax v. Industrial Coal Enterprises [1999] 114 STC 365; (1999) 2 SCC 607 and Administrator, Nagar Palika v. Bharat (2001) 9 SCC 232. Mr. Das next submitted that even if the State Government had the power to withdraw the exemptions, this power cannot be exercised without giving notice to persons likely to be affected by such withdrawal and before issuing the notifications dated 30th July, 1999 withdrawing the exemptions of sales tax, the petitioner who was likely to be affected by the withdrawal of the exemptions from sales tax was not given any notice. In support of this argument Mr. Das cited the decision of the Supreme Court in National Buildings Construction Corporation v. S. Raghunathan (1998) 6 JT 21 (SC ). Mr. Das further submitted that the impugned notifications dated 30th July, 1999 issued by the Finance Department of the Government of Orissa were not ratified by the Council of Ministers in their meeting held on October 14, 1999 and consequently became null and void. He argued that the Council of Ministers in its subsequent meeting held on April 22, 2000 sought to annul the decision of the Council of Ministers taken on October 14, 1999 and ratify the two notifications dated 30th July, 1999, but by April 22, 2000 the notifications dated 30th July, 1999 were already dead and could not be revived retrospectively. Mr. Das submitted that in the Task Force constituted by the State Government, the Director of Industries opined that withdrawal of sales tax incentives to small-scale industries would adversely affect the industrialists of the State but this opinion of the Director of Industries was not taken into account before the impugned notifications dated 30th July, 1999 were issued in the garb of public interest. He finally submitted that the court should hold that industries which were already availing the sales tax benefits when the impugned notifications dated July 30, 1999 were issued cannot be deprived of the sales tax benefits and the withdrawal of sales tax benefits would be only applicable to new industries which are set up after the impugned notifications dated July 30, 1999 were issued. Mr. Gangadhar Rath, learned counsel appearing for the petitioner in O. J. C. No. 13017 of 1999, submitted that pursuant to IPR 1989 notifications were issued under section 7 of the Orissa Sales Tax Act granting deferment of payment of sales tax collected by the petitioner on finished products under the Orissa Sales Tax Act and the Central Sales Tax Act for a period of seven years from the date of commercial production and the petitioner was enjoying the said benefit of deferment of payment of sales tax. He submitted that while section 6 of the Orissa Sales Tax Act empowers the State Government to issue a notification granting exemption and withdrawing such exemption, section 7 of the said Act empowers the State Government to issue a notification allowing any class of dealers to defer payment of sales tax but does not empower the State Government to withdraw such benefit of deferment of payment of sales tax. In this context, he submitted that in Sales Tax Officer v. Shree Durga Oil Mills [1998] 108 STC 274 (SC); AIR 1998 SC 591, the Supreme Court upheld the withdrawal of exemption from sales tax because the withdrawal of exemption from sales tax impugned in that case was in exercise of powers of the State Government under section 6 of the Orissa Sales Tax Act to withdraw an exemption and does not apply to the case of the petitioner as the State Government has no such power under section 7 of the Orissa Sales Tax Act to withdraw the benefit of deferment of payment of sales tax. Mr. Rath argued that in the absence of any such express power vested in the State Government in section 7 of the Orissa Sales Tax Act empowering the State Government to withdraw the benefit of deferment of payment of sales tax granted under section 7 of the Act, the State Government cannot withdraw the benefit of deferment of payment of sales tax and the Notifications Nos. 623 and 624 dated July 30, 1999 are ultra vires the Orissa Sales Tax Act. Mr. Rath next submitted that it will be clear from the preliminary counter-affidavit filed by the State-opposite parties that the Chief Minister approved the withdrawal of the sales tax concession on July 27, 1999 in anticipation of the approval of the Cabinet, but the Council of Ministers in their meeting held on October 14, 1999 did not approve of the said withdrawal of sales tax concession and instead observed that the sales tax incentives may be restored subject to some stipulations. He argued that once the Council of Ministers refused to approve the withdrawal of sales tax concession in their meeting held on October 14, 1999, the impugned notifications dated 30th July, 1999 became dead and could not be revived subsequently by the new Council of Ministers which assumed office on March 5, 2000. Mr. S. C. Lal, learned counsel for the petitioners in O. J. C. No. 2718 of 2000 and in O. J. C. No. 2761 of 2001, submitted that in the absence of any express provision in section 7 of the Orissa Sales Tax Act conferring power on the State Government to withdraw sales tax exemption granted to a class of dealers or deferment of payment of tax, such power of withdrawal cannot be exercised by the State Government. He further submitted that section 22 of the Orissa General Clauses Act provides that where by an Orissa Act a power to make or issue notifications is conferred, then that power includes a power exercisable in the like manner and subject to the like sanction and conditions, if any, to rescind any notification so made or issued. He pointed out that similar provision in section 19 of the Punjab General Clauses Act was interpreted by the Supreme Court in Gopi Chand v. Delhi Administrations AIR 1959 SC 609, and it was held therein that the power to cancel the notification under the said section 19 of the Punjab General Clauses Act must inevitably be exercisable within the limits prescribed by the provision conferring the said power. According to Mr. Lal, since power has been conferred to withdraw an exemption under section 6 of the Orissa Sales Tax Act but no such power has been vested on the State Government to withdraw an exemption to a class of dealers or a deferment of payment of sales tax under section 7 of the said Act, the State Government cannot withdraw either exemption to a class of dealers or deferment of payment of sales tax to dealers granted under section 7 of the said Act. Mr. Lal also relied on the decision of the Supreme Court in State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258 in which it was held that a notification issued by the State Government in exercise of powers under section 7 of the Bihar Finance Act to the extent it is repugnant to the Industrial Policy Resolution of the Government of Bihar is bad. He submitted that since withdrawal notifications dated 30th July, 1999 are bad inasmuch as they have, contrary to the IPR 1989, discontinued deferment of payment of sales tax before completion of the period of seven years from the date of commercial production of the petitioners. He submitted that the High Court should hold that the petitioners are entitled to such benefit of deferment of payment of sales tax for the remaining period of seven years in accordance with the IPR 1989 and cited the decision of the Supreme Court in Tungabhadra Industries Ltd. v. Union of India (2000) 5 SCC 501, in support of this submission. In O. J. C. No. 4297 of 2000 Mr. N. Paikray, learned counsel for the petitioner, submitted that although the petitioner being a new small-scale industrial unit established pursuant to the IPR 1989 was entitled to sales tax incentives for the full period of seven years from the date of its commercial production, the Government of Orissa in the Finance Department has by the impugned notifications dated 30th July, 1999 withdrawn the said sales tax incentives on unreasonable and erroneous grounds and that the impugned notification S. R. O. No. 622 of 1999 dated 30th July, 1999 deleting entries 26-F, 30-FFF and other entries from the Tax-free List with effect from 1st August, 1999 are not sustainable in the eye of law. Alternatively, Mr. Paikray submitted that by a fresh notification dated February 17, 2000 issued by the Government of Orissa in the Finance Department and in particular under the first proviso thereof new small-scale industrial units who are in receipt of sales tax incentives immediately before 1st January, 2000 under the Finance Department notification No. 20206-CTA-14/76-F dated April 23, 1976 as amended by notification No. 27662-CTA-56/90-F dated August 16, 1990 shall continue to avail the incentives for the full period of seven years as per the said notification dated August 16, 1990. According to Mr. Paikray, even a small-scale industrial unit set up pursuant to IPR 1989 such as the unit of the petitioner falls within the first proviso to the notification dated February 17, 2000 and is entitled to avail the benefits for the full period of seven years as per the said Finance Department notification dated April 23, 1976 as amended by the notification dated August 16, 1990. Hence, a declaration be issued by the Court that the petitioner is entitled to the exemption of sales tax on purchase of raw materials, spare parts of machinery and packaging materials and on sale of finished products for the full period of seven years from the date of its commercial production, i. e. , April 1, 1994. Mr. B. K. Mahanti, learned counsel appearing for the petitioner in O. J. C. No. 6297 of 2000, took us through the Industrial Policy Resolutions of the Government of Orissa made from time to time to show that the object of the said Industrial Policy Resolutions was to encourage the entrepreneurs to establish industrial units in the State of Orissa for the purpose of creating employment and developing the State. He submitted that the Industrial Policy (sic) power under article 162 of the Constitution and that such Industrial Policy Resolutions can only be reversed or withdrawn by another Industrial Policy Resolutions by the State Government in exercise of its powers under article 162 of the Constitution and that neither the Finance Department of Government of Orissa nor the Chief Minister could withdraw the sales tax incentives granted under the Industrial Policy Resolutions. He relied on the decision of the Supreme Court in State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258 where it has been held that a notification issued by the Finance Department granting exemption has to be consistent with the Industrial Policy Resolution. He submitted that the Council of Ministers have been democratically elected to power and the Industrial Policy Resolutions made by the Council of Ministers cannot be undone by the impugned notifications issued by the bureaucrats so long as the Industrial Policy Resolutions are in force. Mr. Mahanti next submitted that in Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 44 STC 42; AIR 1979 SC 621, the Supreme Court has held that a promise of sales tax incentives granted by the State Government cannot be withdrawn except in public interest and the Government has to satisfy the court by placing relevant materials that the departure from the promise was necessary in the public interest. He argued that in the present case the only reason given by the State Government in their counter-affidavit for withdrawing from the promise of sales tax incentives under the Industrial Policy Resolutions is that the State Government will suffer financial loss if the sales tax incentives continue, but this reason should not be accepted by the court because the State Government knew at the time when the Industrial Policy Resolutions were made that grant of sales tax incentives would cause revenue loss to the State Government and also because sales tax incentives have been restored to the industries by notifications dated February 17, 2000 resulting in loss of revenue to the State Government. Mr. Mahanti next submitted that the counter-affidavit filed on behalf of the State Government would show that a Cabinet Memorandum was prepared for withdrawal of sales tax incentives for being placed before the Council of Ministers and in anticipation of approval of the Cabinet, the Chief Minister approved withdrawal of sales tax concession on July 27, 1999 and the notifications dated July 30, 1999 were issued withdrawing the sales tax incentives, but on October 14, 1999 the Council of Ministers did not approve the withdrawal of the sales tax incentives and instead directed restoration of sales tax incentives subject to some stipulations. He submitted that all justifications for withdrawal of sales tax incentives now pleaded before the court by the State Government were considered by the Council of Ministers in its meeting held on October 14, 1999 but found not correct and therefore the impugned notifications dated July 30, 1999 now cannot be justified by the State Government before the court on the ground that they were issued in public interest. Mr. Mahanti submitted that the notifications dated February 17, 2000 restored sales tax incentives under notifications of the Government of Orissa in Finance Department No. 41267-CTA-106/92-F dated September 23, 1992 and No. 33382-CTA-72/96 dated July 26, 1996 permitting the existing industrial units who were enjoying the same immediately before 1st January, 2000 for the period of their eligibility under the said notifications but did not restore the sales tax incentives under the Notifications No. 27665-CTA-56/90 dated August 16, 1990 granted under section 7 of the Orissa Sales Tax Act to the new industries, continuing industries set up on or after the 1st of April, 1986, continuing industrial units set up on or after 1st August, 1980, industries set up on or after 1st December, 1989, expansions of units set up on or after April 1, 1986 but before 1st December, 1989 and has gone into commercial production after April 1, 1986 on the basis of a project report appraised by financial institutions and expansions of units undertaken between August 1, 1980 and March 31, 1986 and has gone into commercial production after April 1, 1986 on the basis of a project report of appraisal by financial institution. He argued that such denial of benefits under the notification dated August 16, 1990 under section 7 of the Orissa Sales Tax Act to the aforesaid categories of industries while at the same time restoring sales tax benefits to existing industrial units under the notifications dated September 23, 1992 and July 26, 1996 who were enjoying incentives immediately before 1st January, 2000 is based on a classification having no rational nexus with the object sought to be achieved and is discriminatory and violative of article 14 of the Constitution. Mr. Mahanti finally argued that the State Government must follow some morality while dealing with its subjects and institutions and morality requires that the State Government fulfils its promises of sales tax incentives to the industrial units both existing and new made in the Industrial Policy Resolutions and this is also a legitimate expectation of the subjects. Hence, the impugned notification S. R. O. No. 623 of 1999 dated July 30, 1999 withdrawing the benefits granted to the petitioner by notification dated August 16, 1990 be quashed by the court. Mr. Jagabandhu Sahoo, learned counsel appearing for the petitioner in O. J. C. No. 962 of 2001, submitted that the petitioner undertook modernisation and expansion of his industrial unit pursuant to IPR 1989 and was entitled to exemption from tax on purchase of raw materials, spare parts of machinery and packing materials and on sale of finished products for a period of seven years from the date of commercial production, i. e. , up to June, 2000, but the exemptions were withdrawn with effect from August 1, 1999 by the impugned notification dated July 30, 1999. He argued that the notification of exemption, though issued under section 6 of the Orissa Sales Tax Act, was actually a notification of exemption granted under section 7 of the said Act and section 7 of the said Act did not vest any express power in the State Government to withdraw any exemption granted thereunder. He also relied on the decision of the Supreme Court in Gopi Chand v. Delhi Administration AIR 1959 SC 609 wherein it has been held that the power to cancel a notification must inevitably be exercised within the limits prescribed by the provision conferring the said power. Mr. Sahoo next submitted that the impugned notifications dated July 30, 1999 were issued without the prior approval of the State Cabinet and the said notifications were ratified by the State Cabinet only on April 22, 2000. According to Mr. Sahoo, the impugned notifications dated July 30, 1999 having been issued without the prior approval of the State Cabinet were invalid and have to be struck down by the court. Mr. Sahoo cited a division Bench judgment of this Court delivered on May 1, 1992 in the case of Mansfield Electronics v. State of Orissa (O. J. C. No. 4153 of 1990) holding that sales tax benefits granted for a period of five years cannot be denied to the industrial unit for the said period of five years. He also relied on the decisions of the Supreme Court in Pournami Oil Mills v. State of Kerala [1987] 65 STC 1 and in State of Bihar v. Usha Martin Industries Ltd. [1987] 65 STC 430, for the proposition that industrial units which have already been set up prior to the change of the policy should be allowed exemption for the full period for which they were entitled under the old policy. Mr. Sahoo contended that a promise of exemption from sales tax can only be withdrawn in the public interest and the Government has to place all materials to satisfy the court that the withdrawal was in the public interest. He argued that mere widening of fiscal deficit taken as a ground for withdrawal of the exemptions by the notifications dated July 30, 1999 cannot be considered to be public interest. In support of this contention, he relied on the decisions of the Supreme Court in Amrit Banaspati Co. Ltd. v. State of Punjab [1992] 85 STC 493, Pawan Alloys and Casting Pvt. Ltd. v. U. P. State Electricity Board (1997) 7 SCC 251 and Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398. He also cited the decision of the Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 44 STC 42; AIR 1979 SC 621 for the proposition that the Government must satisfy the court by placing relevant materials that the withdrawal of a promise was in public interest and the court will apply a rigorous test while allowing the Government to withdraw the benefit in public interest. Mr. Sahoo finally submitted that law has been settled in the case of Kunnathat Thathunni Moopil Nair v. State of Kerala AIR 1961 SC 552, that a fiscal statute can be challenged on the ground that it is discriminatory and violative of article 14 of the Constitution. He argued that in this case the State Government while withdrawing the sales tax exemptions from industrial units as that of the petitioner set up pursuant to IPR 1989 by the impugned notifications dated July 30, 1999 has allowed sales tax incentives to existing units and industrial units in pipeline under the notifications dated February 17, 2000 and this amounts to discrimination and the impugned notification dated July 30, 1999 is liable to be quashed for violation of article 14 of the Constitution. Mr. Ashok Parija, learned counsel appearing for the petitioner in O. J. C. No. 5122 of 2001, submitted that no materials have been placed before the court to show that withdrawal of the sales tax incentives under the impugned notifications dated July 30, 1999 was in the public interest and only a bald contention is raised in the counter-affidavit that such withdrawal was necessary to take care of the fiscal deficit. Mr. Parija placed great reliance on the decision of the Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 44 STC 42; AIR 1979 SC 621 for the proposition that a mere claim of change of policy would not be sufficient to exonerate the Government from its liability under the principle of promissory estoppel and the Government would have to show what precisely is the changed policy and also its reasonable justification so that the court can judge for itself which way the public interest lies and what the equity of justice demands and it is only if the court is satisfied on proper and adequate material placed by the Government that overriding public interest requires that the Government should not be 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. Mr. Parija submitted that in Dai-Ichi Karkaria Ltd. v. Union of India (2000) 4 SCC 57; (2000) 119 ELT 516, the Supreme Court after considering the affidavit filed by the Government for issuing the impugned notification purportedly in the public interest held that the Government has failed to discharge its statutory obligations while issuing the impugned notifications and the justifications offered were far too naive to be accepted and the reasons set out does not carry the case of the Government further at all and so holding struck down the impugned notifications. Mr. Parija argued that in the present case also the counter-affidavit filed on behalf of the State Government does not make out a case for withdrawal of the sales tax benefits which were granted under the IPR 1996 for various purposes such as harnessing Orissa's vast natural resources and potential for accelerated industrial growth, attracting and facilitating large investments in infrastructure and industries, generating employment in industrial/commercial activities, developing backward areas/regions of the State through industrial and mining ventures, strengthening the rural economy through development of agro-industries, small industries, village and cottage industries, etc. , stimulating and strengthening local entrepreneurial base and developing skill/expertise in the State of Orissa. Mr. Parija submitted that by notification S. R. O. No. 141/2000 dated February 17, 2000 issued under section 6 of the Orissa Sales Tax Act, the State Government has allowed sales tax incentives to pipeline industries if they satisfied the criteria mentioned therein. He submitted that the industry of the petitioner was also a pipeline industry and satisfied the criteria mentioned in the said notification and is entitled to sales tax exemption under the said notification. He submitted that M/s. Hindustan Cocacola Beverage Pvt. Ltd. , which had set up its unit under IPR 1996 and had become disentitled to sales tax exemption by the impugned notification dated July 30, 1999 like the petitioner has been granted the benefit of sales tax exemption under IPR 1996 as a pipeline industry under the notification dated February 17, 2000 of the State Government and the petitioner is similarly entitled as a pipeline industry to the benefit of sales tax exemption under the notification dated February 17, 2000 and the court should issue a declaration accordingly. Submissions of the learned Advocate-General and the learned Senior Standing Counsel (Commercial Taxes) : Mr. Sovesh Roy, learned Advocate-General and Mr. Ashok Mohanty, learned Senior Standing Counsel (Commercial Taxes), submitted that the facts stated in the counter-affidavit on behalf of the State of Orissa by the Secretary to Government, Finance Department, and the materials produced before the court would show that the impugned notifications dated 30th July, 1999 were issued because the State Government was passing through a grave financial imbalance caused by mounting revenue and fiscal deficiencies and immediate measures had to be taken to reduce the loss of revenue on account of sales tax incentives and concessions granted under the IPRs and improve the revenue receipts from sales tax. They pointed out that by the impugned notification S. R. O. No. 622 of 1999 dated 30th July, 1999 issued under section 6 of the Orissa Sales Tax Act exemptions granted under entries 26, 26-A, 26-D, 26-F, 26-FF, 30-FF, 30-FFF, 30-FFFF, 30-FFFFF, 30-FFFFFF, 35-I and 35-J pursuant to the IPR 1980, IPR 1986 and IPR 1989 were withdrawn and by the said notification S. R. O. No. 622 of 1999 dated 30th July, 1999 some more categories of industries were added under items 48 to 52 in the list of industries which were ineligible to get the concessions under the IPR 1980, IPR 1986, IPR 1989, IPR 1992 and IPR 1996. Mr. Roy and Mr. Mohanty further pointed out that by the impugned Notification S. R. O. No. 623 of 1999 dated 30th July, 1999 the State Government rescinded the notification of the Government of Orissa in the Finance Department dated 16th August, 1990 as amended from time to time under which exemption from sales tax and deferment of payment of sales tax on sale of finished products to new, existing and continuing industrial units of IPR 1980 and IPR 1986 in the medium and large scale sectors had been granted pursuant to IPR 1989. They pointed out that by the impugned notification S. R. O. No. 624 of 1999 dated 30th July, 1999 issued under section 13 (3) of the Central Sales Tax Act read with sections 7 and 9 (2) (sic) of the Orissa Sales Tax Act the State Government rescinded the Central Sales Tax (Deferment of Payment of Taxes) Orissa Rules, 1990, as amended from time to time and by the impugned Notification S. R. O. No. 625 of 1999 dated 30th July, 1999 issued under section 8 (5) of the Central Sales Tax Act the State Government rescinded the notification dated 12th November, 1990 as amended from time to time under which exemptions had been granted under sub-section (5) of section 8 of the Central Sales Tax Act, 1956 on sale of finished products to various categories of new, existing and continuing industrial units of IPR 1980 and IPR 1986 in the small-scale sector. Mr. Roy and Mr. Mohanty submitted that the effect of these four impugned notifications dated 30th July, 1999 was that the exemption from tax and deferment of payment of tax granted pursuant to IPR 1980, IPR 1986 and IPR 1989 were withdrawn in the public interest, but the exemption from tax and deferment of payment of tax pursuant to the IPR 1992 and IPR 1996 were continued. Both Mr. Roy and Mr. Mohanty vehemently argued that the facts stated in the counter-affidavit filed on behalf of the State as well as the impugned notification themselves would show that the said four impugned notifications were issued because of supervening public interest. Mr. Roy and Mr. Mohanty submitted that the Supreme Court has held that if a concession has been granted by the Government in public interest, such a concession can also be withdrawn for supervening public interest and estoppel cannot be pleaded against supervening public interest. They cited the decisions of the Supreme Court in Kasinka Trading v. Union of India AIR 1995 SC 874, Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398, Sales Tax Officer v. Shree Durga Oil Mills [1998] 108 STC 274; AIR 1998 SC 591, State of Rajasthan v. Mahaveer Oil Industries [1999] 115 STC 29; AIR 1999 SC 2302 and a decision of a division Bench of this Court in Laxmi Udyog Rock Cement Pvt. Ltd. v. State of Orissa AIR 2001 Orissa 51, in support of this submission. Mr. Ashok Mohanty, learned Senior Standing Counsel, further explained that under the IPR 1980, IPR 1986 and IPR 1989 promises were made to grant exemption from tax and deferment of payment of tax to new industries and industries undertaking expansion/diversification/modernisation for a certain period and such industries have already availed the said exemptions from tax/deferment of payment of tax during the promised period. He submitted that IPR 1980 came into effect on August 1, 1980 and came to an end on April 1, 1986, IPR 1986 came into effect on April 1, 1986 and came to an end on December 1, 1989 and IPR 1989 came into effect on December 1, 1989 and was to remain operative for a period of five years and thus came to an end on November 30, 1994. Mr. Roy and Mr. Mohanty argued that Industrial Policy Resolutions of the State Government by themselves cannot confer any right on the petitioners to claim exemption from tax or deferment of payment of tax unless notifications are issued under the Orissa Sales Tax Act and the Central Sales Tax Act and in any case a provision in the Industrial Policy Resolution cannot override a statutory notification under the said Acts and a notification cannot be struck down as ultra vires the Industrial Policy Resolution. Mr. Sovesh Roy and Mr. Ashok Mohanty further submitted that paragraph 4 of the counter-affidavit filed on behalf of the State Government in the case of Shree Jagannath Packers (O. J. C. No. 9967 of 1999) would show that while the IPR 1992 and IPR 1996 envisaged incentives subject to financial ceiling linked to total fixed capital investment, IPR 1989 envisaged exemption from tax/deferment of payment of sales tax for 5 to 7 years without any financial ceiling and this open ended facility of IPR 1989 resulted in a serious erosion of the tax base and for this reason the exemption from tax and deferment of payment of sales tax under IPR 1989 were withdrawn by the impugned notifications dated 30th July, 1999, whereas those under IPR 1992 and IPR 1996 were continued. They further submitted that by the impugned notifications dated 30th July, 1999 not a single industrial unit set up pursuant to the IPR 1980, IPR 1986 and IPR 1989 was allowed to avail the benefit of exemption from tax or deferment of payment of tax and only the industrial units set up pursuant to IPR 1992 and IPR 1996 were allowed to enjoy the sales tax benefits granted under the said IPRs. There was therefore classification of the categories of industrial units which were not allowed and which were allowed the benefits of exemption from tax and deferment of payment of tax under the impugned notifications dated 30th July, 1999 and such classification had rational nexus sought to be achieved and the impugned notifications dated 30th July, 1999 therefore cannot be held to be discriminatory and violative of article 14 of the Constitution. They cited a recent decision of the Supreme Court in Union of India v. Indian Charge Chrome AIR 1999 SC 3504, in which it has been held that where a notification was issued granting exemption from customs duty to power projects generating electricity for distribution while denying it to power plants generating electricity for captive consumption only, the notification was based on a reasonable classification and cannot be challenged as being violative of article 14 of the Constitution. Mr. Roy and Mr. Mohanty next submitted that even though the impugned notifications dated 30th July, 1999 were issued by the State Government in the Finance Department pursuant to orders of the Chief Minister in anticipation of approval by the Council of Ministers, the facts stated in the counter-affidavit filed on behalf of the State Government would show that all the four impugned notifications were subsequently ratified by the Council of Ministers in a meeting held on April 22, 2000. They argued that on account of the subsequent ratification by the Council of Ministers, the impugned four notifications dated July 30, 1999 cannot be held to be null and void because the defects, if any, at the time of the issue of the impugned notifications stood cured by the said ratification of the impugned notifications by the Council of Ministers on April 22, 2000. Mr. Roy and Mr. Mohanty submitted that section 7 of the Orissa Sales Tax Act, it is true, does not contain an express provision empowering the State Government to withdraw an exemption from tax or deferment of payment of tax granted thereunder, but section 7 has to be read along with section 22 of the Orissa General Clauses Act, 1937 which provides that where by an Orissa Act a power to issue a notification is conferred, then that power includes the power exercised in the like manner and subject to like sanction and conditions to rescind any such notification. Hence, under section 7 of the Orissa Sales Tax Act the State Government cannot only issue a notification granting exemption from tax or deferment of payment of tax but can also rescind such notification of exemption of tax and/or deferment of payment of tax. They also pointed out that section 25 of the Customs Act provides for the powers of the Central Government to grant exemption from duty but does not expressly provide for withdrawal of such exemption of duty and yet the Supreme Court has upheld the power of the Central Government to withdraw exemptions under the said section 25 of the Act in Kasinka Trading v. Union of India AIR 1995 SC 874. Mr. Ashok Mohanty, learned Senior Standing Counsel (Commercial Taxes), explained that the counter-affidavit filed on behalf of the State Government would further show that on account of the developments after the impugned notifications were issued on 30th July, 1999, the State Government had to take a decision to restrict such sales tax incentives only to industrial units which were in receipt of such incentives immediately before 1st January, 2000 or which were in pipeline as on 1st January, 2000 and accordingly the State Government issued Notifications S. R. O. No. 140 of 2000 and S. R. O. No. 141 of 2000 dated 17th February, 2000. Mr. Mohanty explained that by the said Notifications S. R. O. No. 140 of 2000 and S. R. O. No. 141 of 2000 dated 17th February, 2000, the notifications S. R. O. No. 622 of 1999, 623 of 1999, 624 of 1999 and 625 of 1999 dated 30th July, 1999 have not been rescinded or superseded and therefore the exemption from tax and deferment of payment of tax which were withdrawn by the said notifications dated 30th July, 1999 have not been restored to any industrial unit but all existing industrial units of IPR 1992 and IPR 1996 which were in receipt of the incentives as on 1st January, 2000 and new industrial units which were in pipeline as on 1st January, 2000 if they satisfied the criteria mentioned therein were entitled to the sales tax incentives mentioned in the said two notifications dated 17th February, 2000. Questions which arise for consideration and decisions thereon. The first question which arises for consideration in this batch of writ petitions is whether the petitioners have enjoyed the sales tax incentives during the promised period as contended on behalf of the State of Orissa or whether the petitioners were unable to enjoy the sales incentives for the full promised period because of the impugned notifications dated July 30, 1999. In O. J. C. No. 9967 of 1999, the case of the petitioner, Shree Jagannath Packers, is that under IPR 1989 exemption from sales tax was to be allowed to its new small-scale industrial unit on purchase of spare parts of machinery, raw materials and packing materials and on sale of finished products for a period of seven years from the date of commencement of commercial production. The small-scale industrial unit set up by the petitioner commenced commercial production on September 11, 1993 and therefore the promised period for exemption from sales tax was up to September 11, 2000, but by the impugned notifications dated July 30, 1999, the said exemption was withdrawn with effect from 1st August, 1999. In O. J. C. No. 13017 of 1999, the case of the petitioner, Larsen and Toubro Company Ltd. , is that under IPR 1989 deferment of payment of tax under the Orissa Sales Tax Act and the Central Sales Tax Act was allowed for a period of seven years from the date of commercial production to new pioneer industries set up in Zone "c" and the new pioneer industry of the petitioner was set up in Zone "c" at Arda in Jharsuguda, which went into commercial production on September 10, 1993. Hence the petitioner was entitled to deferment of payment of tax for the promised period of seven years up to September 9, 2000, but the said benefit of deferment of payment of tax was withdrawn with effect from August 1, 1999 by the impugned notifications dated July 30, 1999. In O. J. C. No. 2718 of 2000, the case of the petitioner, IFGL Refractories Limited, is that under IPR 1989 large scale industrial units were eligible for deferment of payment of tax under the Orissa Sales Tax Act and the Central Sales Tax Act for a period of seven years from the date of commercial production. The large scale industrial unit of the petitioner set up pursuant to the IPR 1989 went into commercial production on February 1, 1993 and thus the promised period of seven years of such deferment of payment of tax was up to January 31, 2000, but the said benefit of deferment of payment of tax was withdrawn with effect from 1st August, 1999 by the impugned notifications dated July 30, 1999. In O. J. C. No. 4297 of 2000, the case of the petitioner, Kali Oil Mills (P) Ltd. , is that under IPR 1989 new small-scale industries were entitled to sales tax exemption on spare parts of machinery, raw materials and packing materials and on sale of finished products with effect from the date of commercial production. Pursuant to IPR 1989, the petitioner set up a small-scale industrial unit which went into commercial production on April 1, 1994 and was entitled to such exemption for the promised period up to March 31, 2000, but by the impugned notifications dated July 30, 1999 the said exemption from sales tax was withdrawn with effect from 1st August, 1999. In O. J. C. No. 6297 of 2000, the case of the petitioner, Noble Pharma Care Limited, is that pursuant to IPR 1986 the petitioner set up a medium scale industry which went into commercial production on May 9, 1998. Under IPR 1989 the aforesaid medium scale industry of the petitioner was entitled as a continuing industrial unit of IPR 1986 to exemption of sales tax on sale of finished products for a period of five years with effect from May 9, 1998. Thus, the promised period of such exemption was up to April 8, 2003, but the said exemption was withdrawn by the impugned notifications dated July 30, 1999 with effect from 1st August, 1999. In O. J. C. No. 962 of 2001, the case of the petitioner, Agarwala Fabricators, is that under IPR 1989 small-scale industrial units undertaking expansion/modernisation/diversification on the basis of exclusive project report duly appraised by financial institutions were entitled to such exemption on spare parts of machinery, raw materials and packing materials and on sale of finished products for a period of seven years from the date of commercial production. The petitioner undertook such expansion/modernisation/diversification and started commercial production on June 27, 1993 and was thus entitled to the exemption for the promised period up to June 26, 2000, but the said exemption was withdrawn by the impugned notifications dated July 30, 1999 with effect from 1st August, 1999. In O. J. C. No. 2761 of 2001, the case of the petitioner, Ponni Sugars and Chemicals Ltd. , is that under IPR 1989 new large scale industrial units were to be allowed deferment of payment of tax collected on finished products for a period of seven years in zones "b" and "c" and nine years in zone "a" from the date of commercial production and in lieu thereof such industrial unit could opt for exemption from sales tax on finished products for a period of five years in zones "b" and "c" for a period of seven years in zone "a" from the date of commercial production. Pursuant to the IPR 1989 the petitioner set up a large scale unit in zone "a" in the district of Bolangir and commenced commercial production on February 16, 1994 and opted for exemption from tax on sale of its finished products and the promised period of seven years of such exemption was up to January 15, 2001, but by the impugned notifications dated July 30, 1999 the said exemption was withdrawn with effect from 1st August, 1999. In O. J. C. No. 5122 of 2001, the case of the petitioners, Mahanadi Distilleries Pvt. Ltd. and another, is that under IPR 1996 effective from March 1, 1996 various incentives including sales tax incentives were allowed to new industries in the State of Orissa. The petitioners purchased the assets of M/s. Suki Industries Pvt. Ltd. from the O. S. F. C. and invested further in land and machinery and converted the said assets into a Bottling Unit of I. M. F. L. which went into commercial production on November 24, 2000. The petitioner No. 1 company applied to the General Manager, District Industries Centre, Ganjam, Berhampur, for issuing sales tax exemption envisaged under IPR 1986, but on October 27, 2000 the General Manager, District Industries Center, Ganjam, Berhampur, intimated the petitioner No. 1 company that it will not be entitled to sales tax exemption in view of the impugned notifications dated July 30, 1999 withdrawing the sales tax incentives with effect from 1st August, 1999. Thus, in each of the cases of the petitioners as discussed above, before the promised period of exemption from tax or deferment of payment of tax the exemption from tax or deferment of payment of tax was withdrawn by the impugned notifications dated July 30, 1999 with effect from 1st August, 1999. The contention of Mr. Ashok Mohanty, learned Senior Standing Counsel (Commercial Taxes) that the petitioners have enjoyed the exemption during the promised period under the Industrial Policy Resolutions is therefore not correct. The second question which arises for consideration is whether the State Government could withdraw the exemption of tax or deferment of payment of tax before the promised period under the Industrial Policy Resolutions by the impugned notifications dated July 30, 1999 with effect from 1st August, 1999. In Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 44 STC 42; AIR 1979 SC 621, the Supreme Court held that the Government cannot claim to be immune to the applicability of the principle of promissory estoppel and if the Government makes a promise and the promisee acts in reliance upon it and alters its position, there is no reason why the Government should not be compelled to make good such promise like any other private individual. But in the said decision the Supreme Court also observed that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires and if it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the court would not raise an equity in favour of the promisee and enforce the promise against the Government. The Supreme Court further clarified that where the Government claims that on account of change of policy due to facts which have transpired since the making of the promise, public interest would be prejudiced if the Government were required to carry out the promise, the Government would have to show what precisely the changed policy is and also its reason and justification so that the court can judge for itself which way the public interest lies and what the equity of the case demands. The relevant portion of the said judgment of the Supreme Court on which the counsel for the petitioners have placed great reliance is quoted herein below : " Mere claim of change of policy would not be sufficient to exonerate the Government from the liability; the Government would have to show what precisely is the changed policy and also its reason and justification so that the court can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be 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. . . . . . . . . . . . . " The crux of the law laid down by the Supreme Court in the aforesaid case is that the court should compel the Government to make good its promise to its subjects on grounds of equity or morality, but where the court is satisfied on materials placed before it that due to change in circumstances overriding public interest demands that the promise should not be enforced against the Government, the court will not enforce such promise against the Government on grounds of superior equity or morality. The aforesaid law as laid down by the Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. [1979] 44 STC 42; AIR 1979 SC 621 was applied by the Supreme Court in Kasinka Trading v. Union of India AIR 1995 SC 874 wherein the action of the Union of India in withdrawing a time-bound exemption from customs duty on import of PVC resins was challenged. The Supreme Court found that PVC resins were manufactured in India and also imported from abroad and with a view to equalising sale price of the indigenous and imported material and to make the commodity available to the consumers at a uniform price and keeping in view the trends in supply of materials, the Central Government had exempted import of PVC resins from customs duty by the Notification No. 66 dated March 15, 1979 under section 25 (1) of the Customs Act, 1962 and the said notification of exemption was to remain in force up to March 31, 1981, but subsequently when it was found that the international prices of products were falling and consequently the import prices had become lower than the ex-factory prices of the indigenous materials, the matter was examined again by the Central Government and it was decided in the public interest to withdraw the exemption by Notification No. 205 dated October 16, 1980 issued under section 25 of the Customs Act, 1962. The case of the appellants before the Supreme Court was that they had acted on the promise held out in the said notification that it will remain in force up to March 31, 1981, but the Supreme Court held that the Union of India had disclosed the circumstances under which the exemption was initially granted as well as the change of circumstances which warranted the withdrawal of the exemption notification and the reasons given by the Union of India justifying the withdrawal of exemption notification were not irrelevant to the exercise of power in public interest nor were insufficient to support the exercise of that power and the appellants cannot invoke the doctrine of promissory estoppel to question the withdrawal notification issued under section 25 of the Customs Act, 1962. The aforesaid decisions of the Supreme Court in the cases of Motilal Padampat Sugar Mills Co. Ltd. [1979] 44 STC 42 (SC); AIR 1979 SC 621 and Kasinka Trading AIR 1995 SC 874 were followed in Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398 wherein the very same Notification No. 205 dated October 16, 1980 withdrawing the exemption from customs duty on import of PVC resins was challenged on the ground that on the faith of the solemn assurance given in the exemption Notification No. 66 dated March 15, 1979 that no duty of customs is leviable on the import of the PVC resins up to March 31, 1981, the appellant had entered into arrangements for import of PVC resins as actual user with U. P. Export Corporation Company and opened Letters of Credit against the foreign suppliers and goods had also arrived at Bombay Port on November 18, 1980. The Supreme Court held that the facts of the economic situation explained in the judgment in Kasinka Trading AIR 1995 SC 874 have not been controverted nor is it alleged by the appellant that public interest did not call for supersession of the exemption Notification No. 66. The Supreme Court further observed : ". . . . . . . . . Once public interest is accepted as the superior equity which can override individual equity, the principle should be applicable even in cases where a period has been indicated. . . . . " In Pawan Alloys and Casting Pvt. Ltd. v. U. P. State Electricity Board (1997) 7 SCC 251, by notifications dated October 24, 1982, July 13, 1984 and January 21, 1986, the U. P. State Electricity Board in exercise of its powers under section 49 of the Electricity Supply Act had promised to new industrial units seeking to establish industries in different parts of U. P. that on charges of electricity consumed by them, they will be given 10 per cent rebate for a period of three years from the date of commencement of the supply of electricity to them for the first time, but the Board had prematurely withdrawn the said rebate of 10 per cent by a subsequent notification dated July 31, 1986 and the appellant Pawan Alloys and Casting Pvt. Ltd. , challenged the said premature withdrawal of the said 10 per cent rebate on, inter alia, the ground that the withdrawal was contrary to the principles of promissory estoppel. The Supreme Court after discussing the law laid down in its earlier decisions in Motilal Padampat Sugar Mills Co. Ltd. [1979] 44 STC 42; AIR 1979 SC 621, Kasinka Trading AIR 1995 SC 874 and Shrijee Sales Corporation (1997) 3 SCC 398 held : " It is, therefore, obvious that even though it may be found that the Government or any other competent authority had held out any promise on the basis of which the promisee might have acted, if public interest required recall of such a promise and such a public interest outweighed the interest of the promisee then the doctrine of promissory estoppel against the Government would lose its rigour and cannot be of any avail to such promisee. . . . . . . " In the facts of the case of Pawan Alloys and Casting Pvt. Ltd. v. U. P. State Electricity Board, however, the Supreme Court held in para 32 at page 278 of the judgment reported in (1997) 7 SCC 251 that it was not the case of the respondent Board that it has sought to withdraw the development incentive rebate made available earlier to new industrial units on the ground of public interest as nowhere it was even whispered that the Board had to withdraw this development incentive rebate midstream on account of some overriding public interest. In Sales Tax Officer v. Shree Durga Oil Mills [1998] 108 STC 274 (SC); AIR 1998 SC 591, the law laid down by the Supreme Court in Kasinka Trading (1995) 1 SCC 274 and Shrijee Sales Corporation (1997) 3 SCC 398 was applied to a case of withdrawal of exemption of sales tax under the Orissa Sales Tax Act. Under the Industrial Policy Resolution dated July 18, 1979 promulgated by the Industries Department of Government of Orissa, sales tax was not payable by a new industry on purchase of raw materials for a certain period. The respondent therein M/s. Shree Durga Oil Mills set up an industry in terms of the said Industrial Policy Resolution and was allowed exemption from sales tax on purchase of raw materials under the earlier exemption notifications issued on November 11, 1969 and April 23, 1976 under section 6 of the Orissa Sales Tax Act, but by a notification dated September 25, 1977 the said two earlier notifications were abrogated. The State Government again restored the earlier two notifications by notification dated September 9, 1977 but the exemption was limited to the industries which had started production prior to April 1, 1976. Since the industry of the respondent commenced production only on March 19, 1980 it was not eligible for the exemption under the notification dated September 9, 1977. The petitioner challenged the said notification dated September 9, 1977 before this Court in a writ petition and this Court allowed the writ petition on the ground that in the Industrial Policy Resolution a clear and un-equitable promise had been made on the basis of which the respondent set up its industry and there was no way for the State Government to back out from such promise made in the IPR after the respondent had actually set up its industry pursuant to the IPR which was effective for the period from 1977 to 1983. The Supreme Court discussed its earlier views in Kasinka Trading (1995) 1 SCC 274 and Shrijee Sales Corporation (1997) 3 SCC 398 in para 22 of the judgment as reported in Sales Tax Officer v. Shree Durga Oil Mills [1998] 108 STC 274 (SC); AIR 1998 SC 591 which is quoted herein below : " The view taken by this Court in Kasinka's case (1995) 1 SCC 274 was reiterated by a Bench of three-Judge in the case of Shrijee Sales Corporation v. Union of India (1977) 3 SCC 398. It was laid down in that case that the determination of applicability of promissory estoppel against the Government hinges upon balance of equity or public interest. In case there is a supervening public equity, the Government would be allowed to change its stand; it would then be able to withdraw from the representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Once public interest was accepted as the superior equity which can override individual equity, the aforesaid principle should be applicable even in cases where a period had been indicated for operation of the promise. " After discussing the aforesaid law that a promise could be withdrawn by the Government by change of policy for overriding public interest, the Supreme Court held that the plea of change of policy on the basis of resource crunch of the State Government should have been sufficient for dismissing the respondent's case based on the doctrine of promissory estoppel. The aforesaid law laid down by the Supreme Court in Kasinka Trading (1995) 1 SCC 274 and Shrijee Sales Corporation (1997) 3 SCC 398 was again applied by the Supreme Court in State of Rajasthan v. Mahaveer Oil Industries [1999] 115 STC 29 to withdrawal of exemptions from tax given under a sales tax incentives scheme for new industries. By two notifications dated 23rd May, 1987 issued under section 4 (2) of the Rajasthan Sales Tax Act, 1954, and under section 8 (5) of the Central Sales Tax Act, the State Government of Rajasthan notified a sales tax incentives scheme under which new industrial units were exempted from Rajasthan sales tax and Central sales tax respectively on sale of goods in the State of Rajasthan and on inter-State sale of goods manufactured by them in the State of Rajasthan during the period from 5th March, 1987 to 31st March, 1992. After the said notifications, the respondent M/s. Mahaveer Oil Industries set up an industry for oil extraction and oil manufacturing in the State of Rajasthan. Thereafter, two notifications dated 7th May, 1990 were issued under the Rajasthan Sales Tax Act and the Central Sales Tax Act amending the aforesaid two notifications dated 23rd May, 1987 and as a result of the said amendments, the benefit of the sales tax incentives scheme were withdrawn from oil extracting and manufacturing industries. Subsequently, however, a notification dated July 26, 1991 was issued restoring the benefit of exemption of Central sales tax to oil industries and oil manufacturing industries to the extent indicated therein. The result was that new industrial units established after 1990 and before July 26, 1991 alone were not entitled to the benefit of incentive scheme under the Central Sales Tax Act in respect of inter-State sale of their goods. The respondents M/s. Mahaveer Oil Industries which commenced production on 17th February, 1991, contended that by framing the sales tax incentives scheme the State of Rajasthan had held out a promise that the benefits of the scheme would be available to all new industries set up during the period March 5, 1987 to March 31, 1992 and relying upon this promise the respondents had taken all effective steps to set up the new industrial unit within that period and hence the doctrine of promissory estoppel would be attracted and it will not be open to the State of Rajasthan to withdraw the benefit of the scheme during the subsistence of the said scheme by the notification dated May 7, 1990. The Supreme Court negatived the contention thus : " 14. Are the respondents justified in holding the State to the promise made by it in the form of an incentive scheme which is made available for a specified period of time, when new industries are set up on the basis of that scheme relying on the promise of benefits held out by it ? Public interest requires that the State be held bound by the promise held out by it in such a situation. But this does not preclude the State from withdrawing the benefit prospectively even during the period of the scheme, if public interest so requires. Even in a case where a party has acted on the promise, if there is any supervening public interest which requires that the benefit be withdrawn or the scheme be modified, that supervening public interest would prevail over any promissory estoppel. " Applying the aforesaid law to the facts of that case, the Supreme Court found from the affidavit filed by the State Government in the connected Civil Appeal No. 5738 of 1994 in State of Rajasthan and another v. Gopal Oil Mills and another (Reported in [1998] 115 STC 25 (SC)) that the sales tax incentive scheme had adversely affected existing industrial units in the State because tax liability of new industries was much less than the tax liability of old ones and the old units had gradually started closing down while new units started coming up and the closure of old units and their replacement by new units resulted in blockage of capital and funds invested in old units and on these facts the Supreme Court held that withdrawal of the benefits of the incentive scheme in respect of oil industries was in the public interest and the notification dated May 7, 1990 was issued on account of supervening public interest. The law laid down in Kasinka Trading (1995) 1 SCC 274 and Shrijee Sales Corporation (1997) 3 SCC 398 was again taken note of by the Supreme Court in Dai-Ichi Karkaria Ltd. v. Union of India (2000) 119 ELT 516 (SC ). The discussion is para 6 at page 62 of the judgment as reported in (2000) 4 SCC 57; para 7, page 519 of (2000) 119 ELT 516 (SC) runs thus : " The law on the matter is now well-settled that even in respect of exemptions that may have been made by the Government the doctrine of promissory estoppel will not be applicable if the change in the stand of the Government is made on account of public policy. This position has been explained in detail by this Court in Kasinka Trading (1995) 1 SCC 274 and reiterated in Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398. In both these cases this Court is concerned with notifications issued under section 25 of the Customs Act. In Kasinka Trading case (1995) 1 SCC 274 it is stated that the exemptions granted under section 25 (1) of the Customs Act in public interest is designed to offset the excess price which the local entrepreneurs were required to pay for importing PVC resin at a time when the difference between the indigenous product and the imported product was substantial and at a time when the notification was withdrawn by the Government there was no scope for any loss to be suffered by the importers and, therefore, the change of policy was permissible. This decision is the same as in Shrijee Sales Corporation (1997) 3 SCC 398 wherein it was noticed that once public interest is accepted as the superior equity which can override individual equity, the principle would be applicable even in cases where a period has been indicated for which period the notification would remain in force and the Government is competent to resile from a promise. . . . . . . . . " In the said case of Dai-Ichi Karkaria Ltd. (2000) 4 SCC 57; (2000) 119 ELT 516 (SC), by Notification No. 210 of 1982 dated September 10, 1982 issued under section 25 (1) of the Customs Act, the Government of India exempted raw materials and components for manufacture of goods to be supplied to some organisations from payment of customs duty and additional duty of customs. By subsequent notifications the benefit of the said exemption Notification No. 210 of 1982 was extended to import of raw materials and components required for manufacture and supply of products to Oil and Natural Gas Commission (ONGC), Oil India Limited (OIL) and Gas Authority of India Limited (GAIL ). The said exemption was to remain in force till September 30, 1987, but by Notification No. 517 of 1986 dated December 30, 1986, the exemption Notification No. 210 of 1982 dated September 10, 1982 was amended so as to withdraw the said exemption on import of raw materials and components required for manufacture and supply of products to ONGC, OIL or GAIL. As a result, the appellant who was a manufacturer and supplier of goods to ONGC became liable to pay duty to the extent of 25 per cent for the period between December 30, 1986 and September 10, 1987 and the appellant contended that public interest did not demand the variation during the period the exemption under Notification No. 210 of 1982 was in force. In the counter-affidavit filed by the Union of India it was stated that it was believed that the imposition of a nil rate of duty on import of raw materials and components required for manufacture and supply of products to ONGC, OIL and GAIL would lead to misuse, specially by the private contractors who have other interests, in addition to the supplies to the oil sector. The Supreme Court held that the circumstances relating to public interest disclosed in the counter-affidavit of the Union of India cannot stand close scrutiny because the appellant could not mis-utilise the exemption inasmuch as the appellant was obliged only to import goods for the purpose of supplying them to ONGC and the licence issued under the policy to the appellant reflected export obligation imposed on the appellant and the finished product Diatrolite manufactured from raw materials imported under licence is highly specialised product and could be sold only to ONGC, OIL and others. The Supreme Court held that the factors taken into consideration by the Government appear to be wholly irrelevant and did not sub-serve public interest. Keeping in mind the aforesaid law as laid down by the Supreme Court, we may now examine the circumstances leading to the change of policy and the consequent withdrawal by the State Government of the exemption from tax and deferment of payment of sales tax before the expiry of the promised period as pleaded in these cases by the State of Orissa. In the counter-affidavit filed on behalf of the State of Orissa, it is stated that the fiscal position of the State Government deteriorated because of the increasing gap between the revenue receipts and the revenue expenditure and in 1998-1999 the revenue deficit rose to an alarming level of Rs. 2,625 crores and due to such huge fiscal deficit the State Government account was overdrawn and the Government of India in the Ministry of Finance agreed to provide the required finance to the State Government, inter alia, on the condition that the State Government withdraws the fiscal incentives to industries and adopts resource mobilization measures. Accordingly, an M. O. U. was signed on 9th April, 1994 on behalf of the State Government and the Government of India and in accordance with the M. O. U. the State Government made a detailed review of the tax related incentives granted to the industrial units in the State. The State Government set up a High Level Task Force which unanimously recommended withdrawal of sales tax incentives under all IPRs up to IPR 1989 and for enlarging the list of ineligible industries under IPR 1996 keeping in view the ineligible list of the IPR 1999. A white paper on the State Finance was also laid in the Orissa Legislative Assembly in July, 1999 which depicted the deteriorating finance of the State and suggested corrective measures including review of all tax concessions/deferral/exemptions under different IPRs and their abolition, if necessary. Thereafter, a Cabinet Memorandum on sales tax withdrawal was prepared and vetted by the Finance Department on July 5, 1999 for being placed before the Council of Ministers and in anticipation of approval of the Cabinet, the Chief Minister approved the withdrawal of sales tax concession on July 27, 1999 and on July 30, 1999 the impugned notifications S. R. O. Nos. 622 of 1999, 623 of 1999, 624 of 1999 and 625 of 1999 were issued withdrawing the sales tax incentives in the public interest. The aforesaid circumstances leading to the withdrawal of the sales tax incentives and concessions by the impugned notifications dated July 30, 1999 are the supervening circumstances which have arisen after the State Government issued the IPRs 1980, 1986, 1989, 1992 and 1996 and for these supervening circumstances, the State Government had to issue the said impugned notifications withdrawing the sales tax benefits and concessions before the expiry of the period during which the said concessions and incentives were promised to the concerned industries. The argument of the learned counsel for the petitioners, however, is that exemption from tax or deferment of payment of sales tax were granted under the IPRs for the growth of industries in the State of Orissa and for generating employment in the State and the court should not accept the plea of change of policy due to revenue deficit as a plea of overriding public interest. But as we have indicated above, in the case of Shree Durga Oil Mills [1998] 108 STC 274, the Supreme Court has held that a plea of change of policy on the basis of resource-crunch is sufficient for dismissing a case based on doctrine of promissory estoppel as public interest in such case demanded modification of the IPR. In the language of the Supreme Court in the said case of Shree Durga Oil Mills [1998] 108 STC 274 : " 17. Moreover, it is well-settled that any IPR can be changed if there is an overriding public interest involved. It has been stated on affidavit by the State of Orissa that after a package of incentives was given to the industries, the Government was faced with a severe resource-crunch. On a review of its financial position, it was felt that for the sake of the economy of the State, it was necessary to limit the scope of exemption granted to various industries. Accordingly, further notifications were issued under section 6 of the Orissa Sales Tax Act, 1947 from time to time. Because of this new perception of the economic scenario, the scope of the earlier notifications was restricted by subsequent notifications issued under section 6. This also led to issuance of the Second IPR dated July 31, 1980. . . . . . . . . . 24. In our opinion, the plea of change of trade policy 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 IPR. " It will be clear from the aforesaid judgment of the Supreme Court that severe resource-crunch and review of financial position warranting limitations on the scope of sales tax incentives to various industries can constitute overriding public interest justifying withdrawal of such sales tax incentives before the expiry of the period for which they were promised. Moreover, by the impugned notifications dated July 30, 1999 though the sales tax incentives granted under IPRs 1980, 1986 and 1989 were withdrawn, the sales tax incentives granted to new industries under IPRs 1992 and 1996 continued and a few more industries were added to the list of ineligible industrial units in the State. Thus, the State Government continued the policy of encouraging industries in the State of Orissa but discontinued the sales tax incentives for industries which were set up pursuant to IPRs 1980, 1986, 1989 on the ground that such withdrawal was necessary to improve the financial position of the State Government. We are thus of the view that since the impugned notifications dated July 30, 1999 withdrawing the sales tax incentives with effect from August 1, 1999 were issued due to supervening and overriding public interest, the court cannot compel the State Government to continue the said sales tax incentives for the period for which they were promised under the IPRs 1980, 1986 and 1989 on the principle of promissory estoppel. The third question which arises for consideration is whether the State Government was obliged to give notice to persons likely to be affected by the impugned notifications dated 30th July, 1999 withdrawing the exemptions from sales tax or deferment of payment of sales tax before issuing the impugned notifications. In National Buildings Construction Corporation v. S. Raghunathan (1998) 6 JT 21 (SC) cited by Mr. Yasobant Das, learned counsel for the petitioner in O. J. C. No. 9967 of 1999, the Supreme Court held that claims based on legitimate expectation are similar to claims based on promissory estoppel and referred to Lord Diplock's judgment in Council of Civil Services Union v. Minister for the Civil Services 1985 AC 374 on the doctrine of legitimate expectation which, inter alia, requires that before withdrawing a benefit which a person had been enjoying, the decision-maker must give such person an opportunity to comment, or advance reasons as to why the benefit should not be withdrawn. But in Union of India v. Hindustan Development Corpn. AIR 1994 SC 988, the Supreme Court after examining the decisions of the English and the Indian Courts on legitimate expectation held that legitimate expectation cannot be enforced where overriding public interest requires otherwise. In the language of the Supreme Court : " On examination of some of these important decisions it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation is to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallized right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words where a person's legitimate expectation is not fulfilled by taking a particular decision then decision-maker should justify the denial of such expectation by showing some overriding public interest. . . . . . " Similarly in the case of Motilal Padampat Sugar Mills Co. Ltd. [1979] 44 STC 42; AIR 1979 SC 621, the Supreme Court relying on the English decision in Ajayi v. Driscoe [1964] 3 All ER 556, held that where there is no overriding public interest for resiling from a promise, it may still be competent to Government to resile from the promise on giving reasonable notice. This would imply that where there is overriding public interest, the promise can be withdrawn without notice to the persons likely to be affected by such withdrawal. Accordingly, in the case of Shrijee Sales Corporation (1997) 3 SCC 398, the Supreme Court held that since there was supervening public interest, it would not be mandatory for the Government to give notice for withdrawing the exemption. In the facts of the present case, since we have found that due to supervening and overriding public interest the impugned notifications dated July 30, 1999 were issued withdrawing the sales tax incentives and concessions, the Government was not required to issue notice to the petitioners who were likely to be affected by such withdrawal. The next question which arises for consideration is whether the impugned notifications dated July 30, 1999 are bad being contrary to IPRs 1980, 1986 and 1989. The learned counsel for the petitioners placed great reliance on the decision of the Supreme Court in the case of State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258; (1998) 8 JT 2 (SC) wherein it was held that a notification issued in exercise of powers under section 7 of the Bihar Finance Act cannot authorise the State Government to negate the incentives and the benefits which an industrial unit would otherwise be entitled to under the Industrial Policy Resolution of the State Government and to the extent such notification is found repugnant to the Industrial Policy Resolution declared by the Government, such notification must be held to be bad. The reason for the said decision of the Supreme Court as indicated in para 7 at page 7 of the judgment as reported in (1998) 8 JT 2 (SC) is quoted hereinbelow : ". . . . . . . . . . The Industrial Incentive Policy is issued by the State Government after such policy is approved by the Cabinet itself. The issuance of the notification under section 7 of the Bihar Finance Act is by the State Government in the Finance Department which notification is issued to carry out the objectives and the policy decisions taken in the industrial policy itself. In this view of the matter, any notification issued by the Government Order in exercise of power under section 7 of the Bihar Finance Act, if is found to be repugnant to the Industrial Policy declared in a Government Resolution, then the said notification must be held to be bad to that extent. . . . . . . . . . . " Thus, the reason given in the aforesaid judgment of the Supreme Court in the case of State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258; (1998) 8 JT 2 (SC) is that the Industrial Policy Resolution is issued by the State Government after the Policy Resolution is approved by the Cabinet itself whereas the notification under section 7 of the Bihar Finance Act is issued by the State Government in the Finance Department to carry out the objectives and the policy decisions taken in the Industrial Policy Resolution itself and therefore such notification cannot be repugnant to the Industrial Policy Resolution of the State Government. But in the facts of the present case we find that the impugned notifications dated July 30, 1999 were issued by the State Government in the Finance Department withdrawing the sales tax incentives under the IPRs 1980, 1986 and 1989, but the said notifications were subsequently ratified by the Cabinet of the State Government in its meeting held on April 22, 2000. The legal effect of "ratification" is stated in Black's Law Dictionary, Seventh Edition, page 1268 as thus : " ratification, n. 1. Confirmation and acceptance of a previous act, thereby making the act valid from the moment it was done. . . . . . . . . . . " With the ratification by the State Cabinet on April 22, 2000, the impugned notification dated July 30, 1999 would be treated as having been validly made with the approval of the State Cabinet and the reason given in the judgment of the Supreme Court in the case of State of Bihar v. Suprabhat Steel Ltd. [1999] 112 STC 258; (1998) 8 JT 2 (SC) for holding the notification issued under section 7 of the Bihar Finance Act as bad in law is not available in the facts of the present case. This takes us to the next question as to whether the impugned notifications dated July 30, 1999 were still-born or were dead and therefore could not be revived by subsequent ratification by the Cabinet in its meeting held on April 22, 2000. The discussion on law that is still-born and cannot be revived, in H. M. Seervai's "constitutional Law of India", Third Edition at page 249 paragraph 8. 18 is extracted hereunder : " (1) There is a distinction between a law unconstitutional for lack of legislative power and a law unconstitutional because violative of provisions of the Constitution other than those which relate to the distribution of legislative power. (2) A law which is unconstitutional for lack of legislative competence is void ab initio : a law which is unconstitutional for violation of constitutional limitations is unenforceable as long as it continues to violate constitutional limitations. Such a law, whether pre-Constitution or post-Constitution, is not wholly void if it violates fundamental rights; it is merely eclipsed by the fundamental right and remains, as it were, in a moribund condition as long as the shadow of fundamental rights falls upon it. When that shadow is removed the law begins to operate proprio vigore from the date of such removal unless it is retrospective. (3) A law void for lack of legislative competence is not revived if legislative power is subsequently given to the Legislature which enacted it; a law partly void because of violation of constitutional limitations operates proprio vigore when the limitations are removed. " The aforesaid discussion on the law on the subject would show that where a law is made by a Legislature which lacked the legislative competence to make the law, such a law is still-born and cannot be revived by subsequently vesting in the Legislature the power to make the said law and after vesting of such power on the Legislature the law has to be re-enacted. Applying this law to notifications issued under an Act, if under the Act, as it was in force at the time when the notification was issued, the authority issuing notification lacked the power to issue the notification, such a notification would be void ab initio and still-born and cannot be revived by conferring on such authority subsequently such power to issue the notification by a subsequent amendment and after such amendment conferring the power the notification has to be re-issued. The State Government had the power under the Orissa Sales Tax Act and the Central Sales Tax Act to issue the impugned notifications dated July 30, 1999. The said notifications, however, were not issued with the prior approval of the State Cabinet but with the orders of the Chief Minister in anticipation of the approval of the State Cabinet and though in their meeting held on October 14, 1999 the Council of Ministers did not approve the impugned notifications, in the meeting held on April 22, 2000 the State Cabinet ratified the impugned notifications dated July 30, 1999, and as has been explained in Black's Law Dictionary, Seventh Edition, quoted above, such ratification had the effect of making the notifications valid from the moment the notifications were issued. The impugned notifications dated July 30, 1999 therefore cannot be held to be still-born and dead. We may now consider the question whether the impugned notifications dated July 30, 1999 issued by the Finance Department cannot override such Industrial Policy Resolutions made in exercise of the executive power under article 162 of the Constitution. We will consider this question along with the connected question raised by the learned counsel for the petitioners that under the scheme of our Constitution bureaucrats in the Finance Department cannot be allowed to override the decision of the Council of Ministers. Article 161 of the Constitution provides that subject to the provisions of the Constitution, the executive power of a State shall extend to matters with respect to which the Legislature of the State has power to make laws. Article 154 (1) of the Constitution provides that the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution. Article 154 (2) further provides that nothing in article 154 (1) of the Constitution shall be deemed to transfer to the Governor any function conferred by any existing law or by any other authority or prevent the Parliament or the Legislature of the State from conferring by law functions of any authority subordinate to the Governor. Article 163 of the Constitution further provides that there shall be a Council of Ministers with the Chief Minister as the head to aid and advance the Governor in the exercise of his functions, except in so far as he is by or under the Constitution required to exercise the functions or any of them in his discretion. Article 166 (3) of the Constitution provides that the Governor shall make rules for the more convenient transaction of the business of the Government of the State and for the allocation among Ministers of the said business. Hence, the executive power of the State has to be exercised by the Governor with the aid and advice of the Council of Ministers with the Chief Minister as its head in accordance with the Rules of Business made under article 166 (3) of the Constitution and may also be exercised by any authority or officer subordinate to the Governor if any existing law or law made by the Parliament or the Legislature of a State confers such power on the authority or the officer. In the facts of the present case, even though the Industrial Policy Resolutions were adopted by the State of Orissa in exercise of the executive power under article 161 of the Constitution presumably with the approval of the State Cabinet, the impugned notifications dated July 30, 1999 were issued by the authorities under the provisions of the Orissa Sales Tax Act and the Central Sales Tax Act made by the State Legislature and by the Parliament respectively. The impugned notifications have the approval of the Chief Minister and the Cabinet which is a committee of the Council of Ministers constituted under the Rules of Business made by the Governor under article 166 (3) of the Constitution. We cannot therefore hold that the impugned notifications have been issued in a manner contrary to the provisions of the Constitution. The next question to be decided relates to the scope of the power of the State Government under sections 6 and 7 of the Orissa Sales Tax Act. The said sections 6 and 7 of the Orissa Sales Tax Act are quoted hereinbelow : " 6. Tax-free goods.- The State Government may, by notification, subject to such conditions and exceptions, if any, exempt from tax the sale or purchase of any goods, or class of goods and likewise withdraw any such exemption. 7. Powers of the State Government to exempt dealers from tax and to defer payment of tax.- Notwithstanding anything to the contrary, in this Act, the State Government may subject to such restrictions and conditions including conditions as to registration and registration fees, by notification, exempt in whole or in part, any class of dealers from the payment of tax or allow any class of dealers to defer payment of tax. " The contention of the learned counsel for the petitioners is that while under section 6 the State Government may exempt from tax the sale or purchase of any goods or class of goods and also withdraw such exemption, under section 7 of the Act the State Government can exempt in whole or in part any class of dealers from the payment of tax or allow any class of dealers to defer payment of tax, but the State Government cannot withdraw such exemption or deferment of payment of tax once granted. The decision of the Supreme Court in Gopi Chand v. Delhi Administration AIR 1959 SC 609 has been cited by the learned counsel for the petitioners is that while under section 6 the State Government may exempt from tax the sale or purchase of any goods or class of goods and also withdraw such exemption, under section 7 of the Act the State Government can exempt in whole or in part any class of dealers from the payment of tax or allow any class of dealers to defer payment of tax, but the State Government cannot withdraw such exemption or deferment of payment of tax once granted. The decision of the Supreme Court in Gopi Chand v. Delhi Administration AIR 1959 SC 609 has been cited by the learned counsel for the petitioners for the proposition that the power to cancel a notification issued under the Act has to be exercised within the limits prescribed by the provision conferring the power to issue the notification. The provisions of the. Orissa Sales Tax Act have to be read along with the provisions of the Orissa General Clauses Act, 1937. Section 22 of the Orissa General Clauses Act, 1937 contains the following provision relating to interpretation of an Orissa Act : " 22. Power to make to include power to add to, amend, vary or rescind orders, rules or by-laws.- Where, by any Orissa Act, a power to make or issue notifications, orders, schemes, rules, by-laws or forms, is conferred, then that power includes a power exercisable in the like manner and subject to the like sanction and conditions (if any) to add to, amend, vary or rescind any notifications, orders, schemes, rules, by-laws or forms so made or issued. " It would be clear from the aforesaid provisions in section 22 of the Orissa General Clauses Act, 1937 that where, by an Orissa Act, a power to make or issue notification is conferred then that power includes a power exercisable in the like manner and subject to the like sanction and conditions (if any), to rescind a notification so made or issued. Reading this provision along with section 7 of the Orissa Sales Tax Act, the court will have to hold that the State Government can rescind a notification exempting in whole or in part any class of dealers from payment of tax or allowing any class of dealers to defer payment of tax issued under section 7 of the Act even if section 7 does not expressly empower the State Government to rescind a notification of exemption of tax or deferment of payment of tax issued thereunder. It is in exercise of this power under section 7 of the Orissa Sales Tax Act, read with section 22 of the Orissa General Clauses Act that the State Government has by notifications S. R. O. No. 623 of 1999 and S. R. O. No. 624 of 1999 rescinded the notification of the Government of Orissa in the Finance Department dated 16th August, 1980 as amended from time to time and the notification of the Government of Orissa in the Finance Department dated 12th November, 1990 earlier issued under section 7 of the Orissa Sales Tax Act. Section 6 of the Orissa Sales Tax Act, it is true, empowers the State Government to issue a notification exempting sale or purchase of any goods or class of goods from tax and also expressly empowers the State Government to likewise withdraw such exemption, but in our considered view, the fact that there is no express provision in section 7 of the said Act to withdraw an exemption of tax or deferment of payment of tax granted thereunder will not make a difference in view of the clear provision in section 22 of the Orissa General Clauses Act that the power to make or

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issue a notification will include a power exercisable in the like manner and subject to the like sanction and conditions, if any, to rescind such notification so made or issued. In Gopi Chand v. Delhi Administration AIR 1959 SC 609, under section 20 of the East Punjab Public Safety Act, the Provincial Government was authorised to declare the whole or any part of the province as may be specified in the notification to be a dangerously disturbed area and under section 36 (1) of the said Act the Provincial Government was empowered to certify the offences under the said Act. Four notifications were issued under section 20 of the said Act. By the first notification issued on 8th July, 1949, the whole of the province of Delhi was declared to be a dangerously disturbed area. This first notification was cancelled with effect from 1st October, 1950 by the second notification issued on 28th September, 1950. Third notification was issued on 6th October, 1950 modifying the aforesaid second notification dated 28th September, 1950 by inserting the words "except as respect things done or omitted to be done before the date of this notification". In other words, this third notification purported to introduce an exception to the cancellation of the first notification caused by the second notification and in effect, the third notification purported to treat the Province of Delhi as a dangerously disturbed area in respect of things done or omitted to be done before the date of the said notification. The fourth notification was issued on 7th April, 1951 by the Chief Commissioner of Delhi in exercise of powers conferred by section 36 (1) of the Act certifying as being triable under the said Act in any area within the State of Delhi any offence under any law other than the aforesaid Act of which cognizance had been taken by a Magistrate in Delhi before 1st October, 1950 and the trial in respect of which was pending in any court immediately before 1st October, 1950 and had not concluded before the date of certificate issued under the said notification. An argument was advanced on behalf of the Delhi Administration that the competent authority was entitled to modify any notification issued by it under section 19 of the Punjab General Clauses Act, 1898 which is similarly worded as section 21 of the General Clauses Act, 1897 as also section 22 of the Orissa General Clauses Act, 1937. The Supreme Court held : ". . . . . . . . . In our opinion, this argument is not well-founded. Section 19 of the Punjab General Clauses Act, like section 21 of the General Clauses Act, embodies a rule of construction, the nature and extent of the application of which must inevitably be governed by the relevant provisions of the statute which confers the power to issue the notification. The power to cancel the notification can be easily conceded to the competent authority and so also the power to modify or vary it be likewise conceded; but the said power must inevitably be exercised within the limits prescribed by the provision conferring the said power. Now section 20 empowers the Provincial Government to declare the whole or any part of the Province to be dangerously disturbed area; and if a notification is issued in respect of the whole or any part of the province it may be either cancelled wholly or may be modified restricting the declaration to a specified part of the province. The power to cancel or modify must be exercised in reference to the areas of the province which it is competent for the provincial Government to specify as dangerously disturbed. The power to modify cannot obviously include the power to treat the same area as dangerously disturbed for persons accused of crimes committed in the past and not disturbed for others accused of the same or similar offences committed later. That clearly is a legislative function which is wholly outside the authority conferred on the delegate by section 20 or section 36 (1 ). We must, therefore, hold that the third and the forth notifications are invalid and a result of the second notification the whole of the Province of Delhi ceased to be a dangerously disturbed area from October 1, 1950. " Thus, in the aforesaid case, the Supreme Court held the two notifications to be invalid because they were wholly outside the authority conferred on the delegate by section 20 or section 36 (1) of the aforesaid Act. But in the present batch of cases, it is not disputed that the State Government had issued the earlier notifications for exemption of tax and deferment of payment of tax under the Orissa Sales Tax Act. Therefore the State Government also had the power under the Orissa Sales Tax Act read with section 22 of the Orissa General Clauses Act to rescind such notification of exemption of tax or deferment of payment of tax and the impugned Notifications S. R. O. No. 624 of 1999 and S. R. O. No. 625 of 1999 cannot be held to be beyond the power of the State Government as a delegate of the State Legislature under section 7 of the Orissa Sales Tax Act. The next question is whether the impugned notifications dated 30th July, 1999 and the impugned notifications dated 17th February, 2000 are discriminatory and violative of article 14 of the Constitution. The contention of the petitioners with regard to the impugned notifications dated 30th July, 1999 is that while industries set up pursuant to IPR 1992 and IPR 1996 continued to enjoy the sales tax incentives granted to them under the said IPRs, the petitioners who were granted sales tax incentives under IPR 1989 as new industries or continuing industries of IPRs 1980 and 1986 have been denied the sales tax incentives by the impugned notifications dated 30th July, 1999 before the period for which the exemption was to be in force under the said IPRs. Similarly, the contention with regard to the impugned notifications dated February 17, 2000 is that while existing industries which are in receipt of the sales tax incentives as on 1st January, 2000 and industries which are in pipeline as on that date have been allowed sales tax incentives under the said notifications, the petitioners have been deprived of similar sales tax incentives. It is not disputed that under the impugned notifications dated 30th July, 1999 all new industries and continuing industries of IPRs 1980 and 1986 which were granted sales tax incentives under the IPR 1989 have been treated equally and have not been allowed the sales tax incentives with effect from 1st August, 1999 by virtue of the impugned notifications dated July 30, 1999 whereas industries set up pursuant to IPRs 1992 and 1996 except those categorised as ineligible industries were allowed the sales tax incentives under the said IPRs even after 1st August, 1999. There was therefore a classification of industries "which would" and "which would not" be allowed sales tax incentives after August 1, 1999 by virtue of the impugned notifications dated July 30, 1999. The reason for such differential treatment given in the counter-affidavit filed on behalf of the State Government is that IPR 1992 and IPR 1996 envisaged incentives subject to financial ceiling linked to total fixed capital investment whereas IPR 1989 envisaged exemption from tax/deferment of payment of tax for a period of 5 to 7 years without any financial ceiling and this open-ended facility of IPR 1989 resulted in a serious erosion of tax base contributing to the deterioration of the fiscal position of the State Government. Thus, the classification of the industries adopted by the State Government while issuing the impugned notifications dated July 30, 1999 and February 17, 2000 appear to have a rational nexus with the objective of improving the financial position of the State and the classification does not seem to be unreasonable so as to make the said notifications discriminatory. It is now well-settled that in taxation matters a very wide latitude is given to the Government to pick and choose districts, objects, persons, methods and even rates for taxation and a heavy burden is cast on the person who assails a taxation provision as discriminatory to show that the classification adopted by the provision of the taxation law is not a valid classification. In East India Tobacco Company v. State of Andhra Pradesh [1962] 13 STC 529; AIR 1962 SC 1733, the Supreme Court held : " It should, in this connection, be remembered that under the law it is for the person who assails a legislation as discriminatory to establish that it is not based on a valid classification and it is well-settled that this burden is all the heavier when the legislation under attack is a taxing statute. 'in taxation even more than in other fields', it was observed by the Supreme Court of United States in Madden v. Kentucky (1940) 309 US 83; 84 Law Ed. 590 'legislatures possess the greatest freedom in classification. The burden is on the one attacking the legislative arrangement to negative every conceivable basis which might support it'. " The aforesaid law will equally apply to notifications for exemption from tax and deferment of payment of tax and withdrawal of such exemption and deferment. The burden therefore is on the petitioners to show that the aforesaid classification of industries in respect of which the sales tax incentives were withdrawn by the impugned notifications dated July 30, 1999 and February 17, 2000 and industries in respect of which such sales tax incentives were continued under the said impugned notifications dated July 30, 1999 and February 17, 2000 were not reasonable classifications and the impugned notifications therefore were discriminatory and violative of article 14 of the Constitution. But the petitioners in this batch of cases have not discharged the burden of showing that the classifications made under the impugned notifications dated July 30, 1999 and February 17, 2000 had no rational nexus with the object sought to be achieved and were unreasonable and the impugned notifications were hit by article 14 of the Constitution. In Union of India v. Indian Charge Chrome AIR 1999 SC 3504, notifications were issued under section 25 of the Customs Act, 1962 granting exemption from customs duty to Power Project generating electricity for distribution while denying such exemption to power plants generating electricity for captive consumption only and the notification was challenged on the ground that it was discriminatory and violative of article 14 of the Constitution. The Supreme Court repelling the challenge held : " What is prohibited by article 14 of the Constitution is class legislation. If the Legislature takes care to reasonably classify persons for legislative purposes, so long as the classification is founded on an intelligible differentia which lays down a perceptible differentiation between the two groups and the differentiation has a rational relation with the object sought to be achieved, such a classification does not fall foul of article 14 of the Constitution. We have already held that the two classes in the case at hand have a well defined differentiation. There is nothing wrong in the Central Government forming an opinion that it was in public interest to grant exemption from payment of custom duty to the imports meant for power projects engaged in production of power as an end-product meant for public distribution as such while denying a similar benefit to the imports referable to power plants generating electricity for captive consumption only. " Hence, we do not find any merit in the challenge to the impugned notifications dated July 30, 1999 and February 17, 2000 on the ground of discrimination. In the result, we are not inclined to quash the impugned notifications dated July 30, 1999 and February 17, 2000 issued by the State Government and we declare the said notifications to be valid in law. All interim orders passed by this Court in these cases are vacated. It will be, however, open for the petitioners to contend before the competent authority of the State Government or the competent authority under the Orissa Sales Tax Act and the Central Sales Tax Act that despite the impugned notifications dated July 30, 1999 and February 17, 2000 which we have held to be valid, the petitioners are still entitled to exemption from tax or deferment of payment of tax, as the case may be. With the aforesaid observations, the writ petitions are disposed of. No Costs. M. M. Das, J.- I agree. Writ petitions disposed of accordingly. .
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