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2004 DIGILAW 223 (JK)

Jai Beverages Pvt. Ltd. v. State Of J. &K.

2004-07-30

S.K.GUPTA

body2004
The main issue involved in both the writ petitions (OWP No.613/2002 and OWP No.1166/2002) pertains to the interpre- tation of SRO-247 dated 20-08-1998 (hereinafter SRO-247) issued by the Finance Department, Government of Jammu and Kashmir (hereinafter Jammu and Kashmir Government) regarding Sales Tax exemption allowed to a category of Industrial Units in the State called `prestigious units. According to the averments in the petitions, the State of Jammu and Kashmir, with a view to promote industries in the State and for generation of employment and its over all economic development, formulated a new Industrial Policy 1998-2003, vide Government Order No.202-Ind of 1998 dated 27-05-1998. By the aforesaid new Industrial Policy, the State proposed to grant number of incentives to attract the entrepreneurs from within and outside the State to establish their industries. This Policy was followed by various statutory notifications including Notification SRO-247, whereby exemption from payment of GST and CST was granted under Sections 5 and 8 of the Jammu and Kashmir Sales Tax Act, 1962 and Central Sales Tax Act, 1956 respectively, in respect to `prestigious units, i.e., Units having capital investment of Rs.25 crores or above. That apart, various other incentives and benefits were offered to all entrepreneurs to set up their industries in all categories. It is further stated that there is full exemption from the payment of Sales Tax (both State and Central) for a period of five years from the date of production or until such amount of exemption reaches the level of 150% of Capital Investment in the project, whichever occurs earlier, under this SRO. The promoters of the petitioner-Company, which was already in the business of bottling in Soft Drinks, attracted by the package of incentives floated by the new Industrial Policy of the Government for `prestigious units with capital investment of Rs.25 Crores and above, decided to establish a Company as `prestigious unit in the State in order to avail the incentives meant for the `prestigious units. The State Government was, accordingly, approached by the petitioner with a proposal to set up a `prestigious unit, which came to be considered by the State Cabinet and vide decision No.7/2 dated 19-01-2000, the proposal to allow incentives as a `prestigious unit to the petitioner was approved in the event of petitioner makes an investment of Rs.25 Crores and above before ending September, 2000. The petitioner further stated to have incurred an expenditure of Rs.27.11 Crores in the industrial unit at Bari Brahmana, Jammu, within the stipulated period, as provided by the Cabinet decision. Memorandum of Understanding (MOU) was executed between the State Government and petitioner-Company through SIDCO, their Nodal Agency, on 01-02-2000. The State Government assured all incentives to be provided to the petitioner-Company in terms of the new Industrial Policy for the prestigious units, under this MOU. The petitioner further stated that after that, on signing of the MOU, its case was recommended to the Principal Secretary to the Government, Finance Department, for the issue of necessary SROs, so as to enable the petitioner to derive the benefit of incentives as `prestigious unit, by the OSD, Industries and Commerce, vide No.Ind-71/98 dated 25-04-2000. The entitlement of the petitioner-unit to avail the benefits of the prestigious unit from the date of its commercial production, was also acknowledged by the General Manager, SIDCO, in its certificate issued vide No.IDC/ROJ/99/803 dated 25-04-2000. A similar Certificate was also issued by the Director, Industries and Commerce on 14-06-2000. A Permanent Registration Certificate also came to be issued by the Directorate of Industries and Commerce on 29-04-2000, affirming the date of production of the Unit as 24-04-2000. The petitioner after making the investment of more than Rs.25 Crores within the prescribed period, i.e., 30th September, 2000, informed the Directorate of Industries and Commerce and other Government Agencies to declare the unit as prestigious, as per the Industrial Policy of the State issued by Government Order No.202-Ind of 1998 dated 27-05-1998. After having verified the factum of investment made by the petitioner-Company, the Directorate of Industries and Commerce vide its order dated 12-12-2000 declared the petitioners unit as `prestigious unit. Reliance is placed on Annexure-M. On the basis of the aforesaid order issued by Director, Industries and Commerce, in declaring the petitioners unit as prestigious unit, the petitioner conducted the sale without charging any State Sales Tax or Central Sales Tax from the distributors and retailers to whom the sale was made by the Company. Consequently, the petitioner filed returns with respondent-5 without deposit of any tax, being exempted from payment of tax after having been declared as `prestigious unit. Consequently, the petitioner filed returns with respondent-5 without deposit of any tax, being exempted from payment of tax after having been declared as `prestigious unit. This was done, as stated by the petitioner, in pursuance of the new Industrial Policy of the Government under SRO-247 and on the basis of the MOU dated 01-02-2000, being entitled to the incentives, exemption and benefits detailed in para 16 of the writ petition. The petitioner further stated that the petitioner-unit, being `prestigious unit, is entitled to all exemptions and incentives notwithstanding that the same were not available to similar units manufacturing the same products. That the sane respondents announcement under the State Industrial Policy, viz., Government Order No.202-Ind of 1998 dated 27-05-1998, to allow exemption from General Sales Tax and Central Sales Tax to prestigious unit is final and absolute, they do not implement their Policy and honour their promise, assurance and commitment on the frivolous grounds of having issued SRO-249 dated 20-08-1998, viz., that the product manufactured by the petitioners unit falls under the Negative List and, thus, is not entitled to benefits of exemption. The petitioner also stated that SRO-249 is squarely applicable only to the `non-prestigious units, whereas SRO-247 has its application only to prestigious units. The petitioner-Company is regulated only by SRO-247 being a `prestigious unit declared by the Director, Industries and Commerce, vide its order dated 12-12-2000. The petitioner-Company cannot, therefore, be made liable to pay GST and CST under law for the product manufactured by the petitioner-Company, established as `prestigious unit, for a period of five years from the date of commercial production or till it reaches the level of 150% of Capital Investment in the project, whichever is earlier. The petitioner further claims to be entitled to capital investment subsidy, subsidy for testing equipment, subsidy on working capital, interest subsidy under the new Industrial Policy issued by Cabinet decision No.7/2 dated 19-01-2000. But the respondents-State, it is stated, instead issued a communication to the petitioner vide letter No.Ind/NI-71/98-II dated 04-07-2000 intimating that issue of exemption available to the petitioner was considered and the State vide Annexure-T has decided not to allow any tax exemption to the petitioner-unit. But the respondents-State, it is stated, instead issued a communication to the petitioner vide letter No.Ind/NI-71/98-II dated 04-07-2000 intimating that issue of exemption available to the petitioner was considered and the State vide Annexure-T has decided not to allow any tax exemption to the petitioner-unit. That in view of the aforesaid letter, respondent-5 has proceeded to impose GST and CST upon the petitioner and to make consequent recovery on assessed amount, though no amount is payable by the petitioner having been exempted from the payment of tax under the Government Order No.202-Ind of 1998 dated 27-05-1998 and SRO-247 dated 20-08-1998, that compelled the petitioner to approach the Court with a prayer made to quash letter No.Ind/NI-71/98-II dated 04-07-2000 by a writ of certiorari and mandamus for further commanding the respondents to allow the exemptions from payment of Sales Tax (GST and CST) and Toll Tax in accordance with Government Order dated 27-05-1998, SRO-247 dated 20-08-2000 and MOU dated 01-02-2000 with release of subsidy under various heads explicitly indicated in para 16 of the writ petition and refund the amount allegedly collected illegally from the petitioner on account of import of machinery and plant. 2. It was during the pendency of Writ Petition No.613/2002 and the operation of interim direction passed by the Court on 19-07-2002 directing the parties to maintain status quo with the consent of the learned counsel for the parties, as exists on today till next date before the Bench, the respondents-State issued Order No.GR-20 (IND) of 2002 dated 25-10-2002, whereby the Order issued by the Directorate of Industries and Commerce in declaring the petitioner- unit as `prestigious unit as defined in terms of new Industrial Policy dated 27-05-1998 qualifying for incentives in SRO-247 dated 20-08-1998, along with some other units, had been kept in abeyance. This led the petitioner to prefer another Writ Petition No.1166/2002, seeking to quash the Order dated 25-10-2002, by the issuance of a writ of certiorari, on the same grounds and raising a similar issue with regard to the interpretation of SRO-247 issued by the Government of Jammu and Kashmir in Finance Department in respect of Sales Tax exemptions allowed to a category of Industrial Units called as `prestigious units in invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India, read with Section 103 of the Constitution of Jammu and Kashmir. 3. 3. The stand of the respondents in their demurrer filed to writ petition No.613/2002 is that in order to avail the benefits of exemption from payment of General Sales Tax and Central Sales Tax as prestigious unit under SRO-247, the requirement of investment of Rs.25 Crores or above under SRO-247 is related to the initial investment and a unit, which achieves this level of investment of Rs.25 Crores or more at subsequent stages of its development, is not entitled to exemption. The petitioner has admitted itself to have commenced its production on 24-04-2000 and by this date, the unit had not invested Rs.25 Crores or more, so as to entitled it the benefits of a `prestigious unit under the provisions of SRO-247. Further plea put across by the respondents is that basically all the prestigious units are primarily large and medium scale industrial units and SRO-249 deals with large and medium scale industrial units, which clearly has placed all the industrial units manufacturing Soft Drinks on the Negative List. According to the respondents, if large and medium scale industrial units manufacturing Soft Drinks are in the Negative List, even though their investment is not more than couple of crores, and the prestigious units, even if their investment is Rs.25 Crores or more, are also in the Negative List; it will amount to clear discrimination if the prestigious unit is left out and tax is imposed only on large scale and medium scale industrial units. Any decision of the Industries Department in declaring the petitioner-unit as `prestigious unit cannot supersede SRO-249 of 1998 and does not bind the Sales Tax Department, as the Sales Tax Department is obliged in accordance with the provisions of General Sales Tax Act and Rules framed thereunder. Fulfilment of the conditions and obligations is a sine-qua-non for the eligibility in the SROs 247 and 249 issued by the Finance Department for the grant of exemption from Sales Tax (General Sales Tax and Central Sales Tax). The Department of Sales Tax is to be guided by the instructions in SROs and guidelines issued by the Government and not by the Industries and Commerce Department. The Department of Sales Tax is to be guided by the instructions in SROs and guidelines issued by the Government and not by the Industries and Commerce Department. The case of the petitioner-unit in declaring the unit as a `prestigious unit was under consideration of the Cabinet, but now the same has been turned down and in the wake of which the Department is well within its right to invoke the provisions of J&K General Sales Tax Act, 1962 to recover the tax from the petitioner. Grant or refusal of exemption is within the competence and jurisdiction of the State Government and the Finance Department & the Sales Tax Department. Such exemption has been declined to the petitioner-unit on the ground that the petitioner-unit is covered under SRO-249, i.e., squarely falling on the Negative List and, thus, is under an obligation to pay the tax. The authority, in fact, lies with the State Cabinet to declare a unit as prestigious. No such SRO has been issued by the Government in pursuance of the decision of the State Cabinet; rather, the proposal in respect of the petitioner-unit for according status of `prestigious unit pending before the State Cabinet, has been declined and turned down. It is further submitted that the petitioner though knew that the requisite investment has not been made at the specific level so as to be eligible to be called as `prestigious unit and entitled to exemption from Sales Tax (GST and CST), still approached the Government for getting a favourable decision on the proposal, but now the same has finally and conclusively not been agreed to and declined. In view of the decision of the State Cabinet communicated to the petitioner vide letter No.IND/NI/71/98-II dated 04-07-2002, the petitioner is not entitled to the incentives in the form of exemption from the payment of Sales Tax. The petitioner-unit having not challenged the decision of the Government in rejecting its claim to declare its unit as prestigious unit and only has assailed the communication by virtue of which the Director of Industries and Commerce has been conveyed the said decision, the petition is not maintainable. It is further pleaded by the respondents that in order to derive the benefits of incentives under the new Industrial Policy of the Government, the industrial unit is under a legal obligation to fulfil certain requirements and formalities. It is further pleaded by the respondents that in order to derive the benefits of incentives under the new Industrial Policy of the Government, the industrial unit is under a legal obligation to fulfil certain requirements and formalities. The industrial units manufacturing Soft Drinks in the State, being on the Negative List, notwithstanding their amount of investment including a prestigious unit with investment of Rs.25 Crores or more, are not entitled to exemption vide Cabinet decision and SRO-247. The decision to declare a particular unit as prestigious is within the competence of the Government, to be taken after considering various factors to accomplish the aims and objects of the new Industrial Policy of 1998 and the SROs issued in pursuance thereof from time to time, providing various incentives to the industrial sector in the State. Neither Government Order No.202-Ind of 1998 dated 27-05-1998, SRO-247 nor MOU, directly or indirectly, exempts the petitioner- unit from payment of Sales Tax. The decision has to be taken by the Cabinet with regard to a particular unit to declare as a `prestigious unit and issue necessary SRO in this behalf. That the petitioner being medium scale industrial unit is fully covered under SRO-249 of 1998 being manufacturing Soft Drink and in the Negative List, is not entitled to exemption from Sales Tax and get benefit of provisions of SRO-247 of 1998. 4. Whereas in OWP No.1166/2002, the respondents contested the claim of the petitioner, inter alia, on the grounds that since the prestigious units fall primarily in the category of large and medium scale units, the Negative List has applicability in respect of prestigious units as well. That the order issued by the Directorate of Industries and Commerce in declaring the petitioner-unit as `prestigious unit was not in accordance with the Industrial Policy and SRO-247 of 1998, and beyond its competence. As per the Industrial Policy of the State, it is the initial investment of Rs.25 Crores or above which is the primary condition for a unit to be described as a prestigious unit. Therefore, the Government has committed no illegality or irregularity in keeping in abeyance the orders issued by the Directorate of Industries and Commerce according prestigious status to the petitioner-unit till their cases are considered by the competent authority, i.e., State Level Committee, vide order dated 25-10-2002. Therefore, the Government has committed no illegality or irregularity in keeping in abeyance the orders issued by the Directorate of Industries and Commerce according prestigious status to the petitioner-unit till their cases are considered by the competent authority, i.e., State Level Committee, vide order dated 25-10-2002. It was further submitted that the case of the petitioner was considered by the State Cabinet for declaring as a `prestigious unit two-three times and finally the same was rejected after considering all the relevant facts. The respondents further stated that the petitioner-unit does not qualify for any exemption under the Jammu and Kashmir General Sales Tax Act, 1962 and Central Sales Tax Act, 1956, therefore, cannot be allowed to file the exemption for a period of five years w.e.f. 24-04-2000, as contended in the petition. The petitioner is manufacturing Soft Drinks and for said commodity, there is no exemption as per the Industrial Policy of the State nor any such promise or assurance has ever been given to the petitioner regarding exemption of tax. Confusion, in fact, was created by the order of Directorate of Commerce and Industries in declaring it as a prestigious unit and in order to remove the confusion, the record was set right as per the Industrial Policy and statutory notification by the action of the Government in its order issued in this behalf. 5. I have heard the learned counsel for the respective parties in extenso and perused the record of the files meticulously. The dispute being the same in both the writ petitions, were heard together. 6. The case of the petitioner is that SRO-247 had been issued pursuant to the new Industrial Policy 1998-2003 of the Jammu and Kashmir Government and offered package of incentives to promote industrialization in the State. SRO-247 in its plain language envisages that the unit, which has a capital investment of Rs.25 Crores and above, will be a `prestigious unit and entitled to avail full Sales Tax exemption. The qualifications/conditions and obligations are described in that SRO itself for a unit being termed as a `prestigious unit and these conditions/qualifications pertained to the capital investment of Rs.25 Crores or above. Further contention of the petitioner is that there is no separate registration as `prestigious unit. It is only carved out as medium/large scale unit when the capital investment made by the unit reaches the level of Rs.25 Crores and above. Further contention of the petitioner is that there is no separate registration as `prestigious unit. It is only carved out as medium/large scale unit when the capital investment made by the unit reaches the level of Rs.25 Crores and above. The grant of status to a unit as `prestigious therefore, is based on the investment as a medium scale industrial unit. Therefore, the same Directorate of Industries and Commerce, which has registered the petitioner-unit as medium scale industry, also declared the petitioner-unit as `prestigious unit after verifying the requisite capital investment required for a `prestigious unit, vide its order dated 12-12-2000. It was only after the investment was made by the petitioner-unit up to Rs.25 Crores that the Industries and Commerce Directorate issued declaration qualifying the petitioner as `prestigious unit for incentives under SRO-247 dated 20-08-1998. 7. According to Mr. Ram Chandran, learned Advocate appearing for the petitioner, that in view of the unambiguous and clear position, the respondents are seeking to deny the Sales Tax exemption to the petitioner-unit on the ground that the product manufactured by the petitioner-unit is in the Negative List of another notification being SRO-249 also dated 20-08-1998. His further submission is that for considering the scope of SRO-247, the action of Sales Tax Authority in reading Negative List contained in SRO-249 is ex-facie, wrong and contrary to the clear and plain language of the SRO-247 and is, thus, legally not sustainable. Notwithstanding provision contained in Clause 10 of Annexure-A Government Order No.202-Ind of 1998-II dated 27-05-1998 should be taken specifically to exclude each and every condition and the obligation, which applies for availing incentives under Clauses 7, 8, and 9, i.e., including Negative List contained in SRO-249. In case otherwise, this non-obstante provision will be rendered redundant and meaningless, and the purpose and the objective of allowing the Industrial Policy will be frustrated. Had the Government, in fact, intended to include the Negative List in SRO-247, it would have been so indicated and specified explicitly. It is also urged that right from the initial investment in the land, the petitioner made the investment with the clearance of the Jammu and Kashmir Government as towards the `prestigious unit. The commencement of commercial production prior to the full investment was to the benefit of the industrialization of the State. 8. On behalf of the respondents, Mr. It is also urged that right from the initial investment in the land, the petitioner made the investment with the clearance of the Jammu and Kashmir Government as towards the `prestigious unit. The commencement of commercial production prior to the full investment was to the benefit of the industrialization of the State. 8. On behalf of the respondents, Mr. A.H. Naik, learned Advocate General, submitted that the petitioner-unit was registered a only medium scale unit initially on the provisional basis, vide registration dated 22-09-1999 and subsequently as a medium scale industrial unit on 29-04-2000. The Government had not issued any SRO declaring the petitioner-unit as `prestigious unit pursuant to the Cabinet decision on account of non-fulfilment of the conditions, obligations and any particular qualification, as such, for a `prestigious unit, so as to entitle it to avail the facilities of exemption from Sales Tax. The petitioner had commenced commercial production and had availed Sales Tax incentives before making full capital investment of Rs.25 Crores and above. According to Mr. Naik, the requirement of investment of Rs.25 Crores and above, as per the spirit of SRO-247, relates to initial investment and a unit, which accomplished a level of this investment at a subsequent stage of its development, is not entitled to the exemption. Any decision taken by the Department of the State Government other than the Department itself, viz., Sales Tax Department, declaring the petitioner exempted from payment of Sales Tax is not binding on the latter. It is only the Government competent to declare a unit `prestigious entitled to avail the benefits of tax exemption after it is satisfied about the fulfilment of the conditions of eligibility and obligations indicated and specified in the SRO-247 and SRO-249 issued by the Finance Department. The petitioner-unit, having commenced its commercial production on 24-04-2000 and by this stage having not invested Rs.25 Crores or more, does not entitle it to attain the status of `prestigious unit under the provisions of SRO-247 and also merely on the ground that at a subsequently stage of its development, achieved the level of investment of Rs.25 Crores. The petitioner-unit, having commenced its commercial production on 24-04-2000 and by this stage having not invested Rs.25 Crores or more, does not entitle it to attain the status of `prestigious unit under the provisions of SRO-247 and also merely on the ground that at a subsequently stage of its development, achieved the level of investment of Rs.25 Crores. Various attempts made by the petitioner to approach the State Government for declaring the unit as `prestigious unit and entitle it to derive the benefit of Sales Tax exemption, stood finally turned down after taking into consideration various aspects and the eligibility under SROs-247 and 249 also, including the order declaring the petitioner-unit as `prestigious by the Directorate of Industries and Commerce, contrary to the spirit of SRO-247 issued in pursuance of the new Industrial Policy and Cabinet decision of the State, which created a confusion with the petitioner-unit to avail the benefits of tax exemption, and has been kept in abeyance by order dated 04-07-2002. Further plea of Mr. Naik is that even the writ petition is not maintainable, as the petitioner has not challenged the decision taken by the Government in declining to declare the petitioner-unit as `prestigious unit, but assailed only the communication of the Directorate of Industries and Commerce, by virtue of which the decision of the Government was conveyed to it. It is apt to point out that the new Industrial policy of the Jammu and Kashmir Government by which package of incentives was offered, had the approval of the State Cabinet vide its decision No.77/8 and No.87/8 dated 15-05-1998 and notified by Government Order No.202-Ind of 1998-II dated 27-05-1998, and SRO-247 dated 20-08-1998 has been issued in pursuance of the new Industrial Policy. SRO-247 defines the medium and large scale industries, which can be treated as `prestigious unit, and reads as under: "GOVERNMENT OF JAMMU & KASHMIR CIVIL SECTT. FINANCE DEPARTMENT NOTIFICATION Srinagar, the 20th August, 1998 SRO-247. SRO-247 defines the medium and large scale industries, which can be treated as `prestigious unit, and reads as under: "GOVERNMENT OF JAMMU & KASHMIR CIVIL SECTT. FINANCE DEPARTMENT NOTIFICATION Srinagar, the 20th August, 1998 SRO-247. In exercise of the power conferred by section 5 of the Jammu and Kashmir General Sales Tax Act, 1962 (XX of 1962) and read with sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (Act No.74 of 1956), the Government of Jammu and Kashmir hereby direct that the prestigious units, i.e., those having capital investment of 25 crores or above shall have the option to avail of full exemption from payment of general sales tax and Central sales tax for period of 5 years from the date of production or until such amount of exemption reaches the level of 150% of capital investment in the project, whichever occurs earlier. Sd/- Addl. Chief Secretary (Finance) J&K Government, Srinagar." 9. The intendment of the Government in issuance of SRO-247, as is plainly gatherable in its language, is that the Industrial Unit with capital investment of Rs.25 Crores and above is a `prestigious unit and entitled to exemption for a period of five years from the date of production or until the said amount of exemption reaches the level of 150% of the capital investment in the project, whichever occurs earlier. It may further be significantly point out that this requirement of investment of Rs.25 Crores or above pertains to the initial investment in the industrial unit and the unit which achieves, at a subsequent stage, the level of investment of Rs.25 Crores in its development is not entitled to such exemption. The petitioner has admittedly been registered as medium scale unit initially on a provisional basis, vide registration dated 22-09-1999 and thereafter as medium scale industrial unit on 29-04-2000. For the purposes of incentives are both these registrations. It is not in dispute that till date the Government has not issued any SRO declaring the petitioner-unit as `prestigious industrial unit in pursuance of the Cabinet decision by which SRO-247 was issued, so as to entitle the petitioner to avail the benefits of Sales Tax exemptions. For the purposes of incentives are both these registrations. It is not in dispute that till date the Government has not issued any SRO declaring the petitioner-unit as `prestigious industrial unit in pursuance of the Cabinet decision by which SRO-247 was issued, so as to entitle the petitioner to avail the benefits of Sales Tax exemptions. It is admitted case of the petitioner that it commenced the commercial production on 24-04-2000 and by that date certainly, the petitioner had not made capital investment of Rs.25 Crores or more to attain the status of `prestigious unit, so as to entitle it to the benefits of Sales Tax exemptions under SRO-247. In such circumstances, it cannot be said that the capital investment of Rs.25 Crores was made by the petitioner at the time when the commercial production commenced on 24-04-2000. The requirement, viz., condition to achieve the status of `prestigious unit under SRO-247 being the initial capital investment of Rs.25 Crores, having not been fulfilled, the petitioner cannot be said to have achieved the status of a `prestigious unit. The petitioner-unit cannot claim to have been permitted either by the Cabinet or under SRO-247 to make investment in continuous process at a subsequent stage when he had started commercial production as a medium scale industrial unit on 24-04-2000. The State Government in its Cabinet decision, in pursuance of which SRO-247 was issued to avail the benefits of tax exemption, can be stated to have held out a promise to declare the unit as `prestigious unit only when it fulfils the basic requirement of SRO-247, viz., initial capital investment in the industrial unit up to Rs.25 Crores or more. The intendment of the SRO-247 is not that a unit, which started commercial production as a medium scale unit and at subsequent stage makes a capital investment up to Rs.25 Crores, is entitled to derive the benefits of tax exemptions, as urged by Mr. Ram Chandran, learned counsel for the petitioner. So the plea taken by him that the cause of action has accrued to the petitioner enforceable in a rule under Promissory Estoppel against the Government creating a legal relationship, and acted upon, in relying on the judgment of the Apex Court in case entitled Amrit Banaspati Co. Ltd. and another v. State of Punjab and another, (1992) 2 SCC 411. 10. Ltd. and another v. State of Punjab and another, (1992) 2 SCC 411. 10. Assuming that the petitioner has acted on the representation of the Government for providing tax exemption and other incentives to a `prestigious unit, but having not fulfilled the conditions and obligations, as enshrined in SRO-247 in unequivocal terms with regard to initial capital investment in the industrial unit of Rs.25 Crores or more. Company cannot claim to avail the benefits of tax exemption. The petitioner could have claimed the entitlement and avail the Sales Tax incentives only on making full capital investment of Rs.25 Crores and above at the initial start of commercial production and not at a subsequent stage. 11. The petitioner further asserted that it had made the investment right from the start of the industrial unit with the clearance of the Jammu and Kashmir Government as towards `prestigious unit. Had it been so, then the petitioner-unit should not have been registered as medium scale industrial unit by the Industries and Commerce Department on 29-04-2000 when started commercial production. All industrial units, medium and large scale, are entitled to the incentives provided for such industries under the Industrial Policy of the Government. The requirement, to be declared as a `prestigious industrial unit in unambiguous terms of SRO-247, is the initial investment of Rs.25 Crores or above by the petitioner in the unit, which is admittedly not in the case of the petitioner. 12. The petitioner, however, may be entitled to various incentives, which are available under SROs and orders issued by the Industries and Commerce Department as a medium scale industrial unit, but to avail the facility of exemption of payment of the Sales Tax, the fulfillment of conditions of eligibility as contained in SROs-247 and 249 issued on the same date, i.e., 20-08-1998, was the pre-requisite. It is for the Government, being competent authority, to take decision with regard to the industrial unit to be declared as `prestigious unit, after having been satisfied with regard to the fulfilment of the eligibility conditions specified and indicated in SRO-247 along with SRO-249, which contained the Negative List. It is for the Government, being competent authority, to take decision with regard to the industrial unit to be declared as `prestigious unit, after having been satisfied with regard to the fulfilment of the eligibility conditions specified and indicated in SRO-247 along with SRO-249, which contained the Negative List. While considering the scope of SRO-247, SRO-249 purposefully seemed to have issued by the Government simultaneously while issuing SRO-247, so that while considering the scope of SRO-247, the Negative List in SRO-249 be also considered in taking a decision to declare or not to declare a particular unit as a `prestigious unit. 13. Mr. Ram Chandran has reiterated in his argument by making reference to the order of Director, Industries and Commerce dated 12-12-2000, viz., at the risk of repetition that the petitioner-unit has been declared as `prestigious unit in terms of new Industrial Policy dated 27-05-1998, whereby qualifying for incentives enshrined in the new Industrial Policy and SRO-247 of 1998 dated 20-08-1998 and, thus, entitled to all tax exemptions as `prestigious unit. Had it been the position what is urged by Mr. Ram Chandran, petitioners Advocate, elicited from the spirit of SRO-247, it is not understandable as to what inspired the petitioner to approach the Government with a proposal for declaring the petitioner-unit as `prestigious unit, more than once, which penultimately turned down, and conveyed vide letter dated 04-07-2002, thereby disentitled the petitioner to avail the facilities of prestigious status in respect of exemptions from Sales Tax in OWP No.613/2002 and also in OWP No.1166/2002, and kept in abeyance the orders of the Director, Industries and Commerce in declaring the petitioner-unit along with others as `prestigious units, vide order dated 25-10-2002. This makes it abundantly clear that the petitioner knew that the Director, Industries and Commerce, is not competent to declare the unit as `prestigious unit vide its order dated 12-12-2000 and it is the Government, which is to take the decision and issue SRO for the avowed purpose, after having been satisfied with regard to the fulfilment of the primary requirements of SRO-247. 14. It is meaningful to point out here that the decision of the Government in rejecting the proposal of the petitioner to be declared as `prestigious unit has not been challenged in the writ petition, instead the communication, which conveyed it about the rejection of the proposal by the Government, is the subject matter of challenge. 14. It is meaningful to point out here that the decision of the Government in rejecting the proposal of the petitioner to be declared as `prestigious unit has not been challenged in the writ petition, instead the communication, which conveyed it about the rejection of the proposal by the Government, is the subject matter of challenge. In other words, the order issued by the Industries and Commerce Department cannot, for all intents and purposes, be taken to supersede the notification SRO-247 issued by the Government in pursuance of its new Industrial Policy having the Cabinet approval vide No.202-Ind of 1998-II dated 27-05-1998. More so, the petitioner when approached the Government with the proposal to declare its unit as a `prestigious unit in contending to have fulfilled the requirement of SRO-247 itself shows that it was the Government and the Government alone competent to declare that an industrial unit has achieved the status of `prestigious unit and not the Director, Industries and Commerce. Since the case of the petitioner was pending before the State Cabinet for its decision to be declared the unit as `prestigious unit, the petitioner could not avail the tax exemptions, as is done from the date of initiation of commercial production of the unit. The petitioner-unit, in fact, went into commercial production in April, 2000 and by that time, the capital investment was not up to Rs.25 Crores or above, an essential requirement under SRO-247 and, thus, was not entitled to be declared as `prestigious unit. The unit was registered as medium scale industrial unit by the Directorate of Industries and Commerce. The Government Order No.202-Ind of 1998 dated 27-05-1998, which is the Industrial Policy, MOU and SRO-247 of 1998 neither directly nor indirectly provide the facilities of exemption from payment of Sales Tax to its unit. The entitlement of the petitioner-unit to derive the benefits of SRO-247 for exemption from Sales Tax is dependent upon fulfilment of the essential condition and obligation/requirement, viz., the capital investment of Rs.25 Crores or above before the initial investment in the unit at the time of commercial production, and a unit which achieved this level of investment at a subsequent stage of its development, is not entitled to such exemption. 15. 15. On behalf of the petitioner, it was submitted that after having been declared as `prestigious unit by Director, Industries and Commerce, the petitioner conducted the sale of its products and no tax, in any form, was charged from the dealers/distributors/retailers to whom the sale was made by the Company in view of the full exemption from the payment of State Sales Tax and Central Sales Tax. His further submission is that it was specifically mentioned by the petitioner in its Sales Tax Returns filed with respondent-5 about the exemption available to it as a `prestigious unit. These returns were filed without deposit of any tax, being exempted and, consequently, no such tax was charged by respondent-5. Reliance has been placed on the judgment of the Apex Court in case entitled Assistant Commissioner of Commercial Taxes (Asst.) Dharwar and others Verus Dharmendra Trading Company and others, (1988) 3 SCC 570. 16. It is well settled that the Government is bound by doctrine of promissory estoppel, not to go back on the assurance extended and exemption granted by its initial order to entrepreneurs who, acting upon the same, have set up new industries during the period between the dates of commencement of the first order and its supersession by the second order. The petitioner further stated that once it has availed the benefit of exemption from State Sales Tax and Central Sales Tax, it would not be withdrawn or declined by a subsequent decision of the Government, being clearly violative of doctrine of Promissory Estoppel. The question in this case arises as to whether benefit availed by the petitioner amounted to exemption under SRO-247? The petitioner has, obviously, taken this plea on the ground that after filing the Returns with respondent-5, without deposit of tax and indicating exemption from payment of tax as `prestigious unit, no such tax was charged from it. The stand of the respondents in their reply is that since the proposal of the petitioner to be declared as `prestigious unit was under consideration of the Cabinet, therefore, respondent-5 had not taken any coercive measures to effect the recovery of tax from the petitioner. The stand of the respondents in their reply is that since the proposal of the petitioner to be declared as `prestigious unit was under consideration of the Cabinet, therefore, respondent-5 had not taken any coercive measures to effect the recovery of tax from the petitioner. Since this benefit having been availed by the petitioner prior to its entitlement and eligibility under SRO-247, respondent-5 is within its powers to effect the recovery of the Sales Tax after the proposal of the petitioner was rejected by the Cabinet to give it a status of `prestigious unit. 17. I have carefully gone through the aforesaid judgment and the same has no application to the facts of this case, and I do not find any merit in the submission of the learned counsel for the petitioner. So far as the order issued by the Director, Industries and Commerce, in declaring the petitioner-unit as `prestigious unit, it pertains only to the incentives available to the unit registered as medium scale industrial unit on the date it started commercial production, but granting exemption from payment of Sales Tax is within the competence and jurisdiction of the Government, as is indisputably gatherable from SRO-247 of 1998. 18. Another limb of argument advanced by the petitioners Advocate, Mr. Ram Chandran, is that the Government is estopped from charging Toll Tax on the raw-material, as no further Government Order was required to declare the petitioner-unit as a `prestigious unit once it has fulfilled the requirement of capital investment of Rs.25 Crores or above in terms of the aforesaid SRO. On going through SRO-247, it clearly exhibits the intention to exempt from payment of Sales Tax on the fulfilment of eligibility requirements specified and contained in it. This cannot be termed as exemption notification under Section 5 of the General Sales Tax Act, 1962. Section 5 of the General Sales Tax Act empowers the State to grant exemption from taxation, which reads as under: "5. Exemption from taxation.-The Government may, subject to such restrictions and conditions as may be prescribed, including conditions as to licence and licence fees, by order exempt in whole or in part from payment of tax any class of dealer or any goods or class or description of goods." 19. This expression has been used in SRO-247 and only declares the intention to grant exemption from Sales Tax. This expression has been used in SRO-247 and only declares the intention to grant exemption from Sales Tax. The scope for the purpose of automatic exemption has been further limited by its requirement of eligibility specified therein. SRO-247 reflects only the Cabinet decision to grant exemption on the fulfilment of the requirement indicated therein and has not, as such, an exemption order when we give plain and reasonable meaning to its unambiguous language. This could not be treated as a general order of exemption and a specific further order was required to be issued by the Government on the fulfilment of the requirement and eligibility under SRO-247. 20. The option to avail of full Sales Tax exemption under SRO-247 was dependent on the fulfilment of the condition, viz., initial capital investment of Rs.25 Crores or more, so as to entitle it for exemption. The expression "shall have the option to avail Sales Tax exemption in SRO-247" implies clearly a declaration of intention of the State Government and result in further order of exemption being issued after having been satisfied about the satisfaction of the conditions. The submission of the proposal to the Government for declaring it as a `prestigious unit after the commencement of the commercial production on 24-04-2000 as medium scale industrial unit, is itself a manifestation of the fact that the petitioner knew that the SRO-247 is itself not an exemption order from Sales Tax, but need a specific order with regard to the status of its unit towards `prestigious unit in its favour to be issued by the competent authority, i.e., Government. Ratio of the judgment in the case entitled M/s Pine Chemicals Ltd. and others Versus Assessing Authority and others, (1992) 2 SCC 683, relied upon by the petitioners counsel, is not applicable to the facts of this case being clearly distinguishable. The proposal of the petitioner submitted to the Government to declare the unit as `prestigious unit in its Cabinet decision having been rejected and conveyed vide letter dated 04-07-2002, the petitioner is not entitled to avail full Sales Tax exemptions of a `prestigious unit under SRO-247. 21. In the above view of the matter, the petitioner is also not entitled to any relief under the doctrine of Promissory Estoppel. 22. Giving the matter my anxious consideration, the inevitable conclusion reached is that the writ petitions do not possess any merit and are, accordingly, dismissed. 21. In the above view of the matter, the petitioner is also not entitled to any relief under the doctrine of Promissory Estoppel. 22. Giving the matter my anxious consideration, the inevitable conclusion reached is that the writ petitions do not possess any merit and are, accordingly, dismissed. Stay orders, if any issued in both the writ petitions, shall also stand vacated in resultant thereof.