The State Government is amenable to the doctrine of promissory estoppel, and industries established within the designated area in the State and had commenced commercial production of the stated goods before 14th October, 2004 were entitled to tax rebate for the period they were entitled at the time of production or before the issuance of the impugned notification.

JUDGMENT

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A.M. Khanwilkar, J. - The seminal question involved in both these appeals is about the power of the State to rescind the notification providing for rebate in respect of tax payable under the Uttar Pradesh Trade Tax Act, 1948 (for short, "the 1948 Act") and thus withdrawing the facility even in respect of industrial units, which had commenced production and had complied with the conditions for grant of such rebate in terms of Notification dated 27th February, 1998.

2. Briefly stated, the appropriate authority, in exercise of power Under Section 5 of the 1948 Act issued notification dated 18th June, 1997, to declare the goods having fly ash contents of 10% or more by weight to be notified goods for the purpose of Section 5, and to grant a rebate of 25% in respect of the goods having fly ash contents between 10 to 30% by weight and a rebate of 50% in respect of the goods having fly ash contents exceeding 30% by weight on the tax levied under the Act in the districts notified thereunder. In due course, the feedback received by the Government was that neither any new industrial unit was established within the State nor the consumption of the fly ash had increased by the existing units. Resultantly, there was no extra disposal/consumption of fly ash which was being produced by the thermal power stations situated within the State of Uttar Pradesh. In other words, the avowed objective for issuing the notification to extend rebate did not fructify. In light of such feedback, the appropriate authority issued fresh notification dated 27th February, 1998 bearing No. T.I.F.-2-592/XI-9(226)94-U.P. Act-15-48-Order-98 to rescind the earlier notification and instead to grant a rebate of 25% in respect of the goods having fly ash contents between 10% to 30% by weight and a rebate of 50% in respect of the goods having fly ash contents exceeding 30% by weight on the tax levied under the Act in the districts mentioned thereunder, subject to certain conditions. The said notification reads thus:

[S. No. 1289]

Notification No. T.I.F. - 2-592/XI-9(226)94-U.P. Act-15-48-Order-98, dated 27.02.1998

Whereas, the State Government is satisfied that it is expedient in the public interest so to do:

Now, therefore, in exercise of the powers Under Section 5 of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948), read with Section 21 of the Uttar Pradesh General Clauses Act, 1904 (U.P. Act No. 1 of 1904), the Governor, with effect from March 1, 1998 is pleased:

(a) to rescind the Notification No. TT-2-1885/XI-9(226)/94-UP-Act-15-48 Order-97, dated June 18, 1997;

(b) to grant a rebate of twenty five percent on goods having fly-ash contents between ten to thirty percent by weight and a rebate of fifty percent on the goods having fly-ash contents exceeding thirty percent by weight on the tax levied under the Act in the district mentioned in column-2 Annexure given below for the period mentioned in column-3 of the said Annexure subject to the following condition:

CONDITIONS

(i) such goods shall be manufactured in a unit established in the area mentioned in column-2 of the Annexure;

(ii) such goods shall be manufactured by using fly-ash purchased or received from the thermal power stations situated on Uttar Pradesh;

(iii) the dealer claiming rebate under this notification shall keep records in which following informations will be shown:

(a) date;

(b) name of thermal power stations from which fly-ash is purchased or received;

(c) weight of fly-ash;

(d) name of manufactured goods;

(e) weight of manufactured goods;

(f) weight of fly-ash used in manufacturing of such goods;

(g) weight of other goods used in manufacture of such goods;

(iv) the total weight of manufactured goods and percentage of fly-ash used, should be mentioned on goods of packing of such goods as far as possible.

ANNEXURE