The main legal point established in the judgment is the non-mandatory nature of the provision regarding the timing of claiming sales tax exemption benefits under Rule 28A of the Haryana General Sales Tax Act, 1973, and the application of the principle of promissory estoppel in similar cases.

M.M.Kumar, J.

1. This petition filed under Article 226 of the Constitution challenges order dated 28.10.1994 (P-10) passed by the Lower Level Screening Committee (for brevity, LLSC) rejecting the claim of the petitioner for sales tax exemption on the ground that the petitioners unit went into production prior to 11.2.1994 and in view of notification issued by the Excise and Taxation Department, Haryana, dated 11.2.1994 (P-9),it does not qualify for the said benefit. It has also been noticed by the LLSC that the petitioners unit was prior to 11.2.1994 in the negative list of industries as appended to Schedule III of the Haryana General Sales Tax Rules, 1975 (for brevity, the Rules). Challenge has also been made to the order dated 5.8.1998 (P-12) passed by the Higher Level Screening Committee (for brevity, HLSC) rejecting the appeal of the petitioner filed against the order dated 28.10.1994.

2. Brief facts of the case are that in the year 1988 the State of Haryana formulated an industrial policy and certain industries, which were set up after 1.4.1988, were exempted from payment of sales tax on the goods manufactured by them. Since there was no express provision of exemption in the Haryana General Sales Tax Act, 1973 (for brevity, the HGST Act), therefore, with a view to augment industrial development in the respondent State, Section 13-B was inserted in the HGST Act vide Haryana Act No. 26 of 1988, inter alia, empowering the State of Haryana to exempt any class of industry from payment of sales tax on the goods manufactured by them. On 17.5.1989, the State of Haryana notified Haryana General Sales Tax (Second Amendment) Rules, 1989, amending the Rules. After Chapter IV of the existing Rules, Chapter IV-A was inserted with the heading of "Class of Industries, period and other conditions for exempting/deferring from payment of tax". In the said chapter, Rule 28A has also been incorporated in the Rules. Rule 28A(2) of the Rules defines meaning of various expressions including operative period, new industrial unit, eligible industrial unit, screening committee, medium and large scale industry, eligibility certificate, exemption certificate, notional sales tax liability and negative list, which are relevant for the purposes of the issues raised in the instant petition. Rule 28A(4) deals with the benefit of tax exemption or deferment and provides that the same shall be given to an eligible industrial unit, holding exemption or entitlement certificate, as the case may be, to the extent and for the period from year to year basis in various zones. The details of the quantum and period of tax exemption/tax deferment for new industrial units falling under Zone A, B and C as also relating to such units which intended to expand/diversification, has also been given in Rule 28A(4). Rule 28A(5) lays down a detailed procedure for availing benefit under this Rule whereas Rule 28A(7) talks about the procedure to be adopted for renewal of an exemption certificate from year to year basis. In Schedule III under Rule 28A(2)(7) clause (o) the details of industries/class of industries have been given, which are on the negative list.

3. The effect of clause (o) of sub-rule (2) of Rule 28A of the Rules is that now the Industries Department notifies periodically the list of class of industries which would not be entitled to the grant of incentives in the nature of sales tax exemption/deferment, capital investment subsidy and electricity duty etc. On the basis of such negative list, various agencies of the State of Haryana process the applications of the industrial units who intend to avail incentives. On 11.1.1991, the Industries Department notified the class of industries which were not eligible for the grant of capital investment subsidy under the Industrial Policy of 1988 (P-l). It is pertinent to notice here that after promulgation of Rule 28A of the Rules, the Industries Department issued two Negative Lists on 3.1.1991 and 19.6.1991, containi