Decided on August 23,1999

Kashmir Spices Appellant
STATE OF JANDK Respondents


- (1.) TWO decades back exemption was granted from payment of sales tax. This exemption was withdrawn. This withdrawal of exemption was subject matter of challenge in a writ petition. Writ petition was dismissed. Withdrawal was held to be valid. An appeal has been preferred. Notification granting exemption lost its efficacy by efflux of time. Period of 10 years for which exemption was granted expired on 17.12.1989. Merit of controversy are however, still required to be gone into as judgment of learned single Judge was stayed: a stay order operates.
(2.) FACTS be noticed Exemption was granted from payment of the General Sales Tax vide SRO No 671 issued on 18
(3.) 12.1979. This was with regard to the goods manufactured and sold by the appellant. This exemption was withdrawn by SRO No 118 dated issued on 31.3.1984. The withdrawal of this as indicated above led to filing of writ petitions. This withdrawal was held to be valid by a learned single judge of this court. This happened 17 years ago. An appeal was preferred. This was admitted. Stay was granted subject to the appellant furnishing undertaking that in the event of appellant failing, the amount of tax becoming payable by virtue of the withdrawal of the exemption shall be deposited and the unit in question shall not be put to sale, transfer or otherwise disposed of. The respondent -State of J&K State, it is stated encouraged, allured and attracted enterpreneurs from within and outside the State of J&K to set up Industrial Unit in the State. Policy decisions were taken as early as in the year 1971. Various incentives including exemption from tax as leviable on the raw material and finished goods were granted from time to time. The first such incentive is said to have been given on 11.4.1972. By this the enterpreneurs were assured that they would exempted from payment of sales tax and levy of additional tool tax for the initial period of five years from the date the unit went into production. It is further stated that vide SRO No 267 dated 15.5.1978 incentives were further extended to the existing and new small Scale Industrial Units established or to be established in the State of Jammu and Kashmir. Respondent -State, it is stated, vide Govt. order No 391 -lnd of 1972 announced the package of incentives in the nature of grant of toll -tax and sales tax on import of raw material and sale of finished goods for a period of five years from the date the unit went into production. This notification was issued on 21.6.1972. The Industries Department is also said to have published pamphlets on 6.3.1978 and 9.9.1978 granting exemption from sales tax and toll tax for a period of ten years. The pamphlets so published assured the various Small Scales Industrial Units that exemption from sales tax and toll tax will be available for a period of 10 years. This situation continued. The executive authority of the State through Chief Minister and Industries Minister were occasionally holding meetings with the industrialists and entrepreneurs and were encouraging them to set up the industries within the State of Jammu and Kashmir. It is stated that on 18,12.1979 SRO No: 671 was issued. Exemption from payment of sales tax on the finished goods manufactured by the Small Scale Industrial Units in the State, registered with the Industries Department or with the Directorate of Handicarafts and Handlooms were granted. These benefits were given and exemptions were being granted by the concerned assessing authorities in a prescribed proforma prescribed as SC -I. It is submitted that yet another Notification SRO No: 434 of 1983 was issued on 22.8.1983. By this SRO No 671 of 1971 was superseded. The effect of this supersession was that the exemption allowed from payment of tax on the finished goods manufactured by the manufacturing units was withdrawn. Yet another Notification was issued on 31.3.1984. This is vide SRO No 118 of 1984. By this exemption from payment of sales tax on the finished goods manufactured by the manufacturing units was withdrawn. This was challenged by preferring writ petitions in this court. The grounds of challenge be noticed.;

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