Venkataramiah, J. - (1.) This appeal by special leave is filed against the judgment dated December 1, 1976 in the petition bearing Writ Petition No. O. P. 1740 of 1976 on the file of the Kerala High Court filed by the aforementioned 26 appellants and 20 others. They prayed in the Writ Petition inter alia for the issue of a writ in the nature of mandamus to the State Government of Kerala to give effect to the notification issued by the State Government bearing No.G.O.Ms. 127/73/ID dated October 12, 1973 under Section 10 of the Kerala General Sales Tax Act, 1963 (15 of 1963) (hereinafter referred to as 'the Act') by which the State Government had retrospectively granted an exemption in respect of the tax payable under Section 5 of the said Act by the cashew manufacturers in that State on the purchase turnover of cashewnuts imported from outside India through the Cashew Corporation of India for the period berween September 1, 1970 and September 30, 1973 after quashing the subsequent notification bearing No. G.O. Ms. 143/73/TD dated November 9, 1973 issued under Section 10(3) of the Act cancelling the above said notification dated October 12, 1973. The appellants and the other persons who had filed the writ petition before the High Court are cashew processors owning and/or working cashew factories wherein nearly about 80 per cent of the raw nuts processed were being imported during the relevant time from African countries. The import of raw nuts was canalised through the Cashew Corporation of India and they were allotted to the appellants and various other factory owners who were engaged in the business of processing cashewnuts. It appears that there was delay in making the assessment of tax payable by them under Section 5 of the Act during the periods 1970 to 1974 and the Department commenced to make assessment in or about the year 1974. The Government in the meanwhile had issued the notification dated October 12, 1973 granting exemption to cashew manufacturers for the period between September 1, 1970 and September 30, 1973 and had later on cancelled it by notification dated November 9, 1973 within about three weeks from the date on which the exemption had been-granted. It is not necessary to refer to all the allegations made in the writ petition for purposes of this case since the only point urged before us relates to the right of the appellants to secure the exemption as stated in the notification dated October 12, 1973 by virtue of the rule of promissory estoppel. The appellants urged two contentions before the High Court in support of their plea:(i) that the Government was precluded by the rule of promissory estoppel from claiming the purchase tax in respect of cashewnuts imported from African countries and (ii) that the exemption that had been granted on October 12, 1973 could not be withdrawn by the subsequent notification issued on November 9, 1973. In support of first limb of their argument the appellants depended upon the representation which was alleged to have been made on behalf of the Government by the Chief Minister, the Industries Minister and the Revenue Minister at a meeting held on April 25, 1971 and in support of their second contention they depended upon Section 10 of the Act. The Government contested the case of the appellants on both these points. The High Court upheld the case of the State Government and rejected the said contentions. It however, directed the Kerala Sales Tax Appellate Tribunal to make assessments taking into account the other contentions of the assessees. This appeal by special leave is filed against the judgment of the High Court of Kerala in the said writ petition.
(2.) The allegations regarding the plea based on promissory estoppel ore found in Paragraphs 10 and 11 of the petition which reads thus:- " 10. When the scheme of canalisation came to be introduced in September, 1970, the members of the cashew industry like the first petitioner were keen that the purchases of raw cashew nuts in the form of allotment from the said Corporation should not be subjected to tax under the said Act as was the case under the open general, licence scheme. The then Chairman of the said Corporation, Shri M. C. Sarin, as also its Managing Director Shri Z. K. Joseph assured the members of the cashew industry that such purchases would not be exigible to tax under the said Act. In a meeting held on the 25th April, 1971 where Shri Z. K. Joseph of the said Corporation was also present the representatives of the industry were assured by the Chief Minister Shri Achuta Menon, the then Industries Minister Shri N. E. Ballaram and the then Revenue Minister Baby John that no tax would be levied under the said Act on the turnover of African raw nuts. 11. Subsequently, for three years, the respondents did not initiate assessment proceeding against the allottees like the first petitioner and gave the allottees to believe that no tax would be levied on such purchases, relying upon which the allottees have quoted prices for exports and made huge commitments. If such imports were to be regarded as taxable purchases by the respondents, the allottees, like the first petitioner would not have made commitments with the foreign buyers. In fact, as late as 12th October, 1973, a notification was issued by the fourth respondent, a copy of which is hereto annexed and marked Exh. 'A' under S. 10 of the said Act giving effect to such representations. The said notification was published in Kerala Gazette on 23rd October, 1973, clearly stating that the exemption to such purchases was being accorded on the ground of public interest. Without assigning reasons or showing any change of circumstances, in less than twenty days, another notification was issued on 9th November, 1973, a copy of which is hereto annexed and marked Exh.'B' withdrawing the said exemption."
(3.) In the counter-affidavit filed on behalf of the State Government it is stated in Paras 18 and 19 thus: " 18. The averments in para 11 are denied. The Cashew Corporation of India wrote to the Government by Memorandum dated 3-5-1971 that cashew industry may be exempted from payment of tax under the Kerala General Sales Tax Act on their purchases of imported raw cashew nuts. The Ministry of Foreign Trade also addressed a communication to the State Government dated 4-3-1972 that the matter may be sympathetically considered The cashew manufacturers exporters' Associations also moved the Government in this behalf by memorandum dated 6-3-1972. The Government directed the Board of Revenue (Taxes) to submit a report in the matter. The matter was engaging the attention of the Board of Revenue and the State Government from some time. In view of very heavy stakes involved in the matter, the Government had to analyse the entire situation, especially with reference to the very high amount of the Revenue involved. It was reported that the grant of exemption will involve loss of revenue of at least one crore of rupees per annum. After consideration of the matter, the State Government decided to reject the request of exemption prayed for. The Cashew Corporation of India and the Government of India were given a reply communicating the decision of the State Government in February, 1973. Thereafter the Kerala State Cashew Development Corporation requested the Govt. to re-examine the decision as the levy of tax would be heavy burden on the industry. The Government passed an order (Ext. A) granting the exemption for the period 1-9-1970 to 30-9-1973. It was resolved then that tax should be levied from 1-10-1973 onwards. There was considerable criticism about the grant of exemption especially in the context of the grave and difficult financial position of the State. After mature consideration, by notification dated 9-11-1973 (Ext. B) the earlier Government order dated 12-10-1973 (Ext. A) was cancelled. 19. The allottees were not given to believe that no tax would be leived on such purchases ........";