STATE OF PUNJAB Vs. NESTLE INDIA LIMITED

JUDGEMENT

(1.) All the respondents before us have factories in the State of Punjab where they produce various milk products. For the purpose of their business, they purchase milk from villages, each respondent from a particular "milk shed area" which covers several hundred villages in and around such respondents factory. As registered dealers under the Punjab General Sales Tax Act, 1948, the respondents had been and are at present paying purchase tax on milk in terms of Section 4(B) of the State Act. However, for one year i.e for the period 1-4-1996 to 4-6-1997, none of the respondents paid the purchase tax. They did not do so because they say that the Government had decided to abolish purchase tax on milk for the period in question and was estopped from contending to the contrary.

(2.) On the basis that the State had wrongly raised demands for purchase tax on milk on the respondents for the period 1996-97, the respondents filed separate writ petitions before the High Court. The High Court allowed the writ petitions and quashed the demands raised. Aggrieved by the decision of the High Court, these appeals have been preferred by the State Government.

(3.) The circumstances under which the respondents had approached the Court chronologically commenced with an announcement made by the then Chief Minister of Punjab on 26th Feb. 1996 while addressing dairy farmers at a State level function, that the State Government had abolished purchase tax on milk and milk products in the State. This announcement was given wide publicity in several newspapers in the State.