BAKUL CASHEW CO. & ORS. versus SALES TAX OFFICER QUILON & ANR.

Citation: [1986] 1 S.C.R. 610 · Decided: 12-03-1986 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Dismissed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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BAKUL CASHEW CO. & ORS. 
¥--
v. 
SALES TAX OFFICER QUILON & ANR. 
MARCH 12 , 198& 
[E.S. VENKATARAMlAH AND M.P. THAKKAR, JJ.] 
Promissory estoppel, plea of - Phrases used by Ministers ?"-
which cannot form the basis for a plea of estoppel, detailed -
Sales Tax exemption granted retrospectively by the State 
Government by GOMS 127/73/ID dated 12.10.1973 withdrawn. by a 
later GOMS 143/73/ID dated 9. ll.1973 is.sued under section 
10(3) of the Kerala General Sales Tax Act, 1963 (Kerala Act 15 
of 1963) as amended, validity of - Power of G6vemment to 
cancel the earlier Notification vis-a-vis the right of the 
Cashew Factory owners to secure the exemption. 
... 
' 
The appellants are Cashew Processors owning arW./or ' ~ 
working cashew factories wherein nearly about 80 per cent of 
the raw nuts processed were being imported during the relevant 
time from 
Af ~ican countries. The import of raw nuts were 
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. There was delay in making the assessment of sales 
tax payable by them under section 5 of the Kerala General 
Sales Tax Act, 1963 during the period 1970 to 1974 and the 
Department co111Denced to make assessments in or about the year 1 
197 4. The Government in the meantime issued a Notification · 
dated 12.10.73 granting exemption to cashew manufacturers for 
the period between September 1, 1970 and September 30, 1973 
and had later cancelled it by Notification dated 9.11.73, that 
is within three weeks of the earlier Notification granting 
exemption. 
The appellants filed a writ petition contending: (i) 
that the Government waa precluded by the rule of promissory . .,_ 
estoppel from claiming the purchase tax in respect of 
cashewnuts imported from African countries; and (ii) that the 
subsequent withdrawal of the exemption granted on 12.10.73 waa 
bad. The Writ Petitions having been dismissed, the appellants 
have come up in appeal by way of special leave. 
BAKUL CASHEW CO. v. S.T.O. 
611 
• -r 
Dismissing the appeal, the Court 
HELD : 1.1 The appellants in the instant case, are not 
entitled to any relief either on the principle of promissory 
estoppel or on the basis of the earlier Notif icatibn issued 
under section 10 of the Kerala General Sales Tax Act, 1963. 
[621 E-F] 
~, 
1.2 The whole case of the promissory estoppel lacks the 
necessary factual foundation. 
In the instant case, 
the 
allegations made in the petition do not establish (i) that 
there was a definite representation by the Government to the 
effect that ~he Government will not levy the tax; (ii) that 
the appellants in fact altered their position by acting upon 
such representation; and (iii) that they had suffered from 
some prejudice sufficient to constitute an estoppel. [617 F-G] 
-~ 
1. 3 
In 
cases 
of 
this 
nature, 
the 
evidence 
of 
; 
representation should be clear and unambiguous. It "must be 
certain to every intent." The statements that are made by 
ministers at such meetings, such as, "let us see", "we shall 
consider 
the 
question 
of 
granting 
of 
exemption 
sympathetically", "we shall get the matter· examined", ''you 
have a good case for exemption" etc. even if true, cannot form 
the basis for -a plea of estoppel. The events that have taken 
place subsequently belie the fact of any such promise by the 
ministers. In fact the Cashew Corporation of India had made a 
representation to the Government of India on May 7, 1971 and 
-\the Government of India wrote to the State Government on March 
4, 1972 urging that the exemption prayed for by the· cashew 
manufacturers may be favourably considered by the Government 
of Kerala. The Government of Kerala however rejected the said 
request. Then on further pressure being put upon it, it issued 
the notification dated October 12, 1973 and i111111ediately 
thereafter withdraw it after it encountered severe public 
criticism. This conduct on their part is not consistent with 
the appellants' case that they had actually promised in the 
.$ear 1971 to exempt the cashew trade from payment of the sales 
'tax. [617 C-F] 
2.1 The State Government had the necessary power to 
cancel any Notification earlier issued, which power of 
cancellation has been expressly conferred by section 10 (3) of 
Kerala General Sales Tax Act. The authority which can issue a 
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