Satyeshwar Roy, J.:— Petitioner no. 1, the Company, set up an industrial unit at Adityapur for manufacture of steel wire ropes in coils. The unit went into production on 21st March, 1979. The petitioners, petitioner no. 2 is a share bolder of petition no. 1, have prayed for appropriate writ for commanding the respondents to grant exemption to the petitioner no. 1 from sales tax in respect of purchase of raw materials made by it for its Adityapur industrial Unit for a period of ten years from 21st March, 1979. Prayer have also been made for quashing annexure 11 order dated 24.11.1979 passed by respondent no. 1 by which the petitioner was granted exemption from the levy of general sales tax, special sales tax or purchase tax up to the period of 31st March, 1979.

2. Petitioner' case is that on 29th September, 1973 the Government of Bihar in the Department of Industry and Technical Education adopted a resolution, which was duly published in the Bihar Gazette, to grant various incentives for establishment of large and medium industry in the State of Bihar in private sector. It was, inter alia, resolved in that resolution that during the initial period of production Government would grant exemption from sales tax on all purchase of raw materials needed in the process of manufacture for a period of ten years from the date the unit went into production and exemption from multi-point sales tax at the first stage of sales from the manufacture for a period of ten years from the date the unit went into production, Relying upon this resolution as contained in annexure 1 the petitioner no. 1 took steps for setting up an industrial unit at Adityapur. It applied to the Government of India for an industrial licence for manufacture, of steel wire ropes in coils in that unit. The Government of India granted letter of indent dated 26.7.1976 to petitioner no. 1. It obtained loans both in Indian currency and foreign exchange from different financial institutions including banks. The Adityapur Industrial Area Development Authority (AIADA) alloted land to the petitioner no. 1. It Page: 566thereafter established and set up the industry in 1977-1978. The petitioner no. 1 wrote the Industrial Development Commissioner, Bihar, after furnishing him various details and informations in respect of the unit, to confirm that the industrial unit would get the necessary exemptions from sales tax besides other incentives. These letters are annexures 5, 5.A and 5.B. By annexure 6 of the Industry Department Bihar, informed petitioner no. ??? that it would get various incentives announced from time to time and required it to make application in the prescribed form for sales tax incentives. By annexure 7 letter dated 21st February, 1979 petitioner no. 1 made the required application. The Government of Bihar issued a notification on 18th March, 1977 under the Bihar Sales Tax Ordinance exempting the owners of new medium and large industries from the levy of the general sales tax and special sales tax or purchase tax on raw materials for a period of five years from the date the industry started its production as complained in annexures. The unit was also registered under the Bihar Sales Tax Act. It was accepted as a large-industry. The unit went into production on 21st March, 1979. By annexure 11, respondent no. 1 being satisfied that the petitioner no. 1 was entitled to exemption as notified by annexure 8 held that in terms of annexure 8 it was entitled to exemption from the sales tax up to 21st March 1979. It accordingly ordered that exemption certificate would remain in operation up to 31st March, 1979. By annexure 12 dated 30.01.1980 the petitioner no. 1 wrote the Industry Department to issue necessary instructions to the concerned department for issuing an exemption certificate under the Sales Tax Act for a period of ten years as per annexure 1. The respondents however, declined to allow benefit and inserted that tax must be paid on all raw materials purchased after 31st March 1979. In the writ petition the supplementary affidavit and the rejoinder to the counter affidavit, the petitioner stated that petitioner no. 1 was entitled to the exemption for a period of ten years from the date it was into production in terms of various resolutions and statement of the Finance Minister, Bihar as contained in annexures 1, 1.S, 1.C, 6, 7, 1.I, 1.J. 1.H, 1.G and 2.S.

3. Two counter affidavits were filed on behalf of the respondents. According to the counter affidavits the petitioner no. 1 was entitled to incentives under the Sales Tax Act in terms of the statutory notifications issued under that Act. Petitioner no. 1 was not entitled to any benefit under any of the resolutions of the State Government. Statutory notification under Sales Tax Act or Ordinance of Bihar Finance Act were issued from time to time in public interest and in terms of such notifications the petitioner was allowed incentives for the period up to 31st March, 1979. It was not entitled to any examption for ten years from the date it went into production as claimed by it.

4. Before proceeding further to decide the issues involved it is necessary to note that at the outset of the hearing of this case with regard to the validity of the order as contained in annexure 11 the learned Advocate General conceded that in view of Kailash Roller Flour Mills v. Assistant Commissioner of Commercial Taxes 1980 B.L.J.R 432 , 1980 B.R.L.J 198 the order in annexure 11 that the petitioner no. 1 would get exemption from the sales tax up to 31st March, 1979 cannot be sustained. The learned Advocate General, submitted that as the petitioner no. 1 went into production at its Adityapur Unit on 21st March, 1971 it was entitled to the exemption for five years from that date under the statutory notifications issued under the Sales Tax Act/Ordinance/Finance Act. In view of Kailash Mill's case and in view of the submissions made by the learned Advocate-General the order as contained in annexure 11 shall to be quashed.

5. Mr. Debi Pal, learned counsel for the petitioners, submitted that the petitioner no. 1 was entitled to incentives for ten years and, therefore, in this application it should be decided whether the petitioner no. 1 was so entitled.

6. There is no dispute that the petitioner no. 1 fulfilled all the requirements as laid down in the different resolutions of the State Government for getting sales tax exemption for ten years from the date it went into production. The question that falls for consideration in this case is whether the petitioner no. 1 was entitled to sales tax exemption in terms of the resolutions of the State Government or in terms of the notifications under the Sales Tax Legislation. According to the petitioners, it was so entitled under the resolutions and according to the respondents it was entitled under the notifications.

7. In support of the case of the petitioners, Mr. Pal submitted that since petitioner no. 1 set up the industrial unit at Adityapur basing on the terms held out by the State Government in its different resolutions and acted to its detriment by taking huge loans from the public institutions, the respondents are estopped from denying the petitioner no. 1 the incentive under the Sales Tax Legislation for ten years from 21st March, 1979. The learned Advocate General, submitted that the petitioner no. 1 never acted on basis of the resolutions of the state Government. Even it acted, the notifications under the Sales Tax Legislation will prevail over the resolutions of the State Government and therefore the ‘petitioner no. 1 was entitled to incentives for five years only from 21st March, 1979.

8. In order to appreciate the respective contention, it is necessary to look into the resolutions and the notifications. By annexure 1 the Government of Bihar in the Industry Department adopted a resolution which was duly published in the Bihar Gazette. By annexure ??? it was resolved that to achieve a faster rate of industrial growth and equitable dispersal to build up and strengthen enter penurial activity within the State to extent possible and to draw potential investors from outside, as well as to ensure in that industrial units spread out to new and existing in balance in the levels of development in different regions of the State were gradually overcome, the State Government decided to grant various incentives to large and medium industrial enterprises. Some of the incentives were that the Government would support the application for industrial licence to the concerned authorities under the Government of India, would give all reasonable assistance to the party concerned in setting the licence as well as the foreign exchange required for setting up the unit, would allot land in different industrial areas including Adityapur, would provide revolving fund for building materials, would give preference, for the purchase of stores to the products of the all large and medium industries located in Bihar, would give financial assistance and in order to help all new industry, to compete with an established industry during the initial period of its production, would grant exemption from sales tax on all purchase of raw materials needed in the process of manufacture for a period of 10 years, from the date the unit went into production, and exemption from multi point sales tax at the first stage of sales from the manufacture of the finished products for a period of 10 year ??? the date unit went into production. By annexure A dated 29th June, 1976, the State Government, after noticing that large and medium industrial units were given some relief under Sales Tax Legislation for a period of 10 years. It resolved to amend annexure 1. Accordingly it decided that large and medium industries which went into production before 1-7-1976 or later would be entitled to get interest free and unsecured loans of the amount paid as sales tax for a period of 10 years from the date of production. Large and medium industrial units which went into production before 1-7-1976 and which had not completed ten years would be entitled to interest free loans in lieu of sales tax paid by them for the remaining period commencing from 1-7-1976. Large and medium industrial units set up Before 1-7-1976 and which had completed ten years from the date of start of production would also be eligible for the respective incentive provided they took up expansion and diversification programme and make additional investments.

9. Annexure A was amended by annexure 1.C, dated 28th November, 1976 and it was resolved that the sales tax exemption would be for ten years from date of production in terms of annexure 1, and units which went into production in future would not only get exemption from sales tax on purchase of raw materials, but also be entitled to loan equa Ito the account of sales on finished goods in terms of annexure ‘A’. By Annexure 1.E dated 8th February, 1977 respondent no. 2 informed all the subordinate offices that annexure A was modified and directed to implement annexure 1.C. During the subsistance of this resolution the Government of Bihar terms of the provisions of the Sales Tax Act-Ordinance/Bihar Finance Act issued from time to time notifications exempting industrial units from the operation of the Act for a period of five years from the date the industrial units went into production. These notifications during the relevant period are dated 14th May, 1974, 30th June, 1968, 18th January, 1977, 18th March, 1977 and 10th October, 1981. So far the notifications dated 10th October, 1981, as contained in annexure 2/5, is concerned that has no application to, the present case, because it was meant for industrial units which went into production between 1st October, 1979 to 31st March, 1984.

10. It will thus appear that whereas in the resolutions the State Government resolved to give incentives from the sales tax to large industrial units for ten years from the date of production, under the notifications such exemption was provided for five years only. In paragraph 5 of the writ petition it has been Stated that petitioner no, 1 relying on annexure 1 took steps for setting up industrial unit at Adityapur and accordingly applied for an industrial licence to the Government of India. These facts have not been controverted in the counter affidavit. Learned Advocate General, submitted that before petitioner no. 5 applied for land to AIADA and for the industrial licence, notification under the Sales Tax Act was issued on 14-3-1974 by which exemption was given to large and medium scale industries for a period of five years from the date the industries started its production. He contended that the petitioners cannot contend that they took steps on the basis of annexure 1. In other words, his submission was that before petitioner no. 1 took effective steps to set up the industrial unit at Adityapur exemption for five years was issued on 14-3-74 and the petitioners, therefore, cannot claim an exemption under Annexure 2 on any subsequent resolutions. Mr. Pal, submitted that by notification dated 14-3-1974 annexure 1 was not revoked and on the contrary during the subsistence of that notification annexure A was issued. Annexures A, 1.C and 1.E dated 29-6-76, 28-11-1976 and 8-2-1977 respectively, were issued from time to time which contained in the resolution of the State Government and during the subsistence of those resolutions, notifications under the sales tax legislation were also issued. Petitioner no. 1 obtained loans from the financial institution to the tune of Rs. 3.14 crores and entered into lease with AIADA, on 18th January 1977. A notification under Section 4(3)(6) of the Bihar Sal rs Tax Act, 1959 (Annexure I/D) was issued exempting from sales tax and purchase tax to new large and medium industries on purchase of raw materials required by it in use of goods for sale within the State of Bihar for a period of five years from the date the unit went into production. This came into force with retrospective effect from 1st July, 1976.

11. It is interesting to note that in annexure 1.F the attention of different offices of the Commercial Tax Department loos drawn to annexure I/C and it was stated that annexure I/D was issued in fulfilment of resolution of the State Government in the Department of Industry. In will thus appear that before issuance of notification under the sales tax legislation the State Government was conscious about the resolution. By annexure 5 dated 4th August, 1977, Page: 569annexure 5.A dated 27th September, 1971, and annexure ⅝ dated 4th July, 1978 the petitioner no. 1 wrote to the Industrial Development Commissioner to confirm that its new unit would be exempted from payment of sales tax on its purchase of raw materials and also entitled to exemption of the sale tax payable on its finished products, in annexure 5 reference was made to annexures A and 1.E and in annexure 5.A reference was made to annexure A. By annexure 6, the Director of Industry wrote to petitioner no. 1 that it would give the incentives decided from time to time by the Stale Government and required it to return the required proforma which was enclosed with annexure 6 after properly filling up for getting the approval of the State level Committee.

12. Respondent no. 3, the Managing Director AIADA with reference to annexure 6 sent the application duly filled up by the petitioner no. 1 to the Secretary, Department of Industry for exemption in terms of annexure 1. From the perusal of this annexure it appears that the proforma in which the applications were required to be filed for exemption was prepared in pursuance of annexure 1. By annexure 1/1 dated 19th October, 1979 again a resolution of the State Government ill the name of the Governor of Bihar was published in which reference was made to different resolutions of the State Government including annexures 1.A and 1.C and it was stated that the said resolution would remain in force upto 30th September, 1979. Yet another resolution was published under the order of the Governor of Bihar on 8-3-1980 as contained in annexure 1.J, by which again the exemptions from sales tax legislation were provided for ten years for large industry. Annexure 1.H dated 20-1-1981 was also on the same terms.

13. On the basis of the above facts relying on Motilal Padampat Sugar Mills Co. (P) Ltd. v. State of U.P (1979) 2 SCC 409 , A.I.R 1979 S.C 621, Mr. Pal contended that the respondents were bound to give necessary exemption under sales tax legislation to petitioner No. 1. In Motilal's case (supra) the Supreme Court observed as follows:

“The trite principle of promissory estoppel, therefore, seems to be that where one party has by words of conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party the promise would be binding on the party making it and be would not be entitled to go back upon it if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties and this would be so irrespective whether, there is any pre-existing relationship between the parties or not.”

14. The learned Advocate-General submitted that Motilal's case (supra) has no application to the present case in a much as the petitioner no. 1 before embarking on the project never got it confirmed from the State Government as to whether it would get exemption from sales tax legislation under the different resolutions of the State Government, as was done in the Motilal's case. He further contended that in Jit Ram Shiv Kumar v. State of Haryana, (1981) 1 SCC 11 , A.I.R 1980 S.C 1265 the Supreme Court differed from Motilal's case (supra). With regard to the first part of the submissions of the learned Advocate as already noticed, as far back as on 5th of August, 1977 by annexure 5 the petitioner no. 1 wrote the Page: 570Industrial Development Commissioner to confirm as to whether they were entitled to the incentives in terms of annexure A and 1.E. This was followed by annexure 5/1 dated, 27th September, 1977 in which reference was made to annexure A. On 26th December, 1978 by annexure 6 of the Director of Industries assured the petitioner no. 1 that it would get the incentive and from annexure 7 it appears that the incentives referred to in annexure 6 were the incentives as stated in annexure 1. All the resolutions of the State Government were published in the Bihar Gazette. Some were issued in the name of the Governor of Bihar. That being the position, I am of the opinion that the Motilal's case cannot be distinguished on facts, rather the petitioners are on a better footing in this case. With regard to the second part of the contention of the learned Advocate-General it is true that Jitram's case the Supreme Court differed with the proposition stated in Mortal's case. Both, Motilal's case and Jitram's case were noticed in Gujrat State Financial Corporation v. Lotus Hotels (Pvt.) Ltd. (1983) 3 SCC 379 , AIR 1983 S.C 848. With reference to Jitram's case the Supreme Court observed as follows:

“Jitram Shiv Kumar v. State of Haryana (1981) 1 SCC 11 , A.I.R 1980 S.C 1285 which slightly differs from the view taken by this Court in the aforementioned decision at any rate would not help the appellant because it only lays down that the principle of promissory estoppel cannot be invoked for preventing the Government from discharging its functions under the law. Even then it was held that when the officer authorised under a scheme enters into an agreement and makes representation and a person acting on that representation puts himself in a disadvantageous position, the Court is entitled to regulate the officer to act according to the scheme and the agreement or the representation. The officer cannot arbitrarily on his mere whim ignore his promise on some undefined and undisclosed grounds of necessity or change to the conditions to the prejudice of a person which had acted upon duel representation and put himself in a disadvantageous position on this point, both the decisions concur and the ratio would govern the decision in this appeal. The respondent acting upon the solemn promises made by the appellant incurred huge expenditure and if the appellant is not held to its promise the respondent would be put in a very disadvantageous position and therefore also the principle of promissory estoppel can be invoked in this case.”

15. In Lotus Hotel's case, (supra) the Supreme Court, therefore, have laid down the impact of Jeet Ram's case (supra) on the decision in Motiial's case.

16. It is true that in Motilal's case (supra) the Supreme Court also observed as under:—

“If it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promise and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such case because, on the facts equity would t not require that the Government should be held bound by the promise made by it. When the Government is able to show that in view of the facts which have transpired since the making of the promise public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen Page: 571to act upon it and alter his position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies.

17. Relying on this part the learned Advocate-General drew our attention to paragraph 3 of the counter affidavit filed on 22-12-1983. Paragraph 3 of the counter affidavit reads as follows:—

“That the statutory notification under the Bihar Sales Tax Act giving exemption of tax for 5 years and not for 10 years were issued in public interest. Due to increasing overdraft and deficit budget of the State and due to shortage of resources for progressing development and welfare scheme, it was not possible to give exemption for 10 years.”

18. The public interest shown in this paragraph was, therefore, increasing overdraft and deficit budget of the State Government and due to shortage of resources for progressing development and welfare scheme. As already noticed the State Government repeatedly adopted resolutions for giving incentives to large industrial units by way of exemption from sales tax for ten years and/or loan or exemption from purchase tax and loan equivalent to the amount paid as sales tax on the finished goods. In this case the period which have been brought to our notice within which the resolutions were repeatedly adopted was between September, 1973 to October, 1981. It is common knowledge that the State was always burdened with overdraft and deficit budget. Relying on the observations made in Motilal's case (at page 644 in AIR) it must be held that public interest shown in the counter affidavit is not such for which State Government should be relieved from carrying out the promise.

19. Besides all the facts noticed above there is yet another document for which also the contention of the learned Advocate General cannot be sustained. Annexure 1.G is the letter, dated 17-3-1981 from the Director, Industries-cum-Special Secretary, Bihar to the petitioner no. 1. By this annexure petitioner no. 1 was informed that it was entitled to the incentives terms of annexure 1, annexure A and annexure 1.H. This was issued during the pendency of this writ petition. No counter affidavit was filed by the respondents controverting the grounds of aunexure 1.G and nothing was stated as to why the petitioner should not be granted relief on the basis of annexure 1.G was ultra vires the power of Director of Industries-cum-Special Secretary. Equity in this case must be held to be in favour of the petitioners.

20. In the result, this application is allowed and annexure 11 is quashed. It is held that the petitioner no. 1 shall be entitled to the incentives under the Sales Tax legislation in terms of annexure 1.G, dated 13-3-1981. No order as to costs.