CASE NO.: Appeal (civil) 5814 of 2006 PETITIONER: M/s. A.P. Steel Re-Rolling Mill Ltd. .. Appellant RESPONDENT: State of Kerala & Ors. .. Respondents DATE OF JUDGMENT: 14/12/2006 BENCH: S.B. Sinha & Markandey Katju JUDGMENT:
J U D G M E N T
(Arising out of S.L.P.(C)Nos.7972-7973 of 2005)
With
CIVIL APPEAL NO. 5816 /2006
(Arising out of S.L.P.(C)No.6809 of 2005)
M/s. Victory Papers and Boards India Ltd. .. Appellant
Versus
State of Kerala & Ors. .. Respondents
S.B. Sinha, J.
Leave granted.
These two appeals, involving common questions of fact and law, were
taken up for hearing together and are being disposed of by this common
judgment.
We will, however, notice the fact of the matter from M/s. Victory
Papers and Boards India Ltd.’s case.
The State of Kerala adopted an industrial policy in the year 1992 and
in the light thereof a notification bearing No.G.O.(MS)No.4/92/PD dated
6.2.1992, was issued, which reads as under :
“ORDER
In the light of the statement of Industrial Policy
approved for implementation by Government the
following incentives in respect of electricity are ordered :
1. New industrial units will be exempted for 5
years from payment of enhanced power tariff which
came into effect on 1.1.92. This concession will be
available.
i. to new units from the date of commercial
production, which start such production between 1.1.92
and 31.12.96.
ii. to manufacturing units only and not to service
and entertainment units.
iii. To existing units for substantial expansion/
modernization/diversification the concession in such
cases will be available only for the consumption of the
new machinery and equipments which adds to the capital
asset, by not less than 25% of the exiting fixed capital
investment excluding land and building, the installation
of which is to be certified by the competent authority.
iv. for modernization, to industrial units having a
contract demand not exceeding 500 KVA. In such cases,
new equipments alone will be eligible for the
concession.”
The said industrial policy of the State was accepted by the Kerala
State Electricity Board, which is a body constituted and incorporated under
the provisions of the Electricity (Supply) Act, 1948, in respect of which a
notification was issued on 27.3.1992. By reason of the said notification,
some guidelines were also issued. The appellant herein contended that
pursuant to or in furtherance of the representation made by the State of
Kerala and/or the respondent-Board, they altered their position by investing
a huge amount by setting up factories/new units.
The State, admittedly, at the district level constituted a ‘Green
Channel Clearance Committee’ (GCC).
The appellant had applied for grant of electric power allocation to the
extent of 2500 KVA. It obtained loan on 19.1.1995. As the application of
the appellant had not allegedly been processed, GCC issued several
reminders to the Board. On or about 17.11.1995, Appellant informed the
Board that the project was at an advanced stage. It was recorded that despite
recommendations by GCC, sanction for grant of electrical connection had
not been issued, stating :
“We wish to add at this juncture that the Government is
inviting entrepreneurs to start their industrial units in the
State and are offering Power, Water and other
infrastructural facilities availability so easily. But on the
contrary the concerned authorities are reluctant to
sanction the necessary infrastructural facilities to the
units. Our case is one of the examples. Your goodself
will appreciate that without electric power we cannot
start out production as schedule, which will hamper the
work and finally affect the production of the unit. The
delay in implementing the project will, finally, escalate
the cost of the project.
Since more than one year has lapsed after submitting our
application to the KSEB, we have so far not received
sanction of Power to our unit. Hence we request to your
goodself to kind enough to prevail upon the authority to
sanction Electric Power to out unit to the extent of our
requirement.”
It, allegedly, imported machinery from abroad, which fact was
intimated to the Board by a letter dated 24th June, 1996, stating :
“Under the circumstances, our Bankers are reluctant to
clear term loan because of non-sanctioning of Power to
the Project. Presently, the total machinery worth Rs.3.5
Crore have already arrived at site and the erection is in
progress. Any further delay in receiving the power
allocation will affect our total project which will lead to a
financial constraint. It is really unexpected from the
authorities such a situation by the entrepreneur who is
taking initiative to install a factory in Kerala.
Since we have already invested a huge amount for
land, building and machinery, we do not have other
alternative other than to complete the project and start
production at the earliest.
We have informed these facts and figures to the
previous Ministry vide our letter dated 22nd February,
1996, addressed to Hon’ble Minister of Electricity. We
are sorry to inform you that so far we have not received
any favourable decision.
According to our schedule, we are planning to start
production in the month of August, 1996. Of the huge
investment of Rs.12.5 crore, 75% of the total cost of the
project has already been invested and any more delay in
power allocation will effect our project very seriously.
To avoid unnecessary delay in starting the
production, we need the sanction of power allocation
urgently.
We understand that our file is pending with the
Chief Engineer, World Bank Projects, Vaiduthy
Bhavanam, Thiruananthapuram and with the Secretary,
Kerala State Electricity Board, Trivandrum vide No.
TSI/PA/Victory Paper/95-96/3019 dated 7.8.1995.”
[Emphasis supplied]
The response of the Board thereto is to be found in the letter dated
11.2.1997, whereby sanction for power allocation was sought for by the
Deputy Chief Engineer from the Chief Engineer of the Board. Having
regard to the fact that there was no adequate transformer capacity at
Kanjiokode Sub Station, the allocation could not be granted, as was
informed to the appellant by the Board in terms of its letter dated 21.4.1997.
Electrical energy was allocated for six months on trial-run basis on
24.12.1997 and a final sanction was granted on 21.12.1998. Appellant
started commercial production on 10.3.1999. It evidently denied the benefit
of the said incentive scheme dated 6.2.1992. A writ petition was filed by the
appellant, which has been dismissed by reason of the impugned judgment of
the High Court, inter alia, stating :
“…..The only question to be considered is whether the
Petitioner had satisfied the various terms and conditions
laid down in the order dated 6.2.1992. Facts would
eloquently show that Petitioner had not satisfied the
various conditions laid down in the order. Petitioner
might have submitted an application during the year
1994. Mere submission of application would not be
sufficient to hold that Petitioner had complied with all the
terms and conditions. Power allocation was issued by the
fourth Respondent on 24.12.1997 with specific condition
that the connection would be effected only after
providing a separate 22 KV feeder with outlet from the
substation to the factory under OYEC scheme.
Respondent could start the work of drawing at 2.8 km of
22 KV line only after the Petitioner remitting the OYEC
amount. Even though allocation was given on
24.12.1997 Petitioner took his own time to remit the
amount. Petitioner has taken considerable time to
complete the work and was not ready for availing power
supply. Petitioner has produced energization sanction
order under Rule 63 of the Indian Electricity Rules 1956
from the Chief Electrical Inspector only during
December 1998 even though power allocation was
sanctioned on 24.12.1997. Petitioner had executed the
H.T. agreement only on 22.1.1999 and the unit was
energised on 10.3.1999, by the time period fixed for
concessional tariff was already over. We are of the view,
ext. P1 order of the apex court would not apply to the
facts of this case where power allocation was made from
the year 1991 but the power could not be supplied.
Hence commercial production could not be started by
31.12.1996. Hence Petitioner had not complied with the
formalities so as to get the benefit of the concession
orders. The principle of promissory estoppel in the facts
and circumstances of the case cannot be put against the
Board. Above being the factual situation, we are of the
view Petitioner is not entitled to get concessional tariff.”
So far as case of M/s. A.P. Steel Re-Rolling Mill Ltd. is concerned,
we need not go into the factual aspect of the matter. Suffice it to notice that
its writ petition was permitted to withdrawn by the High Court by an order
dated 24th November, 2003. A review application filed by the said appellant
was also dismissed by an order dated 25th May, 2004. We may, however,
note that an application for grant of electrical connection was filed by it in
November, 1995 and actual commercial production started in or about
October, 1998.
The principal contentions which have been raised by Mr. Ranjit
Kumar and Mr. Venkatararamani, learned Senior counsel appearing on
behalf of the appellants, are : –
i) Appellants having altered their position pursuant to or in
furtherance of the representation made by the State of Kerala as also the
Board, the doctrine of promissory estoppel would squarely apply in the
instant cases;
ii) The High Court committed a manifest error in proceeding on
the premise that the appellants were not entitled to grant of such exemption
as they had started commercial production after the period envisaged in the
said notification;
iii) The Board was statutorily obligated to supply electrical energy
to the appellant within a reasonable time.
(iv) Had electrical energy been supplied to the appellants within a
reasonable time, they would have been able to obtain the benefit of the said
exemption.
Mr. Venkataramani added :
(v) A concession made by the Counsel on a question of law being not
binding on the client, the High Court should have allowed the application for
review of its earlier order permitting to withdraw its writ petition.
Mr. M.T. George, learned Counsel appearing on behalf of the Board,
on the other hand, would urge that the appellants themselves were guilty of
serious delay and latches on their part in complying with the statutory
requirements and thus, it is idle to put the blame on the Board. It was
submitted that the language of the notification dated 6.2.1992 being clear
and explicit, the same does not envisage grant of any benefit beyond
31.12.1996.
Before adverting to the rival contentions raised on behalf of the
parties, we may notice that construction of the notification in question came
up for consideration before a Bench of this Court in Hitech Electrothermics
& Hydropower Ltd. vs. State of Kerala & Ors. [(2003) 2 SCC 716],
wherein this Court opined :
“On a perusal of the industrial policy of the
government, unequivocally indicting that concessional
tariff rate would be given as well as the order of the
Electricity Board adopting the same, it can be safely held
that such concession could be availed of by the industrial
units for a period of five years from the date, they start
such production between 1.1.1992 and 31.12.1996. In
this context the stand of the Board as well as the State
Government cannot be held to be devoid of any
substance when admittedly the commercial production of
the appellant’s unit did not start till 31.12.1996. But the
question for consideration is when the government has
itself come forward alluring industrial units to set up their
industries and when under the provisions of the
Electricity Act, every consumer has the right to get the
supply of power and in the case in hand, when power
allocation has been made in favour of the appellant as
early as in 1995, and yet the same power could not be
supplied for such non-supply of power, the commercial
production could not start by 31.12.1996, would it at all
be equitable to deny the relief to the appellant by giving a
literal interpretation to the incentive scheme of the
government as adopted by the Board? Our answer to this
question must be in the negative. There are several
documents on record, which were produced before us to
indicate that the appellant has been communicating with
the Board, seeking power connection at an early date so
that it would be able to start commercial production by
31.12.1996. In making such communication, the
appellant has been bringing it to the notice of the Board
but for supply, the appellant has made all other
arrangements to set the production, but yet there has been
inaction on the part of the Board in providing power to
the appellant. Mr. Rohatgi, appearing for the Board no
doubt brought to our notice a letter from the appellant to
the Board and contended that it could not have been
possible for the appellant to start production by 31.12.96
but we are unable to accept this submission nor are we
making deeper probe into the matter. Suffice it to say that
the appellant has been denied power supply by the Board
in appropriate time, which has prevented the appellant
from starting the commercial production by 31.12.1996.
This being the position, and having regard to the gamut
of the circumstances, starting from the government
policy resolution and culminating in setting up of the
factory by the appellant in Kerala and commencing the
production of ferro alloys, though not by 31.12.1996, we
are of the considered opinion that granting the
concessional tariff for a period of three years instead of
five years, as indicated in the policy resolution would
meet the ends of justice and we, accordingly, so direct.”
A review application filed by the Kerala State Electricity Board, in the
said matter again fell for consideration of this Court in Kerala State
Electricity Board vs. Hitech Electrothermics & Hydropower Ltd. &
Ors. [(2005) 6 SCC 651]. The said review application was dismissed,
stating :
“This Court has referred to several documents on
record and also considered the documentary evidence
brought on record. This Court on a consideration of the
evidence on record concluded that the respondent had
been denied power supply by the Board in appropriate
time which prevented the respondent from starting the
commercial production by 31.12.1996. This is a finding
of fact recorded by this Court on the basis of the
appreciation of evidence produced before the Court. In a
review petition it is not open to this Court to re-
appreciate the evidence and reach a different conclusion,
even if that is possible. Learned counsel for the Board at
best sought to impress us that the correspondence
exchanged between the parties did not support the
conclusion reached by this Court. We are afraid such a
submission cannot be permitted to be advanced in a
review petition. The appreciation of evidence on record
is fully within the domain of the appellate court. If on
appreciation of the evidence produced, the Court records
a finding of fact and reaches a conclusion, that
conclusion cannot be assailed in a review petition unless
it is shown that there is an error apparent on the face of
the record or for some reason akin thereto. It has not
been contended before us that there is any error apparent
on the face of the record. To permit the review petitioner
to argue on a question of appreciation of evidence would
amount to converting a review petition into an appeal in
disguise.”
Applicability of doctrine of promissory estoppel in a case where
entrepreneur alters his position pursuant to or in furtherance of a promise
made by the State to grant exemption from payment of charges on the basis
of current tariff is not in dispute. The State made its policy decision. The
said policy decision could be made by the State in exercise of its power
under Section 78A of the Electricity (Supply) Act, 1948. The Electricity
Board framed tariff for supply of electrical energy in terms of Sections 46
and 49 of the 1948 Act. While framing its tariff, the Board could take into
consideration the policy decision of the State.
It was, therefore, permissible both for the State to issue a policy
decision and for the Board to adopt the same in exercise of their respective
statutory powers under the 1948 Act.
When a beneficent scheme is made by the State, the doctrine of
promissory estoppel would undoubtedly apply.
In Union of India & Ors. vs. M/s. Indo-Afgan Agencies Ltd.
[(1968) 2 SCR 366], this Court opined :
“We hold that the claim of the respondents is
appropriately founded upon the equity which arises in
their favour as a result of the representation made on
behalf of the Union of India in the Export Promotion
Scheme, and the action taken by the respondents acting
upon that representation under the belief that the
Government would carry out the representation made by
it. On the facts proved in this case, no ground has been
suggested before the Court for exempting the
Government from the equity arising out of the acts done
by the exporters to their prejudice relying upon the
representation”
In M/s. Motilal Padampat Sugar Mills Co. Ltd. vs. State of Uttar
Pradesh & Ors. [(1979) 2 SCC 409], this Court rejected the plea of the
State to the effect that in the absence of any notification issued under Section
4-A of the U.P. Sales Tax Act, the State was entitled to enforce the liability
to sales tax imposed on the petitioners thereof under the provisions of the
Sales Tax Act and there could be no promissory estoppel against the State so
as to inhibit it from formulating and implementing its policy in public
interest.
The question came up for consideration before this Court also in
Pournami Oil Mills & Ors. vs. State of Kerala & Anr. [1986 (Supp) SCC
728], wherein it was held:
“Under the order dated April 11, 1979, new small scale
units were invited to set up their industries in the State of
Kerala and with a view to boosting of industrialisation,
exemption from sales tax and purchase tax for a period of
five years was extended as a concession and the five-year
period was to run from the date of commencement of
production. If in response to such an order and in
consideration of the concession made available,
promoters of any small scale concern have set up their
industries within the State of Kerala, they would certainly
be entitled to plead the rule of estoppel in their favour
when the State of Kerala purports to act differently.
Several decisions of this Court were cited in support of
the stand of the appellants that in similar circumstances
the plea of estoppel can be and has been applied and the
leading authority on this point is the case of M.P. Sugar
Mills. On the other hand, reliance has been placed on
behalf of the State on a judgment of this Court in Bakul
Cashew Co. v. STO. In Bakul Cashew Co. case this
Court found that there was no clear material to show any
definite or certain promise had been made by the
Minister to the concerned persons and there was no clear
material also in support of the stand that the parties had
altered their position by acting upon the representations
and suffered any prejudice. On facts, therefore, no case
for raising the plea of estoppel was held to have been
made out. This Court proceeded on the footing that the
notification granting exemption retrospectively was not
in accordance with Section 10 of the State Sales Tax Act
as it then stood, as there was no power to grant
exemption retrospectively. By an amendment that power
has been subsequently conferred. In these appeals there is
no question of retrospective exemption. We also find that
no reference was made by the High Court to the decision
in M.P. Sugar Mills’ case. In our view, to the facts of the
present case, the ratio of M.P. Sugar Mills’ case directly
applies and the plea of estoppel is unanswerable.”
Yet again in Assistant Commissioner of Commercial Taxes (Asst.)
Dharwar & Ors. vs. Dharmendra Trading Company & Ors. [(1988) 3
SCC 570], this Court, on the factual matrix obtaining therein, rejected the
contention of the State that any misuse of the concessions granted was
committed by the respondent therein and thus the State cannot go back on its
promise.
It was further observed:
“The next submission of learned counsel for the
appellants was that the concessions granted by the said
order dated 30-6-1969 were of no legal effect as there is
no statutory provision under which such concessions
could be granted and the order of 30-6-1969 was ultra
vires and bad in law. We totally fail to see how an
Assistant Commissioner or Deputy Commissioner of
Sales Tax who are functionaries of a State can say that a
concession granted by the State itself was beyond the
powers of the State or how the State can say so either.
Moreover, if the said argument of learned counsel is
correct, the result would be that even the second order of
12-1-1977 would be equally invalid as it also grants
concessions by way of refunds, although in a more
limited manner and that is not even the case of the
appellants.”
Mangalore Chemicals and Fertilisers Limited vs. Deputy
Commissioner of Commercial Taxes & Ors. [1992 Supp (1) SCC 21] is a
case where this Court had the occasion to consider as to whether subsequent
change in the eligibility criteria can undo the eligibility for the condition
stipulated in the earlier notification and answered the same in the negative.
This Court reaffirmed the legal position in Pawan Alloys & Casting
Pvt. Ltd., Meerut vs. U.P. State Electricity Board & Ors. [(1997) 7 SCC
251], holding:
“As a result of the aforesaid discussion on these points
the conclusion becomes inevitable that the appellants are
entitled to succeed. It must be held that the impugned
notification of 31-7-1986 will have no adverse effect on
the right of the appellant-new industries to get the
development rebate of 10% for the unexpired period of
three years from the respective dates of commencement
of electricity supply at their units from the Board with
effect from 1-8-1986 onwards till the entire three years’
period for each of them got exhausted. This result
logically follows for the appellants who have admittedly
entered into supply agreements with the Board as new
industries prior to 1-8-1986.”
The question yet again came up for consideration before this Court
recently in State of Punjab vs. Nestle India Ltd. & Anr. [(2004) 6 SCC
465], wherein this Court surveyed the growth of the said doctrine and held
the doctrine to be applicable to legislative action also.
In Jai Narain Parasurampuria (Dead) & Ors vs. Pushpa Devi
Saraf & Ors. [(2006) 7 SCC 756], this Court held :
“The doctrine of estoppel by acquiescence was not
restricted to cases where the representor was aware both
of what his strict rights were and that the representee was
acting on the belief that those rights would not be
enforced against him. Instead, the court was required to
ascertain whether in the particular circumstances, it
would be unconscionable for a party to be permitted to
deny that which, knowingly or unknowingly, he had
allowed or encouraged another to assume to his
detriment. Accordingly, the principle would apply if at
the time the expectation was encouraged”
In Shrijee Sales Corporation & Anr. vs. Union of India [(1997) 3
SCC 398], this Court referring to Motilal Padampat (supra), it was stated :
“Two propositions follow from the above analysis:
(1) The determination of applicability of
promissory estoppel against public authority/Government
hinges upon balance of equity or “public interest”.
(2) It is the Court which has to determine whether
the Government should be held exempt from the liability
of the “promise” or “representation”.
In the present case, the first Notification exempting the
customs duty on PVC itself recites “….Central
Government being satisfied that it is necessary in public
interest to do so…”. In the Notification issued later
which gave rise to the present cause of action, the same
recitation is present.”
An exemption notification, however, can be withdrawn only if it is
permissible to do so in public interest.
Yet again, in Dr. Ashok Kumar Maheshwari vs. State of U.P. &
Anr. [(1998) 2 SCC 502], it was held :
“There are many aspects of “Promissory Estoppel”,
but in the instant case we are concerned only with one
aspect which is to the effect that if any “promise” has
been made contrary to law, can it still be enforced by
invoking this rule.
The basic principle is that the plea of estoppel
cannot be raised to defeat the provisions of a Statute.
(See: G.H.C. Ariff v. Jadunath Majumdar Bahadur;
Mathra Parshad & Sons v. State of Punjab and Ors.;
Rishabh Kumar & Sons v. State of U.P.)
This principle was reiterated in Union of India v.
R.C. D’Souza, where a retired army officer was recruited
as Assistant Commandant on temporary basis and was
called upon to exercise his option for regularisation
contrary to the statutory rules. It was held that it would
not amount to estoppel against the Department.
Whether a Promissory Estoppel, which is based on
a ‘promise’ contrary to law can be invoked has already
been considered by this Court in Kasinka Trading and
Anr. v. Union of India and Ors., as also in Shabi
Construction Co. Ltd v. City & Industrial Development
Corporation and Anr. wherein it is laid down that the
Rule of “Promissory Estoppel” cannot be invoked for the
enforcement of a “promise” or a “declaration” which is
contrary to law or outside the authority or power of the
Government or the person making that promise.”
{See also M/s. Ashoka Smokeless Coal Ind. P. Ltd. & Ors. vs. Union of
India & Ors. [Civil Appeal No.5302 of 2006 @ SLP(C)No.20471 of 2005
and batch, disposed of on 1st December, 2006].}
We may notice that a somewhat different view viz. strict construction
of such notification was advocated in the case of State Level Committee &
Anr. vs. Morgardshammar India Ltd. [(1996) 1 SCC 108], wherein, B.P.
Jeevan Reddy, J., referring to CCE vs. Parle Exports (P) Ltd. [(1989) 1
SCC 345], opined :
“We agree with the above statement of law except
insofar as it states that where two views of the exemption
notification are possible, it should be construed in favour
of the subject since it is contrary to the decisions afore-
mentioned including the three-Judge Bench decision in
Novopan India Ltd. It may be noted that this decision
was referred to in Mangalore Chemicals and Fertilizers
and yet a slightly different principle enunciated. So far as
decision in Hindustan Aluminium Corporation (referred
to in Parle Export), rendered by a Bench comprising
Tulzapurkar and R.S. Pathak, JJ., is concerned, it only
holds that the expression “metal” occurring in a
notification issued under U.P. Sales Tax Act should be
understood in its primary sense, i.e., in the form in which
it is marketable as a primary commodity. The learned
Judges held that the subsequent forms evolved from the
primary form constituted distinct commodities
marketable as such and must be regarded as new
commercial commodities and not included within the
four corners of the notification. This decision cannot
therefor be understood as supporting the proposition
enunciated in Parle Exports with which we have
disagreed. Be that as it may, the occasion for applying
the said proposition arises only where there is “real
difficulty, in ascertaining the meaning of a particular
enactment” (statement in Parle Exports). In the case
before us, there is neither any ambiguity in the language
nor does the clause in question present a real difficulty in
ascertaining its meaning.”
We may, however, also notice that in Southern Ispat Ltd. vs. State
of Kerala & Ors. [(2004) 4 SCC 68], this Court took somewhat different
view then Hitech Electrothermics & Hydropower Ltd. vs. State of
Kerala & Ors. [(2003) 2 SCC 716], stating :
“As the Division Bench rightly pointed out, the
question to be decided in this case is essentially a
question of fact, namely, whether the appellant had
started ‘commercial production’ between 1.1.1992 and
31.12.1996 so as to be entitled to power supply at
concessional tariff rates. As a rule, it is not the practice of
this Court to interfere with factual findings which have
been concurrently recorded by two courts below. Both
the learned single Judge and Division Bench have
concurrently answered all factual findings against the
appellant. On that ground itself the appellant must fail.
Nonetheless, as the appeal was argued with some
seriousness, we propose to deal with the facts and
examine the factual findings only from the point of view
of interference under our special jurisdiction under
Article 136.
The Division Bench of the High Court rightly
pointed out that though the policy of granting
concessional tariff was announced by the State
Government on 6.2.1992; followed by the KSEB order
dated 27.3.1992, the appellant did nothing till or about
June 1995. It is only in June 1995 that the appellant
company was incorporated and an application for power
allocation was made on 17.7.1995. The appellant’s
factory had yet to be constructed and machinery to be
transported and installed after the construction of the
factory building. Undoubtedly, the application was
moved on 17.7.1995 in anticipation. The material on
record suggests that there was acute shortage of
electricity as a result of which even domestic power
connections were being refused. The high tension power
supply required by the appellant had to be specially
arranged by drawing the electrical lines on OYEC basis
by construction of PSC polls along the line at the
Appellant’s cost. This amount was deposited on
11.12.1996, only a few days before the concession was
about to lapse. Having examined the correspondence on
record, we are not in a position to accept the contention
of the appellant that the respondents had acted with
undue tardiness or lethargy. Further, the remittances of
Rs.8,54,700/- and Rs.3,45,200/- made by way of security
deposit for executing the power supply agreement were
actually made on 1.2.1997 and 4.2.1997, after the expiry
of the period of concession.”
The general principles with regard to construction of exemption
notification are not of much dispute. Generally, an exemption notification is
to be construed strictly, but once it is found that the entrepreneur fulfils the
conditions laid down therein, liberal construction would be made.
In M/s. O.N.G.C. Ltd. vs. Commnr. Of Customs, Mumbai [(2006)
8 SCALE 551], this Court held :
“This Court, times without number, has construed
such exemption notifications in liberal manner. [See
Commissioner of Customs (Imports), Mumbai v. Tullow
India Operations Ltd., (2005) 13 SCC 789, [See Tata
Iron & Steel Co. Ltd. v. State of Jharkhand and Others,
(2005) 4 SCC 272, Government of India and Ors. v.
Indian Tobacco Association, (2005) 7 SCC 396,
Commnr. Of Central Excise, Raipur v. Hira Cement, JT
2006 (2) SC 369. and P.R. Prabhakar v. Commnr. Of
Income Tax, Coimbatore, 2006 (7) SCALE 191]. If,
thus, the Appellant was entitled to the same, it should not
be denied the benefits thereof. It is directed
accordingly.”
A question as to whether, in a given situation, an entrepreneur was
entitled to the benefit under an exemption notification or not, thus, would
depend upon the fact of each case. A bare perusal of the notification dated
6.2.1992 issued by the 1st respondent would show that the purport and object
thereof was to grant benefit of a concessional power tariff which came into
force on and from 1.1.1992. The phraseology used in the said notification
postulates that the benefit was to be granted in regard to the ‘enhanced
power tariff’. Thus, where the new units had started production between
1.1.1992 and 31.12.1992, such exemption was available to the entrepreneurs.
Evidently, except in a situation as might have been existing in Hitech
Electrothermics (supra) that any application filed by the entrepreneur had
not been processed within a reasonable time, in which case benefit might not
be denied on equitable ground; in cases where there has been a substantial
failure on the part of the industrial unit to obtain such benefit owing to acts
of omission and commission on its part, in our opinion, no such benefit can
be given.
The High Court has arrived at a finding of fact that the appellant
herein had failed and/or neglected to comply with the terms and conditions
of the scheme or contributed to a large extent in not being able to obtain
such sanction within a reasonable time.
The appellant applied for grant of electrical connection on 9.11.1994.
It, however, on its own showing did not receive any sanction till 17.11.1995.
But even on that date the project was not complete. It was only at an
advanced stage.
From the appellant’s letter dated 24th June, 1996, as noticed supra, it
would appear that it merely had been complaining of about non-grant of
sanction, but then, evidently, it was not ready for commencing commercial
production. Machineries were obtained by it only on 4.6.1996. How much
time was taken for installation of machinery and completion of the project,
is not known.
Sanction, evidently, had been allocated on 24.2.1997. It accepted the
same without any demur. It had been making payments in terms of the new
tariff. It filed the writ petition only in the year 2003, i.e., only after this
Court rendered its decision in Hitech Electrothermics (supra) on 17th
December, 2002.
The benefit of a judgment is not extended to a case automatically.
While granting relief in a writ petition, the High Court is entitled to consider
the fact situation obtaining in each case including the conduct of the
petitioner. In doing so, the Court is entitled to take into consideration the
fact as to whether the writ petitioner had chosen to sit over the matter and
then wake up after the decision of this Court. If it is found that the appellant
approached the Court after a long delay, the same may disentitle him to
obtain a discretionary relief. {See Chairman, U.P. Jal Nigam & Anr. vs.
Jaswant Singh & Anr. [2006 (12) SCALE 347].}
We are, thus, of the opinion that the principle of promissory estoppel
will apply where an entrepreneur has altered its position pursuant to a
promise made by the State, but the application thereof would depend upon
the facts and circumstances of each case. Having regard to the findings of
fact arrived at by the High Court, we are of the opinion that it cannot be said
to have committed any illegality in passing the impugned judgment.
So far as the case of M/s. A.P. Steel Re-Rolling Mill Ltd. is
concerned, evidently the question involved therein was a disputed question
of fact. Although, the High Court could have entertained a writ petition, as
has been done in the case of M/s. Victory Papers and Boards India Ltd., but
as M/s. A.P. Steel Re-Rolling Mill Ltd. withdrew its writ application, in our
our opinion, no case has been made out for interference with the impugned
judgment. As the appellant has still its remedies open, it may avail the same.
For the reasons aforementioned, there is no merit in these appeals
which are dismissed accordingly. However, in the facts and circumstances
of the case, there shall be no order as to costs.