TMI Blog2012 (1) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... nst unjust enrichment or unjust benefit. Equity demands that if one party has not been unjustly enriched, no order of recovery can be made against that party. In present case, the State has not at all gained or received any benefit as a result of the stay orders passed by the High Court on the second PILs. Therefore, the principle of restitution cannot be applied against the State. The judgment of the High Court to that extent is erroneous. Regarding second principle that the company cannot be made to lose the benefit, for an act of Court - Held that:- Mere mistake or error committed by Court cannot be a ground for restitution. This Court held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly. Further this Court also held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision and in case of doubt or ambiguity, benefit of it must go to the State. Therefore, judgement of High Court is set aside. - CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), the rate of incentive applicable to Essar was the rate available for the most backward area. The extent of exemption was 125% of eligible fixed capital investment. 7. Part II Clause (iii) (b) provided that Under the Sales Tax Deferment incentive scheme, the recovery of sales tax connected by the unit on sale of goods manufactured by it including intermediate products, by products and scrap/waste generated as incidental to manufacturing activities and turnover tax, leviable to Government will be deferred and amount so deferred will be recovered in six equal annual installments by Sales Tax Department beginning from the financial year subsequent to the year in which the unit exhausts limit of incentive granted to it under the scheme or after the expiry of relevant period or time limit during which deferment is available or whichever is earlier. 8. Since Essar's investment was going to be more than Rs.1,000 crores, the duration of incentive of sales-tax deferment was to be for a period of 17 years from the date of commercial production. 9. Clause 6(v) of the said Scheme provided for effective steps for extending date of commercial production in the following terms : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner for permanent prestigious/premier registration, Industries Commissioner will carryout the assets verification and submit a verification report to the High Power State Level Committee, for granting permanent registration." 12.Some relevant facts which arose prior to the floating of the Scheme and which are necessary for appreciating the said Scheme, as contended by Essar and which the records also shows, are as under. 13.Essar was encouraged by the State Government to set up a major venture at Vadinar in Jamnagar District of Gujarat as a 100% export oriented unit for refining of petroleum products with a capacity of 9 Million Tons per annum at an estimated project cost of Rs. 1900 crores in collaboration with M/s Bechtel Inc., USA. 14.By letter dated 11th April, 1990, the then Chief Minister of the State of Gujarat wrote to the Ministry of Planning, Government of India, stating that the project was expected to generate foreign exchange earnings of over Rs.3000 crores within a period of 5 years and that it was expected to be set up in 36 months. It was anticipated by the State Government that the project would "completely change the face of the Vadinar area, which is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995 along with an application in the prescribed form seeking prior approval from the Central Government under Section 2 of FCA. The application with its enclosures together with the recommendation of the State Government that 15.49 hectares of forest land be made available to the appellant, was forwarded to the Central Government by the Central Chief Conservator of Forests on 3rd February, 1997. Upon receipt of the proposal of the State Government, the Central Government constituted a team for joint inspection of the area. The report of the joint inspection team was that the proposed activity of the appellant would not have much ramification from the forestry point of view and the damage would only be temporary in nature in a localized area during the construction phase. 19.On 08.09.1995, the State Government in its Forests and Environment Department informed the Government of India in the Ministry of Environment and Forests, inter alia, that the approval "in principle" was granted to Essar to install Single Buoy Mooring / Crude Oil Terminal / Jetty and connecting pipeline in the National Marine Park and Sanctuary area in Vadinar, District Jamnagar on the terms and conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt forced Essar to stop work and further lodged on 19.3.1999 a criminal complaint against Essar and its contractor, for offence committed under sections 17(A), 29, 35(6), 51(1) and 58 of the WPA and section 26 of the Indian Forests Act. 27.In April 1999, a writ petition being Special Civil Application No.2840/1999 in the nature of Public Interest Litigation was filed before the High Court of Gujarat by one Halar Utkarsh Samiti (hereinafter "Samiti") alleging serious violations of several environmental legislations on the part of Essar, who was impleaded as Respondent No.4 in the petition. 28.By interim order-dated 20.04.1999 passed in that PIL High Court directed Essar not to carry on any construction activity in the Marine National Sanctuary and Marine National Park in violation of the statutory provisions including the provisions contained in Wild life (Protection) Act, 1972. 29.By order-dated 20.08.1999 the High Court disposed of the said PIL in which Essar undertook to file an Undertaking to the effect that they would not carry out any construction activities at the site in question, without obtaining the approval from the authorities. Pursuant to the said order, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra Port Ltd. 35.Before the High Court, the State Government submitted that the proposal from Essar for laying down pipelines in Marine National Park and Marine Sanctuary, Vadinar in Jamnagar District has been only approved `in principle' vide letter-dated 08.09.1995. However, formal sanction under section 29 of the WPA, 1972 is yet to be given by the State Government. 36.By judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 the High Court, in the second PILs, restrained the Government of Gujarat from granting any more authorization and permission for laying down any pipeline in any part of the sanctuary or the national park. As a result of this order, Essar was not given permission to lay down pipelines by the State Government. 37.Being aggrieved, inter alia, on the ground that it was not a party to the second PILs, Essar filed a review/recall application before the High Court being MCA No.250 of 2011 in SCA No.1778 of 2000, inter alia, seeking review and recall of the judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 passed in the second PILs by the High Court and a further declaration to the eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing down the pipeline in the National Marine Park/Sanctuary area. One thing which is of some importance is that despite the stay of this Court and the Government letter dated 29.10.2001, Essar did not challenge the Government stand in the pending special leave petition filed by it in this Court. 43. It is also pertinent to note that the Government of Gujarat had also challenged the judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court passed in the second PILs by way of filing Special Leave Petition being (SLP) CC No.5123-5125 of 2001 (later SLP No.17694-96 of 2001) before this Court, wherein by interim order dated 24.09.2001 this Court passed the following operative order: "Issue notice. Tag with SLP(C) 9454-9455/2001. There will be status quo as of today with the result that any permission which has been granted is not stayed. It will be open to the State Government to consider the granting of further permission which will be subject to the outcome of this appeal." 44.Essar just requested by its letter dated 11.04.2002 the Industries Commissioner to extend the date of commercial production to 30.11.2004 instea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Chief Wild Life Warden under Sections 29 and 35 of the Wild Life (Protection) Act, Essar again sent representations dated 06.04.2004, 12.07.2004, 27.07.2004 and 22.12.2004 to the Government requesting extension of time limit for commencement of commercial production for the purpose of sales tax deferment incentive scheme. In view of the above representations, the State Government in the Industries and Mines Department vide Resolution dated 10.05.2006 constituted a Committee comprising of the Advisor to the Chief Minister, the then Additional Chief Secretary, Finance Department and the then Principal Secretary, Industries and Mines department. The Committee was constituted to consider various such representations of Essar and other Companies. 50.On 26.11.2006 Essar commenced commercial production and started paying sales tax on the products sold by it, under protest. 51.As nothing was heard from the said Committee constituted in the year 2006 and the representations made by Essar in respect of granting Sales Tax Deferment were undecided, Essar filed a writ petition being Special Civil Application No. 24233/2007 before the High Court contending that for no fault of it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gust, 2000 and 27.02.2004 is reasonable." 55.It is also pertinent to note herein that in the impugned order, a direction was given to the State Government that while considering Essar's application for the incentives, the State Government shall stipulate the following conditions, provided the final eligibility certificate is issued within one month from the date of receipt of the judgment:- "22. ... (i) The petitioner shall not be given the benefit of deferment of Sales-tax/Value Added Tax beyond 14th August, 2020. (ii) The amount of Sales-tax/VAT already paid/payable by the petitioner for the period upto today shall not be refunded to the petitioner. (The above amount is stated by the petitioner company to be above Rs.300 crores) (iii) Without adjusting the Sales-tax/VAT paid for the period upto today as aforesaid, the amount otherwise computable under the Incentive Scheme on the basis of the eligible capital investment made by the petitioner in the unit under consideration shall be reduced by Rs.700 crores." 56. The above direction is based on the submissions of the counsel of both the parties, which were made without prejudice to their respective cases. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o received an unjust benefit of the erroneous decree to restitute the other party for what the other party has lost during the period the erroneous decree was in operation. Therefore, the Court while granting restitution is required to restore the parties as far as possible to their same position as they were in at the time when the Court by its erroneous action displaced them. In the case of Lal Bhagwant Singh v. Sri Kishen Das reported in AIR 1953 SC 136, Justice Mahajan speaking for a unanimous three-Judge Bench of this Court explained the doctrine of restitution in the following words:- "...the principles of the doctrine of restitution which is that on the reversal of a judgment the law raises an obligation on the party to the record who received the benefit of the erroneous judgment to make restitution to the other party for what he had lost and that it is the duty of the Court to enforce that obligation unless it is shown that restitution would be clearly contrary to the real justice of the case..." 61.Subsequently, in Binayak Swain v. Ramesh Chandra Panigrahi and another (AIR 1966 SC 948) this Court relied on the principles in Bhagwant Singh (supra) and explained the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the judgment is reversed or set-aside, unless restitution would be inequitable (page 302 of the Restatement of the Law of Restitution by American Law Institute). 67.Equity demands that if one party has not been unjustly enriched, no order of recovery can be made against that party. Other situation would be when a party acquires benefits lawfully, which are not conferred by the party claiming restitution, Court cannot order restitution. 68. From the facts of the case which has been discussed above it is debatable whether the respondent's inability to avail benefit under the said Scheme is because of its own act or because of the act of the appellant. There is a reasonable basis in the argument of the appellant that after this Court granted the stay order on 11.5.2001 on the special leave petition filed by Essar, the respondents should have made an effort of obtaining the necessary licence by again coming to the Court. Admittedly Essar did not do it. Essar merely represented to the State for grant of licence. Assuming that the State had not responded favourably to the representation of Essar by giving the clearance, it was open to Essar to approach this Court for some ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of appeal, but the act ofthe Court as a whole, from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expression, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court." 72.In the Antulay case (supra), it was found that directions of this Court in its order-dated 16.02.1984 in the previous Antulay Case {R.S. Nayak v. A.R. Antuley, (1984) 2 SCC 183} was given per incuriam and without noticing the provisions of section 6 and 7 of the Criminal Law Amendment Act, 1952 and also the binding nature of the Larger Bench decision in The State of West Bengal v. Anwar Ali Sarkar another (AIR 1952 SC 75). 73.It was made clear in the Antulay Case [(1988) 2 SCC 602] that when Court passes an order, which is rendered per incuriam, and the party suffered because of the mistake of the Court, it is the Court's duty to rectify the said mistake. It is in that context that the concept of actus curiae can be invoked. In the instant case the order passed by the High Court in the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court whereby the appellant was restrained from giving any further permission for laying pipelines has resulted in any undue advantage to appellant? (ii) Whether in respect of the order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 of the High Court, later on reversed by this Court on 19.01.2004 on a different interpretation of Section 29 of WPA, the actus curiae principle can be invoked. 78.Coming to the first question, as mentioned above, it is clear that the appellant had also challenged this restraining order before this Court. It cannot be said by this restraining order the appellant had gained any undue advantage. On the contrary, twin objects of development of the backward areas and employment opportunities, which were sought to be achieved by the appellant by floating the said scheme, were adversely affected. 79.Therefore the principles in South Eastern Coalfield Ltd. (supra) are not attracted here. 80.In Mumbai International Airport Pvt. Ltd v. Golden Chariot Airport another, (2010) 10 SCC 422, after a Civil Court returned the plaint filed by respondent, the respondent came up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true that this case is one relating to grant of concessional tariff rate. However the fact shows that in that case the Electricity Board provided power to the appellant only in the year 1998 and the Court found that the delay in giving power was for sheer inaction on the part of Electricity Board. In that context this Court held that literal construction to the entitlement of concessional tariff rate should not be done and the Court also noted that the appellant enjoyed concessional tariff rates on the basis of interim order of Court. 84.In the instant case, no inaction on the part of appellant was pleaded by Essar. In fact before the High Court, Essar expressly gave up its plea of delay against the appellant. In fact the High Court passed the injunction order not because of the inaction of the appellant but the said order was passed in a proceedings which was opposed by appellant right upto this Court. Therefore, the case of Hitech Electrothermics (supra) is clearly distinguishable on facts. 85.The learned counsel for Essar relied on a decision of this Court in Ishwar Dutt v. Land Acquisition Collector another reported in (2005) 7 SCC 190. But no question of issue estopp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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