TMI Blog2015 (11) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the legislation and subordinate legislation and the limitation of subordinate legislation. Delegated legislation cannot take away the right that is vested or accrued by way of retrospective amendment. Therefore, in view of the said reasons, we hold that the amended rule 57A(1) ultra vires the provisions of the definition of "manufacture" under the Act and beyond the competence of rule-making power to alter the definition of "manufacture". Dispute with regard to the date on which the industry was set up and it commenced the commercial production. - Held that:- disputes are basically questions of fact, which has to be resolved by the industries Department where the application for grant of eligibility certificate is pending - Petition disposed of. - W.P. (C) NOS. 5342 AND 5350 OF 2009, 1110 OF 2010 AND 2897 TO 2901 OF 2011 - - - Dated:- 12-5-2015 - K. SREEDHAR RAO, ACTG. CJ. AND P. K. SAIKIA, J. For The Appellant : Dr. Ashok Saraf, D. Baruah, Miss N. Hawelia, Ms. M.L. Gope, S. Chetia, A. Goyal, K. Choudhury and P. Baruah For The Respondent : K.N. Choudhury, R. Dubey and D. Saikia ORDER K. Sreedhar Rao, Actg. CJ. The writ petitioners are th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of conversion of coal to coke as a manufacturing process. It is argued that as on the date when the unit was established and production was commenced, the process of conversion of coal to coke was a manufacturing process within the definition. However, under the Rules, the definition of manufacture is altered retrospectively. The executive, by its rule-making power, cannot alter any provision of the Act under the guise of rule-making power, since Rules shall always be subordinate to the provisions of the Act and cannot prevail or override the provisions of the Act. Therefore, the rule 57A(1) is ultra vires. It is further argued that by virtue of the definition of manufacture under the Act, the industrial policy, which extended tax benefit to the industries, which commenced production on or after the date of Industrial Policy, 2008, would get accrued and vested right. The State, by amendment of Rules by way of delegated legislation, cannot take away the vested or the accrued rights on the pretext of exercise of legislative powers. 5. In this regard the observations made in paragraphs 21, 22, 23, 24, 37, 38, 41, 42, 43 44 of the decision of the Supreme Court in Mahabir Ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can also be taken subject to certain conditions. (See Union of India v. V. Ramakrishnan [2005] 8 SCC 394, SCC paras 23 and 24.) 38. The promises/representations made by way of a statute, therefore, continued to operate in the field. It may be true that the appellants altered their position only from August 1996, but it has neither been denied nor disputed that during the relevant period, namely, August 1996 to December 16, 1996 not only they have invested huge amounts but also the authorities of the State sanctioned benefits, granted permissions. Parties had also taken other steps which could be taken only for the purpose of setting up of a new industrial unit. An entrepreneur who sets up an industry in a backward area, unless otherwise prohibited, is entitled to alter his position pursuant to or in furtherance of the promises or representations made by the State. The State accepted that equity operated in favour of the entrepreneurs by issuing Note 2 to the notification dated December 16, 1996 whereby and whereunder solvent extraction plant was for the first time inserted in Schedule III, i.e., in the negative list. ............... 41. We may at this stage consider the ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 SCR 575 and Raman Lal Keshav Lal Soni [1983] 2 SCC 33 ; [1983] SCC (L S) 231. 7. Per contra, Sri S Saikia, the counsel for the Department, relied upon the decision of the Supreme Court in R.C. Tobacco (P.) Ltd. v. Union of India [2005] 7 SCC 725, and made a specific reference to the observations made in paragraphs 20, 21 and 22, which read as follows (paras 21 to 23, pages 494 and 495 in 5 RC): 20. The competence of Parliament and the State Legislatures to repeal, amend or supersede an exemption notification is unquestionable. The power to do so retrospectively cannot be and is also not doubted. The limitation on this power is that the legislation must not conflict with other provisions of the Constitution. As far as fiscal legislation is concerned, the limitation is implicit in article 265 of the Constitution which provides that no tax shall be levied or collected except by authority of law. As was held by this court in Chhotabhai Jethabhai Patel and Co. v. Union of India [1962] Supp 2 SCR 1; AIR 1962 SC 1006 (SCR page 30): 'If by reason of article 265 every tax has to be imposed by law it would appear to follow that it could only be imposed by a law which is v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agar Prints v. Union of India [1989] 179 ITR 317 (SC). 8. Sri Saikia, also relied upon the observations of the Supreme Court made in paragraph 32, 33, 35 and 43 of Shree Sidhbali Steels Ltd. v. State of Uttar Pradesh [2011] 3 SCC 193, which read as follows: 32. The doctrine of promissory estoppel is by now well recognised and well defined by a catena of decisions of this court. Where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by article 229 of the Constitution. The rule of promissory estoppel being an equitable doctrine has to be moulded to suit the particular situation. It is not a hard-and-fast rule but an elastic one, the objective of which is to do justice between the parties and to extend an equitable treatment to them. This doctrine is a principle evolved by equity, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as contrary to section 49 of the Act of 1948. On review of the law on the subject and the relevant statutory provisions, this court finds that, for the reasons mentioned hereinafter, the above statement of law is not an accurate proposition of law. ....... 43. This court finds that the proposition of law laid down by the two-Judge Bench in the decision in Sant Steels' case [2008] 2 SCC 777 mentioned above is too wide and has tendency to make section 21 of the General Clauses Act, 1897, inoperative. The concept of the larger public interest introduced, before invocation of section 21 of the General Clauses Act, in fact, amounts to amendment of the said provision, as notifications dated June 18, 1998 and January 25, 1999, issued under section 49 of the Act of 1948, as well as notification dated August 7, 2000, issued under section 24 of the Uttar Pradesh Electricity Reforms Act, 1999, are in the nature of legislations and, therefore, the principle of promissory estoppel would not apply to them. 9. Sri Saikia, summarizing the ratio laid down in the said decisions, argued that the legislative power to amend the provisions of the Act retrospectively cannot be denie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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