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2016 (1) TMI 1115 - SUPREME COURT

2016 (1) TMI 1115 - SUPREME COURT - 2016 AIR 637, 2016 (4) SCC 134, 2016 (1) JT 577, 2016 (1) SCALE 631 - Principles of promissory estoppel - whether Principles can be invoked in favour of the appellants so as to entitle them to the benefit of concessional tariff of electricity? - Held that:- The principle of promissory estoppel would have no application to the case of the appellants so as to entitle the applellants any right to the continuation of the concessional tariff earlier granted. - .....

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and granted, may have earned a profit. The concessional tariff having been granted to the industry by the Act in question, though in respect of its caustic soda unit, the assessment of profit/loss made by the industry as a whole and not by the unit alone, cannot be said to be an arbitrary or irrational basis for determining the application of the impugned G.O. to the appellants in C.A.Nos.9748 and 9750 of 2003. Similarly in the case of the appellant National Oxygen Ltd. the refusal of the respon .....

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he situation prevailing earlier cannot invalidate the G.O. (No. 861 dated 30.4.1982) inasmuch as it is for the State and not for the court to determine what should be the policy for grant/refusal of concessional power at different points of time. These are questions that must be left to the State and not to the Courts to decide. - C.A. 9748 OF 2003 With C.A. NO. 9749/2003 & C.A. NO. 9750/2003 - Dated:- 29-1-2016 - GOGOI, RANJAN, MISHRA, ARUN AND PANT,PRAFULLA CHANDRA, JJ For Parties : Mr. Pravin .....

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to whether, in the facts of the case, the principles of promissory estoppel can be invoked in favour of the appellants so as to entitle them to the benefit of concessional tariff of electricity. 2. Civil Appeal No.9748 of 2003 and Civil Appeal No. 9750 of 2003 have identical facts. In fact the appellant in Civil Appeal No. 9750 of 2003 is the successor-in-interest of the appellant in Civil Appeal No. 9748 of 2003. The facts in the third appeal i.e. Civil Appeal No. 9749 of 2003 are also largely .....

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he appellants were required to pay tariff would be below the rate applicable to the other two established caustic soda units in the State for the first three years and thereafter the rates will be at par with that of the other two units in the State. 4. Admittedly the unit of the appellant had started commercial production with effect from January, 1979. On 23.2.1979 the Tamil Nadu Revision of Tariff Rates on supply of Electrical Energy Act, 1978 (hereinafter referred to as the Act ) came into f .....

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Act after taking into account the cost of production of energy and such other matter as may be prescribed. The schedule to the Act, inter alia, provides that in the case of new industries, concessional tariff would be charged after commencement of the production in the following manner- For the first Three years ..... 66-2/3 Per cent of the High Tension rates under 1(A) (B) as the case may be. For the fourth year ...... 80 Per cent of the High Tension rates under 1(A), 1(B) as the case may be. F .....

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d undertakings that it will be bound by amendment to the Schedule as affected by G.O. No.861 dated 30.4.1982. 7. On the above basis, a demand was raised on the appellants for consumption of electricity at the normal rate of tariff applicable on the ground that the industries had started earning profits. The said demand insofar as the appellant, M/s. Kothari Industrial Corporation Ltd. and Southern Petro Chemical Industries Corporation Ltd. is concerned is for the period from May 1982 to November .....

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not made any profits as claimed by the State. Therefore, even if the amendment in the Schedule to the Act is to be construed to be legally permissible, the same would have no application to the appellants which were loss making concerns. The said claim was negatived by the High Court leading to the appeals before us. 9. We have heard Shri Pravin H. Parekh and Ms. Nalini Chidambaram, learned senior counsels for the appellants in C.A. No 9748 of 2003 and C.A. No 9750 of 2003 and Shri Krishnamurth .....

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ver by Southern Petro Chemical Industrial Corporation Ltd., is concerned, strictly speaking, the above question would not even arise inasmuch as at the time when the unit was set up and had started commercial production, the Act had not yet come into force. The promise, if any, was made by the letter dated 29.6.1976 on the terms noticed above, namely, the tariff payable by the industry was to be at a rate less than what was applicable to the other two units of the State for the first three years .....

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h consideration of the provisions of Section 48/49 of the Electricity Supply Act, 1948 under which the concessional tariff/rebate was granted and the provisions of Section 21 of the General Clauses Act as well as the provisions of the U.P. Electricity Reforms Act, 1999 under which the concessional tariff/rebate was later withdrawn this Court in para 51 came to the following conclusion - From the above discussion, it is clear that the petitioners cannot raise plea of estoppel against the Notifica .....

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An exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the State Government so that the beneficiaries of such concession are not required to pay the tax or duty they are otherwise liable to pay under such statute. The recipient of a concession has no legally enforceable right against the Government to grant of a concession except to enjoy the benefits of the concession during the period of its grant. This right to enjoy is a defeasible on .....

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s granted to the petitioners, was, by definition, a freedom from an obligation which the appellants otherwise were liable to discharge. The rebate was a privilege granting an advantage which was not made available to others. The rebate granted under Section 49 of the Electricity (Supply) Act of 1948 was, therefore, a concession granted by the State Government so that the beneficiaries of such concessions were not required to pay the electricity tariff they were otherwise liable to pay under the .....

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uld have no application to the case of the appellants so as to entitle the applellants any right to the continuation of the concessional tariff earlier granted. 15. The appellants have urged certain other issues to persuade the court to strike down the impugned action of the respondents in withdrawing the concessional tariff, the foremost being that the industries in question had earned no profits so as to attract the withdrawal/disabling condition introduced in the Amended Schedule. In this reg .....

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