9911796707
TMI Blog2017 (4) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... f Annexure-B to the Incentive Scheme is not applicable to the petitioner No.1 and in the alternative as ultra vires and hence, void ab initio. [2.0] Facts leading to the present Special Civil Application and so pleaded in the petition are as under: [2.1] That Indian Petrochemicals Corporation Limited (hereinafter referred to as "IPCL") was a company duly constituted and registered in consonance with the provisions embodied in the Companies Act, 1956. The IPCL was a Government of India Undertaking at the time of its incorporation and, thereupon, IPCL continued as a Government of India Undertaking till in the month of June 2002 or thereabout, the Government of India decided to disinvest its shareholding as a major shareholder in IPCL and, thereupon, in furtherance thereof entered into a Share Purchase Agreement with the petitioner No.1 herein for the purpose of causing transfer of 46% of its shareholding in the setup of IPCL to a subsidiary of petitioner No.1, in the name and style of "Reliance PetroInvestments Limited". That subsequent to the aforesaid, pursuant to the order dated 12.06.2007 passed by the Bombay High Court, a scheme of amalgamation of IPCL with the petitioner No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cceded to and, thereupon, on 13.01.2000, a certificate, declaring IPCL as eligible for Exemption from Sales Tax to the tune of Rs. 377 Crores for the said Gandhar Complex came to be issued by the office of Commissioner of Sales Tax in favour of IPCL. It appears that thereafter and subsequent to the aforesaid, vide communication dated 10.08.2000 issued by the office of the respondent No.2, the aforesaid eligibility certificate dated 01.01.2000, declaring IPCL for PhaseI of its Gandhar Complex as eligible for Sales Tax Exemption for a sum of Rs. 377 Crores for the period commencing from 24.01.1997 to 16.04.2010, came to be amended by extending the validity period thereof upto 23.01.2013. [2.5] It is the case on behalf of the petitioners that subsequent to the aforesaid, since Phase-II of the aforesaid Gandhar Complex of IPCL was also completed, a communication dated 11.01.2001 came to be addressed for and on behalf of the IPCL to the office of respondent No.2, seeking eligibility certificate for Exemption of Sales Tax in respect of Phase-II of Gandhar Complex under the Incentive Scheme. That in response to the aforesaid, on 09.03.2001, IPCL received a communication from the office o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme is continued in the shape of Exemption from Value Added Tax in lieu thereof, a notification dated 01.04.2006 came to be issued by the State Government under Section 5(2) of the VAT Act. That thereafter even another notification dated 01.04.2006 came to be issued by the Finance Department, State Government, by virtue of which the VAT Act came to be duly amended to provide for the procedure to be followed for claiming Exemption from the Value Added Tax in lieu of the Sales Tax and accordingly, an appropriate application in the prescribed format came to be moved by the IPCL before the concerned authority in respect of the PhaseI, which was duly accepted by the concerned authority. [2.6] It is the case on behalf of the petitioners that since the application moved by the IPCL, seeking issuance of eligibility certificate for Sales Tax Exemption covering Phase-II of the Gandhar Complex of IPCL, was pending since long before the office of respondent No.2, a communication dated 13.06.2006 came to be addressed for and on behalf of the IPCL to the Principal Secretary, Industries and Mines Department, State of Gujarat, respondent No.1 herein, requesting for early issuance of the eligibil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Tax granted by the office of the respondent No.2, in the form of change in the name of beneficiary therein from IPCL to petitioner No.1 (RIL). That in response to the aforesaid, requisite orders dated 03.11.2007 and 29.11.2007 came to be issued by the respondent No.2 and the office of the Commissioner of Sales Tax respectively, by virtue of which, the name of the IPCL came to be replaced in the concerned eligibility certificate for Exemption and the concerned certificate of Exemption. It is the case on behalf of the petitioners that thereafter endeavors were made by the petitioner No.1 to convince the respondents for issuance of eligibility certificate for Exemption from the Sales Tax / Value Added Tax covering investment made for Phase-II of the Gandhar Complex, by specifically pointing out that the reasons assigned by the respondent No.1 vide its aforesaid communication dated 15.09.2006 for denying benefit of Exemption from Tax as an incentive in respect of Phase-II of the Gandhar Complex is not germane to the incentive scheme and, therefore, appropriate steps deserve to be taken at the earliest for issuance of the concerned certificate of eligibility for Exemption from Tax i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se on behalf of the petitioners that despite the above, respondents have continued with their stand that the petitioner No.1 for Phase-II of Gandhar Complex shall not be eligible for Exemption of the Sales Tax under the Incentive Scheme. Hence, the petitioners have preferred the present Special Civil Application for the aforesaid reliefs. [3.0] Shri S.N. Soparkar, learned Senior Advocate has appeared on behalf of the petitioners. Ms. Manisha Lavkumar, learned Government Pleader has appeared on behalf of the respondents. [4.0] Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioners has vehemently submitted that the decision of the respondents in holding that for Phase-II of Gandhar Complex the petitioner No.1 / IPCL is not entitled to the benefit of Incentive Scheme under the Government Resolution dated 11.09.1995 is absolutely arbitrary and de hors the scheme. [4.1] It is further submitted that impugned decision while holding that for Phase-II of Gandhar Complex, the petitioner No.1 / IPCL is not eligible for Exemption from payment of Sales Tax / Incentive Scheme is based on misinterpretation of clause 9(c) of Annexure-B to the Incentive Scheme / Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral Act or Rules, the decision to deny the benefit of the Incentive Scheme for Phase-II of Gandhar Complex is absolutely illegal and arbitrary and on misinterpretation of clause 9(c) of Annexure-B to the Incentive Scheme and therefore, the same deserves to be quashed and set aside. [4.6] It is further submitted by Shri Soparkar, learned Senior Advocate appearing on behalf of the petitioners that even otherwise the action on the part of the respondents in denying the benefit of Tax Exemption in respect of Phase-II of Gandhar Complex under the Incentive Scheme is de hors the doctrine of legitimate expectation and principle of promissory estopple. It is submitted that all throughout the concerned respondents and the High Power Committee were considering the grant of the benefit of Tax Exemption in respect of Phase-II of the Gandhar Complex also. [4.7] It is submitted that even otherwise clause 9(c) can be said to be discriminatory and violative of Article 14 of the Constitution of India as it seeks to create an artificial classification between public sector undertaking and private sector undertaking. It is submitted that for drawing the said line of demarcation between the privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is submitted that after issuance of provisional premier registration, unit was granted the final Sales Tax incentive of Rs. 938.14 Crores for PhaseI Project. It is submitted that in the minutes of the SLHPC meeting held on 23.04.2002 to grant final eligibility certificate of Rs. 938.14 Crores, the Committee noted that the Company is not consuming any local mineral resources of the country in PhaseI. It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader appearing on behalf of the State that as such the petitioner Company had already affirmed that the decision of the SLHPC will be binding and while the revised application was submitted for PhaseI Project and also clarified that PVC Project having capacity of 1,50,000 TPA is not based on local mineral resources for which permit or license is required under any Mineral Rules or Act or nonutilization of natural gas as per Para 6(ii) of the Government Resolution dated 11.09.1995. [5.2] It is further submitted by Ms. Manisha Lavkumar, learned Government Pleader appearing on behalf of the State that as such the State Level High Power Committee is to work as a body to interpret the resolution and the decision taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x incentive of Rs. 938.15 Crores had been granted earlier for PhaseI and Phase-II of the Project is gas related and so it is not eligible under the Government Resolution and therefore, the demand of incentive for Phase-II cannot be accepted. [5.5] Now, so far as the submission on behalf of the petitioner that provision of clause 9(c) of Annexure-B to the Incentive Scheme made for PSU is discriminatory with private sector is concerned; it is submitted that it has no substance as it is a matter of policy decision of the Government to frame an incentive policy. It is submitted that as such during the implementation of the Project, the IPCL was PSU and therefore, it was treated as a Public Sector Undertaking by the Committee and the Government. It is submitted that as one of the condition provided in Clause 9(c) of Annexure-B to the Incentive Scheme has not been satisfied and it has been found that for Phase-II Project the petitioner Company is based on natural gas i.e. local mineral resources for which permit / license is required under the relevant Mines and Mineral Rules and the final decision has been taken by the SLHPC, who is the competent Authority to interpret the policy, who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it is further observed by the Hon'ble Supreme Court that as legislature enjoys very wide latitude in classification of objects, persons and things for Taxation purpose, in view of inherent complexity of fiscal adjustment of diverse elements and therefore, such a beneficial scheme may not be said to be ultra vires the equality clause in Article 14 of the Constitution of India merely because cutoff date prescribed therein resulted in disadvantage to some individual assessees. It is further submitted that as held by the Hon'ble Supreme Court in the said decision while implementing the Scheme, liberal construction may be given, but it cannot be extended beyond conditions prescribed in the statutory scheme and there is no warrant for the Court to travel beyond the Scheme and extend the scope of the Statute on the pretext of extending the statutory benefit to those who are not covered by the Scheme. Making above submissions and relying upon above decision, it is requested to dismiss the present petition. [6.0] Heard learned Counsel appearing for respective parties at length. The short question which is posed for consideration of this Court is whether for its Phase-II Project the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mineral resource for which any license or permit is required under the Mineral Act or Rules, [6.4] In the case of Association of Natural Gas & Others (Supra), the Hon'ble Supreme Court has observed and held that "natural gas" in raw and liquefied form is 'petroleum product' and part of mineral oil resources. It is further held that for mineral oils no license is required under Mineral Act or Rules. Even under the Oil Fields (Regulation and Development) Act, 1948 (hereinafter referred to as "Oil Fields Act"), "mineral oil" is not a mineral. Therefore, when the 'natural gas' cannot be said to be 'mineral resources' for which any permit is required under the Mineral Act or Rules, the petitioner could not have been denied the benefit of the Incentive Scheme for Phase-II Project, on the ground that 'natural gas' used by the petitioner in its Phase-II Project is a 'local mineral resource' for which any permit / license is required under the Mineral Act or Rules. [6.5] At this stage some of the provisions of the Mines and Minerals (Development and Regulation) Act, 1957 (hereinafter referred to as "Act, 1957") are required to be referred to. As per section 3(a) of the Act, 1957 "minerals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able and therefore, initial application was bifurcated into application for PhaseI and Phase-II Project. Even otherwise it is required to be noted that on the aforesaid ground i.e. on the ground that the earlier application of the petitioner for Phase-II Project was rejected and therefore, the same cannot be considered again, the petitioner has not been denied the benefit Sales Tax Incentive Scheme. By impugned order / decision the petitioner has been denied the benefit of Sales Tax Incentive Scheme as per the Government Resolution dated 11.09.1995 solely on the ground that one of the condition of Clause 9(c) of Annexure-B to the Incentive Scheme is not satisfied, inasmuch as the natural gas used by the petitioner, used in Phase-II Project is local mineral resource for which the license / permit under the Mineral Act or Rules is required. At this stage the Minutes of Meeting of SLHPC held on 02.07.1998 more particularly Item No.8 is required to be referred to and considered. In the Minutes of Meeting, the SLHPC specifically recommended that "prima facie" the unit seemed eligible. Item No.8 reads as under: "Item No.8 : M/s. Indian Petrochemicals Ltd., Gandhar Industrial Complex, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Phase-II which can be said to be local mineral resource for which the license / permit under the Mineral Act or Rules is required. As observed hereinabove, such a decision is on misinterpretation of Clause 9(c) of Annexure-B to the Incentive Scheme. As observed hereinabove natural gas cannot be said to be a local mineral resource for which permit / license is required under the provisions of Mineral Act or Rules. As observed hereinabove, natural gas is not a local mineral resource for which license or permit is required under the Mineral Act or Rules. [6.7] It is next contended on behalf of the State that the word used "local mineral resources" is required to be construed as local mineral and local resources and therefore, natural gas can be said to be local resources and therefore, for the natural gas being local resources the petitioner is not entitled to the Sales Tax incentive benefit under the Government Resolution dated 11.09.1995. The aforesaid has no substance. Clause 9(c) is required to be read as it is. In the word "local mineral resources", neither there is any coma nor the word "and" is mentioned. In Clause 9(c) what is stated is "local mineral resources". [6.8] In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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