TMI Blog2017 (8) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... licy rested on an executive decision to encourage entrepreneur investment. It naturally includes the power of the State to review the policy from time to time, including on considerations for the manner in which the policy was proving beneficial or detrimental to the larger public interest, and the State exchequer. The policy could therefore well be withdrawn or modified at any time for just, valid and cogent reasons. Judicial review of a policy decision, especially an economic policy decision, shall have to be restricted to the presence of just and valid reasons eschewing arbitrariness, so as not to fall foul of Article 14 of the Constitution. But, in the garb of judicial review, the Court will not examine the sufficiency or adequacy of the reasons or materials, in the manner of an appellate authority, to substitute its own wisdom for that of the government. That would tantamount to taking over of the executive decision making process. There has been much passage of time since the issue originated and the litigation that followed. The mere fact that ample documentary evidence may not be available with the State today, for valid reasons as mentioned in the additional affidavit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54-IND of 1983 dated 26.02.1983, providing for refund of CST for a period of 5 years from the date of production. 4. A fresh G.O. No. 318-GR of 1990, dated 30.11.1990, was issued in supersession, providing for such refund in full up to 31.03.1995, after which it was to be provided on a sliding scale of (a) 50 per cent of the tax paid up to end of 31.03.1998 and (b) 25 per cent of the tax paid up to end of 31.03.2000. Option was also given to those entitled to avail the earlier package of incentives, to continue availing the benefit for the remaining period of their entitlement. It was again superseded by G.O. No. 253-Ind/DIC of 1993, dated 01.10.1993, leading to institution of writ petitions assailing it. 5. The challenge to the notification dated 01.10.1993, by the respondents was on principles of promissory estoppel, contending that having held forth a promise for grant of exemption from CST on raw materials purchased from outside the State for five years from the date of production, the appellant could not have withdrawn or modified the benefit before that time period. 6. The Division Bench of the High Court rejected the plea of promissory estoppel. But, regarding the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and the intention was to curb it, capping the limit for exemption had no nexus with the object sought to be achieved. 9. The respective submissions have received our thoughtful consideration. The grant of refund on CST paid, to boost entrepreneur investment was primarily an executive economic policy decision. The scope for judicial scrutiny and interference with the same, has to be restricted to arbitrariness and unreasonableness as observed in Ugar Sugar Works Ltd. vs. Delhi Admn., (2001) 3 SCC 635, as follows:- 18 ..It is well settled that the courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness, irrationality, perversity and mala fide will render the policy unconstitutional. However, if the policy cannot be faulted on any of these grounds, the mere fact that it would hurt business interests of a party, does not justify invalidating the policy. In tax and economic regulation cases, there are good reasons for judicial restraint, if not judicial deference, to judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as being taken or misuse was being made of the concessions granted the court may permit the government to do so but before allowing the government to resile from the promise or go back on the assurance the court would have to be satisfied that allegations by the government about misuse being made or undue advantage being taken of the concessions given by it were reasonably well established 12. It is the contention of the appellants that in or about 1992, genuine doubts were entertained about the veracity of the refund claims of CST made by SSI units. A specific reference has been made by illustration to the case of the respondent in Civil Appeal No. 9844 of 2011. Enquiries were also made from the Excise and Taxation Officer II, Amritsar, as dealers at Amritsar were suspected of being in connivance with the dealers in the appellants State. It was observed on the basis of information furnished by the authorities at Amritsar that the original payee receipts produced by the SSI units in the appellant State, did not tally with that given by the sales tax authorities of Punjab, and who had also confirmed that the suppliers did not deposit any CST. Enquiries from the authorities at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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