TMI Blog2017 (3) TMI 1651X X X X Extracts X X X X X X X X Extracts X X X X ..... reby, the State respondents with the intention to promote the use of nonconventional sources has issued the notification. Further State respondents has included the dealers who will consume such power will be given exemption in commercial tax for those years from the date of commencement of the consumption - It is pertinent to mention that the notification dated 28/02/1995 do not provide for any cutoff date for the dealers / investors to set up plant. The State respondent respectfully submit that the MPGST, 1958 stood repealed by the enactment of the M.P. Commercial Tax Act, 1994 and Section 17 of the Act of 1994. In the considered opinion of this Court, no retrospective withdrawal of exemption is permissible - In the case of State of M. P. Vs. G. S. Dall & Flour Mills [1990 (9) TMI 70 - SUPREME Court], the apex Court has held that while a notification can be prospective or retrospective, only a prospective operation can be given to a notification rescinding an exemption granted earlier. The subsequent notification cannot be construed to have a retrospective operation. A right which has already accrued in favour of the petitioner cannot be extinguished by a subsequent notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in the system or the date on which cumulative quantum is achieved, whichever is earlier. Whereas in the case of consumer unit purchasing power from generating unit, the exemption period is six years from commencement of consumption of power in non-conventional power generating system or date of achievement of cumulative quantum of tax whichever is earlier irrespective to the fact when the generation of power was started by the generating unit. 04- The petitioner has further stated that the petitioner was entitled for exemption from payment of taxes by virtue of notification dated 28/02/1995, however, on account of subsequent notification dated 05/09/1998, a cutoff date has been introduced. In the notification dated 28/02/1995 which has the effect of withdrawing the benefit of exemption to the dealers, who have already set up the non-conventional power generation system after 30/09/1998 but before the issuance of notification dated 05/09/1998. Based upon the subsequent notification, the Sate Level Committee has passed an order refusing to grant exemption from payment of Commercial Taxes and other taxes to the petitioner. 05- The petitioner's contention is that subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate respondents has included the dealers who will consume such power will be given exemption in commercial tax for those years from the date of commencement of the consumption. 09- It is pertinent to mention that the notification dated 28/02/1995 do not provide for any cutoff date for the dealers / investors to set up plant. The State respondent respectfully submit that the MPGST, 1958 stood repealed by the enactment of the M.P. Commercial Tax Act, 1994 and Section 17 of the Act of 1994, reads as under:- 17. Saving .- (1) The State Government may, by notification and subject to such restrictions and conditions as may be specified therein, exempt whether prospectively or retrospectively (i) (a) any class of dealers; or (b) any goods or class of goods, in whole or in part, from the payment of tax under this Act for such period as may be specified in the notification; (ii) any dealer or class of dealers from any provision of this Act or any provision of a rule made under Section 80 for such period as may be specified in the notification. (2) Any notification issued under this Section may be rescinded before the expiry of the period for which it was to have remained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court on various grounds and one of the major ground is Doctrine of promissory estoppels should be tested against the public interest if promotion is made based on the public money. 14- His contention is that in the present case, exemption was granted for the set up of power generating unit though nonconventional sources, which was not done even after issuance of notification and even ambiguity occurred while issuing the notification dated 28/02/1995. Therefore, in exercise of legislative powers conferred on the State vide section 12 and 17, the State Government has issued a notification providing for cutoff date and, there can be no promissory estoppel against the exercise of legislative powers, as the State Government is acting on the strength of the authority vested in it in the management and administration of the taxes, therefore, estoppels cannot and does not apply. 15- Learned counsel for the respondent has placed reliance upon and judgment delivered in the case of M/s. Jeetram Shivkumar Ors. Vs. State of Haryana reported in 1980 AIR 1285 and his contention is that the Hon'ble Apex Court in the apex Court has held as under:- The action taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants will be entitled to the benefit of tax exemption only for the limited period during which the concession was offered by the Government. We find no merit in the appeal and accordingly it stands dismissed. No order as to costs. 17- He has also placed reliance upon a judgment delivered in the case of State of Rajasthan Anr. Vs. M/s. Mahaveer Oil Industries Ors . reported in AIR 1999 (6) SC 2302 . Paragraph No.14 and 15 of the aforesaid judgment reads as under:- 14. Are the respondents justified in holding the State to the promise made by it in the form of an incentive scheme which is made available for a specified period of time, when new industries are set up on the basis of that scheme relying on the promise of benefits held out by it? Public interest requires that the State be held bound by the promise held out by it in such a situation. But this does not preclude the State from withdrawing the benefit prospectively even during the period of the scheme, if public interest so requires. Even in a case where a party has acted on the promise, if there is any supervening public interest which requires that the benefit be withdrawn or the scheme be modified, that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent is that since no cutoff date was provided, therefore, the cutoff date was provided vide notification dated 14/09/1995 and since the dealer required to set up the power generating system generating electrical energy from non-conventional sources or before 30/06/1998 has failed to set up the unit, therefore, the exemption as provided in the notification to the dealer who sets up non-conventional unit and even to the dealers who were supposed to use the said energy will not be eligible for exemption vide notification dated 14/09/1995. 21- The respondent submits that the notification dated 05/09/1998 is not ultra vires rather the same has been issued under the legal authority and, therefore, does not deserves to be quashed or declared void and unconstitutional by this Court. 22- Heard learned counsel for the parties at length and perused the record. 23- In the instant case petitioner has filed present petition under Article 226 of the Constitution of India challenging the validity of notification No.A-3-32-94-ST-V(66) dated 05/09/1998 issued by the State Government of Madhya Pradesh for amending the earlier notification No.A-3-32-94-ST-V(5) dated 28/02/1995 wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch amendment is that the power generation units set up on government lands in which permission has been granted by government prior to that date but the generation of power started between 01/07/1998 to 04/09/1998 i.e. prior to issuance of amending notification have been deprived of the benefit of exemption, which was otherwise available to such units and consumers of such units by virtue of earlier notification dated 28/02/1995. In effect and substance in respect of the dealers setting up of the non-conventional power generation system in whose case the generation of power in the unit started between the above period as also the dealers consuming such power, the benefit of exemption has been retrospectively withdrawn by the State Government. The present petitioner is among such unfortunate dealers who are victims of such retrospective withdrawal of benefit. 27- It is evident from a bare perusal of the factual position narrated in the petition (which is not disputed by the respondents in their reply) that the petitioner has purchased the electricity generated by non-conventional power generation sources i.e. Wind Electricity Generators (WEG) set up by one M/s. CEPCO Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be governed by the earlier notification dated 28/02/1995. He has placed reliance upon judgments delivered by the Division Bench of this Court in the case of Sunpet Pack Jabalpur Pvt. Ltd. Vs. State of M. P . reported in (2011) 18 STJ 614 and Sunpet Pack Jabalpur Pvt. Ltd. Vs. State of M.P. Ors. reported in (2014) 24 STJ 325 wherein this Court in similar circumstances has directed the SLC to decide the case strictly in accordance with unamended notification. 31- His further contention is that although Section 12 of MPGST Act and Section 17 of the MPCT Act (both repealed) enabled the government to withdraw / rescind any exemption notification before the expiry of its period but both the provisions specifically provided that such notification rescinding the benefit shall have a prospective effect. Thus, no retrospective withdrawal of exemption is permissible under the law. Accordingly, the notification dated 05/09/1998 to the extent it retrospectively withdraws the benefits of exemption in cases like petitioner is contrary to the above statutory provisions and therefore, ultra vires to that extent. 32- In the considered opinion of this Court, no retrospective withdrawal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel appearing on behalf of the appellants have not seriously challenged this part of the impugned order of the High Court. However, since this question arose before us and the High Court decided the same against the appellants relying on a decision of its court, we prefer to deal with the question in this judgment. Let us, therefore, examine whether, in the facts and circumstances of the case, the notification dated 10th April 1995 which denied exemption to NPK 23:23:0 retrospectively can be held to be invalid as held by the High Court in the impugned order. Before proceeding further we may reiterate that the notification dated 2nd November, 1994 as quoted herein earlier permits exemption from taxes on the sale of Potassium Phosphatic Fertilizer from 1 st November, 1994 to 31st March, 1995. In the notification dated 2 nd November, 1994 exemption, therefore, was allowed on sale of all categories of Potassium Phosphatic Fertilizer which, however, was withdrawn in respect of the product of the respondent, namely, NPK 23:23:0 by the notification dated 10th April, 1995. 8. Now the question arises whether by the notification dated 10th April, 1995 retrospectively, the exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the proviso to Section 25 of the Act. Accordingly, we hold that the notification dated 10th April, 1995, denying exemption to NPK 23:23:0 retrospectively is illegal and invalid and are in agreement with the view expressed by the High Court on this question. 34- In the case of State of Haryana Vs. Anil Pesticides Ltd. Another reported in (2011) 19 STJ 11 , the Hon'ble Supreme Court in paragraph No.7 has held as under:- 7. It appears that notification dated 16th December 1996 was challenged by some of the industrial units whose products were included in the negative list for the first time by virtue of the said notification, before the Punjab Haryana High Court. Having failed before the High Court, the Dealers filed appeals before this Court, inter-alia, contending that the notification deleting Note 2 to Schedule III with retrospective effect and thereby disentitling the Dealers to the benefit of exemption was illegal because Section 64(2A) of the Act had come into force in the year 2001. Accepting the said plea of the Dealers, this Court in Mahabir Vegetable Oils (P) Ltd. Anr. Vs. State of Haryana Ors.1 held that afore-extracted Note 2 could not be given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication dated 07/01/1981 is that even though Section 12(2) of the Act permits that any notification issued under the said section may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission, such notification shall cease to be in force, the rescission cannot be made with retrospective effect. In support of this submission, reliance has been placed on the last sentence of Section 12(2), it reads as hereunder:- Any notification issued under this section may be rescinded before the expiry of the period for which it was to have remained in force and on such recission, such notification shall cease to be in force. A notification rescinding an earlier notification shall have prospective effect. According to the learned counsel for the petitioners, the aforesaid last sentence in Section 12(2) excludes issuance of a notification rescinding an earlier notification with retrospective effect. Reliance on this submission has also been placed on the decision of a Division Bench of this Court in Vijay Dal Mill. Vs. State of M. P. 1982 MPLJ 523. In that case, while dealing with the power of exemption contained in Section 8(5) of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of facility of exemption, which availed of the facility over the unexpired period of eligibility certificate shall also be eligible to first adjust balance of input-tax rebate if any, against any other tax liability of self and to transfer remaining balance for adjustment against tax liability of any other registered dealer, if desired. Therefore, the dealer who was continuing with the facility of exemption under the eligibility certificate earlier issued has not been said to any adverse consequence and rather, sufficient liberty is granted to such dealers for making necessary adjustment of rebate or claiming rebates or exemption. The petitioner who is continuing with the facility of exemption as on April 1, 2006 will continue to collect tax from its customers, and to compute his tax liability by taking input tax rebates from the tax collected on sales. Further, he will be eligible to retain tax collected, which is in excess of its input-tax rebate and the amount so, retained shall be included in computation of cumulative quantum of tax benefits. 21. It is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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