TMI Blog2019 (12) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... romise. It is well established that the Court would not act on mere ipse dixit of the Government and must insist on a highly rigorous standard of proof in discharge of its burden by the Government. Resultantly, it is not necessary for us to dilate on the precedents pressed into service by the respondents on the application of doctrine of promissory estoppel of the State Government like any other private party or individual. On a bare reading of provision of Section 5 of the Uttar Pradesh Trade Tax Act, 1948, it is evident that there is no express authority given to the Executive to issue notification for withdrawing or rescinding the rebate facility from a date prior to the date of notification. Section 5(2) merely constrict that power only for allowing rebate with effect from a date prior to the date of notification. That does not include, by necessary implication or otherwise, power to withdraw or rescind the rebate from a date prior to the date of the notification - also, Section 21 of the 1904 Act, is pari materia to the above provision and will be of no avail for withdrawing the rebate from a date prior to the date of the notification. In the present case, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in favour of such industrial units. Appeal dismissed. - CIVIL APPEAL NO.1579 OF 2019, CIVIL APPEAL NO.1580 OF 2019 - - - Dated:- 20-11-2019 - A. M. Khanwilkar And Dinesh Maheshwari, JJ. For the Petitioner : Bhakti Vardhan Singh For the Respondent : Praveen Kumar JUDGMENT A. M. Khanwilkar, J. 1. The seminal question involved in both these appeals is about the power of the State to rescind the notification providing for rebate in respect of tax payable under the Uttar Pradesh Trade Tax Act, 1948 (for short, the 1948 Act ) and thus withdrawing the facility even in respect of industrial units, which had commenced production and had complied with the conditions for grant of such rebate in terms of Notification dated 27th February, 1998. 2. Briefly stated, the appropriate authority, in exercise of power under Section 5 of the 1948 Act issued notification dated 18th June, 1997, to declare the goods having fly ash contents of 10% or more by weight to be notified goods for the purpose of Section 5, and to grant a rebate of 25% in respect of the goods having fly ash contents between 10 to 30% by weight and a rebate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng flyash purchased or received from the thermal power stations situated on Uttar Pradesh; (iii) the dealer claiming rebate under this notification shall keep records in which following informations will be shown: (a) date; (b) name of thermal power stations from which flyash is purchased or received; (c) weight of flyash; (d) name of manufactured goods; (e) weight of manufactured goods; (f) weight of flyash used in manufacturing of such goods; (g) weight of other goods used in manufacture of such goods; (iv) the total weight of manufactured goods and percentage of flyash used, should be mentioned on goods of packing of such goods as far as possible. ANNEXURE Serial Number Name of District Period for which the rebate will be allowed 1 2 3 1 Banda, Hamirpur, Jalaun, Mahoba, Jhansi, Lalitpur and Shahuji N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified in the notification resulted in causing discriminatory treatment to the producers and suppliers of the sale product imported from neighbouring States as opposed to the goods manufactured and produced in the State of Uttar Pradesh. Such dispensation contravened the constitutional provisions of Articles 301 and 304(a) of the Constitution of India. The High Court vide order dated 29th January, 2004 upheld the said challenge. The State of Uttar Pradesh carried the matter in appeal against the said decision of the High Court, which eventually culminated with the judgment of this Court, affirming the challenge, in State of Uttar Pradesh Ors. vs. Jaiprakash Associates Limited (2014) 4 SCC 720. This Court held that rebate of tax granted by the State Government only to the cement manufacturing units using fly ash as raw material in the units established in the districts of the State of Uttar Pradesh, is violative of the provisions contained in Articles 301 and 304(a) of the Constitution of India. The Court further declared that notification, therefore, would also apply to the cement manufacturing units of the neighbouring States who were using fly ash as raw material. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove notifications can be repealed. In case above notifications have to be repealed from retrospective effect then the same can be done by way of an ordinance. In accordance with the legal opinion tendered by the Hon ble Add. Advocate General, a recommendation has made to proceed further expeditiously. 4. It appears that the main objective of providing the rebate vide the above notifications was that the Industrial units of the Uttar Pradesh should utilize more and more fly ash available for disposal in the state, in view of the above rebates. In the light of above judgment of the Hon ble High Court, now above rebate shall also be available to the unit situated outside the state. Therefore it deems to be fit that above notifications should be repealed. In this regard the proposal of Commissioner Trade Tax seems to be proper. 5. Therefore it is proposed that notifications issued under section 5 of the Trade Tax Act and Section 8 (5) of Central Sales Tax Act, related to rebate applicable to industries based on the fly ash should be repealed. 6. Finance department has expressed the consent to the above proposal. 7. Law department has expr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the said respondent at Raibareli and it had commenced commercial production from 14th December, 1998. As the said respondent had complied with all the conditions specified in the notification dated 27th February, 1998, it availed the rebate facility from 14th December, 1998 until 13th October, 2004. It could have continued to avail of that facility for a period of ten years, i.e., upto 13th December, 2008, but that arrangement has been disrupted because of the issuance of the impugned notification dated 14th October, 2004. In other words, denial of rebate to respondentBCL is for the period from 14th October, 2004 to 13th December, 2008. 9. In the case of respondent in Civil Appeal No. 1580/2019 M/ s. Jai Prakash Associates Limited (for short, the JPAL ), it was operating its factory outside the State and because of the condition specified in the notification dated 27th February, 1998, had challenged the said notification which, as aforesaid, was upheld by the High Court and later by this Court. In terms of the said decision, this respondent could have continued with its business and also avail of the rebate but for the impugned notification issued on 14th October, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h February, 1998 was to discontinue the rebate to industry that would be set up on and from 14th October, 2004 and to other industrial units in the neighbouring States on account of the decision of the High Court. However, that decision cannot be implemented or enforced against the industries which had already commenced commercial production within the designated areas in the State of Uttar Pradesh after 27th February, 1998 but before 14th October, 2004. Taking any other view would result in giving retrospective or retroactive effect to the notification dated 14th October, 2004. That is impermissible in law. 11. The writ petitioners had also contended that in any case, the State Government had failed to make out a case of inevitable supervening circumstances warranting cancellation and withdrawal of the rebate facility with retrospective effect. The fact that the High Court decided the issue against the State and extended the benefit to other industrial units in the neighbouring States, by itself cannot be the basis much less a supervening circumstance to justify the act of resiling from the commitment flowing from the notification dated 27th February, 1998. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arted production establishing the factory in Tanda, the principle of promissory estopple attracted in view of catena of judgement of Hon ble Supreme Court particularly Kalyanpur Cement Ltd (supra) as well as world wide settled proposition of law, it shall be fitness of thing and to maintain the people s confidence in the administration, ordinarily government should be abide by its assurance or promise and person should not be deprived of the benefit available from such assurance, in case it acted on. Though the government has got right to change its policy but that too is subject to judicial review and the courts have got ample power to ensure that because of change of policy fundamental or statutory rights of the citizen is not infringed. Equitable relief under the principle of promissory estopple may be given by courts for the ends of justice. 123. The impugned notification should be given prospective effect with regard to tax rebate. Thus, industries which were established relying upon the assurance given in the notification dated 27.2.1998 and started production are entitled for tax rebate for the period which they were entitled at the time of production or before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the public interest in granting the tax rebate. iii). State had no territorial jurisdiction to ascertain fly ash consumption and source of Units operating outside the State of U.P. iv). Utilization of fly ash was promoted in terms of Government of India Notifications dated 14.09.1999 27.08.2003, as also directions given by Hon ble Delhi High Court in a PIL from 2003 to 2005. State was taking all steps for disposal of fly ash by promoting its use. v). Future revenue loss. 15. It is then urged that the High Court has not carefully analysed each of these reasons, much less the impact of all the reasons taken together justifying the exercise of power to rescind the notification providing for rebate facility. It is also contended that the decisions pressed into service by the respondents would be applicable to ordinary situation where the principle of promissory estoppel has been invoked by the State Government but the same will have no application to the notification under consideration which was the outcome of supervening public interest. In other words, general principle of promissory estoppel and vested/accrued rights have no appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of this Court in Kazi Lhendup Dorji vs. Central Bureau of Investigation Ors. 1994 Suppl. (2) SCC 116 and Industrial Infrastructure Development Corporation (Gwalior) Madhya Pradesh Limited vs. Commissioner of Income Tax, Gwalior, Madhya Pradesh (2018) 4 SCC 494. 18. It is urged that in the present case, an enforceable right had accrued in favour of the respondent(s) under the notification dated 27th February, 1998 to avail the benefit of rebate for its full eligibility period up to 13th December, 2008 and 17th September, 2014 respectively. That right could not be interdicted and disrupted by virtue of the impugned notification dated 14th October, 2004. It is not a case where the legislature has intervened to interdict that right, but it is being done by a notification by an authority who is not empowered to issue notification having retrospective or retroactive effect. The respondents are relying on the decisions of this Court which has taken the view that the notifications cannot apply to units already set up prior to their issuance. (See MRF Limited, Kottayam vs. Assistant Commissioner (Assessment) Sales Tax Others (2006) 8 SCC 702; Southern Petrochemical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er stations in Uttar Pradesh has continued unabated causing serious health hazards in the neighbourhood, turning fertile lands into barren lands. Notably, the new industry set up in the designated areas after 27th February, 1998 and before 14th October, 2004 is using the fly ash generated in thermal power stations in Uttar Pradesh. Thus, the newly established industry would continue to achieve the object and intent behind the said notification, which has not ceased to exist and is still relevant. In such a situation, it is incomprehensible as to how the principle of supervening public interest could be invoked by the State much less of such magnitude that it would be impossible for the State to hold or be bound by the promise made by it in notification dated 27th February, 1998. The only reason recorded in the proposal for issuing the impugned notification dated 14th October, 2004, as can be discerned from the note submitted by the Principal Secretary of the concerned Department to the Council of Ministers, mentions only about the fall out of the judgment of the High Court dated 29th January, 2004. The apprehension of the State that it would not be in a position to verify the factu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the concerned authority. The respondents submit that the appeals be dismissed being devoid of merits. 22. We have heard Ms. Aishwarya Bhati, learned senior counsel appearing for the State and Mr. S.K. Bagaria and Mr. S.B. Upadhyay, learned senior counsel appearing for the respondents. 23. After cogitating over the rival submissions, it becomes evident that the parties have proceeded on the premise that the State Government or the Executive is competent to rescind the earlier notification and the doctrine of promissory estoppel can be no impediment in that behalf. That, however, is hedged or laced with condition that the burden is upon the Government to show that it acted in furtherance to public interest in issuing such a notification otherwise than in accordance with the promise and that the public interest is so overwhelming that it would be inequitable to hold the Government bound by the promise. It is well established that the Court would not act on mere ipse dixit of the Government and must insist on a highly rigorous standard of proof in discharge of its burden by the Government. Resultantly, it is not necessary for us to dilate on the precedents pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf expressly rescinds notification dated 27th February, 1998 with effect from 14th October, 2004. There is no express or tacit intent manifested from this notification, so as to construe it as bestowing power to withdraw the rebate facility with effect from a date prior to the date of notification as such. On this finding, nothing more is required to be said as the concomitant of this finding would necessarily be that all the industrial units set up after 27th February, 1998 and before 14th October, 2004 which had commenced commercial production, must continue to qualify for rebate for specified term mentioned in notification dated 27th February, 1998, subject to fulfilling all other conditions specified therein. 28. In the case of BCL, the rebate ought to continue up to 13th December, 2008 and in the case of JPAL, up to 17th September, 2014. Any other interpretation of the impugned notification dated 14th October, 2004, would entail in giving retrospective or retroactive effect thereto. That is not predicated by Section 5 of the 1948 Act or the impugned notification itself. Having said this, it would necessarily follow that the challenge to the notification on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned manufacturing units continue to manufacture specified goods by using fly ash purchased or produced from the thermal power stations situated within the State. As long as that activity is continued until the term specified under the notification dated 27th February, 1998, namely ten years from the date of commencement of commercial production, there is no tangible reason nor it is open to contend that the dominant purpose underlying notification dated 27th February, 1998 had ceased to exist or had become irrelevant in any manner, much less there are supervening circumstances qua such units which are so overwhelming that it would be inequitable for the State Government to be bound by the promise given in notification dated 27th February, 1998. 30. Indeed, the judgment rendered by the High Court and affirmed by this Court in interpreting the notification dated 27th February, 1998, at best, may have given rise to some logistical issues for the State including financial implications regarding future revenue loss. That ground cannot be invoked as supervening public interest in reference to the activities of the industrial units who qualify the conditions specified in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supervening public interest qua the respondents herein and similarly placed persons. The notification dated 14th October, 2004 cannot be construed as having retrospective or retroactive effect to whittle down the accrued rights in favour of such industrial units. 32. In this view of the matter, it is unnecessary to dilate on the precedents pressed into service to buttress the argument that doctrine of promissory estoppel applies or not to the State Government or about the power of the State Government to rescind the earlier notification whereunder rebate under Section 5 of the 1948 Act had become due and payable to the eligible industrial units. We also dispose of the grievance of the appellant that the High Court has not elaborately dealt with the argument of supervening public interest justifying the issuance of notification dated 14th October, 2004. We say so because, we are convinced with the argument of the respondents that no material fact has been pleaded in the response filed before the High Court or in the present proceedings by the State Government in that regard. 33. Nevertheless, we had permitted the State Government to articulate the reasons which i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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