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TMI Blog2017 (11) TMI 1888X X X X Extracts X X X X X X X X Extracts X X X X ..... d with the life of the policy or the person will be entitled for the benefit of five years irrespective of the termination of the life of the policy. 3. The petitioner is a registered company under the Companies Act, 1956 having its registered office at Radha Nagar, Motihari, East Champaran, Bihar. The petitioner has set up a flour mill under the name and style of Radha Flour Mill Private Limited for manufacturing Atta, Suji, Maida and Chhokar and has been working since 10.2.1989. The Government of Bihar in order to attract domestic and foreign investment as well as revival and expansion of business of the existing industrial unit by providing right industrial ambient and with an intention to generate employment and its promotion the Government has come up with the Bihar Industrial Incentive Policy of 2011. For attracting the investors, certain benefits have been extended to the establishment which fall under the parameter of the Industrial Policy. In terms of the 2011 Industrial Policy, different types of benefits have been conferred under different heads having been mentioned in Clause-2 of the Industrial Policy, 2011 which includes benefit such as exemption for Monthly Minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above list does not cover the flour mill of this nature. 5. As per statement made in paragraph No. 6 of the writ application that the Company has gone for expansion/modernization during the period 5.4.2014 to 25.10.2014. The petitioner company increased the capacity applied for electric connection which was provided on 9.10.2014 in LTIS=11 category. The bill raised was time to time paid. The petitioner company applied to the NBPDCL for remission of electric bill in view of certificate of expansion which was issued by the District Industry Center, East Champaran, Motihari, as the unit came to commercial production on 25.10.2014, inasmuch as, the General Manager, District Industry Center vide letter No. 1295 dated 4.12.2014 informed to the Executive Engineer accordingly. The dispute has arisen when the life of Industrial Policy 2011 Scheme came to an end after enforcement of the Bihar Industrial Investment Promotion Policy, 2016 for promoting the industrial development in the State. As per averment made in the writ application, the petitioner from time to time continued to pay the bill as per its liability but, the North Bihar Power Distribution Company has raised a bill includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Department and the matter was referred to the Finance Department. It will be relevant to quote Item No. 4 Annexure-A which reads as follows:-- 7. The matter was sent to Law Department, Government of Bihar for its opinion on period of entitlement and the Law Department recorded its opinion that the industry set up and came in commercial production during the period 1.7.2011 to 30.6.2016, would get the benefit for 5 years as reflected from Annexure-A (Page-150) of the counter affidavit of 2nd Supplementary Affidavit which reads as follows:-- 8. The matter was referred and considered by the Finance Department. The Finance Department deliberated the issue and gave its opinion which is absolutely clear from the letter dated 2.8.2017 issued by the Director, Technical Development, Technical Development Directorate, Bihar, Patna wherein it has been quoted verbatim the opinion of the Finance Department: and finally the Samadhan Samiti has arrived to a finding that after considering the opinion of Finance Department as well as of the Law Department gave final decision is reflective from the letter dated 22.8.2017 issued by the Principal Secretary, Industry Department is as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Commercial Taxes and Ors. (1986) 61 STC 301, Shree Sanyeeji Ispat Pvt. Ltd. and Anr. vs. State of Assam and Ors. (2006) 147 STC 146, State of Bihar and Ors. vs. M/s. Suprabhat Steel Limited & Ors., (1999) 1 SCC 31 : [1999(1) PLJR (SC) 1], Kamper Concast Limited vs. State of Bihar and Ors. 2004(3) PLJR 309, Kunwar Pal Singh (Dead) by L.Rs. vs. State of U.P. and Ors., (2007) 5 SCC 85, Hukam Chand Shyam Lal vs. Union of India (UOI) and Ors. AIR 1976 SC 789, Bahadureinh Lakhubhai Gohil vs. Jagdishbhai M. Kamalia and Ors. (2004) 2 SCC 65, The Purtabpore Co., Ltd. vs. Cane Commissioner of Bihar and Ors. (1969) 1 SCC 308, Apar (P) Ltd. and Anr. vs. Union of India (UOI) and Ors., 1992 Supp (1) SCC 1. 11. Per contra, learned counsel for the State has taken a plea that the benefit cannot be extended beyond the life of the Industrial Policy, it will automatically would come to an end on the termination of life of 2011 Industrial Policy whereas learned counsel for the Electricity Board has submitted that the Board is ready to give benefit provided it is interpreted in favour of the petitioner. 12. In the present case, the issue has been raised of aims and object of Policy, 2011 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by section, clause by clause, phrase by phrase and word by word. If a statute is looked at, in the context of its enactment, with the glasses of the statute-maker, provided by such context, its scheme, the sections, clauses, phrases and words may take colour and appear different than when the statute is looked at without the glasses provided by the context. With those glasses we' must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of the entire Act. No part of a statute and no word of a statute can be construed in isolation. Statutes have to be construed so that every word has a place and everything is in its place. It is by looking at the definition as a whole in the setting of the entire Act and by reference to what preceded the enactment and the reasons for it that the Court construed the expression Prize Chit in Srinivasa and we find no reason to depart from the Court's construction." 12. In the case of Union of India and Others vs. Wood Papers Limited and Another since reported in AIR 1991 SC 2049, a case dealing with certain tax incentive for promoting indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oached the Government of Kerala with its proposal to make substantive expansion and diversification of industrial unit at unit, A Memorandum of Understanding was entered into between the MRF and the State of Kerala which stipulates investment of huge amount for expansion/diversification of the existing industrial unit at Kottayam. The Government of Kerala issued the notification, granted the tax exemption and, later on, the tax exemption was withdrawn. The matter went to the Hon'ble Apex Court for the resolution of the dispute of entitlement of tax exemption. The Hon'ble Apex Court has held that once the Government has held out the concession or the exemption through the industrial policy for the purpose of attracting investors, later on, the Government withdraw such concession, it will be unsustainable on the principle of promissory estoppel, once the promise has been given and, on that basis, the industrial unit has expanded or established a new industry, that cannot be allowed to be withdrawn, has placed reliance on several judgments of the Hon'ble Apex Court. It will be relevant to quote paragraph Nos. 30, 31, 32; 33, 34, 35, 36, 37 and 38 of the aforesaid judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with Section 10 of the State Sales Tax Act as it then stood, as there was no power to grant exemption retrospectively. By an amendment that power has been subsequently conferred. In these appeals there is no question of retrospective exemption. We also find that no reference was made by the High Court to the decision in M.P. Sugar Mills' case (1979) 2 SCC 409. In our view, to the facts of the present case, the ratio of M.P. Sugar Mills' case directly applies and the plea of estoppel is unanswerable. 8. ...Such exemption would continue for the full period of five years from the date they started production. New industries set up after 21.10.1980 obviously would not be entitled to that benefit as they had notice of the curtailment in the exemption before they came to set up their industries. [Emphasis supplied] 31. This decision was followed by a three-Judge Bench in the case of State of Bihar vs. Usha Martin Industries Ltd. 1987 (Supp.) SCC 710 where it was stated that the matter stands concluded by the decision in Pournami Oils Mill's case (supra). In Shri Bakul Oil Industries vs. State of Gujarat: (1987) 1 SCC 31, it was observed in para 11: 11. ...Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese new industries and as these new industries had admittedly got established in the region where the Board was operating, acting on such promise, the same in equity would bind the Board. Such a promise was not contrary to any statutory provision but on the contrary was in compliance with the directions issued under Section 78-A of the Act. These new industries which got attracted to this region relying upon the promise had altered their position irretrievably. They had spent "large amounts of money for establishing the infrastructure, had entered into agreements with the Board for supply of electricity and, therefore, had necessarily altered their position relying on these representations thinking that they would be assured of at least three years' period guaranteeing rebate of 10% on the total bill of electricity to be consumed by them as infancy benefit so that they could effectively compete with the old industries operating in the field and their products could effectively compete with their products. On these well-established facts the Board can certainly be pinned down to its promise on the doctrine of promissory estoppel. [Emphasis supplied] 33. In a recent judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills's case (supra) and Shri Bakul Oil Industries's case (supra) were distinguished in the said case on the ground that the notifications in those cases were incentive notifications. It was observed in para 27: "Again in Bakul Oil Industries (supra) it was the incentive to set up industries in a conforming area that the exemption had been granted and the Court held that the Government could withdraw an exemption granted by it earlier only if such withdrawal could be made without offending the rule of promissory estoppel and without depriving an industry entitled to claim exemption for the entire specified period for which exemption had been promised to it at the time of giving incentive. Both these cases therefore cannot advance the case of the appellant and are distinguishable on facts because the exemption notification under Section 25 of the Act which was issued in this case did not hold out any incentive for setting up of any industry to use PVC resins and on the other hand had been issued in exercise of the statutory powers, in public interest and subsequently withdrawn in exercise of the same powers again in public interest. In our opinion, no justifiable prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized right as such is involved. The protection of such legitimate expectation does not require the fulfillment of the expectation where an overriding public interest requires otherwise. In other words, where a person's legitimate expectation is not fulfilled by taking a particular decision then the decision maker should justify the denial of such expectation by showing some overriding public interest. [See Union of India and Ors. vs. Hindustan Development Corporation and Ors. AIR 1994 SC 988)]. 9. While the discretion to change the policy in exercise of the executive power, when not trammeled by any statute or 'is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give the impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heart beat of fair play. Actions are ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RC with the effective date of the new Industrial Policy. This facility will be available for five years." 18. On giving a plain reading it is completely clear the facility of exemption from monthly minimum charges has been stipulated for five years and there is no dispute that these industries (petitioners) were granted the benefit of incentive provided under the industrial policy. There is no dispute that the petitioners are not covered by the industrial policy of 2011 of the State of Bihar but, the question has to be seen in what manner the incentive, which has been given in different way, will be interpreted. As has been explained hereinabove, the Industry Department, Law Department has given its opinion that once the industry is established during the period mentioned in the Industrial Policy, 2011, they would be given the benefit of incentive for the period mentioned therein and it cannot be curtailed in any manner in mid of its operation, it will not be dependent on the life of the policy but, the Financial Department has turned turtle, has arrived to a finding that incentive will terminate on the day the life of the policy gets terminated. If the view of the Finance Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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