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TMI Blog2024 (1) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... C) No. 2662 of 2019, Writ Petition(C) No. 2659 of 2019, Writ Petition(C) No. 2661 of 2019, Writ Petition(C) No. 2677 of 2019, Writ Petition(C) No. 1936 of 2019, Writ Petition(C) No. 4375/2020, For the Petitioners : Dr. Ashok Saraf, Sr. counsel assisted by Mr. P. Baruah, Advocate For the Respondents : Mr. S.C. Keyal, SC, GST JUDGMENT & ORDER (CAV) These bunch of writ petitions have been filed by the petitioners who had setup their factories in various industrial growth centers in State of Assam in pursuance to the incentives offered under the Industrial Policy by the Government of India by Notification dated 24.12.1997. As per the Office Memorandum brought about by the Government of India notifying the New Industrial Policy Resolution, a slew of packages were notified containing various incentives and concessions with the avowed object of development of industries in the Northeastern Region. These industrial zones setup under the Industrial Policy in the State of Assam offered completely tax free zones for the period of ten (10) years. It was announced by the Government of India under the Industrial Policy that all industrial activities for such areas would be free from inter al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnounced a new package of fiscal incentives and other concessions for the Northeastern Region to continue the exemptions and benefits as was promised. This new package was known as North East Industrial Investment Promotion Policy, 2007 (NEIIPP). This policy was came effect from 01.04.2007. The said incentives were available to new industrial units or existing industrial units undergoing substantial expansion on or after 01.04.2007. Amongst the various incentives announced, there was Central Excise duty exemption to the extent of 100% which was to be continued on finished products made in the Northeastern Region which was earlier available under the North East Industrial Policy, 1997. The petitioners set up new industrial units pursuant to the NEIIPP, 2007 in the various industrial growth centres and certificates of registrations were issued to these petitioners by the Directorate of Industries under NEIIPP 2007. After setting up their industries, they applied for registration and were granted certificate of issuance by the General Manager, DICC. Along with the NEIIPP, 2007 announced by the Government of India, the Government of Assam had also announced a new industrial policy, nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /NU/2013 24.06.2013 Namkeen/Fried Grams, Snacks and Confectionery (Soan Papdi) 9 W.P(C) No. 2661/2019 (Nano Steel Pvt. Ltd. Vs. Union of India and Ors.) DICC/KAMRUP/EM(PT- 2)/01103/2011 16.06.2011 Bamboo Ply & Board 10 W.P(C) No. 2673/2019 (M/S Kishlay Savoury Foods Vs Union of India and Ors.) DICC/AKMRUP9EM(PT- 2)/02662/2016 03.12.2016 Extruded Namkeens and Popcorn 11 W.P(C) No. 2703/2019 (Amiker Enterprise Pvt. Ltd. Vs. Union of India & Ors.) DICC/KAMRUP/NEIIPP2007/ 01175/EU/2013 25.12.2013 12 W.P. (C) No. 2762/2019 (Prataap Snacks Ltd. Vs Union of India and Ors.) DICC/KAMRUP/NEIPP2007/0 1912/NU/2014 17.02.2014 Extruded Snack 13 W.P(C) No. 2764/2019 (Prataap Snacks Ltv Vs. Union of India and Ors.) DICC/KAMRUP/NEIPP2007/02071/NU/2016 13.01.2016 Common Salt, Sugar et 14 W.P(C) No. 4375/2020 (M/S Keshari Udyog Vs. Union of India and Ors. ) - - Manufacturers, Processors, Exporter, Importer, Dealers, Contractors, Agents, Suppliers, Stockiest, Representatives, Engineers, Designers, Consultations etc. 3. The petitioners are industries whose turnover was less than 1.5 Cr. which is below the threshold limits. As per the option available in the Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort raised by the petitioner were rejected on the ground that such units were not registered under the Central Excise Act prior to introduction of the GST Act and were not availing any benefits under Notification No. 20/2007. It is this claim of the petitioners which have been rejected which is assailed in these bunches of writ petitions. The petitioners have prayed for Writ of Mandamus to direct the authorities to consider their cases like other similarly situated units and industries and extend the benefit of budgetary support as have been done in cases of other industries who were eligible and availing benefits under the Industrial Policies. 5. Dr. A. Saraf, learned Sr. Counsel assisted by Mr. P. Baruah, learned counsel for the petitioner submits the aforesaid writ petitions have been filed challenging the Notification dated 05.10.2017 issued by the Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) framing a Scheme of budgetary support under the GST Regime to the units located in States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim as well as the consequential circulars dated 27.11.2017, 30.11.2017 and 10.01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n amongst others declared all industrial activity in growth centers, integrate infrastructural development centers, export promotion and industrial parks, export processing zone, industrial estates and industrial areas as completely tax free zones for a period of 10 years. It was announced and promised by the Government of India that all industrial activities for such areas would be free from inter alia income tax, central excise for a period of 10 years from the date of commencement of production and also that the State Government would be moved for exemptions of sales tax, municipal tax and other such local taxes on industrial activity in the said areas. It was further stated in the aforesaid office memorandum dated 24th December, 1997 that the Ministry of Finance, Government of India, would be moved to amend the existing rules/notifications for giving effect to the decisions embodied in the Industrial Policy Resolution. Apart from exemption from inter alia, income tax and central excise duty, the Industrial Policy Resolution envisaged other different incentives and concessions like capital investment subsidy assistance in obtaining term loan and working capital and interest subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty exemption will be continued, on finished products made in the North Eastern Region, as was available in the NEIP, 1997. 9. It is submitted that being inspired and encouraged by the North East Industrial and Investment Promotion Policy (NEIIPP), 2007, the petitioner set up a new industrial unit at Industrial Growth Centre, Chaygaon, Vill. No- 2, Jambari in the District of Kamrup, Assam for manufacturing of nails, nut bolts, hinges and other hardware goods. The petitioner thereafter applied for registration under the NEIIPP, 2007 for availing the benefits of the different incentive schemes announced in the NEIIPP, 2007 and the General Manager, DICC, Kamrup accordingly vide certificate dated 01.02.2011 granted Certificate of Registration to the petitioner under the NEIIPP, 2007 bearing the registration number DICC/KAMRUP/ NEIIPP2007/01180/NU/2011 dated 01.02.2011. After the establishment of new industrial unit, the petitioner firm applied for registration under the District Industries & Commerce Centre, Kamrup and was accordingly granted certificate of issuance dated 12.04.2013 by the General Manager, DICC, Kamrup. 10. It is submitted on behalf of the petitioner that after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecame taxable under the GST Act and thereby the petitioners got itself registered under the GST Act and started collecting tax and making payment of the same. 12. The Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) thereafter vide Notification dated 05.10.2017 framed a Scheme of budgetary support under the GST Regime to the units located in States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim. The said Scheme was in pursuance to the decision of the Government of India to provide budgetary support to the existing eligible manufacturing units operating in the States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim under different Industrial Promotion Schemes of the Government of India, for a residual period for which each of the units were eligible. The new Scheme was offered, as a measure of goodwill, only to the units which were eligible for drawing benefits under the earlier excise duty exemption/refund schemes. In the said Scheme, it was provided that units which were eligible under the erstwhile Schemes and were in operation through exemption notifications issued by the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary support was laid down in Clause 5 of the said Scheme. It was provided in the said Scheme that sum total of (i) 58% of the Central tax paid through debit in the cash ledger account maintained by the unit in terms of sub-section(1) of section 49 the Central Goods and Services Act, 2017 after utilization of the Input tax credit of the Central Tax and Integrated Tax. (ii) 29% of the integrated tax paid through debit in the cash ledger account maintained by the unit in terms of section 20 of the Integrated Goods and Services Act, 2017 after utilization of the Input tax credit Tax of the Central Tax and Integrated Tax shall be the amount of budgetary support under the scheme for specified goods manufactured by the eligible unit. The manner of budgetary support is laid down in Clause 7 which is as under: "7. MANNER OF BUDGETARY SUPPORT 7.1 The manufacturer shall file an application for payment of budgetary support for the Tax paid in cash, other than the amount of Tax paid by utilization of Input Tax credit under the Input Tax Credit Rules, 2017, to the Assistant Commissioner or Deputy Commissioner of Central Taxes, as the case may be, by the 15th day of the succeeding month afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing exempted goods but were required to pay GST under the GST regime, the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Custom vide Circular dated 10.01.2019 confirmed that the Scheme of Scheme seeks to provide benefits to the eligible units for the residual period which were availing exemption under erstwhile exemption notifications issued under Central Excise regime and as such the benefit would not be available to units which were under threshold exemption or manufacturing exempted goods but are required to pay GST under the GST regime. 16. Before coming into force of the GST regime, the petitioners due to having turnover of less than 1.5 crores, which was the threshold limit, were not registered under the central excise law as was provided vide Notification No. 8/2003 dated 01.03.2003 and as such the petitioners were not collecting and paying taxes under the central excise law. The manufacturing units whose turnover was above the threshold limit were registered under the central excise law and were paying taxes and became eligible for refund under the NEIIPP, 2007 read with the Notification issued under Central Excise Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Central Excise Act were not required to be registered under the central excise law and after the issuance of the budgetary support scheme in the GST regime have become ineligible for benefits for the reason that the same were not registered under the erstwhile central excise law. If the same is allowed, small industries like that of the petitioner's will become uncompetitive in the market, which was neither the object nor the scheme of the NEIIPP, 2007. 18. In support of his contentions, the learned Sr. Counsel for the petitioners relied upon the following Judgments: Reasonable Classification-Article 14 (i) Budhan Choudhury Vs. State of Bihar, reported in AIR 1955 SC 191 (ii) Ram Krishna Dalmia Vs. S.R. Tendolkar, reported in AIR 1958 SC 538 (iii) Nagpur Improvement Trust Vs. Vithal Rao, reported in (1973) 1 SCC 500 (iv) E.P. Royappa Vs. State of Tamil Nadu, reported in (1974) 4 SCC 3 (v) Ameerunnissa Begum Vs Mahboob Begum, reported in (1953) SCR 404 (vi) Ramprasad Narain Sahi Vs. State of Bihar, reported in (1953) SCR 1129 (vii) State of U.P. Vs. Deepak Fertilizers & Petrochemical Corp Ltd., reported in (2007) 10 SCC 342 (viii) D.S. Nakara Vs. Union of India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n NER and other Himalayan States due to the change in Tax policy and structure. It is submitted that there was no relation between Central Excise Duty and GST. The GST council in it's wisdom had left it to the discretion of the Central and State Government to notify schemes of budgetary support to such units you may want to continue with such schemes. During the deliberation held between the concerned departments, it was proposed to Department for Promotion of Industry and Internal Trade (DPIIT) that it should provide budgetary support to eligible units for the residual period stipulated under the Scheme of NEIIPP-SPS by way of reimbursement of Goods and Service Tax limited to the Central Government Share of CGST and IGST retained after devolution of states. It is stated that only such industrial units which are currently availing area based exemption under the Central Excise Act will be eligible for financial incentives under the scheme for definite period not exceeding 10 years from the date of commencement of commercial production. It is stated that the scheme is for a residual period for which each of the units is eligible and this budgetary support is offered only as a measure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the following Judgments to buttress his submissions: Validity of Budgetary support scheme upheld (i) Hero Motocrop Ltd. Vs. Union of India (W.P.(C) No. 505/2022); Meaning of eligible industries (ii) State of Gujarat Vs Arcelor Mittal Nippon Steel India, reported in (2022) 6 SCC 459; Interpretation of taxing Statute (iii) State of Maharashtra Vs. Shri Vile Parle Kalvani Mandal & Ors., reported in (2022) 2 SCC 725 (iv) Krishi Upaj Mandi Samiti Vs. Comm. Of Central Excise & Service Tax, reported in (2022) 5 SCC 62 (v) Commissioner of Customs Vs Dilip Kumar & Co. (2018) 9 SCC 1 20. In rejoinder to the submissions of the respondents, the learned Senior Counsel for the petitioner submits that the said contentions of the Respondents are not tenable at all inasmuch as the Petitioners established their industrial units on the basis of the promises held out under the North East Industrial and Investment Promotion Policy (NEIIPP), 2007 and to give effect to the promises made in the said Policy, the Excise Notification No. 20/2007 dated 25.04.2007 was issued. Since the Petitioners are entitled to the benefits as per the Industrial Policy of 2007 read with notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in resolving the disputes raised in the present set of Writ Petitions. 23. It is submitted by the learned counsel for the petitioners that not only under the Doctrine of Promissory Estoppel but even under the Doctrine of Legitimate Expectation, the petitioners cannot be denied the benefits under the Budgetary Support Scheme on ground that the petitioners were not registered under the Central Excise Act, 1944 prior to 01.07.2017 as their total turnover of the industrial unit was below threshold limit and/or that the industrial unit was manufacturing exempted goods and as such respondent authorities are liable to be directed to extend the benefits of the Scheme to the petitioner's industrial unit. 24. The learned counsels for the parties have been heard. Pleadings on records have been perused. Judgments cited at the bar also been carefully perused. 25. It is argued on behalf of the petitioner that the budgetary support scheme was made applicable in terms of the definition prescribed at Clause 4.1 of the Office Memorandum dated 05.10.2017 to those units which had been availing the benefit of the NEIIPP policy. Although the petitioner units were eligible under the NEIIPP, but the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and paying taxes under the central excise law. Other manufacturing units whose turnovers were above the threshold limit of 1.5 crores were registered under central excise law and were paying taxes and consequently became eligible for a refund under NEIIPP 2007 read with the notification issued under Central Excise Act. However, after introduction of the GST those units like the petitioners which were earlier not required to pay excise duty by virtue of their turnover being below the threshold limit of 1.5 crores, became liable to pay GST. These units who were not paying central excise duties although were otherwise eligible to avail the benefits granted under the NEIIPP, but these benefits were not availed of for the simple reason that under the existing law then which is the central excise and Salt Act 1944, these units were not called upon to pay central excise duty as per the provisions of the erstwhile central excise law as their turnover fell below the threshold limit of 1.5 crores. 26. This, however, did not mean that the petitioners were otherwise not eligible for claiming benefits. According to the petitioners, they had fulfilled all the necessary requirements and were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... EIIPP. The very scheme of the budgetary support was brought in to provide a relief to those industries who were availing the benefits under the area based exemption schemes like the NEIIPP. 28. Consequently, the respondent authorities could not have arbitrarily created a class within a class by permitting budgetary support scheme to be provided only to those industries who were willing benefits under the area based exemption schemes and who were paying Central excise duty under the erstwhile Central Excise law. The essence of the budgetary scheme which has been brought out is to provide budgetary support to all industries who were availing benefits under the area based exemption schemes like the NEIIPP. If that is the avowed policy of the Government to provide budgetary support to all those units or industries who are availing area based exemption schemes under the NEIIPP, the exclusion of the petitioners and/or rejection of their claims seeking budgetary support solely on the premise that they were either not registered under the central excise law or their turnover fell below the threshold limit of 1.5 crores is opposed to the policy brought in by the Government of India and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore the writ petitions should be dismissed. At the outset. Mr. Keyal submits that the scheme of budgetary support dated 5.10.2017 was put to challenge before the Delhi High Court in WP(C) No. 505/2022 (Hero Motocrop Ltd. Vs. Union of India). This writ petition was dismissed by judgment and order dated 02.03.2020. The SLP filed against the Judgment was also dismissed by the Apex Court on 17.10.2022 in Civil Appeal no.7405/2022 reported in (2023) 1 SCC 386. Mr. Keyal submits that in view of the authoritative finding by the Apex court negating the challenges made to the budgetary scheme, the entire matter actually stands covered by the Apex Court Judgment. In the said writ petitions, the very budgetary scheme was challenged in its present form and that being negated and the budgetary scheme being upheld, the arguments made by the learned counsel for the petitioner need not be specifically dealt with and the issue stands covered by the Judgment and Order of the Apex court as the budgetary scheme itself has been upload. Mr. Keyal submits that under clause 2.3 of the scheme, although a reference is made to the notification number 20/2007- CE dated 25.04.2007, but in clause 4, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of other similarly situated units. Therefore, the contention of the respondents that in view of the authoritative finding of the Apex court in Hero Motocorp(Supra), the matter does not require any further consideration inasmuch as the Apex court has upheld the validity of the budgetary scheme, is thoroughly misplaced and not applicable to the issues raised by the present petitioners in the present proceedings. The fact that the Apex Court had upheld the validity of the budgetary scheme is all the more reason why the petitioners should also be granted and extended the benefit of the budgetary scheme. The grievances of the petitioners is in respect of the exclusion of the petitioner units from the benefit of being granted the budgetary support scheme by creating an artificial classification that the benefit is to be extended to only those industries who are eligible and were paying central excess duties and claiming exemptions. 32. In so far as the contentions of the respondents that the exemption notification needs to be interpreted strictly, the petitioners submit that this argument is not applicable in the facts and circumstances of this case as the challenge in the present pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside and quashed, and the respondents be directed to extend the benefit of budgetary scheme to the petitioners. 33. On the basis of the contentions made before this Court, the writ petitioners can be broadly classified into two groups:- a) One category are those units which were not paying central excise Duty because their annual turnover was below the threshold limit of rupees 1.5 crores per annum. b) The second category comprises of the writ petitioners who are manufacturing exempted goods which were exempted from the duty under the Central Excise and Salt Act 1944. Both these groups were therefore not required to be registered under the Central Excise and Salt Act 1944. With effect from 01.7.2017, the Goods and Services Act having been enacted, the items which are manufactured by both these categories of units are taxable under the GST laws and therefore they are now required to pay the GST. The respondent authorities did not consider the cases of these petitioners for being given the benefit of budgetary support scheme on the ground that they were not registered under the Central Excise law prior to the GST act. 34. In the Chart extracted at Paragraph-2 above, the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation also contained the particulars of the various integrated infrastructure development centers and growth centers, export promotion Industrial Park, Industrial estates, industrial area, commercial estate for the various states of the Northeastern Region including the State of Assam. The procedure prescribed for claiming the exemption is detailed in clause 2 of the said notification. 36. This was followed by another Notification being notification number 33/1999-CE dated 08.07.1999. This notification was in respect of the goods of the specified newly expanded units in the states which are exempt from the basic and additional duties equivalent to the duty paid by the manufacturer in respect of the units/factories in the Northeastern region. Under the said Notification, the goods specified in the schedule were exempted from payment of basic and additional duties. The Government of India thereafter by Office Memorandum dated 01.04.2007 approved another package of fiscal incentives and other concessions for the Northeast region, namely the Northeast Industrial Investment promotion policy NEIIPP, 2007 with effect from 01.04.2007. The said policy inter alia also included excise duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were not required to pay central excise duty under the statute either because the manufactured goods were exempted from excise duty or their total turnover fell below the threshold limit of 1.5 crores. However, post introduction of GST, all these items which were manufactured by the petitioner units became taxable under GST and they were not exempted on that basis or on the basis of their turnover falling below 1.5 crores. However, their claim for the benefit of budgetary financial support was clarified by the government by notification dated 10.01.2019 whereby the budgetary support scheme was extended only to those eligible units for the residual period for which they were availing exemptions under the erstwhile exemption notification issued under the Central Excise Laws and statutes. This clarification was issued by circular number 116/15/2017-CX-3 dated 10.01.2019. It is this decision of the respondents which is being assailed in the present proceedings whereby the petitioner units were excluded from being conferred the benefit of the budgetary support scheme. 38. It is necessary to refer to the Notification and the Circular which have given rise to the controversy which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mir- Notification nos. 56/2002-CE dated 14.11.2002, 57/2002-CE dated 14.11.2002 and 01/2010-CE dated 06.02.2010 as amended from time to time; 2.2 Himachal Pradesh & Uttarakhand- Notification nos. 49/2003-CE dated 10.06.2003 and 50/2003-CE dated 10.06.2003 as amended from time to time; 2.3 North East States including Sikkim- Notification no 20/2007-CE dated 25.04.2007 as amended from time to time. 3. SHORT TITLE AND COMMENCEMENT 3.1 The scheme shall be called Scheme of Budgetary Support under Goods and Services Tax (GST) Regime to the units located in State of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North Eastern States including Sikkim. The said Scheme shall come into operation w.e.f. 01.07.2017 for an eligible unit (as defined in para 4.1) and shall remain in operation for residual period (as defined in para 4.3) for each of the eligible unit in respect of specified goods (as defined in para 4.2 ). The overall scheme shall be valid upto 30.06.2027. 3.2 OBJECTIVE: The GST Council in its meeting held on 30.09.2016 had noted that exemption from payment of indirect tax under any existing tax incentive scheme of Central or State Governments shall not continue und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aph 2, during which the eligible unit would have been eligible to avail exemption for the specified goods. The documentary evidence regarding date of commercial production shall be submitted in terms of para 5.7. 5. DETERMINATION OF THE AMOUNT OF BUDGETARY SUPPORT 5.1 The amount of budgetary support under the scheme for specified goods manufactured by the eligible unit shall be sum total of - (i) 58% of the Central tax paid through debit in the cash ledger account maintained by the unit in terms of sub- section (1) of section 49 the Central Goods and Services Act,2017 after utilization of the Input tax credit of the Central Tax and Integrated Tax. (ii) 29% of the integrated tax paid through debit in the cash ledger account maintained by the unit in terms of section 20 of the Integrated Goods and Services Act, 2017 after utilization of the Input tax credit Tax of the Central Tax and Integrated Tax. Provided where inputs are procured from a registered person operating under the Composition Scheme under Section 10 of the Central Goods and Services Act, 2017 the amount i.e. sum total of (i) & (ii) above shall be reduced by the same percentage as is the percentage value of inp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -initio. The units will have to declare total procurement of inputs from unregistered suppliers and from suppliers working under Composition Scheme under CGST Act, 2017. 5.6 The grant of budgetary support under the scheme shall be subject to compliance of provisions relating to any other law in force. 5.7 The manufacturer applying for benefit under this scheme for the first time shall also file the following documents: (a) the copy of the option filed by the manufacturer with the jurisdictional Deputy Commissioner/ Assistant Commissioner of Central Excise officer at the relevant point of time, for availing the exemption notification issued by the Department of Revenue; (b) document issued by the concerned Director of Industries evidencing the commencement of commercial production (c) the copy of last monthly/quarterly return for production and removal of goods under exemption notification of the Department of Revenue. (d) An Affidavit-cum-indemnity bond, as per Annexure-A, to be submitted on one time basis, binding itself to pay the amount repayable under para 9 below. Any other document evidencing the details required in clause (a) to (c) may be accepted with the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to receipt of inputs, input tax credit involved on the inputs or capital goods received by the eligible unit and quantity of specified goods manufactured by the eligible unit vis-a-vis the inputs, input tax credit availed by the registrant under the given GSTIN. 5.9.2 Under GST, one business entity having multiple business premises would generally have one registration in a State and it may so happen that only one of them (eligible unit) was operating under Area Based Exemption Scheme. In such situations where inputs are received from another business premises of (supplying unit) of the same registrant (GSTIN) by, the details of input tax credit of Central Tax or Integrated Tax availed by the supplying unit for supplies to the eligible unit shall also be submitted duly certified by the Chartered Accountant. The jurisdictional Deputy/Assistant Commissioner in such cases shall sanction the reimbursement of the budgetary support after reducing input tax credit relatable to inputs used by the supplying unit. 6. INSPECTION OF THE ELIGIBLE UNIT 6.1 The Budgetary Support under the Scheme shall be allowed to an eligible unit subject to an inspection by a team constituted by DIPP for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort shall be made by the eligible unit after the payment of CGST/IGST has been made for the quarter to which the claim relates, in cash in respect of specified goods after utilization of Input Tax credit, if any. 8.3 The sanctioning authority (AC/DC) with the approval of the Commissioner may call for additional information (inclusive but not limited to past data on trends of production and removal of goods) to verify the correctness of various factors of production such as consumption of principal inputs, consumption of electricity and decide on the basis of the same, if the quantum of supply have been correctly declared. 8.4 Special audit by the Chartered Accountant/Cost Accountant may be undertaken for units selected based on the risk parameters identified by CBEC in order to verify correctness of declared production capacity and production or overvaluation of supplies. Such special audit shall be undertaken only with the approval of the Commissioner, CGST. 8.5 The list of sanctions for payment, on the basis of amount sanctioned by the jurisdictional Deputy Commissioner or Assistant Commissioner of the Central Tax shall be forwarded by the authorised officer of the jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke required legal action and send a certificate specifying the amount due from the unit to the concerned District Magistrate/ Deputy Commissioner of the district to recover that amount, as if it were arrears of land revenue 10 Residual issues related to the Scheme arising subsequently shall be considered by DIPP, Ministry of Commerce & Industry whose decision shall be final and binding. 11. SAVING CLAUSE 11.1 Upon cessation of the Scheme, the unpaid claims shall be settled in accordance with the provisions of the Scheme while the recovery and dispute resolution mechanisms shall continue to be in force. Sd- (RAVINDER) Joint Secretary to the Government of India (ii) The Circular dated 10th January, 2019 by which the review of the progress of implementation of budgetary scheme is also extracted below: "Circular No, 1068/1/2019-CX F .No: 116/1512017-CX-3 Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs New Delhi, dated 10th January, 2019 To The Principal Chief Commissioner / Chief Commissioner of CGST & Central Excise (Chandigarh, Meerut, Koikata and Shillong zone) DG, GSTI. Subject: Review of progress of implement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... represented that where the entities are having multiple operations in the state on account of there being single return for all the transactions, the credit of one gets off-set against the other and the budgetary support is not being allowed over and above the cash paid by them. 4. Under the scheme, a provision of certificate by the Chartered accountant has already been provided for. In addition, an assesee also has an option to register its operations other than eligible unit as a separate business vertical having a unique GSTIN. The definition of business vertical is proposed to be omitted in terms of CGST (amendment) Act, 2018 from the date to be notified in this regard. Therefore after operationalization of the said act the eligible unit may maintain its existing GSTIN and for other operations separate GSTIN may be obtained. Such a benefit should be available from 1st day of commencement of a quarter as per the scheme of budgetary support. Cases where the finding of sanctioning authority differs from inspection team: There is no provision in the scheme as to whose views will prevail in case the sanctioning authority differs with the findings of the inspection team 5. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having jurisdiction over the 'Principal Place of Business'. In some cases location of the eligible unit and principal place of unit is different. It needs to be clarified as to which of the two officers will verify the claims. 10. The system being followed under the GST regime will be applicable mutatis mutandis and the Central Tax officer having jurisdiction over the 'Principal Place of Business' shall sanction the refund claim. Such officer is the jurisdictional officer in respect of eligible unit located at any other place in the State as is the position as per GST law. While conducting verification of multi locational assesse covered under the same registration number, the jurisdictional AC/DC may take inputs from other jurisdictions, wherever necessary. It was pointed out that there is no access to Electronic Credit Ledger and Electronic cash ledger for verification of the claim by the field officers. This leads to difficulty in verifications. 11. Field officers presently have access to Electronic Credit Ledger and Electronic cash ledger. There is no clarity w.r.t requirement of pre-audit or post -audit for the budgetary support amount sanctioned. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the registration of the Central Excise Act shall not arise and thereby provided for the requirement of only GST registration number in respect of such industrial units. 40. The Petitioners before this Hon'ble Court stand on the same footing as that of the eligible units situated in the State of Himachal Pradesh and Uttarakhand inasmuch as the Petitioners were not required to pay Central Excise Duty under the Central Excise Act as the items manufactured by them were either exempted under the Central Excise Act or the total turnover were below threshold limit. Under such circumstances, denial of the benefit of the Budgetary Support Scheme to the Petitioners only on the ground that they were not having the Central Excise registration prior to 01.07.2017 is assailed in the present proceedings as being absolutely illegal and thereby requiring the industrial units to comply with the provisions which are not envisaged under law as per the Central Excise Act. Thereby the impugned clarification provided that the benefit of the Budgetary Support Scheme shall not be available to the industrial units who were under the threshold exemption or manufacturing exempted goods, but to require them t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arely applicable in the case of the Petitioners and thereby the Petitioners cannot be denied the benefit of the Budgetary Support Scheme on the ground that the Petitioners have not having Central Excise Registration prior to 01.07.2017. 42. There were certain industrial units which were established prior to the introduction of GST w.e.f 01.07.2017 and since after availing the CENVAT credit no amount was payable through account PLA, the said industrial units had not paid any amount through account PLA and consequently no refund was claimed and disbursed as per notification no. 20/2007 and those industries were held to be ineligible for benefits under the budgetary support scheme on the ground that the said industrial units were not availing excise exemptions as per notification no. 20/2007 prior to the introduction of GST w.e.f 01.07.2017. A number of writ petitions were filed before this Hon'ble Court challenging the said decision of the Department in holding the said industrial units to be ineligible on the ground that the said industrial units were not availing excise exemptions as per notification no. 20/2007 prior to the introduction of GST w.e.f 01.07.2017. During the pendenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit after introduction of GST when the goods manufactured by the petitioner have become taxable under GST. 44. The classification made between an industrial unit registered under Central Excise Act prior to 01.07.2017 and other industrial units which was not required to be registered under the Central Excise Act because the total turnover of the said industrial unit was below the threshold limit and/ or were manufacturing goods that were exempted under the Central Excise Act, though such industrial units were established in pursuance to the promises and assurances made under NEIIPP, 2007 and were entitled to all the benefits and concessions covered under Notification No. 20/2007 dated 25.04.2007, is absolutely irrational and has no nexus with the object sought to be achieved. The said Scheme of budgetary support has treated the similarly situated industrial units in two different manner by making an unreasonable classification and thereby discriminating between two types of industrial units similarly situated. Such discrimination made by the Government is hostile discrimination inasmuch as equals have been treated unequally and thereby such classification made to exclude the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds; (d) that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be concieved existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce: in fact the latter comprehends the former. Both are inhibited by Articles 14 and 16. 50. In State of UP Vs. Deepak Fertilizers & Petrochemical Corp. Ltd, reported in (2007) 10 SCC 342. In this matter the Apex Court was examining the challenge in respect of the denial of exemption in respect of NPK 23:23:0 fertilizer which was of the same category as that of other fertilizers which were included in the exemption list. The Apex Court held that this denial was impermissible and NPK 23:23:0 fertilizer was directed to be given exemption in respect of the relevant period. The Apex Court held that the reasonableness of this classification must be examined on the basis, that when the object of the taxing provision is not to tax the sale of certain chemical fertilisers included in the list, which clearly points out that all the fertilisers with the similar compositions must be included without excluding any other chemical fertiliser which has the same elements and composition. 51. In D.S. Nakara Vs. Union of India, reported in (1983) 1 SCC 305, in this celebrated case, the Constitution Bench of the Apex Court was held that the fundamental principle is that Article 14 forbids class leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellants filed the writ petitions in the High Court of Madras challenging the levy at 30% on arishtams and asavas, being violative of Article 14 as well as Article 19(1)(g) of the Constitution. The High Court dismissed the writ petition by observing that the imposition of the rate of 30% on the sale of arishtams and asavas must be regarded principally as a measure for raising revenue, and repelled the argument that the rate of tax was discriminatory or that Article 19(1)(g) was infringed." 55. In Associated Cement Companies Ltd. (Supra), the Apex Court noted the facts laid down in Ayurveda Pharmacy (Supra), and after noticing the same at p. 611 of the decision in Associated Cement (Supra), the Apex Court observed as under: "29. ... Reversing the decision it was held by this Court that the two preparations, arishtams and asavas, were medicinal preparations, and even though they contained a high alcohol content, so long as they continue to be identified as medicinal preparations they must be treated, for the purposes of the sales tax law, in like manner as medicinal preparations generally, including those containing a lower percentage of alcohol." 56. In Amarendra Kumar Moha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ituted by an exact or scientific exclusion or inclusion of persons or things. The courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary. (4) The principle underlying the guarantee of Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject-matter of the legislation their position is substantially the same. (5) By the process of classification, the State has the power of determining who should be regarded as a class for purposes of legislation and in relation to a law enacted on a particular subject. This power, no doubt, in some degree is likely to produce some inequality; but if a law deals w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of legislation in accordance with the objective indicated in the statute. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective of the legislature, its action can be annulled as offending against the equal protection clause. On the other hand, if the statute itself does not disclose a definite policy or objective and it confers authority on another to make selection at its pleasure, the statute would be held on the face of it to be discriminatory, irrespective of the way in which it is applied. (10) Whether a law conferring discretionary powers on an administrative authority is constitutionally valid or not should not be determined on the assumption that such authority will act in an arbitrary manner in exercising the discretion committed to it. Abuse of power given by law does occur; but the validity of the law cannot be contested because of such an apprehension. Discretionary power is not necessarily a discriminatory power. (11) Classification necessarily implies the making of a distinction or discrimination between persons classified and those who are not members of that class. It is the essence of a clas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Chowdhury [Charanjit Lal Chowdhury v. Union of India, 1950 SCC 833 : AIR 1951 SC 41 : 1950 SCR 869] , F.N. Balsara [State of Bombay v. F.N. Balsara, 1951 SCC 860 : AIR 1951 SC 318 : 1951 Cri LJ 1361 : 1951 SCR 682] , Anwar Ali Sarkar [State of W.B. v. Anwar Ali Sarkar, (1952) 1 SCC 1 : AIR 1952 SC 75 : 1952 Cri LJ 510 : 1952 SCR 284] , Kathi Raning Rawat [Kathi Raning Rawat v. State of Saurashtra, (1952) 1 SCC 215 : AIR 1952 SC 123 : 1952 Cri LJ 805 : 1952 SCR 435] , Lachmandas Kewalram Ahuja [Lachmandas Kewalram Ahuja v. State of Bombay, (1952) 1 SCC 726 : AIR 1952 SC 235 : 1952 Cri LJ 1167 : 1952 SCR 710] , Syed Qasim Razvi [Syed Qasim Razvi v. State of Hyderabad, AIR 1953 SC 156 : 1953 Cri LJ 862 : 1953 SCR 589] , Habeeb Mohamed [Habeeb Mohamed v. State of Hyderabad, AIR 1953 SC 287 : 1953 Cri LJ 1158 : 1953 SCR 661] , Kedar Nath Bajoria [Kedar Nath Bajoria v. State of W.B., AIR 1953 SC 404 : 1953 Cri LJ 1621 : 1954 SCR 30] and innovated to even associate the members of this Court to contribute their V.M. Syed Mohammad & Co. [V.M. Syed Mohammad & Co. v. State of Andhra, AIR 1954 SC 314 : 1954 SCR 1117] Most of the above decisions were considered in Budhan Choudhry [Budhan Cho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation." 42. In Ram Krishna Dalmia [Ram Krishna Dalmia v. S.R. Tendolkar, AIR 1958 SC 538 : 1959 SCR 279] , it was emphasised that: (AIR p. 548, para 11) "11. ... the above principles will have to be constantly borne in mind by the court when it is called upon to adjudge the constitutionality of any particular law attacked as discriminatory and violative of the equal protection of laws." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he matter of the selection or classification. After such scrutiny the court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situate and that, therefore, the discrimination is inherent in the statute itself. In such a case the court will strike down both the law as well as the executive action taken under such law.... (iv) A statute may not make a classification of the persons or things for the purpose of applying its provisions and may leave it to the discretion of the Government to select and classify the persons or things to whom its provisions are to apply but may at the same time lay down a policy or principle for the guidance of the exercise of discretion by the Government in the matter of such selection or classification.... (v) A statute may not make a classification of the persons or things to whom their provisions are intended to apply and leave it to the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ti Pershad v. UT of Delhi, AIR 1961 SC 1602 : (1962) 2 SCR 125] and Shri Ambica Mills Ltd. [State of Gujarat v. Shri Ambica Mills Ltd., (1974) 4 SCC 656 : 1974 SCC (L&S) 381 : (1974) 3 SCR 760], in the majority judgment the then Chief Justice Y.V. Chandrachud, inter alia, exposited the following propositions relating to Article 14: (Special Courts Bill, 1978, In re [(1979) 1 SCC 380] , SCC pp. 424-26, para 72) "(1)*** (2) The State, in the exercise of its governmental power, has of necessity to make laws operating differently on different groups or classes of persons within its territory to attain particular ends in giving effect to its policies, and it must possess for that purpose large powers of distinguishing and classifying persons or things to be subjected to such laws. (3) The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e object of the Act are distinct things and what is necessary is that there must be a nexus between them. In short, while Article 14 forbids class discrimination by conferring privileges or imposing liabilities upon persons arbitrarily selected out of a large number of other persons similarly situated in relation to the privileges sought to be conferred or the liabilities proposed to be imposed, it does not forbid classification for the purpose of legislation, provided such classification is not arbitrary in the sense abovementioned. (9) If the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body of administrators or officers to make selective application of the law to certain classes or groups of persons, the statute itself cannot be condemned as a piece of discriminatory legislation. In such cases, the power given to the executive body would import a duty on it to classify the subject-matter of legislation in accordance with the objective indicated in the statute. If the administrative body proceeds to classify persons or things on a basis which has no rational relation to the objective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion but if it is proved that the conditions laid down are entirely unreasonable and absolutely arbitrary, then the provisions will have to be struck down. With regard to due process clause in the American Constitution and Article 14 of our Constitution, this Court referred to Anwar Ali Sarkar [State of W.B. v. Anwar Ali Sarkar, (1952) 1 SCC 1 : AIR 1952 SC 75 : 1952 Cri LJ 510 : 1952 SCR 284] , and observed that the due process clause in the American Constitution could not apply to our Constitution. The Court also referred to A.S. Krishna [A.S. Krishna v. State of Madras, AIR 1957 SC 297 : 1957 Cri LJ 409 : 1957 SCR 399] wherein Venkatarama Ayyar, J. observed: (AIR p. 303, para 13) "13. ... The law would thus appear to be based on the due process clause, and it is extremely doubtful whether it can have application under our Constitution." 47. In D.S. Nakara [D.S. Nakara v. Union of India, (1983) 1 SCC 305 : 1983 SCC (L&S) 145] , the Constitution Bench of this Court had an occasion to consider the scope, content and meaning of Article 14. The Court referred to earlier decisions of this Court and in para 15, the Court observed: (SCC pp. 317-18) "15. Thus the fundamental princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are: (i) discrimination, based on an impermissible or invalid classification, and (ii) excessive delegation of powers; conferment of uncanalised and unguided powers on the executive, whether in the form of delegated legislation or by way of conferment of authority to pass administrative orders-if such conferment is without any guidance, control or checks, it is violative of Article 14 of the Constitution. The Court also needs to be mindful that a legislation does not become unconstitutional merely because there is another view or because another method may be considered to be as good or even more effective, like any issue of social, or even economic policy. It is well settled that the courts do not substitute their views on what the policy is. 60. After elaborate discussion the Apex Court held that the Constitution permits the State to determine, by the process of classification, what should be regarded as a class for purposes of legislation and in relation to law enacted on a particular subject. There is bound to be some degree of inequality when there is segregation of one class from the other. However, such segregation must be rational and not artificial or evasive. In oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al for seven years from the period indicated. The Apex Court held that the policy has to be read as a whole and harmonious construction to be applied. The notifications denying exemption to those eligible under the state's industrial policy, which was held to be bad by the High Court was upheld by the Apex Court. The notification issued by the State Government in exercise of powers under section 7 of the Bihar Finance Act, if found to be a repugnant to the industrial policy declared in a Government resolution, then the said notification must be held to be bad to that extent. The Apex Court held that the High Court was fully justified in striking down that part of the notification which is a repugnant to the said relevant clause in the industrial policy. 64. In Motilal Padampat Sugar Mills Co. Ltd. Vs. State of U.P., reported in (1979) 2 SCC 409, the Apex Court held that promissory estoppel also applies to Government and State in whichever capacity it acts. However, the Government will not be bound if it can show that equity lies in its favour. The Apex Court held that there is a heavy responsibility on the government in such a situation to project the relevant facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order would be deemed to have been made under the provision enabling the making of it. The Apex Court were cited in support of the stand of the appellants therein that in similar circumstances, the plea of estoppel can be and has been applied and the leading authority on this point is the case of M.P. Sugar Mills [Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409 : 1979 SCC (Tax) 144]. On the other hand, reliance has been placed on behalf of the State on a judgment of this Court in Bakul Cashew Co. v. STO [(1986) 2 SCC 365 : 1986 SCC (Tax) 385] . In Bakul Cashew Co. case [(1986) 2 SCC 365 : 1986 SCC (Tax) 385] this Court found that there was no clear material to show any definite or certain promise had been made by the Minister to the concerned persons and there was no clear material also in support of the stand that the parties had altered their position by acting upon the representations and suffered any prejudice. On facts, therefore, no case for raising the plea of estoppel was held to have been made out. This Court proceeded on the footing that the notification granting exemption retrospectively was not in accordance with Section 10 of the State Sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication. (See West v. Gwynne [(1911) 2 Ch 1 : 104 LT 759 (CA)] .) Although there lies a distinction between vested rights and accrued rights as by reason of a delegated legislation, a right cannot be taken away. The amendments carried out in 1996 as also the subsequent amendments made prior to 2001, could not, thus, have taken away the rights of the appellant with retrospective effect. 70. In State of Punjab Vs. Nestle India Ltd and Anr, reported in (2004) 6 SCC 465, the Apex Court reiterated the well-known preconditions for the operations of the doctrine: (1) a clear and unequivocal promise knowing and intending that it would be acted upon by the promisee; (2) such acting upon the promise by the promisee so that it would be inequitable to allow the promisor to go back on the promise. The doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. 71. In Kasinka Trading and Anr. Vs. Union of India and Anr., reported in (1995) 1 SCC 274, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal alertness at high altitude and hazardous and hostile topography along the Line of Control where a Brigade Commander is required to serve for effective command and control. This was true even about Battalion Commanders who are required to move during operations with their units for effective command and control. The Committee, therefore, took the view that the officers of Combat Arms should assume command at the age of 36-37 years by which time they would have attained the requisite experience and the ability to finish their command tenure before attaining 40 years of age. The Apex Court held that the plea of legitimate expectation does not appear to be of any assistance to the respondents for two precise reasons. Firstly, there is no real basis for the respondents to argue that the Government of India had either by representation or by any sustained course of conduct created an impression in the minds of the respondents that any additional vacancies created to the lower age profile of commanding officers serving in Combat Arms or Combat Arms Support shall also benefit those serving in the Service streams of the Army. There is no factual basis laid by the respondents in the plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and its instrumentalities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrariness in a State action, it is, therefore, necessary to consider and give due weight to the reasonable or legitimate expectations of the persons likely to be affected by the decision or else that unfairness in the exercise of the power may amount to an abuse or excess of power apart from affecting the bona fides of the decision in a given case. 75. Noida Enterprise Association Vs. Noida and Ors, reported in (2011) 6 SCC 508, the Apex Court held that State actions are required to be non- arbitrary and justified on the touchstone of Article 14 of the Constitution. Action of the State or its instrumentality must be in conformity with some principle which meets the test of reason and relevance. Functioning of a "democratic form of Government demands equality and absence of arbitrariness and discrimination". The rule of law prohibits arbitrary action and commands the authority concerned to act in accordance with law. Every action of the State or its instrumentalities should neither be suggestive of discrimination, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndly, the High Court also held that the question of now exempting the appellants from building tax would not arise as Section 3A had itself been omitted with effect from 01.03.1993. 77. The Apex Court while examining the matter and several other earlier judgments of the Apex Court held that the doctrine of promissory estoppel is a doctrine whose foundation is that an unconscionable departure by one party from the subject-matter of an assumption which may be of fact or law, present or future, and which has been adopted by the other party as the basis of some course of conduct, act or omission, should not be allowed to pass muster. And the relief to be given in cases involving the doctrine of promissory estoppels contains a degree of flexibility which would ultimately render justice to the aggrieved party. The entire basis of this doctrine has been well put in a judgment of the Australian High Court in Commonwealth of Australia v. Verwayen [Commonwealth of Australia v. Verwayen, (1990) 170 CLR 394 (Aust)] , by Deane, J. in the following words: "1. While the ordinary operation of estoppel by conduct is between parties to litigation, it is a doctrine of substantive law, the factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted. In cases falling within Category (a), a critical consideration will commonly be that the allegedly estopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption. Particularly in cases falling within Category (b), actual belief in the correctness of the fact or state of affairs assumed may not be necessary. Obviously, the facts of a particular case may be such that it falls within more than one of the above categories. 5. The assumption may be of fact or law, present or future. That is to say, it may be about the present or future existence of a fact or state of affairs (including the state of the law or the existence of a legal right, interest or relationship or the content of future conduct). 6. The doctrine should be seen as a unified one which operates consistently in both law and equity. In that regard, "equitable estoppel" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... future. And secondly that the relief that may be given on the facts of a given case is flexible enough to remedy injustice wherever it is found. And this would include the relief of acting on the basis that a future assumption either as to fact or law will be deemed to have taken place so as to afford relief to the wronged party. The Apex Court thereafter held that the non issue of the notification under the relevant laws by the Government of Kerala was a ministerial Act. This ministerial Act of non issue of the notification cannot possibly stand in the way of the appellants therein getting relief under the said doctrine as it would be unconscionable on the part of the government to get away without fulfilling its promise. On the facts the Apex Court held that no other consideration of overwhelming public interest exists in order that the government would be justified in resiling from its promise. The Apex Court therefore moulded the relief on the facts of the case that for the period that Section 3A was in force, no building tax is payable by the appellants. (emphasis supplied) 79. After examining the various Judgments earlier rendered by the Apex Court, it was held that it is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 81. Under such circumstances, perhaps till any further or new policies are undertaken or brought in, the government has decided to extend the benefit of budgetary support scheme to those industries with the condition that they should be registered under Central Excise Law and should have paid the Central Excise Duty and thereafter claimed the exemption as provided under the scheme. A deeper look into the policy adopted for grant of budgetary support scheme while excluding the units like the petitioner units from such benefit, it is seen that the only basis for providing the budgetary support is the payment of Central Excise Duty by the units prior to the GST regime. What is not in dispute or what has not been disputed by the respondents in the present proceedings is that the petitioner units also had the eligibility to claim the benefits and the exemptions offered under the NEIIPP scheme. These industries were all set up pursuant to the NEIIPP being brought in by the Government of India and they all satisfied the eligibility criteria required for availing the benefits. They were given the eligibility certificates by the competent components under the industrial policy. They sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scheme to be available to only those industries who have been paying Central Excise Duty and claiming exemptions. Viewed from the context of the present GST regime, such a classification does not appear to have a reasonable nexus with the object sought to be achieved. It is clear from the pleadings as well as from the submissions made by the respective counsels as well as by the notifications available on the pleadings issued by the Central Government that this budgetary support scheme is a scheme to provide some financial benefits to those industries who were eligible to claim the benefits under the Industrial Policy. No reference has been made to the provisions of the CGST, SGST or IGST Act and the Rules framed thereunder by the respondent authorities to submit that there is any provision prescribed under the statute which permits determination or quantification of the Excise Duty component within the GST tax payable. No such mechanism is seen from the statutes. The forms appended to the Circular dated 27.01.2017 shows that particulars of Central Tax, State/U.T. Tax, Integrated Tax, Cess paid are required to be submitted by the units claiming budgetary support. A perusal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while the Central Excise Act, is absolutely based on fiction. Such artificial and imaginary classification brought out by the Union of India by the respondents to exclude the present petitioners from being extended the benefit of the budgetary support scheme cannot be countenanced in the absence of any explanation as to how it will seek to achieve the object for which the budgetary scheme has been introduced. 83. As discussed above, as is seen from the recital of the notification of the budgetary support scheme, it is to provide financial support to those industries who were existing eligible manufacturing units operating in the various states mentioned including the North Eastern States under the industrial policies announced. The petitioner units were also availing benefits under the Industrial Policy and under the erstwhile Central Excise Law but were however either exempted from payment of central excise duty by virtue of their turnover being below threshold limit of 1.5 crores per annum or that the items which they had manufactured were already exempted. No materials have been placed before the Court by the respondents to suggest that because the petitioner units were not req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86. Under such circumstances when the avowed object of the budgetary support scheme is to provide financial support to those industries who were eligible to avail benefits under the NEIIPP, the exclusion of the petitioner units on the classification that they did not pay Central Excise Duty either because their annual turnovers were below the threshold limit of 1.5 crores or that they had produced items which were already exempted is based on fiction and cannot be permitted to be a ground to deny the benefits of budgetary support scheme. Such classification cannot be held to be a reasonable classification as it fails to achieve the object for which the classification is made, namely providing financial support to those industries availing benefits under the NEIIPP. The said classification of the respondent authorities is therefore arbitrary and is hit by Article 14 of the Constitution of India and the same is, therefore, held to be bad in law. 87. The respondent authorities are therefore directed to examine the individual claims of the petitioners and if they are found to have satisfied the criteria and the eligibility laid down under the NEIIPP, the benefits of budgetary suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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