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2023 (1) TMI 142 - HC - GSTEligible unit for budgetary support - doctrine of promissory estoppel and legitimate expectation - sunset clause prescribed under Excise Exemption Notification, giving an option to existing units to undertake substantial expansion at any date without any limitation - Constitutional Validity of N/N. 10(1)2017-DBA-II/NER dated 5th October 2017 and Notification/SRO 519 and 521 dated 21st December 2017 read with Circular No.1060/9/2017-CX dated 27th November 2017 - HELD THAT - From perusal of impugned Order dated 28th August 2018, it is vivid that petitioner-unit is not Eligible Unit , to be given the benefit that it exhorts to be bestowed under the auspices of the Scheme of 2017. It is clearly mentioned in the impugned order dated 28th August 2018 that petitioner-unit, working under and in terms of Notification of 2002, being Notification no.56/2002, was entitled to the benefits percolating in terms thereof, however, till 9th February 2017 - And insofar as benefits as available under and in terms of Notification/Scheme of 2017 are concerned, petitioner-unit is not entitled to any benefit thereunder as petitioner-unit was not availing any benefit immediately before and/or on 1st day of July 2017. Not only this, petitioner-unit has been unambiguously shown to have commenced its commercial production as on 25th September 2017 and,as such, petitioner-unit is not squarely qualified and covered to have had the benefits as are emanating from the Notification/Scheme of 2017. In the present case, impugned Notifications are lucid and eloquent and need not be interpreted or construed in the way and manner the petitioner intends and chooses to and as a result whereof, writ petition qua impugned Notifications is liable to be dismissed. It is worthwhile to mention here that exemption notification should not be read liberally construed and beneficiary must fall within the ambit of exemption and fulfil the conditions thereof and if the conditions are not fulfilled, the issue of application of notification does not arise at all by implication. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification - The statutory provisions providing for exemption have to be interpreted in light of the words employed in them and there cannot be any addition or subtraction from the statutory provisions. It is also well settled eligibility clause in relation to exemption notification must be given effect to as per the language and not to expand its scope deviating from its language and therefore, there is a vast difference and distinction between a charging provision in a fiscal status and an exemption notification. While considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must forever be present to the mind of the court, while considering the applicability of the doctrine. Doctrine of promissory estoppel must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation - The supersession or revocation of an exemption notification in the public interest is an exercise of the statutory power of the State under the law itself. In KASINKA TRADING VERSUS UNION OF INDIA 1994 (10) TMI 64 - SUPREME COURT , the Supreme Court has held that the appellants in the said case appear to be under the impression that even if, in the altered market conditions the continuance of exemption may not have been justified, yet, the government was bound to continue it to give extra profit to them. That certainly was not the object with which the notification had been issued. The withdrawal of exemption in public interest is a matter of policy and the courts would not bind the Government to its policy decision for all times. When the case in hand is looked into and examined in the backdrop of above well settled legal position of law, there is no naysaying that petitioner has failed to establish that its case squarely falls within the impugned notifications and exemptions provided thereunder. As a corollary thereof, both the writ petitions are devoid of any merit and are, thus, dismissed - petition dismissed.
Issues Involved:
1. Constitutionality of Notifications No.F.No.10(1)2017-DBA-II/NER dated 5th October 2017 and Notifications/SRO 519 and 521 dated 21st December 2017. 2. Eligibility of the petitioner's units for budgetary support under the impugned notifications. 3. Legality of Order No. C.No.IV(16)GST-1/Regd-ID/Godrej/2017/2989 dated 20th August 2018. 4. Validity of Notification No.21/2017-Central Excise dated 18th July 2017. 5. Constitutionality of Proviso to Section 174(2)(c) of the CGST Act, 2017. 6. Application of the doctrine of promissory estoppel and legitimate expectation. Issue-wise Detailed Analysis: 1. Constitutionality of Notifications No.F.No.10(1)2017-DBA-II/NER dated 5th October 2017 and Notifications/SRO 519 and 521 dated 21st December 2017: The petitioner argued that these notifications were violative of Article 14 of the Constitution as they excluded their units from availing benefits. The court noted that the notifications were issued as a measure of goodwill to units eligible under earlier excise duty exemption schemes but had no relation to the erstwhile schemes. The court held that the notifications were clear and did not require interpretation beyond their plain language, thus dismissing the challenge to their constitutionality. 2. Eligibility of the petitioner's units for budgetary support under the impugned notifications: The petitioner's units were not considered "Eligible Units"¯ as defined under Para 4.1 of the Budgetary Support Notification dated 5th October 2017. The court upheld the rejection of the petitioner's application for budgetary support, noting that the petitioner's unit commenced commercial production on 25th September 2017, which did not meet the criteria of availing benefits immediately before 1st July 2017. The court emphasized that the plain language of the provision must be preferred in a taxing statute. 3. Legality of Order No. C.No.IV(16)GST-1/Regd-ID/Godrej/2017/2989 dated 20th August 2018: The court found the impugned order self-explanatory, stating that the petitioner's unit was not eligible for the benefits under the 2017 scheme as it was not availing any benefit immediately before 1st July 2017. The order was based on the clear provisions of the notifications, and the court dismissed the challenge to its legality. 4. Validity of Notification No.21/2017-Central Excise dated 18th July 2017: The petitioner contended that this notification was issued without legal backing as the Central Excise Act was repealed by the CGST Act effective 1st July 2017. The court held that the notification was valid, as the power to rescind or modify an exemption notification is inherent under the General Clauses Act. The court dismissed the challenge to its validity. 5. Constitutionality of Proviso to Section 174(2)(c) of the CGST Act, 2017: The petitioner argued that the proviso was inconsistent with the main provision of Section 174 and restricted tax exemptions contrary to the doctrine of promissory estoppel and legitimate expectation. The court held that the withdrawal of exemption in public interest is a matter of policy, and the government has the power to change its policy in public interest. The court found no merit in the challenge to the proviso's constitutionality. 6. Application of the doctrine of promissory estoppel and legitimate expectation: The court held that the doctrine of promissory estoppel cannot be invoked in the abstract and must yield when equity demands, particularly in matters of public interest. The court emphasized that the government can change its policy in public interest, and the doctrine cannot be used to enforce a promise contrary to law. The court dismissed the petitioner's reliance on promissory estoppel and legitimate expectation. Conclusion: The court dismissed both writ petitions, upholding the constitutionality and validity of the impugned notifications and orders. The court emphasized that exemption notifications should be strictly construed, and the petitioner's units did not meet the eligibility criteria under the 2017 scheme. The assertion of promissory estoppel and legitimate expectation was also rejected, as the government's policy changes in public interest were deemed lawful and necessary.
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