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TMI Blog2006 (3) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... as said to remain in force for a period of one year and provided for payment of Industrial Promotion Assistance equivalent to 90 per cent sales tax paid. The said resolution provided that the scheme had been formulated in public interest to allow financial assistance to certain industries in the State which have been passing through acute financial crisis, in order to tide over such crisis for promotion of such industries. Relying upon and on the faith of the said representation and/or assurance and/or promise of the respondent contained in the said speech of Finance Minister and the said resolution and subsequent resolution extending the said scheme from year to year with 90 per cent of the sales tax paid in respect of banaspati manufactured and sold in the State would be granted an industrial promotion assistance, the company did not stop production of banaspati in the State unit even though the said unit suffered huge loss, and continued to manufacture the same in spite of such losses and made substantial future investment towards capital in the State. The said company was under bona fide impression in view of the said representation made by the respondents that it will be ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1962 SC 1288. Union of India v. Godfrey Philips India Ltd. AIR 1986 SC 806. Union of India v. Indo Afghan Agencies AIR 1968 SC 718. Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 44 STC 42 (SC); AIR 1979 SC 621. AIR 1972 SC 248. (sic) The aforesaid propositions has also been reiterated in recent times by the Supreme Court in the following decisions: Sharma Transport v. Government of Andhra Pradesh [2002] 2 SCC 188, Prestige Engineering (India) Ltd. v. Collector of Central Excise [2004] 6 SCC 465, and State of Orissa v. Manglam Timber Products [2004] 1 SCC 139 and Mullah's Contract Act 12th Edition, pages 299-309. He further contends that by holding out promise and inducing the petitioner to act thereupon the Government has created vested or legal right and such right cannot be affected by mere executive order and without there being sanction by the legislative action. He has referred to a Supreme Court decision for this proposition. Promod Chandra Deb v. State of Orissa AIR 1962 SC 1288. Even assuming by a policy decision a promise can be withdrawn but such a decision cannot be arbitrary, unreasonable or mala fide and further su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion dated May 23, 1997 is an independent one and it creates new right with new obligation. By no stretch of imagination it can be said to be a clarificatory. Clarification statute is passed merely to clear ambiguity or doubt of previous statute. He has relied on the decision of the Supreme Court reported in Keshavlal Jethalal Shah v. Mohanlal Bhagwandas AIR 1968 SC 1336 and Commissioner of Income-tax, Bombay v. Podar Cement Pvt. Ltd. [1997] 226 ITR 625 (SC); AIR 1997 SC 2523. Moreover if two interpretations are possible the original resolution stands even if the subsequent resolution is accepted as clarificatory one. Reliance is placed on the following decisions for this proposition of law: In re Athlumney [1898] 2 QB 547, R. Rajagopal Reddy v. Padmini Chandrasekharan AIR 1996 SC 238 and Birla Cement Works v. Central Board of Direct Taxes AIR 2001 SC 1080. Accordingly he contends that the second resolution is ultra vires articles 14 and 19(1) of the Constitution of India as the same is arbitrary, irrational and unreasonable. Thus the petitioner is entitled to get reliefs for payment of money or suitable adjustment and this is permissible under the law in writ jurisdiction as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... implicit in the original Scheme. His legal contention is that clarificatory provision always has retrospective effect. He relied on the decision of the Supreme Court in this context rendered in case of Commissioner of Income-tax, Bombay v. Podar Cement Pvt. Ltd. reported in [1997] 226 ITR 625 (SC); AIR 1997 SC 2523. Principle of promissory estoppel has no manner of application in this case, he emphasises, as there is no sufficient pleading in the writ petition about the case of promissory estoppel. He contends that the plea of promissory estoppel is a mixed question of fact and law. It must be averred clearly that promises were held out and pursuant thereto the petitioner has acted upon altering its position. From the submission and averment of the petitioner it will appear that the writ petitioner did not rely and act upon so-called promise on being assured by the scheme. It was the writ petitioner's own policy to manufacture banaspati despite having incurred loss. Thus the factual case of promissory estoppel has not been stated. He further contends that the scheme was introduced initially for one year without any assurance for its continuance. Only extension of schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petition and affidavits and also examined documents annexed thereto. I have heard the submission of the learned counsel. In this case the following are the questions, which have fallen for consideration of this court: (i) Whether by and under the Resolution dated May 23, 1997 adopted by the Finance (Taxation Department), Government of West Bengal, can be (1)Reported as State of Punjab v. Nestle Ltd. [2004] 136 STC 35 (SC). given retrospective effect aiming at to take away the benefit given under the earlier resolution dated May 27, 1994 as extended from time to time. (ii) Whether the petitioner's right of promotional assistance in terms of Resolution of 1994 for the period starting from July, 1995 to March, 1997 is vested right or not. (iii) Whether the Government is estopped from backing out from the promise held out by the earlier Resolution of 1994 by the subsequent resolution aiming at to take away the right already accrued in favour of the petitioner. If so what is the nature of the relief the petitioner is entitled to. It is an admitted position that in terms of the Resolution dated May 27, 1994 and the subsequent Resolution extending the said Scheme from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to use a piece of land for the purpose of setting up of a market rent-free. Later on the Government after 70 years backed out from this promise with the plea that the land was meant for transfer in accordance with law. Therefore it is clear that promissory estoppel does not remain within the realm of enforceable contract. There is no element of quid pro quo. None the less, it is enforceable. What is of consideration is the necessity of equity and fairplay. Because on the basis of the promise, if the promisee alters its position detrimental to its interest, this affectation itself is a consideration which gives rise an action. It appears that the observation of Justice Chandrasekhar Aiyar was a minority view in that judgment, but the same was later on adopted by the Supreme Court without any exception in all the decisions rendered subsequently. The above principles was also followed in case of Union of India v. Indo Afghan Agencies AIR 1968 SC 718. In this case the Supreme Court approving the aforesaid observation of Justice Chandrasekhar Aiyar held in paragraph 23 as follows: 23. Under our jurisprudence the Government is not exempt from liability to carry out the represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts all over India. Few decisions of the Supreme Court have been brought for the court's assistance by Mr. Ray which are as follows: Delhi Cloth General Mills Ltd. v. Union of India AIR 1987 SC 2414 (para 18); Kasinka Trading v. Union of India AIR 1995 SC 874 (para 12); Sharma Transport v. Government of Andhra Pradesh [2002] 2 SCC 188. State of Orissa v. Mangalam Timber Products [2004] 1 SCC 139. State of Punjab v. Nestle India Ltd. [2004] 136 STC 35 (SC); [2004] 6 SCC 465. Upon careful reading of all these decisions it appears to me the principle laid down by the Supreme Court for enforcement of promissory estoppel uniformly is that the State is bound by the promise if the promisee altered its position by acting upon. It has also been settled that promissory estoppel cannot be applied against the statutory provision, meaning thereby if the Legislature thinks fit to withdraw the promise by way of appropriate legislation then such promise cannot be enforced. The true principle behind it is that the Legislature always enacts laws for the interest of the public at large even if such an action affects individual rights. Therefore, true distinction is while enforcing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution. The second resolution is executive action. I do not find any statement wherefrom it can be gathered that this has been done for overriding public interest. In the affidavit in opposition it has not been stated either as to why benefit accrued already ought to be withdrawn giving retrospective operation. If retrospective effect is given it would be wholly inequitable as the petitioner has already acted upon pursuant to the earlier promise, and manufactured and marketed, banaspati therefore, whatever benefit has been granted the same has to be given under the 1994 resolution. The decisions rendered in case of State of Punjab v. Nestle India Ltd. [2004] 136 STC 35 (SC); [2004] 6 SCC 465 and State of Orissa v. Mangalam Timber Products [2004] 1 SCC 139, may be referred to. I fail to comprehend the contention of Mr. Gupta as to why the principle of promissory estoppel will not have any application in this matter. Case of promissory estoppel factually has been made out in paragraph 15 of the petition. It is not the concern of the Government as to whether the petitioner has suffered loss. The only criterion while applying principle of promissory estoppel, is whether conditions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epayment, as nothing was received by the Government. Therefore, the decisions rendered in this regard as cited by Mr. Ray are not applicable. I am of the view from the above that the petitioner is entitled to get relief but in what form is the question. The order of payment in a writ jurisdiction can be made and it is a settled position of law. The Supreme Court in numerous cases has decided so. Of hand, I find three Supreme Court decisions reported in ABL International Ltd. v. Export Credit Guarantee Corporation of India Ltd. [2004] 3 SCC 553; AIR 1951 SC 135 (sic) and Firm A.T.B. Mehtab Majid Co. v. State of Madras [1963] 14 STC 355 (SC); AIR 1963 SC 928. Considering facts and circumstances of this case payment order should not be made but suitable relief can be granted directing adjustment. I therefore hold that the petitioner is entitled to get assistance under the scheme and resolution dated May 27, 1994 form the month of July, 1995 to March, 1997. But the petitioner is not entitled to any interest as claimed as according to me it is not a debt, so question of payment of interest does not and cannot arise. This amount is to be adjusted as against the sales tax payable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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