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TMI Blog2011 (4) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... of commercial production by the petitioner. In the alternative, the petitioner has prayed that the date of commencement of commercial production under the Incentive Scheme of 2001 be extended. The petition arises in the following factual background: The present petitioner-Jaiprakash Associates Limited, sometime in the year 2006, had taken over one Gujarat Anjan Cement Company Limited ("GACL", for short). The said GACL had desired to set up a cement factory in the village Vayor in Abdassa Taluka of Kutch District in the year 1999. It appears that the said region being a backward region, there were certain sales tax benefits available even at that time to the companies setting up such industrial plants. In the year 1999, to set up a cement factory, the GACL applied for "no objection certificate" as required to the Ministry of Forest and Environment ("MOEF", for short). It is the case of the petitioner that the application dated August 13, 1999 was forwarded by the State Government to the MOEF in October 1999. It was on May 23, 2000, the MOEF responded to the request stating that the Supreme Court has restrained the Government from permitting any mining operation around certain reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be further substantial investment in the cement plant to the tune of Rs. 425 crores. On the other hand, the State Government had assured the Sumeru Group of all necessary facilities; including providing basic infrastructure facilities like land, power, road, water supply, etc. It was indicated that the commercial production would commence by December 2005. It is, however, the case of the petitioner that the State Government did8 not fulfil such promises. Neither the power supply nor the water were made available. The petitioner had to set up its own power plant and draw water by tankers. According to the petitioner, all these added to further delay in completing the project and in commencing the commercial production. The petitioner, therefore, approached the Committee constituted under the Incentive Scheme of 2001 and requested that the period spent beyond its control in setting up the factory and commencing the commercial production be ignored and the petitioner be granted benefits of the Incentive Scheme of 2001. We may notice that at one stage, the petitioner approached this court by filing Special Civil Application No. 1574 of 2010 (Jaiprakash Associates Ltd. v. State of G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtended period of pipeline case, i.e., December 31, 2007. (3) It is not the policy of the State Government to extend the incentive scheme on a case to case basis. (4) The State Government has never extended the benefit to any individual unit after the completion of the scheme." On the basis of the above background, counsel for the parties have made detailed submissions for final disposal of the petition. Mr. KS Nanavati, learned senior counsel, contended that the project got delayed due to reasons beyond the control of the petitioner. At all stages, there was delay in getting the infrastructure facilities, clearances and permissions. Such period, which was consumed by the State authorities should be discarded from consideration for commencement of the commercial production, as provided in the Incentive Scheme of 2001. Counsel further submitted that in the MOU dated February 5, 2005, certain promises were made by the State Government of providing necessary facilities and infrastructure, such as, road, electricity, etc. These promises were not fulfilled. Water and electricity were never made available. Counsel, therefore, submitted that even on the principles of promissory estopp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in the policy, to meet with the ends of justice. Counsel pointed out that the said decision was sought to be reviewed by the Kerala State Electricity Board. The apex court, however, in the case of Kerala State Electricity Board v. Hitech Electrothermics & Hydropower Limited reported in [2005] 6 SCC 651, dismissed the review application. (4) In case of A.P. Steel Rerolling Mill Ltd. v. State of Kerala reported in [2007] 2 SCC 725, wherein the apex court in paragraph 34 of the judgment, observed that, ". . . A question as to whether, in a given situation, an entrepreneur was entitled to the benefit under an exemption notification or not, thus, would depend upon the fact of each case. A bare perusal of the notification dated February 6, 1992 issued by the first respondent would show that the purport and object thereof was to grant benefit of a concessional power tariff which came into force on and from January 1, 1992. The phraseology used in the said notification postulates that the benefit was to be granted in regard to the 'enhanced power tariff'. Thus, where the new units had started production between January 1,1992 and December 31, 1996, such exemption was availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The progress of the project itself was slow from the beginning. The petitioner has not given any reasonable explanation for gross delays on its part. The learned Advocate-General further contended that the State policy was not to extend the benefits on individual basis. It was contended that no case of application of principles of promissory estoppel is made out. Such case has to be pleaded and established before the court. It was further contended that the scheme was envisaged to encourage and speed up industrial investments in Kutch region which had suffered heavily on account of devastating earthquake. If the industrial units did not commence commercial production within reasonable period, the entire purpose would frustrate. Reliance was placed on following decisions of the apex court: (1) In case of Director of Settlements, A.P. v. M.R. Apparao reported in [2002] 4 SCC 638, wherein, the apex court in context of the High Court's power for issuance of mandamus under article 226 of the Constitution, observed as under: "17. Coming to the third question, which is more important from the point of consideration of the High Court's power for issuance of mandamus, it appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty that may be enjoined by mandamus may be one imposed by the Constitution, a statute, common law or by rules or orders having the force of law. . ." (2) In case of Dhampur Sugar Mills Ltd. v. State of U.P. reported in [2007] 8 SCC 338, the apex court discussed the doctrine of power coupled with duty. (3) In case of Commissioner of Police, Bombay v. Gordhandas Bhanji reported in AIR 1952 SC 16, wherein also, in the context of seemingly discretionary power of the Commissioner of Police to grant or refuse the licence for erection of a building for the purposes of public amusement, the doctrine of power coupled with duty came up for consideration of the apex court. (4) In case of A.P. Steel Re-rolling Mill Ltd. v. State of Kerala reported in [2007] 2 SCC 725, wherein, the apex court observed as under: "35. Evidently, except in a situation as might have been existing in Hitech Electrothermics [2003] 129 STC 464 (SC); [2003] 2 SCC 716 that any application filed by the entrepreneur had not been processed within a reasonable time, in which case benefit might not be denied on equitable ground; in cases where there has been a substantial failure on the part of the industrial unit to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner to avail of the exemptions flowing from notification of the State Government. Second question is whether the respondents committed an error in not accepting the request of the petitioner for extension of time, looking to what the petitioner terms as, "causes beyond its control which delayed the commencement of commercial production." Taking up the question of promissory estoppel first, the law on the issue is no longer res integra. By series of judgments, it is now well settled that to be able to press in service the principle of promissory estoppel, the petitioner must clearly plead the same on record supported with necessary facts. In a recent decision, the apex court in the case of State of Haryana v. Mahabir Vegetable Oils Pvt. Ltd. [2011] 38 VST 514 (SC); [2011] 3 SCC 778 observed as under (pages 528 and 529 in 38 VST): "25. The doctrine of promissory estoppel is an equitable remedy and has to be moulded depending on the facts of each case and not straitjacketed into pigeonholes. In other words, there cannot be any hard and fast rule for applying the doctrine of promissory estoppel but the doctrine has to evolve and expand itself so as to do justice between the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory approvals. Such statement in the MOU needs to be seen in the entire background of the facts of the case. We have noticed that same project in question was envisaged way back in the year 1999. The progress was not satisfactory. Earthquake then, had not taken place. Exemption notification was nowhere in sight. Many years later, the petitioner took over the cement project from the erstwhile Company-Gujarat Anjan Cement Limited and the Government offered to extend its help and co-operation. It cannot be stated that the Government made any promise to provide necessary facilities to enable the petitioner to set up a project so as to enable the petitioner to avail of the exemption notification. There is nothing on the record not at least in the MOU to suggest that but for such a promise from the Government, the petitioner would not have made further investments. The MOU only records the Government's desire to extend necessary help in the petitioner setting up such a factory. Such general offer of the Government cannot be considered a firm promise on the basis of which the petitioner can claim to have changed its position so as to press in service, the principles of promissory es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtended time meant for pipeline cases. We have perused the scheme, as it was initially envisaged. Preamble to the Notification reads as follows: "The economic activities in the district of Kutch came to a standstill on account of devastating earthquake in the State on January 26, 2001. New employment opportunities could be created if new investment takes place. The Government is committed to attracting industries in the district to make the industrial and economic environment live. Government of India have announced excise duty exemption for new industries to promote large scale investment in the district, along with which the State Government has also decided to announce the scheme of sales tax incentives. Since the scheme is aimed at making the economic environment of Kutch District live, it has been decided to confine the same only to Kutch District." Reference to some of the provisions of the scheme need to be made. Clause 2 of the scheme provides for "operative period of the scheme" and states that, "the scheme shall come into force from July 31, 2001 and shall remain in force till October 31, 2004". The term, "commercial production" defined in clause 3.3 to mean that the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittee and provides that such committee will resolve the issues of interpretation, dispute or quarrel under the scheme. From the various provisions made in the scheme, it can be seen that the exemption notification was issued since the economic activities in the District of Kutch had come to a standstill on account of the devastating earthquake. The State Government, therefore, to create new employment opportunities, desired that new investments should take place in the said region. The Central Government had announced excise duty exemption for new industries to promote large scale investment in the district. The State had also decided to announce sales tax incentives. It was also provided that since the scheme is aimed at making the economic environment of Kutch district live, the same is confined to the district alone. From the above, it can be seen that if the industries were allowed to linger the project for an unlimited time, the entire purpose for which the scheme was framed, would frustrate. The central idea of granting sizeable sales tax exemption was to rehabilitate the district by offering fresh inflow of industries to create new employment opportunities. We may recall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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