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TMI Blog1993 (6) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4. The petitioner purchased land for its plant on 14-10-1987, constructed a factory building thereon and set up a plant and machinery. The plant was fully set up and commercial production was commended from 13-4-1988. The petitioner-company got itself registered as a Small Scale Industrial Unit with the District Industries Centre, Dhar and a permanent registration as Small Scale Industrial Unit was issued to it on 23-5-1988. Being eligible for obtaining 25% subsidy under the said Scheme, the petitioner applied for the same on 25-6-1988. The application was forwarded by the District Industries Centre, Dhar to the State Level Committee on 27-8-1989. Meanwhile, the Government of India, Ministry of Industries issued a circular dated 21-7-1989, holding that all those Units, whose cases were not decided by the State Level Committee and to whom the subsidy was not sanctioned prior to September, 1988, were not entitled to the subsidy as the Scheme had lapsed on 30th September, 1988. The petitioners are aggrieved by this decision and have filed this petition, challenging the decision depriving them of grant of subsidy. 5. In the return filed in the case the stand taken is that the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpetually. The Government has a right to revoke the Scheme as it has a right to promulgate the Scheme. According to Shri Neema, no question of promissory estoppel arose because the promise was not unconditional but was dependent upon certain conditions. One of those was sanction of the subsidy by the State Level Committee. So long as the sanction was not granted by the State Level Committee, there was no question of any entitlement to grant of subsidy. He referred to and relied on the decision reported in AIR 1984 MP 70. At the time of argument, when ihe case was closed for judgment, a plain copy of the decision in M/ s. Javkar Fire Works v. Union of India (a decision of High Court of Madras) was shown to us. Shri T. N. Singh, learned Addl. Advdcate-General, also contended that there is no question of promissory estoppel as no unconditional promise or representation was in fact made to the petitioners. He relied on the decision of the Supreme Court in Andhra Steel Corporation Ltd. v. Andhra Pradesh State Electricity Board, 1991 (3) SCC 263 : (AIR 1991 SC 1456). 8. In Pounami Oil Mill's case (supra) the Supreme Court had an occasion to consider a case where a notification gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat tax exemption and other incentives would be given to them if they set up Industry in the State and acting on the representations such entreprenuers established Industries in the State, the principle of promissory estoppel would apply and accordingly such Industrialists would be entitled to the benefit of exemption for the entireperiod, as specified in the exemption order. 11. In Manglore Chemical's case (supra) it was held that there can be no doubt that the doctrine of promissory estoppel is applicable against the Government in exercise of its Governmental or executive functions and the doctrine of executive necessity or freedom of future executive action, cannot be invoked to deny the applicability of the doctrine of promissory estoppel. It was noted by the Supreme Court that in a decision subsequent to the decision in AIR 1979 SC 621 : (1979 All LJ 368) a solitary different view from that of Motilal Sugar Mills was taken and it was held that the doctrine of promissory estoppel was nut available against the exercise of the executive functions of the State a,nd the State cannot be prevented from exercising its function under the law. After carefully considering both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-1989 the petitioner was asked to cure the defects in the application. Another letter was sent in this regard on 4-5-1989. The corrected application was forwarded by the District Industries Centre, Dhar to the Joint Director, Industries, Indore on 27-5-1989. The Joint Director, Industries Indore, returned the file on 29-6-1989 to D.I.C. Dhar because in the meanwhile on 30th September, 1988 the Scheme had come to an end. 15. In Manglore Chemical's case (supra) the Supreme Court ha's held that the consequence of loss of exemption from tax flowing from the non-compliance of condition prescribed for eligibility for exemption would be the result if the condition was a substantive one fundamental to the policy underlying the exemption. Its stringency and mandatory nature must be justified by the purpose intended to be served. There are conditions and conditions. Some may be substantive, mandatory and based on considerations of policy and some others may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purposes they were intended to serve. 16. Applying this test to the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f expiry of the Scheme, such Unit would be made to suffer for no fault on its part. Similarly, if defects not substantial in character are found in an application of the Unit and the sanction of subsidy is delayed because of this, such a Unit though eligible for grant of subsidy would not get it only because its application was defective in form though not in substance. In the case before us the subsidy is being denied only on the ground that before it could be sanctioned by the Slate Level Committee, the Scheme was withdrawn by the Government. It is not the case of the respondents that the petitioner was not eligible for subsidy because of lack of essential eligibility qualifications prescribed by the Scheme. The only reason for rejection of the claim was that the application was not processed and sanctioned by the Stale Level Committee before the Scheme expired. For the aforesaid reasons, we are of the opinion that the respondents had to consider the case of the petitioner on merits and could not have rejected the claim of the short ground that it was not sanctioned before the expiry of the scheme. 17. Finally, award about the decision of the Madras High Court in M/s. Javkar F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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