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TMI Blog2008 (5) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... nergy Not-withstanding anything contained in the Tamil Nadu Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 (Tamil Nadu Act XXIX of 1949), the tariff rates payable to the Tamil Nadu Electricity Board by any consumer on the electrical energy supplied by the Board shall be as specified in the Schedule to this Act. 4. Power of the State Government to amend the Schedule- The State Government may after taking into account the Cost of production of energy, and such other matters as may be prescribed by notification, amend the provisions of the Schedule to this Act." 5. Pursuant thereto and in furtherance thereof, High Tension Supply tariff was prescribed. The State issued a G.O. bearing No. G.O.Ms No. 29 dated 31.01.1995 providing for tariff concession for High Tension industries; the relevant portions whereof are as under: "a) In the case of new High Tension Industries to be set up in the areas other than the Madras Metropolitan areas, the following concessional tariffs shall be charged for the first three years from the date, the consumer is given service connection under high tension tariff -I- For the first year 60 per cent of the High Tension ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons as H.T. services constitute major source of revenue for the Board and to bestow all efforts to achieve the target fixed for the year 95-96 without fail." 7. The flow chart annexed thereto specified the maximum period of 18 months' time to be taken from the date of filing of the application till the date of grant of connection. 8. The G.O. dated 31.01.1995 was amended on 14.02.1997 in the following terms: "H.T. Tariff - I There is increase in both demands and energy charges. For consumption of energy during peak hours viz. 6.00 AM to 9.00 AM and 6.00 PM to 9.00 PM, the energy charges are to be billed at 20% extra. This will be implemented on installation of 'Time of Day' meters. New industries set up on or after 15.2.97 are not eligible for any tariff concession. However, in respect of H.T. industries set up in areas other than Chennai Metropolitan area before 15.2.97 shall continue to avail the tariff concession until the expiry of 3 years period reckoned from date of service concession." By a G.O. issued on 14.02.1997, the Schedule appended to the 1978 Act was amended as under: "(a) New High Tension Industries set up in any area on or after 15th February 1997, sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Board would be entitled to enjoy the tariff concessions for the full period of three years, from the date of power connection as stipulated in the Notification dated 31.1.1995. c) Those writ petitioners who had not made applications or sent intimation to the Electricity Board regarding their readiness to got power connection on or before 14.2.97 but have altered their position by establishing the industry on or before 14.2.97 would be entitled to the tariff concessions as stipulated in the Notification dated 31.1.95 "provided if they are able to establish the same before the 2nd respondent - Electricity Board. 11. Appeals were preferred there against both by the Board and the State Government. Some of the industries who have challenged the notification on the plea of applicability of the doctrine of promissory estoppel also preferred appeals. Indisputably, during pendency of the said appeals before the Division Bench of the High Court, the Schedule to the 1978 Act was further amended by a notification dated 7.01.2000 whereby and whereunder the following Explanations were added: "Explanation 1. - For the purpose of this clause, an industry may be considered to be set up o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext of the expression "shall continue to avail themselves of the said tariff concession" appearing in the proviso? iii) Whether the expression "set up" would also takes its colour from the context that the continued tariff concession could be availed by the High Tension Industries "until the expiry of the period of three years from the date on which the consumer is given service connection.? iv) Whether the expression "set up" be not construed to ensure certainty amongst the consumers who could continue to avail of the tariff concession and whether the date on which the consumer is given a service connection provides such certainty? v) Whether the Notification conferring tariff concessions could be construed liberally to extend the benefit thereof by construction of the expression "set up" and by introducing the element of uncertainty? 15. Mr. A.K. Ganguly, learned senior counsel appearing on behalf of the appellants would submit that the State of Tamil Nadu intended to confer benefit on a class of people. Such classes of people having been identified as consumers of High Tension Electrical Energy, it was permissible for the State not only to fix a cut-off date but also to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e should be given effect to. It was furthermore contended that the subsequent notification dated 7.01.2000 whereby two Explanations were introduced is also clarificatory in nature as a bare perusal of Explanation 1 would demonstrate that it merely clarified what was inhered/ implied in the said proviso which also reflects the undertaking of the government which alone was competent to grant exemptions to concerned industries and/ or to withdraw or modify the same. It was urged that the operative part of the order of the Division Bench should be suitably modified to reflect that the setting up of an industry prior to 15.02.1997 implies that such industry was ready to discharge all the functions for which it had been set up and that it has already become a consumer having obtained High Tension service connection from 15.02.1997 and only those industries which have been set up before 15.02.1997 shall continue to avail themselves of the said tariff concession until the expiry of the period of three years from the date on which the consumer is given a service connection. 16. Mr. K. Parasaran and Mr. S. Ganesh, learned senior counsel and other learned counsel appearing on behalf of some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inder Lal Cooper [(2007) 6 SCC 694]. 18. The High Court unfortunately did not go into the fact of each case. It proceeded on the basis that the word "set up" should be given its dictionary meaning, i.e., erect or establish in view of a decision of this Court in Ramaraju Surgical Cotton Mills Ltd (supra). The effect for a clarificatory order has also not been considered stating that the Secretary of the Government cannot clarify an amendment to the Schedule which has been made by the Governor. 19. We wish that the Division Bench would have bestowed serious considerations on the issues, as has been done by the learned Single Judge. 20. The validity of the 1978 Act is not in question. It overrides the provisions of the 1948 Act. It empowered the State Government to amend the provisions contained in the Schedule to the Act prescribing tariff rates payable by different classes of consumers for supply of electrical energy by the Board taking into account the cost of production of energy and such other matters as may be prescribed by notification. Indisputably, the Schedule appended to the Act had been amended from time to time. The notification dated 31.01.1995 was issued amending the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t when a business is established and is ready to commence business, only then it can be said of that business that it is set up. But before it is ready to commence business it is not set up. (See CWT v. Ramaraju Surgical Cotton Mills Ltd.) 10. In the said case, it was further held that the word "set up" is equivalent to the word "established" but operations for establishment cannot be equated with the establishment of the unit itself of (sic or) its setting up." 23. What is necessary to take into consideration is that the Schedule appended to Section 3 of the 1978 Act is a part of the Act. It provides for High Tension tariff. It fixes up cut-off dates. It is a piece of subordinate legislation. A subordinate legislation validly made may have to be read in the same manner as if it is a part of the Act. For the said purpose, although the same would be amenable to constitutional challenge on well-settled principles of law, as noticed by this Court in Bombay Dyeing & Mfg. Co. Ltd. (3) v. Bombay Environmental Action Group and Others [(2006) 3 SCC 434], Vasu Dev Singh and Others v. Union of India and Others [(2006) 12 SCC 753] and State of Kerala and Others v. Unni and Another [(2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended to the effect that tariff concession which prevailed prior to 14.2.1997 can be extended to consumers who have informed readiness on or before 14.2.1997 and certified as such all Field Superintending Engineers on inspection of the industry after receipt of readiness report, and after 15.2.1997, due to the reason that it was not informed prior to 14.2.1997." 27. It does not appear that the Chief Secretary of the State had issued the letter in question upon following the procedure laid down in the Rules of Executive Business framed under Article 166 of the Constitution of India. We are, however, not much concerned therewith. It is not a case where the opinion of the Chief Secretary and/or for that matter the State was decisive. In the matter of interpretation of statute, the Court has the last say. We have, therefore, to consider the issues raised before us independently. 28. Furthermore, concession is to be given in respect of payment of the charges for electrical energy. When can it be given would be a question of fact. When it has been given would be known to everybody. The bills are required to be paid only after electrical energy is consumed. Question of availing the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the statute operating in the field, viz., the 1910 Act, the 1948 Act and the 1956 Rules. 31. Validity of the notifications on the ground they are unreasonable has not been raised before the High Court. We, therefore, cannot go into the issue. If that be so, it is difficult to agree with Mr. Parasaran that we should undertake an exercise to interpret the notifications in a manner which would not lead to unreasonableness. For the purpose of declaring a statute unconstitutional, foundational facts have to be laid therefor. [See M/s. Seema Silk & Sarees & Anr. v. Directorate of Enforcement & Ors. Criminal Appeal @ SLP (Crl.) No. 6812 of 2007 decided on 12th May, 2008]. Grounds are required to be raised therefor. In absence thereof it would not be possible for us to enter into the debate of constitutionality of the said provisions. The Division Bench of the High Court had rightly or wrongly opined that the doctrine of promissory estoppel has no application. The fact that the said doctrine may apply even in relation to a statute is beyond any dispute as has been held by this Court in Mahabir Vegetable Oils (P) Ltd. and Another v. State of Haryana and Others [(2006) 3 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bargains in ignorance of the statutory requirement. If an estoppel would have the effect of enforcing a void contract and subverting Parliament's purpose it may have to yield to the statutory law which confronts it, except so far as the statute's saving for a constructive trust provides a means of reconciliation of the apparent conflict." Clarke LJ stated, at p 182, that where a particular estoppel relied upon would offend the public policy behind a statute it is necessary to consider the mischief at which the statute is directed. Where a statute had been enacted as the result of the recommendations of the Law Commission it *44 is appropriate to consider those recommendations. He stated that in his opinion: "the contents of that report [Transfer of Land: Formalities for Contracts of Sale etc of Land (1987) (Law Com No 164)] will be of the greatest assistance in deciding whether or not the principles of particular types of estoppel should be held to be contrary to the public policy underlying the Act. In this regard it seems to me that the answer is likely to depend upon the facts of the particular case." Beldam LJ stated, at p 191, that "The general principle that a party cannot re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the areas other than Madras Metropolitan areas. Indisputably, the respondents before us have started setting up their industries after the said date. It is on the aforementioned backdrop, the impugned notification dated 14.02.1997 requires interpretation. Those who had set up their industries have acquired a right, viz. the right to obtain the tariff concession once a right is accrued in their favour. What was promised to them was that they would be granted the tariff concession for a period of three years @ 60%, 70% and 80% of the consumption charges. 35. Whether by reason of the said notification dated 14.02.1997, an accrued or vested right has been taken away or not is the question. The core question, therefore, is as to whether by reason of the said notification dated 31.01.1995, the entrepreneurs who had set up new high tension industries after the said date have acquired any right pursuant thereto. The notification dated 31.01.1995 must be interpreted in a broad based manner, as a promise was made to grant the concessional tariff not only for the new industries which were to be set up thereafter but also to the pre- existing industries. The right accrued to them is soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mselves of the said tariff concession. Legally, those who had not become consumer of electrical energy, but were the potential consumers, they had not only applied for it but they were and, in fact, some of them has also been gone into commercial production. Once they have set up the high tension industries and who had gone up for commercial production must be held to have set up the high tension industries. Once they have set up the high tension industries after 31st March, 1995, they became entitled to the benefit of concessional tariff for a period three years. Such concession was to be availed by them from the date of grant of service connection. If they had already been granted service connection, they would continue to avail themselves of the said tariff concession. However, the difficulty arises only in cases where despite applying for grant of electrical communication, actual service connection had not been granted. If a literal interpretation of the proviso is taken recourse to, the same may result in an anomaly in the sense that in one case, connection may be granted in one day and in another case, connection may not be granted for a long time. Because of the acts of dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Board would tantamount also to reading the limitation into the classification itself." 40. In State of Orissa and Others v. Tata Sponge Iron Ltd. [(2007) 8 SCC 189], this Court held: "20. In view of the clear legal provision as also the aforementioned Notification dated 23-9-1992, there cannot be any doubt whatsoever that the exemption in respect of deferment of sales tax having been provided for under the Orissa Sales Tax Act as also the notification issued thereunder, the High Court, in our opinion, is correct in taking its view." 41. In State of Kerala and Others v. Kurian Abraham (P) Ltd. and Another [(2008) 3 SCC 582], it was opined : "23. Tax administration is a complex subject. It consists of several aspects. The Government needs to strike a balance in the imposition of tax between collection of revenue on one hand and business-friendly approach on the other hand. Today, Governments have realized that in matters of tax collection, difficulties faced by the business have got to be taken into account. Exemption, undoubtedly, is a matter of policy. Interpretation of an Entry is undoubtedly a quasi-judicial function under the tax laws. Imposition of taxes consists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discharging its statutory obligation under Section 25(1) of the Act, if it was satisfied that it was in the 'public interest' to withdraw, modify or rescind the earlier notification. The plain language of Section 25 of the Act is indicative of the position that it is the public interest and public interest alone which is the dominant factor. It is not the case of the appellants that the withdrawal of Notification No.66 of 1979 by the impugned notification was not in 'public interest'. Their case, however, is that relying upon the earlier notifications they had acted and the Government should not be permitted to go back on its assurance as otherwise they would be put to huge loss. The courts have to balance the equities between the parties and indeed the courts would bind the Government by its promise 'to prevent manifest injustice or fraud'." It was further held : "23. The appellants appear to be under the impression that even if, in the altered market conditions the continuance of the exemption may not have been justified, yet, 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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