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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 ..... ng industries. The right accrued to them is sought to be taken away w.e.f. 15.02.1997. Those who were eligible upto 14.02.1997 to avail the benefit of the notification dated 31.01.1995 became ineligible. An accrued right ordinarily cannot be taken away with retrospective effect. It is not a case where the notification has a retroactive operation. A person may apply on a particular date for grant of electrical connection. He may get the electrical connection within a few days or a few weeks or a few months. According to the State Electricity Board, keeping in view the role played by all the three players, namely, the consumer, the Board and the State, an outer limit of 18 months is taken for grant of supply. A statute, even a subordinate legislation, may have to be construed reasonably. A subordinate legislation ordinarily would not be given a retrospective effect. Retrospective effect can be granted only if there exists any power in that behalf. There is nothing to show that such a power has been conferred upon the State in terms of the Act. The proviso is an exception to the main clause whereas all industries which were set up on or after 15th February become wholly ineli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed. It was held that the power which can be used for grant of concession, namely, Section 25(1) of the Customs Act itself is the source to rescind the earlier notification We have noticed that some of the industries had even installed generators. They had to do it. They inevitably had to do it because the Board would not supply power. We think that for the said purpose, the proviso has to be read down. It must be made applicable to them who not only had started commercial production before the said date, namely, 14.02.1997 but also had applied and were otherwise ready to take electrical connections having deposited the amount asked for, wherefor their industries were otherwise ready for consuming electrical energy. We, therefore, held: 1. As the concession had been granted by the State, it had the power to withdraw the same. 2. It is not a case where in view of the doctrine of promissory estoppel, the State could not have in law amended the Schedule. 3. In view of existence of public interest the doctrine of promissory estoppel would have no application. 4. Even otherwise the appellants having not preferred appeals against the judgment of the Division bench of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sional 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 rates. For the second year 70 per cent of the High Tension rates. For the third year 80 per cent of the High Tension rates. For the fourth year Full Tariff. The above concession shall apply to both unit rates and maximum demand charges. This concession shall not however, be applicable to an industry set up before the 3rd May, 1989. The concession shall not also be applicable to a consumer, who utilizes power from his own generating units or makes other arrangements for production purposes and utilizes the power supplied by the Board for auxillary purposes only. 6. A memorandum was issued on or about 23.08.1995 to specify the time limit required for dealing with the applications for grant of electrical connections as and when applications therefor are filed which are in the following terms: Adverting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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, shall not be eligible for tariff concession: Provided that the High Tension Industries set up in any area other than Chennai Metropolitan area before 15th February 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 service connection. (b) New industry to be set up in the areas other than the Chennai Metropolitan area which will work night shift only and existing industry which has only night shift between 9.30 p.m. of a day and 5.30 a.m. of the next day, shall be given a concession of 40 per cent of the appropriate rate for energy consumed during night shift only for a period of seven months from July to January during a period of five years from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 on the date of obtaining High Tension Service Connection. Explanation 2. - For the purpose of this clause Existing Industry means an industry, which has not completed five years from the date, the consumer is given service connection and which is still eligible to the concessional tariff rate. 12. The Division Bench of the High Court disposing of the said batch of appeals by a judgment and order dated 19.07.2005 opined that it was not necessary to discuss the individual fact of each of the respondents case on the premise that the Secretary to the Government could not clarify the amendments to the Schedule which were made by the Governor. The said appeals were disposed of holding: i) In the present case, the meaning of the words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 specify the same so as to enable the industries to take the benefit only from the date when they start consuming electrical energy. It was, however, submitted that there can be some exceptional cases where despite filing of applications for grant of electrical connection, there had been some avoidable delays on the part of the Board. It was urged that for the purpose of grant of benefit of concession in tariff rate, the Board must know who the beneficiaries were. The learned counsel further submitted that the Division Bench of the High Court committed a serious error insofar as it failed to take into consideration that a High Tension industry gets ready to discharge the functions for which it was set up, only with c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 of the respondents, on the other hand, would contend that the amendments to the Schedule carried out by the notification are unreasonable being in contravention of the statute. The word set up having been interpreted by this Court in Commissioner of Wealth Tax v. Ramaraju Surgical Cotton Mills, Ltd. [1967 (1) SCR 761] which in turn having been followed in Kabini Minerals (P) Ltd. and another v. State of Orissa and others [(2006) 1 SCC 54], it must be held that the said word is in contra-distinction of the word commence . Some of the High Tension industries having already set up their business and having gone for commercial production by reason of generators, it cannot be said that they had not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Schedule. It for all intent and purport substituted the then existing Schedule; Part A thereof dealt with tariff for High Tension supply. It is only in that notification some concession, as noticed hereinbefore, had been granted. The concession was to apply to both unit rates and maximum demand charges. Certain limitations for grant of the said concession had also been specified. 21. The Schedule was amended by the notification dated 14.02.1997 reflecting the operation of grant of concession tariff to those who had set up the new High Tension industries on or after 15.02.1997. What is, therefore, significant for our purpose is the meaning of the word set up vis- -vis commencement . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) 2 SCC 365], the validity thereof is not under challenge. 24. The notification dated 31.01.1995 postulated concession to the new High Tension industries to be set up for the first three years from the date the consumer is given a service connection. It did not speak of commencement of production. It intended to attain a certainty as to from which date such concession would be available. Grant of service connection was considered to be a pre-requisite for grant of the concession. It is in the aforementioned context, the impugned amendment will have to be construed. It fixes a cut off date beyond which the concession shall not be available to the industries, viz., tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 benefit of concession would not arise unless a service connection is granted. For the said purpose, the definition of consumer, as contained in Section 2(1)(c) of the 1910 Act would be relevant. The benefit can be availed by the consumer keeping in view the nature of concession granted. Exemption notifications, therefore, require construction depending upon the tenor of the statute/ notification. Whether it should undergo a strict construction or a liberal construction is one thing but it is another thing that whether a person is entitled to concession on a plain reading of the notification. It may be true that the exemption notification should receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 620], A.P. Steel Re-Rolling Mill Ltd. (supra), Pawan Alloys and Casting Pvt. Ltd. v. U.P. State Electricity Board and others [(1997) 7 SCC 251] and Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector ETIO and Others [(2007) 5 SCC 447] 32. Strong reliance has been placed by Mr. Parasarn on Shah v. Shah [2002 Q.B. 35 : (2001) 4 All ER 138] to contend that the doctrine of promissory estoppel is applicable even in the field of the statute. Therein, it was held: In the Godden case [1997] NPC 1 an attempt was made to defeat by an estoppel the provision in section 2(1) of the 1989 Act that a contract for the sale or othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priate 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 rely on an estoppel in the face of a statute depends upon the nature of the enactment, the purpose of the provision and the social policy behind it. The said decision has also been referred to Actionstrength Ltd. (trading as Vital Resources) v. International Glass Engineering IN.GL.EN SpA and another [2003 (2) All. E.R. 615 at 619], but therein it was held that the doctrine of promissory estoppel may not be applicable in case of a statute. As would appear from the discussions hereinafter, applicability of the said doctrine would depend upon various factors including the nature and purport of the Statute, the object it seeks to achie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sought to be taken away w.e.f. 15.02.1997. Those who were eligible upto 14.02.1997 to avail the benefit of the notification dated 31.01.1995 became ineligible. It is in the aforementioned context, the proviso appended to clause (a) is required to be interpreted. It has used the term set up in any area other than Chennai Metropolitan area before 15.02.1997. Should the rule of liberal interpretation be applied? In our opinion, it should not be. An accrued right ordinarily cannot be taken away with retrospective effect. It is not a case where the notification has a retroactive operation. A person may apply on a particular da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 discrimination on the part of the officers of the Board or the State, the entrepreneurs would suffer. It is in the aforementioned limited sense, the doctrine of promissory estoppel will have application. If doctrine of promissory estoppel applies, the right accrued in terms thereof cannot be withdrawn with a retrospective effect. [See Mahabir Vegetable Oils (P) Ltd. (supra) Southern Petrochemical Industries Co. Ltd. (supra)] 38. In MRF Ltd., Kottayam v. Asstt. Commissioner (Assessment) Sales Tax and others [(2006) 8 SCC 702], this Court held : In any event, the appeal preferred by the State of Kerala was dismis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 of liability, quantification of liability and collection of taxes. Policy decisions have to be taken by the Government. However, the Government has to work through its senior officers in the matter of difficulties which the business may face, particularly in matters of tax administration. That is where the role of the Board of Revenue comes into play. The said Board takes administrative decisions, which includes the authority to grant Administrative Reliefs. This is the underlying reason for empowering the Board to issue orders, instructions and directions to the officers under it. 42. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould 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 withdrawal of exemption in public interest is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the public interest . The courts, do not interfere with the fiscal policy where the Government acts in public interest and neither any fraud or lack of bona fides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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