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TMI Blog2017 (3) TMI 1651X X X X Extracts X X X X X X X X Extracts X X X X ..... s contention is that the benefit of exemption of payment of taxes was granted under the said notification to the class of dealers specified in Column-2 to the extent of maximum cumulative quantum of tax as specified in Column-3 thereof for the maximum period as specified in Column-4 thereof. It has been further stated that notification granted exemption to the dealers who have set up nonconventional sources as also to the dealers who have set up industrial unit in the State and who have consumed the power generated and sold by the dealers establishing such nonconventional power generation system. 03- The petitioner's contention is that by virtue of aforesaid notification the petitioner was entitled for exemption. The petitioner has further stated that maximum period of exemption for which exemptions are available are specified in Column-4 and according to the aforesaid notification the exemption to generating unit is six years from the date of commencement of generation of electricity in the system or the date on which cumulative quantum is achieved, whichever is earlier. Whereas in the case of consumer unit purchasing power from generating unit, the exemption period is six ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such notification shall have prospective effect. (iii) Sub-section (3) of Section 12.- Substituted w.e.f. 01/04/87, vide Act No.24 of 1987. The Sub-section (3) during the period 01-10-78 to 31-03-87 reds as under:- (3) Notwithstanding the repeal of the Madhya Pradesh Vikraya Rashi Tatha Kraya Rashi Par Kar Adhiniyam, 1972 (No.8 of 1972), the State Government may, be notification, exempt any dealer or class of dealers from the payment of tax under the said Adhiniyam for the period it was force and for that purpose, it shall Adhiniyam have been revived for the purpose of grant of such exemption." 08- From the bare reading of the above provisions the State / respondents vide notification dated 28/02/1995 granted exemption to the dealers who will set up non-conventional power set up from the non-conventional sources, meaning thereby, the State respondents with the intention to promote the use of nonconventional sources has issued the notification. Further State respondents has included the dealers who will consume such power will be given exemption in commercial tax for those years from the date of commencement of the consumption. 09- It is pertinent to mention that the notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the set up of unit which was detrimental to the interest of the public at large, as the public money will be used for grant of such exemption and since the State found that in spite of notification in the year 1995, the units were not set up as no cutoff date was fixed in the notification dated 28/02/1995. 12- The respondent State further submitted that the notification dated 05/09/1998 providing the cutoff date for the set up of the unit was issued by the State Government after being satisfied that it was necessary in the public interest to provided for the cutoff date, therefore, under the powers conferred under Section 17 which even provides for issuance of a notification retrospectively and, therefore, the respondent State is not bound by the promissory estoppel. 13- The respondent state has submits that the doctrine of promissory estoppels has been crystallized over the years by the various judgments of the Hon'ble Supreme Court on various grounds and one of the major ground is "Doctrine of promissory estoppels should be tested against the public interest if promotion is made based on the public money." 14- His contention is that in the present case, exemption was grant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s circumstance and by no stretch of imagination can it ever be said that the commissioning of the industry was directly the outcome of the Government's Notification granting tax exemption. The concession offered by the Government under the first Notification dated 29.4.70 did not prescribe any period or time limit, and hence the appellants cannot claim anything more than the benefit of the Notification for such period the exemption was in force. Once the Government decided, in exercise of the powers vested in it, to revoke the original Notification, the benefit of exemption from sales tax en- joyed by the appellants came to an automatic end. The period of five years mentioned in the second Notification will have no reference to the appellants' oil mill commissioned much earlier because the Notification had only prospective effect. We have, therefore, to affirm the view of the High Court that the appellants will be entitled to the benefit of tax exemption only for the limited period during which the concession was offered by the Government. We find no merit in the appeal and accordingly it stands dismissed. No order as to costs." 17- He has also placed reliance upon a judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not required to pay the tax or duty they are otherwise liable to pay under such statute. The recipient of a concession has no legally enforceable right against the Government to grant a concession except to enjoy the benefits of the concession during the period of its grant. This right to enjoy is a defeasible one in the sense that it may be taken away in exercise of the very power under which the exemption was granted." 19- The respondent State further submitted that under the legislative competence and the authority has issued the notification granting exemption which was clarified by providing cutoff date in the interest of public and the Hon'ble Supreme Court has held that if public interest so require, the grant of benefit clan even be withdrawn or modified even retrospectively, as the supervening public interest will prevail over promissory estoppels. 20- The contention of the respondent is that since no cutoff date was provided, therefore, the cutoff date was provided vide notification dated 14/09/1995 and since the dealer required to set up the power generating system generating electrical energy from non-conventional sources or before 30/06/1998 has failed to set u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption was available to the dealer setting up of the non-conventional power generation system from the date of commencement of the generation of power in such system and from the date of consumption of the power to the dealers consuming electricity generated. However, the amending notification i.e. notification dated 05/09/1998 prescribed fresh conditions which require that the generation of electricity ought to commence up to 30/06/1998 when the power generating unit set up on the land owned by the dealer. The exemption after that date was available in case of the units set up on government lands only if the permission to use government land was sought before 30/06/1998 (cutoff date), permission is granted by State Government after the date and the generation of power had started within one years from the date of grant of permission by the government. 26- The effect of such amendment is that the power generation units set up on government lands in which permission has been granted by government prior to that date but the generation of power started between 01/07/1998 to 04/09/1998 i.e. prior to issuance of amending notification have been deprived of the benefit of exemption, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the State Level Committee is also subject matter of challenge in the present writ petition. 29- In the present case the issue involved is about the validity of the above order, which in turn has refused to grant the benefit of exemption to the petitioner on the basis of the cutoff date which has been introduced after the date of commissioning of the power generating units. The introduction of cutoff date being by a subsequent notification cannot affect petitioner's right which had already accrued under parent notification dated 28/02/1995. 30- The contention of learned counsel for the petitioner is that the cutoff date of 30/06/1998 is not applicable in petitioner's case, since the generation of power in the units in question had already commenced prior to the issuance of the amending notification dated 05/09/1998, the petitioner's right would be governed by the earlier notification dated 28/02/1995. He has placed reliance upon judgments delivered by the Division Bench of this Court in the case of Sunpet Pack Jabalpur Pvt. Ltd. Vs. State of M. P. reported in (2011) 18 STJ 614 and Sunpet Pack Jabalpur Pvt. Ltd. Vs. State of M.P. & Ors. reported in (2014) 24 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of being retrospective: it enacts the rescission of the earlier exemption and, hence, can operate only prospectively. It cannot take away the exemption conferred by the earlier notification." 33- In the case of State of U.P. & Others Vs. Deepak Fertilizers and Petrochemical Corporation Ltd. reported in (2007) 11 STJ 419, the apex Court in paragraphs No. 7 to 10 of the aforesaid judgment has held as under:- "7. In the writ petition, the first grievance of the respondent was that the notification dated 10th April, 1995 could not have been issued with retrospective effect. Relying on a decision of the Allahabad High Court, namely, Ganesh International & Anr. v. Assistant Commissioner and Ors. [(2001) 124 STC 600 (All)], the High Court held that the notification dated 10th April, 1995 shall apply prospectively and not retrospectively. The learned counsel appearing on behalf of the appellants have not seriously challenged this part of the impugned order of the High Court. However, since this question arose before us and the High Court decided the same against the appellants relying on a decision of its court, we prefer to deal with the question in this judgment. Let us, therefore, exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ective effect under this section." (Emphasis supplied - Here italicised) 10. For this aspect, proviso to Section 25 of the Act is important. A bare perusal of the proviso to Section 25 of the Act would clearly show that no notification having the effect of increasing the tax liability shall be issued with retrospective effect under the aforesaid section. In our view, the High Court was justified in holding that exemption could not be withdrawn with retrospective effect by issuance of subsequent notification dated 10th April, 1995, superseding the notification dated 2nd November, 1994. Restricting the exemption of tax to certain fertilizers in the same class of chemical fertilizers certainly amounted to increasing the liability to tax of the dealer with retrospective effect, which in our opinion, cannot be issued in view of the proviso to Section 25 of the Act. Accordingly, we hold that the notification dated 10th April, 1995, denying exemption to NPK 23:23:0 retrospectively is illegal and invalid and are in agreement with the view expressed by the High Court on this question." 34- In the case of State of Haryana Vs. Anil Pesticides Ltd. & Another reported in (2011) 19 STJ 11, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to withdraw such exemption with retrospective effect. If an exemption was granted by the State Government by issuing continuous two notifications, then the aforesaid exemption could not have been withdrawn by the State Government vide Annexure P/1 with retrospective effect. Issuance of Notification (Annexure P/1) is having far reaching consequences on the petitioner, and in such a situation, the State Government could not have withdrawn such exemption with retrospective effect." 36- Again a Division of this Court in the case of Dhannalal Labhchand & Others Vs. Sales Tax Officer, Seoni & Anr. reported in (2005) 5 STJ 356 in paragraphs No.2 and 3 has held as under:- "2. The first ground which has been been urged by the learned counsel for the petitioners in challenge to the aforesaid notification dated 07/01/1981 is that even though Section 12(2) of the Act permits that any notification issued under the said section may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission, such notification shall cease to be in force, the rescission cannot be made with retrospective effect. In support of this submission, reliance has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of State of Haryana v. Anil Pesticides Ltd. reported as [2011] 19 STJ 11 (SC), Ruchi Fabrics Ltd. v. State of M. P. reported as [2000] 117 STC 273 (SC); [1993] 32 VKN 449, State of Madhya Pradesh v. G. S. Dall and Flour Mills reported as [1991] 80 STC 138 (SC); [1991] 187 ITR 478 (SC); 24 VKN 224 and the Division Bench decision of the M. P. High Court in the case of Ambika Refinery v. State of M. P. reported as [2012] 53 VST 146 (MP); [2012] 20 STJ 563 and submitted that the amendment could not be given retrospective effect and could not have taken away the rights of the petitioner with retrospective effect and prayed for its quashment. 15. It is clear from the specific provisions contained in the notification dated March 31, 2006 that dealers who are continuing to avail of facility of exemption, which availed of the facility over the unexpired period of eligibility certificate shall also be eligible to first adjust balance of input-tax rebate if any, against any other tax liability of self and to transfer remaining balance for adjustment against tax liability of any other registered dealer, if desired. Therefore, the dealer who was continuing with the facility of exemption u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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