9911796707
TMI Blog2008 (5) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfied that the need was to grant concession if not permanently, at least for a long time. It is now a well settled principle of law that the Doctrine of promissory estoppel applies to the State. It is also not in dispute that all administrative orders ordinarily are to be considered prospective in nature. When a policy decision is required to be given a retrospective operation, it must be stated so expressly or by necessary implication. The law which emerges from the discussion is that the doctrine of promissory estoppel would not be applicable as no foundational fact therefore has been laid down in a case of this nature. The State, however, would be entitled to alter, amend or rescind its policy decision. Such a policy decision, if taken in public interest, should be given effect to. In our constitutional scheme, however, the statute and/or any direction issued thereunder must be presumed to be prospective unless the retrospectivity is indicated either expressly or by necessary implication. It is a principle of rule of law. A presumption can be raised that a statute or statutory rules has prospective operation only. The State of Kerala in this case did not grant any c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a statutory liability. The Act provides for its consequences. Unless, therefore, the 2003 Act specifically introduced, the bar of limitation as regards the liability of the consumer incurred prior to coming into force of the said Act. In our opinion, having regard to Section 6 of the General Clauses Act, the liability continues. We, therefore, are of the opinion that the High Court was not correct in its view to the aforementioned extent. The judgment of the High Court is, thus, set aside to the aforementioned extent. The appeals are allowed with costs. Grant of installments - interest on the delayed payment under the tariff - In all other cases, the High Court directed that 18% interest would be payable following the decision of the Court in Kerala State Electricity Board through its Special Officer (Revenue) and Anr. v. M.R.F. Ltd.[ 1995 (12) TMI 381 - SUPREME COURT] . The same principle would apply in this case also but the bill having been raised only in 2003, the question of charging any interest thereupon from a retrospective date would not arise. This appeal is, thus, dismissed. However, there shall be no order as to costs. - S.B. Sinha and L.S. Panta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the institutions either on production of proper certificate from the Director of Tourism or based on list of institutions eligible for the concessional tariff furnished by the director of tourism to the Secretary, Kerala Electricity Board. The certificates/ communications should be given by the Director of Tourism himself. (3) In the case of institutions in the above categories applying for power connection hereafter tariff as above will be applied by the Kerala State Electricity Board on receipt of necessary certificate from the Director of Tourism. (4) Regarding the admissibility of the concession to any particular unit the matter will be referred to the Director of Tourism and the report on the matter will be accepted by the Kerala State Electricity Board. 5. Indisputably, the appellants had set up or upgraded their hotels and motels. The Government of Kerala classified the hotels in question in several categories for which they became entitled to from the year 1990. The Board, allegedly, had been suffering losses. The Government of Kerala, however, issued a Government Order on or about 25.8.1997 adopting the mode of grant of subsidy, inter alia, to the industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the year 1999 keeping in view the investment made by them. Appellants, however, were served with demand-cum- disconnection notices on the basis of bills raised on commercial tariffs on or about 9.4.2000. 8. A writ petition was filed thereagainst. In the meantime, the State of Kerala issued a Government Order on or about 26.9.2000 stating that the concession on electricity tariff shall be limited only to five years by the Department of Tourism, Government of Kerala. The concession was not to be extended for any further period. Clause (3) of the said GO reads, thus: These orders will be operative from 15.5.1999, the effective date from which Kerala State Electricity Board has withdrawn the concessional tariff offered to tourism units. The tourism units, which have received certificate of eligibility for tariff concession from Director, Department of Tourism, have to produce a certificate from the Kerala State Electricity Board regarding the total period for which they have enjoyed the concessional tariff. They will be eligible for concessional tariff only for a period of five years including the period for which already enjoyed the concession. i.e., if the tourism unit has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncession even with retrospective effect. (d) No foundational fact having been laid to establish the plea of promissory estoppel, the same is not available to the appellants particularly when they had entered into a contract with the Board for which the bills were to be raised on the basis of commercial tariff. (e) Appellants having filed writ petitions after a long time, the impugned judgment should not be interfered with. 14. Indisputably, by reason of the impugned Government Order, the benefit of one of the concessions made available to the appellants by reason of the Government Order dated 11.7.1996 had been taken away. The core question which arises for our consideration is whether the said Government Order dated 26.9.2000 is reasonable having been given retrospective effect and retroactive operation. 15. Tourism was declared to be an industry. The wide range of concessions as noticed hereinbefore, inter alia, covered electricity and water charges. It is not a case where some exemptions or concessions were to be given for a specific period or as a one time measure. No time limit was fixed for applicability in respect of the policy decisions. Pursuant thereto long t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority issuing such direction must have power to do so. The Board, having acted pursuant to the decision of the State, could not have taken a decision which would be violative of such statutory directions 15.5.1999 was fixed as the cut off date by the Board. It, by itself, could not have done so. But the State for issuing the GO dated 26.9.2000 could have fixed the said cut off date on its own. We although do not agree that by granting retrospectivity to the said order, the entirety of the Government Order should be set aside the same or per se would be held to be unreasonable, but what we mean to say is that it could be given effect to only from the date of the order, i.e., prospectively and not from an anterior date, i.e., retrospectively. 18. It was held in Lohia Machines Ltd. and Anr. v. Union of India (UOI) and Ors. [(1985) 2 SCR 686]: On the other hand it is quite clear that if the relief granted is to be withdrawn with retrospective operation from 1972 the assessees who have enjoyed the relief for all those years will have to face a very grave situation. The effect of the withdrawal of the relief with retrospective operation will be to impose on the assessee a huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er decision in Kasinka Trading v. Union of India 55 whereupon Mr Andhyarujina placed strong reliance, in the following terms: 40. The case of Kasinka Trading v. Union of India cited by the appellant is an authority for the proposition that the mere issuance of an exemption notification under a provision in a fiscal statute such as Section 25 of the Customs Act, 1962, could not create any promissory estoppel because such an exemption by its very nature is susceptible to being revoked or modified or subjected to other conditions. In other words, there is no unequivocal representation. The seeds of equivocation are inherent in the power to grant exemption. therefore, an exemption notification can be revoked without falling foul of the principle of promissory estoppel. It would not, in the circumstances, be necessary for the Government to establish an overriding equity in its favour to defeat the petitioner's plea of promissory estoppel. The Court also held that the Government of India had justified the withdrawal of exemption notification on relevant reasons in the public interest. Incidentally, the Court also noticed the lack of established prejudice to the promises when it sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industry and the respondent having acted on the solemn promise of the State Government, purchased the raw material at a fixed price and also sold its products by pricing the same taking into consideration the price of the raw material fixed by the State Government and supplied; the State Government cannot be permitted to revise the terms for supply of raw material adversely to the interest of the respondent and effective from a back date and place the respondent in a situation which it will not be able to resolve. The respondent could not have revised its price from a back date and recovered it from innumerable consumers to whom its finished products were supplied at a fixed price. 20. Our attention, however, has been drawn to a decision of this Court in Kasinka Trading and Anr. v. Union of India and Anr. [(1995) 1 SCC 274]. Therein the power of the State to change its policy decision in public interest was emphasized. 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, stating: Since, the notification had been issued under Section 25(1) of the Act, the very s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption notification under Section 25(1) of the Act. 21. We are not concerned with the exercise of a statutory power in this case. We are concerned with issuance of a direction by the State which is binding on the Board as also how and to what extent it can be rescinded. 22. We may, however, notice that in Motilal Padampat Sugar Mills v. State of U.P. [1979]118ITR326(SC) , this Court held: Public bodies are as much bound as private individuals to carry out representations of facts and promises made by them, relying on which other persons have altered their position to their prejudice * * * If our nascent democracy is to thrive different standards of conduct for the people and the public bodies cannot ordinarily be permitted. A public body is, in our judgment, not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice. 23. Another Bench in Jit Ram v. State of Haryana [(1980) 3 SCR 689] took a different view. Jit Ram was overruled in Union of India v. Godfrey Philips India Ltd. [(1985) 4 SCC 369]. 24. If the doctrine of promissory estoppel applies for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n established before 28-1-1986 and which had still some part of unexpired period of three years of development rebate available with them also were given the continued benefit of the development rebate for the unexpired period from 1-2-1986. What the impugned notification of 31-7-1986 sought to do was to delete this first para of Item 8 of the notification of 28-1-1986. The result was that from 1-8-1986 whatever unexpired period for getting development rebate of 10% was available with the new industries covered by the sweep of the said notification, got withdrawn. It could not be said and it is also not the case of the respondent-Board that in the light of the notification of 31-7-1986 whatever development rebate was granted to these new industries earlier as per the then existing scheme would stand withdrawn or any recovery would be effected against them for the said amount. The case of the Board is that despite any unexpired period for earning the incentive rebate of 10% was available to the existing new industries on 31-7-1986, they would lose that benefit of development rebate for the rest of the unexpired period with effect from 1-8-1986 onwards. Hence it is not possible to ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case did not grant any concession by itself. The Central Government took a larger policy of treating the tourism as an industry. A wide range of concessions were to be granted by way of one time measure; some of them, however, had a recurring effect. So far as grant of benefits which were to be recurring in nature, the State exercises its statutory power in the case of grant of exemption from payment of building tax wherefor it amended the statute. It issued directions which were binding upon the Board having regard to the provisions contained in Section 78A of the 1948 Act. The Board was bound thereby. The Board, having regard to its financial constraints, could have brought its financial stringency to the notice of the State. It did so. But the State could not have taken a unilateral decision to take away the accrued or vested right. The Board's order dated 11.10.1999 in law could not have been given effect to. The Board itself kept the said notification in abeyance by reason of order dated 8.11.1999. Appellants, indisputably, continued to derive the benefits in terms of the original order. They obtained certificates of classification. It is on the aforementioned contex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 003 reads, thus: (5) Save as otherwise provided in Sub-section (2), the mention of particular matters in that section, shall not be held to prejudice or affect the general application of Section 6 of the General Clauses Act, 1897 (10 of 1897), with regard to the effect of repeals. Whereas the bills are issued only in respect of the dues arising in terms of the law as was applicable prior to the coming into force of 2003 Act. Sub-section (2) of Section 56 shall apply after the said Act came into force. The Board could have even framed a tariff in terms of the provisions appended to Section 61 of the Act. Appellants incurred liability to pay the bill. The liability to pay electricity charges is a statutory liability. The Act provides for its consequences. Unless, therefore, the 2003 Act specifically introduced, the bar of limitation as regards the liability of the consumer incurred prior to coming into force of the said Act. In our opinion, having regard to Section 6 of the General Clauses Act, the liability continues. [See Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector and E.T.I.O. and Ors. [(2007) 5 SCC 447] 31. We, therefore, are of the opinion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
