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TMI Blog2021 (2) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... er the said Industrial Policy of 2004-2009 fixed capital cost subsidy was to be provided to those companies to the extent of capital investment made for setting up of the industry. The petitioners as such were entitled for 25% of the total capital investment as subsidy by way of tax adjustment under the aforementioned industrial Policy. 3. Upon the petitioner approaching the authorities claiming for the said aforementioned subsidy an eligibility certificate was issued granting the petitioners a total subsidy of Rs. 12,81,44,310/-. In spite of having obtained the eligibility certificate for an amount of Rs. 12,81,44,310 the respondents did not adjust the same against the payment of VAT/CST. On the contrary demand notices were being raised by the respondents for recovering the VAT/CST. A similar demand raised in the subsequent years all of which are under challenge by way of separate Writ Petitions all of which are connected today for adjudication. This has led to the filing of the first Writ Petition WPT No.3909/2011 and other writ petitions are challenging the demand notices of the subsequent years. That an interim relief also to the extent that no coercive steps shall be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred. In other words, a Policy evolved later, after expiry of the 'Policy period', can't guide or navigate a course of action already implemented based on the terms of the 'Policy' existed at that time. The benefit provided under the Policy '2004-2009',as it existed earlier and as covered by the Rules notified in this regard were sought to be altered by the State only after expiry of the said Policy period, by issuing a Notification in the year '2011'. No 'Notification' or 'instruction' could have amended the 'Rules' framed and notified in this regard and in fact, amendment of the Rules came only in the year '2012'.By the time the amended Policy/Rules was issued, the Petitioners had already acted upon the promise/concessions offered by the Respondent-State and had pumped in necessary investments and set up the Industry in the State by virtue of which, they had acquired the right to get the investment subsidy in terms of the subsisting Policy / Rules which governed the field during the Policy period. After expiry of the Policy period, a new Policy for the year '2009-2014' was notified by the Government w.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be rectified in public interest, but for re-writing the terms of contract. The State, in its attempt to generate revenue, can tap any source, but care has to be taken, to see that the source itself is not let to be dried up. 33. We are of the view that the Petitioners have made out a case that they were having 'Legitimate Expectation' to have had the benefits flowing from the Industrial Policy for year 2004-2009 and incorporated as part of the Rules notified and existed throughout the Policy period. This is more so since, similar terms of benefit were offered in the Industrial Policy originally notified for the period 2001- 2006, in respect of which, no plea is raised from the part of the State as to any mistake having occurred therein. Admittedly, the said Policy was prematurely terminated and anew Policy was introduced for the period 2004-2009; when also the need to fix any "additional capping of benefit" was never felt by the Government. As such, the explanation now offered from the part of the Government, that it was only a mistake, which required to be rectified in 'public interest' does not hold any water at all. 34. In the above facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e two writ petitions in respect of second issue i.e. WPT No.33/2016 & WPT No.171/2016. The second issue involved in these bunch of writ petitions is as to whether the decision of the State Level Committee concluding that subsidy to a captive power plant would be paid only to those captive power plants where the generated electricity is only for its own use and not as defined under Central Legislation i.e. Electricity Act 2003 and Electricity Rules framed thereunder of 2005. 9. The reason why these two set of writ petitions are taken up together is that even though the other 5 writ petitions other than WPT 33/2016 & WPT 171/2016 stands allowed in the light of the Division Bench judgment of this Court in WPT 36/2013 dated 04.10.2019, the petitioner would not be able to reap the benefits for the reason which is under challenge in these two writ petitions. i.e. WPT 33/2016 & WPT 171/2016 whereby the decision of the State Level Committee have deprived the petitioners the benefit of subsidy on account of given captive power plant a different interpretation other than what is defined under the Central law and Rules. Therefore unless the petitioners succeeds in these two writ petitions th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents in calling upon the petitioners to provide for an explanation before the decision was taken. 12. It was the further contention of the petitioner that the decision on the part of the respondents while passing the order dated 31.05.2013 is by providing wrong interpretation to the provisions of law as it stands. According to the petitioners, the respondents have given an interpretation in total contravention to the statutory provisions as has enacted by the Central Government both under the Electricity Act as also under the Rules framed therein. According to the counsel for the petitioners, any interpretation that the petitioners intend to give has to be in-consonance with the law and it cannot be violative of the law nor can the respondents give a restricted interpretation to the term "Captive Power Plant" other than what it is defined under the Electricity Act. The counsel for the petitioners in support of his contention relied upon 2001 SCC Online M.P. 519, (2016) 1 SCC 780, (2006) 8 SCC 702, (2000) 5 SCC 271, (1997) SCC Online M.P. 449, (1996) SCC Online M.P. 618 in support of his contention. 13. According to the counsel for the petitioners, the second question of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order passed by the State Level Committee on 31.05.2013. According to the State counsel, the decision of the State Level Committee is as a matter of policy based upon the notification issued by the State Government and which has been applied and since it is a policy decision particularly on revenue matters, there is hardly any scope of interference available for the Writ Court under Article 226 of the Constitution of India. The State counsel while referring to the judgment of the Division Bench of this Court in WPT No. 33/2016 submitted that since the notification dated 10.08.2011 applying the same retrospectively, the same now stands settled and decided. According to him the question now to be considered is only the veracity of the order dated 31.05.2013 by which the petitioners establishment stands excluded from getting the benefit of subsidy. . 17. According to the State counsel, the earlier decision granting subsidy to the petitioners was erroneously granted without proper consideration of the contents of the Industrial Policy. According to the State counsel 17 of the same, the provision for grant of subsidy is made available, to only those Captive Power Plants, which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law introduced, inserted or brought into force by the respondents by giving a retrospective effect. According to the State counsel, in case if the State Level Committee at the first instance had taken an erroneous decision granting the benefit of subsidy to the petitioners, it does not mean that the error so committed by the said State Level Committee cannot be rectified by recalling the same and by giving a proper and meaningful interpretation. It was the further contention of the learned Additional A.G. that even otherwise, the petitioners establishment would not be entitled for the benefit of subsidy for the reason that the Industrial Policy, 2004-09 itself was amended on 10.08.2011 wherein by way of an amendment the respondents had put an upper limit of Rs. 3 crores, so far as the granting of subsidy is concerned and this amendment to the policy was given effect from 01.11.2004 and therefore as per the said amendment of 2011 also, the petitioner at best could have got only the subsidy of Rs. 3 crores and not more. 21. According to the State counsel, the Government of Chhattisgarh had of the said definition, which has been taken into consideration by the State Level Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gibility certificate, but the petitioners were never provided with the refund of subsidy or adjustment of the same against the subsequent liability. The petitioners had been repeatedly approaching the authorities claiming for adjustment of the tax liability against the incentives that the petitioners are entitled for, which the respondents did not respond and meanwhile the respondents raised the demand notice against the assessment order dated 27.02.2009 and later on the authorities also were able to get a revenue recovery certificate issued against the petitioners against the assessment order dated 27.02.2009 and similar demand notices have raised by the respondents in the subsequent years also. It is this demand notice issued in the different years, which are under challenge in this bunch of writ petitions except for WPT No. 33/2016 & WPT 171/2016. In all the writ petitions, petitioners were granted interim protection by this Court to the extent of restraining the respondents not to take any coercive steps against the petitioners. 24. The provisions regarding grant of subsidy subsequently stood amended on 10-08-11, to the extent of the State Government introducing an upper cap o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n use and includes a power plant set up by any co-operative society or association of persons for generating electricity primarily for use of members of such co-operative society or associations." 28. In exercise of the powers conferred under the provision of the Electricity Act, the Central Electricity Board had also framed the Electricity Rules of 2005. The said rules envisages the requirement of captive generating plant, the relevant portion of which in the instant case is Rule 3(1) is reproduced here-in-under: "(1) No power plant shall qualify as a 'Captive Generating Plant' under section 9 read with clause (8) of section 2 of the Act unless- (a) in case of a power plant- (i) not less than twenty six per cent. of the ownership is held by the captive user(s) and (ii) not less than fifty one per cent. of the aggregate electricity generated in such plant, determined on an annual basis, is consumed for the captive use" 29. So also it is relevant at this juncture to refer to Clause 2 of sub-rule 2 of rule 3 which again for ready reference is reproduced here-in-under: "(2) It shall be the obligation of the captive users to ensure that the consumption by the captiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . What has to be visualized at this juncture is that the power that is generated cannot be stored. Whatever power that is generated has to be consumed or else the power would get wasted. What is also to be visualized is the fact that the requirement of power may fluctuate from one month to another depending upon various factors primarily the climatic conditions and also the production, that is to be made in a particular period of time and therefore it would not be possible for any establishment to decide the fixed amount of power that has to be generated and in a given month in case, if the demand falls, the only option available to the petitioner would be to give it to some third agency, which could also be the State Government and in that circumstances if the arguments advanced by the respondents are to apply then this Court has no hesitation in presuming that the benefit of subsidy would not be reaped by any person or any establishment. The policy thus framed would be a redundant or a policy only for name sake, the benefit of which cannot be availed by any establishment as such. This thus in the opinion of the Court was never the intention and the object, firstly while framing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Act as also the Rules framed therein. 35. Another aspect which needs consideration is that under the principles of interpretation, what is to be seen is the most practicable meaning to a term that could be given, an interpretation which is impracticable and which may lead absurdity, has to be avoided. What also has to be considered is looking upon the basic intention of the policy makers. Given the factual circumstances and the purpose, intention and object in providing incentive to investors leads us to an indisputable conclusion that the intention of the policy makers was in providing certain amount of incentives to those persons who would also be investing on captive power plants so as to ensure uninterrupted supply of power so that the investors do not suffer on the production front. 36. It is always a legitimate expectation of an investor of getting certain extra benefit in the course of making huge investment in a particular State. At the same time, the benefit so extended is for giving the booster to the investors by the State Government and while framing the policy, the respondents have not felt that the definition of captive power plant would not be what it is under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is now well settled by a series of decisions of this Court that the State authorities as well as its limbs like the Board covered by the sweep of Article 12 of the Constitution of India being treated as 'State' within the meaning of the said Article, can be made subject to the equitable doctrine of promissory estoppel in cases where because of their representation the party claiming estoppel has changed its position and if such an estoppel does not fly in the face of any statutory prohibition, absence of power and authority of the promisor and is otherwise not opposed to public interest, and also when equity in favour of the promise does not outweigh equity in favour of the promissor entitling the latter to legally get out of the promise...... ...... MRF made a huge investment in the State of Kerala under a promise held to it that it would be granted exemption from payment of sales tax for a period of seven years. It was granted the eligibility certificate. The exemption order had also been passed. It is not open to or permissible for the State Government to seek to deprive MRF of the benefit of tax exemption in respect of its substantial investment in expansion in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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