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TMI Blog2022 (12) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... theastern region. In order to bring about industrial progress in this region, several incentives were granted for such industries who in response to the Industrial Policy announced, will set up their industries and carry on the manufacturing of the various articles and items which are notified in the policy itself. The petitioners are some of such industries who have set up their industries and factories in response to the incentives granted by the Government of India through the NEIIPP, 2007. There are several requirements which are to be fulfilled by these industries in order to make themselves eligible for the benefits/incentives offered under the NEIIPP, 2007. There is no dispute of facts with regard to the eligibility of the industries who are before this Court. All these petitioners have been receiving the incentives offered under the NEIIPP, 2007 in terms of the parameters provided therein. There is also no dispute that although initially the exemptions was to the extent of 100% subsequently, it came to be available only to the extent of value addition made by the concerned industries. Such reduction of the benefits during the currency of the NEIIPP, 2007 by the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held out in the Industrial Policy 2012 - The Apex Court observed that the pleadings are completely silent on the reasons for the delay on the part of the government and offer no justification for making the exemption prospective, contrary to the terms of the representation held out in the Industrial Policy 2012. It is one thing for the State to assert that the writ petitioner had no vested right but quite another for the State to assert that it is not duty bound to disclose its reasons for not giving effect to the exemption notification within the period that was envisaged in the Industrial Policy 2012. It was held that both the accountability of the State and the solemn obligation which it undertook in terms of the policy document militate against accepting such a notion of state power and the state must discard the colonial notion that it is a sovereign handing out doles at its will. In view of the very recent Judgment of the Apex Court rendered in M/S HERO MOTOCORP LTD. VERSUS UNION OF INDIA ORS. [ 2022 (10) TMI 677 - SUPREME COURT] and in view of the authoritative findings rendered by the Apex Court in the said Judgment, nothing further is required to be decided in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of the Companies Act, 1956 having its office situated at Mayur Garden, 2nd Floor, Opp. Rajiv Bhawan, G.S. Road, Guwahati 781005, Assam and having a factory at Gopinath Bordoloi Road, Chamta Pathar, Sonapur, Guwahati, Assam. The petitioner is engaged in the business of production/ manufacture and sale supply of cement in the State of Assam as well as other States of the Country. The Petitioner was earlier registered under the provisions of Central Excise Acts Rules as well as under the Meghalaya VAT Act, 2003 and the Central Sales Tax Act, 1956. 4. The petitioner in W.P(C) No. 4355/2020 is a Partnership Firm having its office at EPIP, AIDC, Complex, Amingaon, Kamrup-781031, Assam. The petitioner is engaged in the business of Manufacturing, Processing etc. The petitioner is also manufacturing of ice creams, frozen desserts, processing and pasteurization of milk. 5. The petitioner in W.P(C) No. 4532/2020 is a Partnership Firm having its office at Abhayapur, Gauripur, Shila Sundarighopa, Kamrup- 781031, Assam. The petitioner engaged in the business of manufacturing of excisable goods, viz. Plastics Moulded Furniture. 6. The petitioner in W.P(C) No. 4591/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner in W.P.(C) No. 9203/2019 is a Private Limited Company incorporated under the provision of the Companies Act, 1956 and having its registered office at Palashbari, NH-31C, P.O. Kajalgaon, District- Chirang (BTAD) , Assam-783385. The petitioner is engaged in the manufacture of excisable goods, namely Clacined Petroleum Cook (CPC). 14. The petitioner in W.P(C) No. 9196/2019 is a Private Limited Company incorporated under the provision of the Companies Act, 1956 and having its registered office at No. 2, Makum Patheer, P.O. Margherita, Tinsukia, Assam-786181. The petitioner is engaged in the business of manufacturing and selling Calcined Petroleum Cook (CPC). 15. The petitioner in W.P(C) No. 6764/2019 is a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at 3rd and 4th Floor Anil Plaza II, ABC, G.S. Road, Guwahati-781005. The petitioner is engaged in the business of manufacture of cement and has got a cement grinding unit at Village: Baghjap, Morigaon Road, Jagiroad in the District of Morigaon, Assam- 782410. 16. The petitioner in W.P.(C) No. 6759/2019 is a company incorporated under the provisions of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 and its industrial unit at Village: Kukurmari, P.O. Dhaligaon in the district of Chirang, BTAD, Assam. The petitioner is engaged in the business of manufacturing of Calcined Petroleum Coke. 22. The petitioner in W.P(C) No. 3601/2019 is a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at Noonmati, Guwahati-781020. The petitioner is engaged in the business of manufacturing and sale of Calcined Petroleum Coke and has got a factory at Noonmati, Guwahati in the district of Kamrup(M), Assam. 23. In W.P(C) No. 3055/2019, the petitioner No.1 is a Company registered under the provisions of the Companies Act, 1956 and having its registered office at Century House, P-15/1, Taratala Road, Kolkata 700088. The petitioner No. 1 is carrying on the business in the name and style of Purbanchal Timber Industries and Petitioner No. 2 having its principal place of business at Mirza-Palashbari Road, Palashbari, Kamrup, Assam-781128. The petitioners are engaged in the manufacture of plywood, block board and flush door. 24. In W.P(C) No. 3052/2019, the petitioner No.1 is a Company registered under the provisions of the Companies Act, 1956 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is contrary to the promises made under, NEIIPP, 2007. 29. The Government of India by a notification dated 24th December, 1997 was pleased to announce a new Industrial Policy Resolutions (herein after referred to as IPR containing a package of incentives and concessions for the entire North Eastern Region. The said IPR, amongst others, declared all industrial activity in growth Centers; integrated infrastructural development centers, export promotion and industrial parks, export processing zone, industrial estates and industrial areas as completely tax free zones for a period of 10 years. It was announced and promised by the Government of India that all industrial activities for such areas would be free from inter alia income tax, central excise for a period of 10 years from the date of commencement of production and also that the State Government would be moved for exemptions of sales tax, municipal tax and other such local taxes on industrial activity in the said areas. By the aforesaid office memorandum of 24th December, 1997, it was further provided that Ministry of Finance of Government of India, would be moved to amend the existing rules/notifications for giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IPP, 2007, on the issue of the excise duty exemption under Clause (v) it was clearly noted that hundred percent excise duty exemption will be continued on finished products made in the North Eastern Region, as was available in NEIP, 1997. In terms of the North East Industrial and Investment Promotion Policy (NEIIPP), 2007 the Government of India, Ministry of Finance (Department of Revenue) issued a Notification vide Notification No. 20/2007-CE dated 25.04.2007 conferring benefits in terms with the promise as visualized in the NEIIPP, 2007 in so far as the exemption of Central Excise was concerned, granting exemption in respect of all excisable goods cleared from an unit located in the State of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim, from such of the excise or additional duty of excise leviable thereon as is equivalent to the amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization of CENVAT credit under the CENVAT Credit Rules, 2004. The exemption claimed in the said Notification was made applicable to only new Industrial Units which commenced their commercial production on or after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Central Excise, Guwahati, Assam. 33. The Government of India, Ministry of Finance (Department of Revenue) vide Notification No. 20/2008-CE dated 27.3.2008 amended the Central Excise Notification No. 20/2007-CE dated 25.04.2007. Vide the said Notification the excise duty refund was restricted to a maximum limit as specified in the rate column of the Table appended to the said Notification whereby different rates of maximum limits has been specified for different Chapter of relatable goods. According to the petitioners, the said amendments had the effect of curtailing the benefit of 100% exemption as was given to the petitioner company vide the NEIIPP, 2007 and vide Notification No. 20/2007-CE dated 25.04.2007. The petitioner s case is that the impugned notification had thus completely modified the promise/incentive granted by the Respondents, on the basis of which the petitioner Company had established its industry believing that full excise exemption under Notification No. 20/2007-CE dated 25.04.2007 would be available to the petitioner Company for a period of 10 years. The Notification No. 20/2008-CE purporting to reduce the Petitioner s entitlement therefore was in violation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) vide Notification dated 05.10.2017 framed a Scheme of budgetary support under the GST Regime to the units located in States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim. The said Scheme was in pursuance to the decision of the Government of India to provide budgetary support to the existing eligible manufacturing units operating in the States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim under different Industrial Promotion Schemes of the Government of India, for a residual period for which each of the units were eligible. The new Scheme was offered, as a measure of goodwill, only to the units which were eligible for drawing benefits under the earlier excise duty exemption/refund schemes. In the said Scheme, it was provided that units which were eligible under the erstwhile Schemes and were in operation through exemption notifications issued by the Department of Revenue in the Ministry of Finance, as listed under Para 2 would be considered eligible under the said Scheme. The said Scheme was made limited to the tax which accru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted Tax. According to the petitioners, the said Scheme of Budgetary Support had therefore, curtailed the benefits of full exemption which were promised in the Industrial Policy and Notification No. 20/2007. 39. On these facts, the petitioner assailed the inaction of the Central Government towards they were promised made in terms of the NEIIPP, 2007 by way of the present writ petitions. According to the petitioners, the curtailment of the benefits of the exemptions as promised under NEIIPP, 2007 and Notification No. 20/2007 dated 25.04.2007 by the budgetary support is absolutely illegal without jurisdiction and in clear violation of the doctrine of promissory estoppel. 40. The submissions of the petitioners are that in response to the promise made by the Government under the NEIIPP 2007 as well as Notification No. 20/2007 dated 25.04.2007, the petitioners altered its position by making huge investments for undertaking substantial expansion in the existing industrial unit and thereby invoking the doctrine of promissory estoppels. Consequently, the respondents authority cannot be allowed the resile from the promises by curtailing the benefits by issuing the scheme of budgetary s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Policy which is still subsisting and therefore, the petitioner company is entitled to complete exemption from payment of Central Excise Duty for a period of 10 years from the date of commencement of production after undertaking substantial exemption as promised in the NEIIPP, 2007. It is urged that such curtailment of the benefits in the face of the clear promise handed out under the NEIIPP, 2007 is absolutely illegal and arbitrary. It is urged that under such circumstances, the doctrine of promissory estoppels is squarely applicable and the Central Government is bound by the promise it had made through the Industrial Police i.e. NEIIPP, 2007 and which promise is still subsisting. 42. Referring to the provisions of Section 174 of the CGST, Dr. Saraf, learned Senior counsel submits that in terms of the said provisions any tax exemption granted as an incentive against the investment through a Notification shall not continue as a privilege if the said notification rescinded on or after the appointed day. It is submitted by Dr. Saraf that the benefits be granted under the Industrial Policy and the same was made effective by notification No. 21/2017-CE. According to Dr. Saraf, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y will, in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights, even where they arise, not under any contract, but on his own title deeds or under statute. The law may, therefore, now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promisee, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee, notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a formal contract as required by Article 299 of the Constitution. The Apex Court further in the said judgment in para 33 observed as under: Whatever be the nature of the function which the Government is discharging, the Government is subject to the rule of promissory estoppel and if the essential ingredients of this rule are satisfied, the Government can be compelled to carry out the promise made by it. 46. So far as the limitation of the Doctrine of Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as extended as a concession for a period of five years, which was to run from the date of commencement of production. By a subsequent notification dated 29-9-1980, published in the gazette on 21-10-1980, the State of Kerala withdrew the exemption relating to the purchase tax and confined the exemption from sales tax to the limit specified in the proviso of the said notification. While quashing the subsequent notification, it was observed: If in response to such an order and in consideration of the concession made available, promoters of any small-scale concern have set up their industries within the State of Kerala, they would certainly be entitled to plead the rule of estoppel in their favour when the State of Kerala purports to act differently. Several decisions of this Court were cited in support of the stand of the appellants that in similar circumstances the plea of estoppel can be and has been applied and the leading authority on this point is the case of M.P. Sugar Mills [Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409 : 1979 SCC (Tax) 144] . On the other hand, reliance has been placed on behalf of the State on a judgment of this Court in Bakul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power cannot be exercised in violation of the rule of promissory estoppel. In other words, the Government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of promissory estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule. If the Government grants exemption to a new industry and if on the basis of the representation made by the Government an industry is established in order to avail the benefit of exemption, it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that promissory estoppel cannot be claimed against a statute. Answering the question as to whether the Board is restrained from withdrawing the rebate prematurely before the completion of three/five years' period by virtue of the doctrine of promissory estoppel, the Apex Court in Pawan Alloys Casting (P) Ltd. v. U.P. SEB [(1997) 7 SCC 251] held in paras 10 24 as under: 10. It is now well settled by a series of decisions of this Court that the State authorities as well as its li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 465, wherein the law has been stated in the following terms: 25. In other words, promissory estoppel long recognised as a legitimate defence in equity was held to found a cause of action against the Government, even when, and this needs to be emphasised, the representation sought to be enforced was legally invalid in the sense that it was made in a manner which was not in conformity with the procedure prescribed by statute. Referring to its judgment in Motilal Padampat (Supra), the Apex Court in Nestle India Ltd (Supra) observed as under: 29. As for its strengths it was said: that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. The Government was held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made - contractual, administrative or statutory. To put it in the words of the Court: The law may, therefore, now be taken to be settled as a result of this decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standable . 52. In MRF Ltd. v. Asstt. CST, (2006) 8 SCC 702, the judgment in Kasinka Trading (Supra) was also held to be inapplicable. In the said judgment, it was held that the doctrine of promissory estoppel will also apply to statutory notifications. 53. The law relating to promissory estoppel was again reiterated and crystallised by the Apex Court in its latest judgment, State of Jharkhand vs. Brahmaputra Metallics Ltd., Civil Appeal No. 3860- 3862 of 2020. 54. The petitioners contend that the respondent authorities on the basis of the Doctrine of Promissory Estoppel cannot be allowed to resile from the promises made in NEIIPP, 2007 and thereby framing of the Scheme of budgetary support vide Notification No. 05.10.2017 seeking to curtail the benefits of incentives given under NEIIPP, 2007 and Notification No. 20/2007-CE dated 25.4.2007 are in violation of the doctrine of promissory estoppel. 55. It is further submitted that the fact that the aforesaid Curtailment of the benefits of exemption/ incentives prior to the promised period is unreasonable and arbitrary and contrary to the doctrine of promissory estoppel was also recognized in the discussions held in GST Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upfront and the assessee was not supposed to pay the taxes. The basic principle has not been altered under the GST regime also. Materially it does not reckon any change in overall tax collection since as per the promise by the Notification No. 20/2007-CE dated 25.04.2007 no taxes were liable to be paid; and this ought to be continued in GST in respect of the eligible units, if not by way of direct exemption then through reimbursement mechanism. 58. The learned Senior counsel for the petitioners contend that Article 270 of the Constitution of India provides that the tax collected by the Union of India under clause (1) of Article 264 A shall be distributed between the Union and the States in the manner provided in Clause (2). Clause (1B) of Article 270 provides that the tax levied and collected by the Union under clause (2) of article 246A and article 269A, which has been used for payment of the tax levied by the Union under clause (1) of article 246A, and the amount apportioned to the Union under clause (1) of article 269A, shall also be distributed between the Union and the States in the manner provided in clause (2). Clause (2) of Article 270 of the Constitution provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be at the cost or expense, prejudice or detriment to the petitioner. It is further submitted that during the pre GST regime when there was complete exemption by virtue of Notification issued under Section 5A of the Central Excise Act, 1944, the said amount of exemption granted by way of refund was not taken in the total proceeds central excise duty and thereby the same did not form part of net proceeds for the Purpose of devolution of the amount of net proceeds of central excise to the State under Article 270 of the Constitution of India. Since, the Central Government is bound to grant the benefits which was promised and assured under the NEIIPP, 2007 and when such a benefit is granted in pursuance to the NEIIPP, 2007, the same cannot form part of total proceeds and thereby the said amount cannot be taken into consideration of devolution by the State Government. Therefore, it is contended that the taxes now to be collected as per the impugned scheme and then liable to be reimbursed never comprised any part of the overall tax kitty or net proceeds from taxes. The exemption ought to have been continued to be treated as taxes not flowing in any form and not forming any part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision with respect to goods and services tax. (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature Of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State. (2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce. Explanation. - The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods and Services Tax Council. 62. The learned Senior counsel for the petitioners contend that under the said Article 246A, Parliament has exclusive power to make laws with respect to GST where the supply of goods or services or both takes place in the course of inter-state trade or commerce. Similarly, under Article 246A, notwithstanding anything contained in the Articles 246 and 254, Parliament and subject to Clause (2) the Legislature of every State has power to make laws with respect of GST imposed by U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2017 clearly provides that any right, privilege, obligation or liability acquired or incurred under the repealed Act, shall not be effected although the proviso to Section 174 (1)(c) provides that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded on or after the appointed day. Since the petitioner on undertaking the substantial expansion/modernization on the existing industrial unit on the basis of the promises made in the NEIIPP, 2007 and the Notification No. 20/2007-CE dated 25.04.2007 issued under Section 5A of the Central Excise Act, 1944 prior to its repeal, the petitioner acquired a legally vested right on the grant of the full exemption from the payment of central excise duty, said right cannot be taken away on the introduction of GST regime and on repeal of the Central Excise Act, 1944. It is respectfully submitted that the proviso to Section 174 (1)(c) provides that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded on or after the appointed day but in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same can be questioned on the well-known grounds attracting Article 14 of the Constitution but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. As regards the relationship between Article 14 and the doctrine of legitimate expectation, a three judge Bench in Food Corporation of India vs Kamdhenu Cattle Feed Industries, (1993) 1 SCC 71 held thus: 7. In contractual sphere as in all other State actions, the State and all its instrumentalities have to conform to Article 14 of the Constitution of which non-arbitrariness is a significant facet. There is no unfettered discretion in public law: A public authority possesses powers only to use them for public good. This imposes the duty to act fairly and to adopt a procedure which is airplay in action. Due observance of this obligation as a part of good administration raises a reasonable or legitimate expectation in every citizen to be treated fairly in his interaction with the State and its instrumentatities, with this element forming a necessary component of the decision-making process in all State actions. To satisfy this requirement of non-arbitrarin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority concerned to act in accordance with law. Every action of the State or its instrumentalities should neither be suggestive of discrimination, nor even apparently give an impression of bias, favouritism and nepotism. If a decision is taken without any principle or without any rule, it is unpredictable and such a decision is antithesis to the decision taken in accordance with the rule of law. 41. Power vested by the State in a public authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact situation of a case. Public authorities cannot play fast and loose with the powers vested in them. A decision taken in an arbitrary manner contradicts the principle of legitimate expectation. An authority is under a legal obligation to exercise the power reasonably and in good faith to effectuate the purpose for which power stood conferred. In this context, in good faith means for legitimate reasons . It must be exercised bona fide for the purpose and for none other...] 69. It is contended that the aforesaid law has again been reiterat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court in Assistant Commissioner of Commercial Taxes (Asst.), Dharwar and Ors. vs. Dharmendra Trading Company and Ors., (1988) 3 SCC 570, wherein a contention was advanced that concession granted by the State were of no legal effect as there is no statutory provision under which such concessions could be granted. By the said order, it was contended that there was no provision under the Sales Tax Act under which a refund could be allowed on the total sales tax paid by a new industrial unit. The Apex Court rejected the aforesaid contention by holding that the mere fact that the order did not specify the power under which it was issued would make no difference on the ground that such power is clearly there in the Act. The Apex Court further held that where the source of power under which it was issued was not stated in an order but the same could be found on examination of the relevant Act, the exercise of power must be attributed to that source. The Apex Court further held as under: The only submission made on behalf of the appellants Is that since the benefit given is called a refund, it cannot be said to be an exemption or reduction as permitted by Section 8-A. In our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute. He also relies upon the Judgment of the Apex Court in State of Bihar vs. Suprabhat Steel Ltd. reported in (1999) 1 SCC 31, the Apex Court while examining a notification issued to give effect to the Industrial and Incentive Policy held that the said notification was issued to carry out the objective and the policy decisions taken in the industrial policy itself and thereby any notification issued by a government order, if found to be repugnant to the industrial policy declared in government resolution, then the Said notification must be held to be bad to that extent. 71. The learned senior counsel submits that in view of the law laid down by the Apex Court in the aforesaid two judgments, it is clear that Notification dated 05.10.2017 cannot be in conflict with the promises and assurances made in NEIIPP, 2007 and thereby the said Notification dated 05.10.2017 framing the Budgetary Support in so far it curtails the benefit to a sum total of (i) 58% of the Central tax paid through debit in the cash ledger account maintained by the unit in terms of subsection( 1) of section 49 the Central Goods and Services Act, 2017 after utilization of the Input tax credit of the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Duty exemption for 10 years as well as 100% Income tax exemption for 10 years. The previous tax structure has been replaced by GST and a number of changes have taken place as a result. The Goods and Service tax (GST) is an indirect tax, came into effect from 1% July 2017. Under the GST, all Central and Single tax will be levied on all commodities and services, apart from motor spirit, petroleum, natural gas and diesel. The GST council further explained that the Central and State Government had already given various incentives of VAT and CST under the old taxation system and any such incentives could not be continued as it needs to be kept in mind that GST is a destination based tax and any such incentives could lead to double outflow for the origin state, one by way of transfer of tax and other by way of reimbursement to the supplier. The implementation was done in accordance with the statutory provisions of law. As Section 174(2)(c) of CGST Act provides that any tax exemption granted as an incentives against investment through a notification under the erstwhile Central Excise Act Shall not continue as a privilege if the said notification is rescinded, and in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. An exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The Supersession or revocation of an exemption notification in the public interest is an exercise of the statutory power of the State under the law itself. It has been observed that 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 . It has been held that where the Government acts in public interest and neither any fraud or lack of bonafides is alleged, much less established, it would not be appropriate for the court to interfere with the same. (Union of India Vs V.V.F. Limited (Date of Judgment 22.04.2020). iii. Once the excise notifications have been rescinded, the privilege bestowed therein extinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Act, shall not continue as a privilege if the said notification is rescinded and in the present case, the notification was, in fact, rescinded. Thus, in the absence of any challenge by the petitioner to the rescission of the said notification which granted exemption or to the vires of the proviso to Section 174(2)(c) of the CGST Act, no plea of promissory estoppel is maintainable. The language used in the proviso to Section 174(2)(c) is clear and unequivocal, and leaves no room for a different interpretation. vii. It is submitted that the scheme of Budgetary Support under GST regime introduced vide the Government of India, Ministry of Commerce and Industry vide notification dated 05.10.2017 for existing eligible manufacturing units under the different Industrial Promotion Schemes of the Government of India is not without jurisdiction and is not violative of the fundamental rights of the Petitioner. viii. With regards to the questioning the validity of governmental policy, it is submitted that the same is not normally within the domain of any court, to weigh the pros and cons of the policy or to scrutinize it and test the degree of its beneficial or equitable dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt that a change in the policy was necessary in the public interest . It has been held that where the Government acts in public interest and neither any fraud or lack of bonafides is alleged, much less established, it would not be appropriate for the court to interfere with the same. 76. Mr. Keyal, learned standing counsel by referring to the Judgment of Shrijee Sales Corp Vs. Union of India reported in (1997) 3 SCC 398, it is observed and held that the principle of promissory estoppel may be applicable against the Government. But the determination of applicability of promissory estoppel against public authority/Government hinges upon balance of equity or public interest . In case there is a supervening public interest, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Once public interest is accepted as the superior equity which can override individual equity, the aforesaid principle should be applicable even in cases where a period has been indicated for operation of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f promissory estoppel is maintainable. The language used in the proviso to Section 174(2)(c) is clear and unequivocal, and leaves no room for a different interpretation. (Para 35 of Hero Motocorp: vs. Union of India) 81. Subsequently, Dr. Saraf, learned senior counsel leading the arguments for the petitioners sought leave of this Court to make further submission on issues which he feels are relevant for the purposes of the present proceedings. 82. Mr. Keyal, learned standing counsel, GST, did not object to the submissions made requesting for making additional submissions but however he prays that he also be permitted a liberty to reply to such further submissions made by Dr. Saraf, learned senior counsel for the petitioners, if required. 83. Upon being granted liberty, the learned senior counsel for the petitioners submits that the Respondents have filed a Written Submission after completion of the hearing and after going through the Written Submission filed by the Respondents, it has become necessary to give reply to some of the submissions advanced by the Respondents in their Written Submission and thereby Additional Written Submission is being filed on behalf of the Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to continue merely because some entity is enjoying exemption from the tax. Changes in tax law, schemes, regulations, orders affecting taxes and subsidies are matters of the Government policy and statues are liable to change without any legal right to recompense as there is no estoppels against the changes in the statute or policy. (7) That notwithstanding, discontinuation of Central Excise Duty and consequent rendering of Central Excise exemptions nugatory, there is no violation of Article 14 of the Constitution of India because the Petitioner has not been singled out for any adverse treatment. The Scheme notified by the DPIIT is applicable to all industries units located in the State of Assam meeting a common criterion. (8) That the plea of promissory estoppel cannot be enforced against an act done in accordance with the statutory provisions of law Under Section 174(2)(c) of the CGST Act, express provision has been made by the Parliament to provide that any tax exemption granted as an incentive against investment through a notification under, inter alia, the erstwhile Central Excise Act, shall not continue as a privilege if the said notification is rescinded. (9) That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and though commonly named promissory estoppel, it is neither in the realm of contract nor in the realm of estoppel. For application of the doctrine of promissory estoppel the promise must establish that he suffered in detriment or altered his position by reliance on the promise. 85. It is submitted by the learned Senior counsel for the petitioner that Since the Respondents have contended that the doctrine of promissory estoppel cannot be made applicable in the instant case for various reasons, it has become necessary to make additional submit submissions in that regard on behalf of the Petitioners. He also sought leave of this Court to file such additional Written submissions. 86. The learned Senior counsel for the petitioners referring to the Judgment of the Apex Court in Union of India Vs. Anglo Afgan Agencies, reported in AIR 1968 SC 718 submits that the said decision of the Apex Court not only not only strengthened the application of the doctrine of promissory estoppel, in India, against the Government by firmly laying down that the Government is not exempted from carrying out the representation made by it as regards its future conduct, the court, further, emphasized tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granting of exemption a Notification under the relevant statute is required to be published and if the Government has declared its Industrial Policy promising to grant exemption if particular type of industry is set up at a particular place, it will be no defence for the Government to say that so long as no requisite Notification is brought out under the relevant statute, the promise made by the Government is not enforceable against it, for, the law is not powerless and will force the Government to bring out a Notification in tune with its Industrial Policy if the person affected has, acting upon the representations made by the Government, set up the industry at the specified place. 90. The learned Senior counsel for the petitioners submits that the Apex Court in Motilal Padmapat Sugar Mills Co. Ltd. V. State of Uttar Pradesh, reported in (1979) 2 SCC 409 built a complete structure for application of the doctrine, in India, against the Government, for, this decision lays down the conditions precedent subject to which the doctrine can be resorted to, it also lays down as to when the Government can be forced, with the help of the equitable doctrine of promissory estoppels, to abi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the rule of law, no one, howsoever high or low, is above the law. Everyone is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned: the former is equally bound as the latter, it is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. 93. It is further submitted that the Apex Court in Motilal Padmapat Sugar Mills Co. Ltd., (Supra) further held that if the Government does not want its freedom of executive action to be hampered or restricted, the Government need not make a promise knowing or intending that it would be acted on by the promise and the promise would alter his position relying upon it. But if the Government makes such a promise and the promise acts in reliance upon it and alters his position, there is no reason why the Government should not be compelled to make good such promise like any other private individual. 94. It is submitted by learned Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vernment to say that necessary notification, in terms of the taxing statute has not been brought out or published, for the Government, in such a case, can be bound by its promise to exempt person(s) from payment of sales tax. 96. Reliance is also placed on Pournami Oil Mills ors. Vs. State of Kerala Anr., reported in 1986 (Supp) SCC 728, wherein the Apex Court held that when the Government make an announcement promising to grant exemption from sales tax if specified industries are set up at specified place(s) within a specified date without, however, bringing out corresponding notification granting exemption in terms of the relevant statute, the notification, which makes no reference to the provisions of the relevant statute, while making the announcement, would still be treated as a notification under the relevant provisions of the statute and the doctrine of promissory estoppels would force the Government not to deny the incentive of exemption from payment of sales tax promised by it provided, of course, that the other conditions for application of the doctrine exist. 97. Reference is also made to the Judgment of the Apex Court in Commissioner of Commercial Taxes (Asstt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought out to give effect to the representations made by the Government, the Government is not bound by the promise. In fact, in a case of present nature, promissory estoppel will come into operation and the court can force the Government to carry out the representations that it had made. Any notification, issued under the relevant statute, which runs contrary to the Government's representation, may be interfered with. Mere claim by the Government that larger public interest permit the Government not to abide by its representation will not be enough to free the Government from the commitments that it had made, for, the Government cannot, be the judge of its own cause and the Government would have to lay bare all the facts and circumstances, which had induced the Government not to carry out the representation that it has made, and if, on balancing between the two competing equities, that is, the commitment made to the promisee, on the one hand, and the public interest, on the other, the court finds that the public interest has the overriding effect, the promise would not be enforced, for, the doctrine of promissory estoppel, being an equitable relief, must yield, when so required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd. Vs. U.P. State Electricity Board, reported in (1997) 7 SCC 251, and the Court held that the notifications, impugned therein, where not designed or issued to induce the appellants to import PVC resin and, strictly speaking, therefore, the notifications could not have been said to have extended any representation , much less a promise , to anyone enabling him to invoke the doctrine of promissory estoppels against the State. In the light of the decision in Pawan Alloys Casting (P.) Ltd., (Supra), the decision in Kaniska Trading, (Supra) proceeded on the basis that by issuing the earlier notification under Section 25 of the Customs Act no promise had been held out to any of the importers that the notification s life would not be curtailed earlier. The Apex Court, however, clarified, in Pawan Alloys Casting (P) Ltd. (Supra), that the decision in Kaniska Trading, (Supra) is not an authority for the proposition that even if a claim of exemption from import duty was resorted to in public interest by way of an incentive for a class of importers, though such public interest continued to subsist during the currency of such exemption notification and even though the promise, for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... status quo ante cannot be restored. 107. It is contended by Dr. Saraf that the aforesaid two decisions in Kasinka Trading Anr (Supra) and Shrijee Salex Corporation (Supra) were distinguished by the Apex Court. In paragraph 26 of the Judgment of Manuelsons Hotels Private Limited (Supra) wherein the Apex Court held as under. in that case a new Industrial Policy dated 30.4.1990 was declared by the State Government assuring the grant of 33.33o/o hill development rebate on the total amount of electricity bills to new entrepreneurs for a period of 5 years. This period was extended by another period of 5 years to be made available to new industrial units set up till 31.3.1997. Vide Notifications dated 18.6.1998 and 25.1.1999, uniform tariffs of electricity were introduced by which the rebate so given was reduced to 17o/o. Post 2000, vide a Notification dated 7.8.2000, a new tariff challenge to the aforesaid notifications was turned down by this Court. This Court was concerned with an earlier decision in U.P. Power Corpn Ltd. V. Sant Steels and Alloys (P) Ltd., which took a very restrictive view of Section 49 of the Electricity (Supply) Act of 1948, stating that any notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the State for specified period. Oil extraction and manufacturing was one of the industries eligible for the benefit of the Scheme. During the currency of the Scheme, the Government vide Notification dated 07.05.1990 included the oil extraction and manufacturing industry in Annexure - B to the Scheme and thereby rendering the said industry ineligible for the benefit of the Scheme. On the said facts, the Apex Court found that the Scheme had failed to achieve its object and had rather adversely affected the oil industry and under that circumstances, the Notification dated 07.05.1990 was held to be in public interest and thereby the Apex Court held that the doctrine of promissory estoppel could not preclude the Government from issuing such a notification. Further, in that case, it was found that the Respondents' industry had not taken effective steps for starting a new unit prior to the issuance of the Notification withdrawing the benefit of the exemption and thereby the Apex Court held that the Respondents' industry was not entitled to invoke the doctrine of promissory estoppel and to claim the benefit of the incentive Scheme. 111. The learned senior counsel for the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ex Court in Bhavesh D. Parish (Supra) were altogether in different context. In the present case, the Industrial Policy of 2007 has not been amended and is still continuing and as such it cannot be said that there was any change of the policy decision of the Government as reflected in the Industrial Policy, 2007. The Petitioner, in fact, is praying in the present writ petitions that the promises made in the Industrial Policy, 2007 should be honoured and the Union cannot resile from the promises made in the said Industrial Policy,2007. As such, the decision of the Apex Court in Bhavesh D. Parish (Supra) relied on by the Respondents does not help the case of the Respondents. 114. It is submitted by the learned senior counsel for the petitioners that similarly, in the case of State of Punjab Ors. Vs. Ram Lubhaya Bagga Ors, reported in (1998) 4 SCC 117 , the Apex Court held that the right of the State to change its policy from time to time, under the changing circumstances is neither changed nor could it be. In that context, the Apex Court observed as under: It is not normally within the domain of any court to weigh the pros and cons of the policy or to scrutinize it and tes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a very restrictive view of Section 49 of the Electricity (Supply) Act of 1948, stating that any notification issued thereunder can only be revoked or modified if express provision was made for such revocation under Section 49 itself. Further, such revocation could take place under the General Clauses Act only if such withdrawal was in larger public interest, or if legislation was enacted by the legislature authorizing the Government to withdraw the benefit granted by the notification. The larger Bench overruled Sant Steels Case (Supra) stating that its view of Section 49 of the Electricity Supply Act was plainly incorrect, and that Sections 14 and 21 of the General Clauses Act made it clear that a notification issued under Section 49 could be exercised from time to time, including the power to revoke such notification. 117. It is strenuously urged by the learned Senior counsel for the petitioners that when it came to the applicability of the doctrine of promissory estoppel, the Apex Court relied upon the observations made in State of Rajasthan Vs. J.K. Udaipur Udyog Ltd, reported in (2004) 7 SCC 673 and Arvind Industries Vs. State of Gujarat, reported in (1995) 6 SCC 53. 118. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification can be withdrawn by the Government by another statutory notification in the public interest if circumstances change (see paras 30 and 42). Such is not the case before us. On the facts before us, a notification which ought to have been issued under Section 3-A after it was introduced pursuant to a promise made was not issued at all. And change in circumstances leading to overriding public interest displacing the doctrine of promissory estoppel is absent in the facts of the present case. We are thus, satisfied that the aforesaid judgment can have no application whatsoever to the fads of the present case. As such the decision of the Apex Court in Shree Sidhbali Steels Ltd, (Supra) is not applicable in the facts of the present case. 121. It is submitted by the learned senior counsel for the petitioners that the decision in R.C. Tobacco (P) LH A Anr. Vs. Union of India Anr, reported in (2005) 7 SCC 725 also does not help the case of the Respondents inasmuch as in the said case, the Apex Court came to a specific finding that the object of the grant of the package of incentives including an exemption from payment of excise duty was not attained because of the misuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent notification curtailing the benefits of the excise exemption were clarificatory in nature and same did not take away the vested rights conferred under earlier notification. Paragraph 12 of the said Judgment is reproduced below:- 12. Now, so far as the decisions relied upon by the learned counsel appearing on behalf of the respective original writ petitioners-respondents herein are concerned, once it is held that the subsequent notifications/industrial policies impugned before the respective High Court are clarificatory in nature and it does not take away any vested rights conferred under the earlier notifications/industrial policies, none of the decisions relied upon shall be applicable to the facts of the case on hand. 124. The learned Senior counsel for the petitioners submits that in view of the submissions made and the Judgments referred showing the development of the Law of promissory estoppel by the Apex Court, the case laws referred to by the respondents in support of their contentions have no application in the present case. The respondents have miserably failed to dispute the contentions raised by the petitioners and therefore the prayers made by the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the pleadings, it is seen that the Government of India had by way of the NEIIPP, 2007 had granted incentives to various industries to set up and open their industrial units within the northeastern region. In order to bring about industrial progress in this region, several incentives were granted for such industries who in response to the Industrial Policy announced, will set up their industries and carry on the manufacturing of the various articles and items which are notified in the policy itself. The petitioners are some of such industries who have set up their industries and factories in response to the incentives granted by the Government of India through the NEIIPP, 2007. There are several requirements which are to be fulfilled by these industries in order to make themselves eligible for the benefits/incentives offered under the NEIIPP, 2007. There is no dispute of facts with regard to the eligibility of the industries who are before this Court. All these petitioners have been receiving the incentives offered under the NEIIPP, 2007 in terms of the parameters provided therein. There is also no dispute that although initially the exemptions was to the extent of 100% subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s presently enforced by the respondents is outside the purview of the GST Scheme of the Tax Structure. 129. Since the doctrine of the promissory estoppel has been very strenuously urged by the petitioners is necessary to refer to the same. In State of Jharkhand and Ors. Vs. Brahmputra Metallics Ltd., Ranchi and Anr, reported in 2020 SCC Online SC 968, the Apex Court has traced the origins and evolution of promissory estoppels. The relevant paragraphs are extracted below: 28. Before the High Court, the State of Jharkhand sought to sustain its action on the ground that though the follow-up notification under Section 9 was issued on 8 January 2015, no outer limit for the issuance of a notification was prescribed and there was no vested right on the part of the respondent to get the notification implemented from an earlier date or to obtain the benefit of the policy until it was implemented by a follow-up notification. The decision in Kalyanpur Cement (supra) was sought to be distinguished on the ground that in that case no follow-up notification had been issued at all until the policy lapsed. In sum and substance, the objection was that the writ petitioner - the respondent her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given; or to prevent a man from ejecting a woman, with whom he has been cohabitating, from the family home. 31. Chitty (supra) clarifies that the doctrine of promissory estoppel may be enforced even in the absence of a legal relationship. However, it is argued that this would be an incorrect application of the doctrine since it gives rise to new rights between the parties, when the intent of the doctrine is to restrict the enforcement of previously existing rights: 4.089. It has, indeed, been suggested that the doctrine can apply where, before the making of the promise or representation, there is no legal relationship giving rise to rights and duties between the parties, or where there is only a putative contract between them : e.g. where the promisee is induced to believe that a contract into which he had undoubtedly entered was between him and the promisor, when in fact it was between the promisee and another person. But it is submitted that these suggestions mistake the nature of the doctrine, which is to restrict the enforcement by the promisor of previously existing rights against the promisee. Such rights can arise only out of a legal relationship existing betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the doctrine of consideration as was the case under English Law. This Court, speaking through Justice P N Bhagwati (as he was then), held thus: 12 .having regard to the general opprobrium to which the doctrine of consideration has been subjected by eminent jurists, we need not be unduly anxious to project this doctrine against assault or erosion nor allow it to dwarf or stultify the full development of the equity of promissory estoppel or inhibit or curtail its operational efficacy as a justice device for preventing injustice We do not see any valid reason why promissory estoppel should not be allowed to found a cause of action where, in order to satisfy the equity, it is necessary to do so. H.4 From estoppel to expectations 36. Under English Law, the doctrine of promissory estoppel has developed parallel to the doctrine of legitimate expectations. The doctrine of legitimate expectations is founded on the principles of fairness in government dealings. It comes into play if a public body leads an individual to believe that they will be a recipient of a substantive benefit. The doctrine of substantive legitimate expectation has been explained in R v. North and Ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , The End of Estoppel in Public Law? (2003) 62 Cambridge Law Journal 3]. (emphasis supplied) 38. Another difference between the doctrines of promissory estoppel and legitimate expectation under English Law is that the latter can constitute a cause of action 23 . The scope of the doctrine of legitimate expectation is wider than promissory estoppel because it not only takes into consideration a promise made by a public body but also official practice, as well. Further, under the doctrine of promissory estoppel, there may be a requirement to show a detriment suffered by a party due to the reliance placed on the promise. Although typically it is sufficient to show that the promisee has altered its position by placing reliance on the promise, the fact that no prejudice has been caused to the promisee may be relevant to hold that it would not be inequitable for the promisor to go back on their promise. 24 However, no such requirement is present under the doctrine of legitimate expectation. In Regina (Bibi) v. Newham London Borough Council 25 , the Court of Appeal held: 55 The present case is one of reliance without concrete detriment. We use this phrase because ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al thinking has not as yet crystallised as regards the nature and scope of the doctrine. At times, it has been referred to as merely a procedural doctrine; at times, it has been treated interchangeably as promissory estoppel. However both these ideas are incorrect. As stated above, legitimate expectation is a substantive doctrine as well and has much broader scope than promissory estoppel. In Punjab Communications Ltd. v. Union of India, the Supreme Court has observed in relation to the doctrine of legitimate expectation: the doctrine of legitimate expectation in the substantive sense has been accepted as part of our law and that the decision maker can normally be compelled to give effect to his representation in regard to the expectation based on previous practice or past conduct unless some overriding public interest comes in the way Reliance must have been placed on the said representation and the representee must have thereby suffered detriment. It is suggested that this formulation of the doctrine of legitimate expectation is not correct as it makes legitimate expectation practically synonymous with promissory estoppel. Legitimate expectation may arise fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory estoppel. The need for this doctrine to have an independent existence was articulated by Justice Frankfurter of the United State Supreme Court in Vitarelli v. Seton 28 : An executive agency must be rigorously held to the standards by which it professes its action to be judged. Accordingly, if dismissal from employment is based on a defined procedure, even though generous beyond the requirements that bind such agency, that procedure must be scrupulously observed. This judicially evolved rule of administrative law is now firmly established and, if I may add, rightly so. He that takes the procedural sword shall perish with the sword. 131. The Apex Court proceeded to clarify the understanding of the doctrine of legitimate expectation as had been dealt with in the earlier Judgment of the Apex Court. Reference was made to the Judgment rendered in National Buildings Construction Corporation Vs. S Raghunathan, wherein paragraph 18 of the said Judgment it was held under: 18. The doctrine of legitimate expectation has its genesis in the field of administrative law. The Government and its departments, in administering the affairs of the country, are expected to honour th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while ordinary property rights are in general far more limited by considerations of public interest : see R (Alconbury Developments Ltd) v. Secretary of State for the Environment, Transport and the Regions [2001] 2 WLR 1389. 35 It is true that in early cases such as the Wells case [1967] 1 WLR 1000 and Lever Finance Ltd. v. Westminster (City) London Borough Council [1971] 1 Q.B. 222, Lord Denning MR used the language of estoppel in relation to planning law. At that time the public law concepts of abuse of power and legitimate expectation were very undeveloped and no doubt the analogy of estoppel seemed useful ..It seems to me that in this area, public law has already absorbed whatever is useful from the moral values which underlie the private law concept of estoppel and the time has come for it to stand upon its own two feet. (emphasis supplied) 133. In the Judgment of Brahmputra Metallic (Supra) reference was also made to the Judgment of the Apex Court rendered in Monnet Ispat and Energy Ltd. Vs. Union of India. In Monnet Ispat and Energy Ltd (Supra) regarding promissory estoppels and legitimate expectation, there has to be a promise, based on which the promise has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elementary requirement of the guarantee against arbitrary state action which Article 14 of the Constitution adopts. A deprivation of the entitlement of private citizens and private business must be proportional to a requirement grounded in public interest. This conception of state power has been recognized by this Court in a consistent line of decisions. The relevant paragraphs of the said Judgments are extracted below: 52. The State having held out a solemn representation in the above terms, it would be manifestly unfair and arbitrary to deprive industrial units within the State of their legitimate entitlement. The State government did as a matter of fact, issue a statutory notification under Section 9 but by doing so prospectively with effect from 8 January 2015 it negated the nature of the representation which was held out in the Industrial Policy 2012. Absolutely no justification bearing on reasons of policy or public interest has been offered before the High Court or before this Court for the delay in issuing a notification. The pleadings are completely silent on the reasons for the delay on the part of the government and offer no justification for making the exemption pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, or provided reasons for it being in public interest, we hold that such a course of action by the State is arbitrary and is violative of Article 14. 137. In Hero Motorcorp Limited Vs- Union of India ans Ors., the Delhi High Court was considering similar claims made by the petitioner therein in respect of the Industrial Policy accounted by the State of Uttrakhand. The petitioner, therein, based on the incentives issued under Industrial Policy by the State of Uttrakhand had set up its industries. The petitioners, therein, qualified for the exemptions under the said Industrial Policy of the State of Uttrakhand and thereafter continued to avail the benefits under the exemptions Notification till 01.07.2017. After the 101st amendment of Constitution of India whereby the GST was introduced, the petitioner therein migrated to new GST Regime and thereafter was required to pay GST and IGST under the provisions of the GST Tax Regime. By Notification No. 21/2017-CE issued by the respondent-authority, the various area based exemptions notification were rescinded including the notification under which the petitioner was availed exemption. Consequently, the financial incentives granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held by the Apex Court that even on the ground of change of policy, which is in public interest or in view of the change in the statutory regime itself on account of the GST Act being introduced as in the instant case, it will not be correct to hold the Union bound by the representation made by it, i.e. by the said O.M. of 2003 and it would be contrary to the statutory provisions as enacted under Section 174(2)(c) of the CGST Act. 141. The Apex Court further held that unless the appellants can show any statutory duty cast upon the respondent-Union of India to grant them 100% refund of writ of mandamus as sought for could not be issued. Undoubtedly, in the present case there is no duty cast on the Union to refund 100% CGST. The reliefs sought for by the appellants therefore, were declined. The relevant paragraphs of the said Judgments are extracted below:- 54. However, a common thread in all these judgments that could be noticed is that all these judgments consistently hold that there can be no estoppel against the legislature in the exercise of its legislative functions. The Constitution Bench in the case of M. Ramanatha Pillai (supra) has approved the view in American J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, Shree Sidhbali Steels Ltd. vs. State of U.P. , and Director General of Foreign Trade vs. Kanak Exports 57. Recently, this Court, in the case of Unicorn Industries (supra), after surveying the earlier judgments of this Court on the issue has observed thus: 26. It could thus be seen that, it is more than well settled that the exemption granted, even when the notification granting exemption prescribes a particular period till which it is available, can be withdrawn by the State, if it is found that such a withdrawal is in the public interest. In such a case, the larger public interest would outweigh the individual interest, if any. In such a case, even the doctrine of promissory estoppel would not come to the rescue of the persons claiming exemptions and compel the State not to resile from its promise, if the act of the State is found to be in public interest to do so. 58. We are, therefore, of the considered view that even on the ground of change of policy, which is in public interest or in view of the change in the statutory regime itself on account of the GST Act being introduced as in the instant case, it will not be correct to hold the Union bound by the repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Union to refund 100% of CGST. As such, we find that the relief as sought cannot be granted. 142. However, the Apex Court held that though the appellants may not have a claim in law, they do have a legitimate expectations that their claims deserves due consideration. Accordingly, the appellants were permitted to make representations to the respective State High Courts as well as to the GST council. The State Governments and the GST council is required to consider such representation if the same are made in accordance with direction observations in the Judgment. The observation made in Paragraph 72 to 80 of the said judgment is extracted below: 72. This Court in the case of The Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. (supra) had an occasion to consider when a writ of mandamus could be issued. This Court held that: 15. ..There is abundant authority in favour of the proposition that a writ of mandamus can be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge the statutory obligation. The chief function of a writ is to compel performance of public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the court may itself pass an order or give directions which the government or the public authority should have passed or given had it properly and lawfully exercised its discretion. 74. It could thus be seen that this Court holds that a writ of mandamus can be issued where the Authority has failed to exercise the discretion vested in it or has exercised such a discretion malafidely or on an irrelevant consideration. 75. This position was again reiterated by this Court recently in the case of Bharat Forge Ltd. (supra) as follows: 18. Therefore, it is clear that a Writ of Mandamus or a direction, in the nature of a Writ of Mandamus, is not to be withheld, in the exercise of powers of Article 226 on any technicalities. This is subject only to the indispensable requirements being fulfilled. There must be a public duty. While the duty may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of MRF Ltd., Kottayam (supra) is concerned, this Court, in the facts of the said case, specifically came to a finding that the decision to deprive MRF of the benefit of exemption for more than 5 years out of a total period of 7 years was highly arbitrary, unjust and unreasonable. In the case of Manuelsons Hotels Private Limited (supra), perusal of the impugned judgment therein would reveal that the provision on which Manuelsons Hotels Private Limited was claiming benefit under was deleted with effect from the 1st of March 1993. This Court, therefore, made it clear that the benefit would only be available during the period when the said statutory provision existed in the statute book, i.e., from 6th November 1990 to 1st March 1993. This Court, therefore, clearly rejected the claim of benefit from the date on which the statutory provision was deleted from the statute book. 80. In the case of Nestle India Ltd. (supra), the respondent milk producers did not pay the purchase tax for the period between 1st April 1996 and 4th June 1997 since the Government had decided to abolish purchase tax for the said period. For the rest of the period, the tax was paid. The State had at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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