TaxTMI 
TaxTMI 
2004 (11) TMI 320
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....dras High Court which held that the withdrawal of benefits extended to the appellants as subsidy was in order. The appellants questioned legality of the G.O. Ms. No. 989 dated September 1, 1988, directing discontinuance of purchase tax exemption in case of mills which exceeded the ceiling of Rs. 300 lakhs during the period of five years, and Government letter dated December 28, 1988, which made the aforesaid G.O. Ms. No. 989 of September 1, 1988, operative retrospectively from April 1, 1988. Initially the writ petitions were filed before the High Court, but after constitution of the Tamil Nadu Taxation Special Tribunal (hereinafter referred to as "the Tribunal") the writ petitions were transferred to the Tribunal which held that on application of the principles of promissory estoppel and legitimate expectation, the withdrawal of benefit was not sustainable in law. The State questioned correctness of the judgment before the High Court which, as noted above, held the G.O. Ms. and the Government letter to be valid, reversing the conclusions arrived at by the Tribunal. The judgment forms the subject-matter of challenge in these appeals. 2.. In support of the appeals the primar....
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.... the Government subsequently claiming exemption at par with the co-operative and public sector mills. As there was no inducement or assurance, the question of any promissory estoppel did not arise. So far as legitimate expectation aspect is concerned, it is too well-known that the benefit extended can be withdrawn and with this knowledge if the units are set up, the principle of legitimate expectation does not apply. The High Court recorded the following findings on the factual aspects: (1) The respondents have established their units prior to the Government orders granting the subsidy and they have no vested right to claim exemption. (2) No inducement was made in the Government orders to establish the units. (3) The respondents have not acted on the basis of the Government orders for establishing the units. (4) The grant of subsidy is a concession and the Government has got good reasons for modifying the scheme in public interest. (5) No prejudice is caused to the respondents since the scheme was intended to make the units viable and the modified scheme provides for safeguards to that extent. (6) The order granting subsidy can b....
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.... evolved by the courts, on the principles of equity, to avoid injustice. "Promissory estoppel" is defined in Black's Law Dictionary as "an estoppel which arises when there is a promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of promisee, and which does induce such action or forbearance, and such promise is binding if injustice can be avoided only by enforcement of promise". So far as this Court is concerned, it invoked the doctrine in Anglo-Afghan Agencies case AIR 1968 SC 718, in which it was, inter alia, laid down that even though the case would not fall within the terms of section 115 of the Indian Evidence Act, 1872 (in short the "the Evidence Act"), which enacts the rule of estoppel, it would still be open to a party who had acted on a representation made by the Government to claim that the Government should be bound to carry out the promise made by it even though the promise was not recorded in the form of a formal contract as required by article 299 of the Constitution. (see Century Spinning & Manufacturing Co. Ltd. v. Ulhasnagar Municipal Council AIR 1971 SC 1021, Radhakrishna Agarwal v.....
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....n though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. The doctrine of legitimate expectation has an important place in the developing law of judicial review. It is, however, not necessary to explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial review. It is generally agreed that "legitimate expectation" gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightaway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overridin....
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....ower acting reasonably and in good faith could not have made it. But there has to be a word of caution. Something overwhelming must appear before the court will intervene. That is and ought to be a difficult onus for an applicant to discharge. The courts are not very good at formulat- ing or evaluating policy. Sometimes when the courts have intervened on policy grounds the court's view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance. On the contrary, curial views of policy have been subjected to stringent criticism. 12.. As Professor Wade points out (in Administrative Law by H.W.R. Wade, 6th edition) there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable. The reasonableness in administrative law must, there- fore, distinguish between proper course and improper abuse of power. Nor is the test court's own standard of reasonableness as it might conceive it in a given situation. The point to note is that the thing is not unreasonable in the legal sense merely because the court thinks it to be unwise. 13.. In Hindustan Development Corporation's case ....
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....the well-known grounds attracting article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. It can be one of the grounds to consider, but the court must lift the veil and see whether the decision is violative of these principles warranting interference. It depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. It follows that the concept of legitimate expectation is "not the key which unlocks the treasure of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits ", particularly, when the elements of speculation and uncertainty are inherent in that very concept. As cautioned in Attorney-General for New South Wales [1990] 64 Aus LJR 327 the courts should restrain themselves and respect....
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....Orders and other instruments made and executed in the name of the Governor shall be authenticated in such manner as may be specified in rules to be made by the Governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the Governor (3) The Governor shall make rules for the more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business insofar as it is not business with respect to which the Governor is by or under this Constitution required to act in his discretion." Clause (1) requires that all executive action of the State Government shall have to be taken in the name of the Governor. Further there is no particular formula of words required for compliance with article 166(1). What the court has to see is whether the substance of its requirement has been complied with. A Constitution Bench in R. Chitralekha v. State of Mysore AIR 1964 SC 1823, held that the provisions of the article were only directory and not mandatory in character and if they were not complied with it could sti....
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....olution was announced for a particular period, it did not mean that the Government could not amend and change the policy under any circumstances. If the party claiming application of the doctrine acted on the basis of a notification it should have known that such notification was liable to be amended or rescinded at any point of time, if the Government felt that it was necessary to do so in public interest. 21.. In view of the factual position recorded by the High Court that at the point of time the appellants' units were set up and the commercial production started there was no assurance or promise, the doctrine of promissory estoppel had no application to the facts of the case at that stage. We find no substance in the plea that before a policy decision is taken to amend or alter the promise indicated in any particular notification, the beneficiary was to be granted an opportunity of hearing. Such a plea is clearly unsustainable. While taking policy decision, the Government is not required to hear the persons who have been granted the benefit which is sought to be withdrawn. 22.. The question of legitimate expectation arises according to the appellants after the benefits we....