TaxTMI 
TaxTMI 
2006 (12) TMI 483
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.... i. to new units from the date of commercial production, which start such production between 1.1.92 and 31.12.96. ii. to manufacturing units only and not to service and entertainment units. iii. To existing units for substantial expansion/ modernization/diversification the concession in such cases will be available only for the consumption of the new machinery and equipments which adds to the capital asset, by not less than 25% of the exiting fixed capital investment excluding land and building, the installation of which is to be certified by the competent authority. iv. for modernization, to industrial units having a contract demand not exceeding 500 KVA. In such cases, new equipments alone will be eligible for the concession." The said industrial policy of the State was accepted by the Kerala State Electricity Board, which is a body constituted and incorporated under the provisions of the Electricity (Supply) Act, 1948, in respect of which a notification was issued on 27.3.1992. By reason of the said notification, some guidelines were also issued. The appellant herein contended that pursuant to or in furtherance of the representation made by the State of Kerala and/....
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....ect and start production at the earliest. We have informed these facts and figures to the previous Ministry vide our letter dated 22nd February, 1996, addressed to Hon'ble Minister of Electricity. We are sorry to inform you that so far we have not received any favourable decision. According to our schedule, we are planning to start production in the month of August, 1996. Of the huge investment of Rs. 12.5 crore, 75% of the total cost of the project has already been invested and any more delay in power allocation will effect our project very seriously. To avoid unnecessary delay in starting the production, we need the sanction of power allocation urgently. We understand that our file is pending with the Chief Engineer, World Bank Projects, Vaiduthy Bhavanam, Thiruananthapuram and with the Secretary, Kerala State Electricity Board, Trivandrum vide No. TSI/PA/Victory Paper/95-96/3019 dated 7.8.1995." [Emphasis supplied] The response of the Board thereto is to be found in the letter dated 11.2.1997, whereby sanction for power allocation was sought for by the Deputy Chief Engineer from the Chief Engineer of the Board. Having regard to the fact that there was no adequate ....
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....s and circumstances of the case cannot be put against the Board. Above being the factual situation, we are of the view Petitioner is not entitled to get concessional tariff." So far as case of M/s. A.P. Steel Re-Rolling Mill Ltd. is concerned, we need not go into the factual aspect of the matter. Suffice it to notice that its writ petition was permitted to withdrawn by the High Court by an order dated 24th November, 2003. A review application filed by the said appellant was also dismissed by an order dated 25th May, 2004. We may, however, note that an application for grant of electrical connection was filed by it in November, 1995 and actual commercial production started in or about October, 1998. The principal contentions which have been raised by Mr. Ranjit Kumar and Mr. Venkatararamani, learned Senior counsel appearing on behalf of the appellants, are : - i) Appellants having altered their position pursuant to or in furtherance of the representation made by the State of Kerala as also the Board, the doctrine of promissory estoppel would squarely apply in the instant cases; ii) The High Court committed a manifest error in proceeding on the premise that the appellants ....
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....uld not be supplied for such non-supply of power, the commercial production could not start by 31.12.1996, would it at all be equitable to deny the relief to the appellant by giving a literal interpretation to the incentive scheme of the government as adopted by the Board? Our answer to this question must be in the negative. There are several documents on record, which were produced before us to indicate that the appellant has been communicating with the Board, seeking power connection at an early date so that it would be able to start commercial production by 31.12.1996. In making such communication, the appellant has been bringing it to the notice of the Board but for supply, the appellant has made all other arrangements to set the production, but yet there has been inaction on the part of the Board in providing power to the appellant. Mr. Rohatgi, appearing for the Board no doubt brought to our notice a letter from the appellant to the Board and contended that it could not have been possible for the appellant to start production by 31.12.96 but we are unable to accept this submission nor are we making deeper probe into the matter. Suffice it to say that the appellant has been de....
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....al in disguise." Applicability of doctrine of promissory estoppel in a case where entrepreneur alters his position pursuant to or in furtherance of a promise made by the State to grant exemption from payment of charges on the basis of current tariff is not in dispute. The State made its policy decision. The said policy decision could be made by the State in exercise of its power under Section 78A of the Electricity (Supply) Act, 1948. The Electricity Board framed tariff for supply of electrical energy in terms of Sections 46 and 49 of the 1948 Act. While framing its tariff, the Board could take into consideration the policy decision of the State. It was, therefore, permissible both for the State to issue a policy decision and for the Board to adopt the same in exercise of their respective statutory powers under the 1948 Act. When a beneficent scheme is made by the State, the doctrine of promissory estoppel would undoubtedly apply. In Union of India & Ors. vs. M/s. Indo-Afgan Agencies Ltd. [(1968) 2 SCR 366], this Court opined : "We hold that the claim of the respondents is appropriately founded upon the equity which arises in their favour as a result of the represent....
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....support of the stand that the parties had altered their position by acting upon the representations and suffered any prejudice. On facts, therefore, no case for raising the plea of estoppel was held to have been made out. This Court proceeded on the footing that the notification granting exemption retrospectively was not in accordance with Section 10 of the State Sales Tax Act as it then stood, as there was no power to grant exemption retrospectively. By an amendment that power has been subsequently conferred. In these appeals there is no question of retrospective exemption. We also find that no reference was made by the High Court to the decision in M.P. Sugar Mills' case. In our view, to the facts of the present case, the ratio of M.P. Sugar Mills' case directly applies and the plea of estoppel is unanswerable." Yet again in Assistant Commissioner of Commercial Taxes (Asst.) Dharwar & Ors. vs. Dharmendra Trading Company & Ors. [(1988) 3 SCC 570], this Court, on the factual matrix obtaining therein, rejected the contention of the State that any misuse of the concessions granted was committed by the respondent therein and thus the State cannot go back on its promise. It was f....
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....6) 7 SCC 756], this Court held : "The doctrine of estoppel by acquiescence was not restricted to cases where the representor was aware both of what his strict rights were and that the representee was acting on the belief that those rights would not be enforced against him. Instead, the court was required to ascertain whether in the particular circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he had allowed or encouraged another to assume to his detriment. Accordingly, the principle would apply if at the time the expectation was encouraged\005" In Shrijee Sales Corporation & Anr. vs. Union of India [(1997) 3 SCC 398], this Court referring to Motilal Padampat (supra), it was stated : "Two propositions follow from the above analysis: (1) The determination of applicability of promissory estoppel against public authority/Government hinges upon balance of equity or "public interest". (2) It is the Court which has to determine whether the Government should be held exempt from the liability of the "promise" or "representation". In the present case, the first Notification exempting the customs duty on PVC itself reci....
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.... should be construed in favour of the subject since it is contrary to the decisions aforementioned including the three-Judge Bench decision in Novopan India Ltd. It may be noted that this decision was referred to in Mangalore Chemicals and Fertilizers and yet a slightly different principle enunciated. So far as decision in Hindustan Aluminium Corporation (referred to in Parle Export), rendered by a Bench comprising Tulzapurkar and R.S. Pathak, JJ., is concerned, it only holds that the expression "metal" occurring in a notification issued under U.P. Sales Tax Act should be understood in its primary sense, i.e., in the form in which it is marketable as a primary commodity. The learned Judges held that the subsequent forms evolved from the primary form constituted distinct commodities marketable as such and must be regarded as new commercial commodities and not included within the four corners of the notification. This decision cannot therefor be understood as supporting the proposition enunciated in Parle Exports with which we have disagreed. Be that as it may, the occasion for applying the said proposition arises only where there is "real difficulty, in ascertaining the meaning of a....
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....ition to accept the contention of the appellant that the respondents had acted with undue tardiness or lethargy. Further, the remittances of Rs. 8,54,700/- and Rs. 3,45,200/- made by way of security deposit for executing the power supply agreement were actually made on 1.2.1997 and 4.2.1997, after the expiry of the period of concession." The general principles with regard to construction of exemption notification are not of much dispute. Generally, an exemption notification is to be construed strictly, but once it is found that the entrepreneur fulfils the conditions laid down therein, liberal construction would be made. In M/s. O.N.G.C. Ltd. vs. Commnr. Of Customs, Mumbai [(2006) 8 SCALE 551], this Court held : "This Court, times without number, has construed such exemption notifications in liberal manner. [See Commissioner of Customs (Imports), Mumbai v. Tullow India Operations Ltd., (2005) 13 SCC 789, [See Tata Iron & Steel Co. Ltd. v. State of Jharkhand and Others, (2005) 4 SCC 272, Government of India and Ors. v. Indian Tobacco Association, (2005) 7 SCC 396, Commnr. Of Central Excise, Raipur v. Hira Cement, JT 2006 (2) SC 369. and P.R. Prabhakar v. Commnr. Of Income Tax,....