TaxTMI 
TaxTMI 
2008 (5) TMI 679
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.... "3. Tariff rates for consumption of electrical energy Not-withstanding anything contained in the Tamil Nadu Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 (Tamil Nadu Act XXIX of 1949), the tariff rates payable to the Tamil Nadu Electricity Board by any consumer on the electrical energy supplied by the Board shall be as specified in the Schedule to this Act. 4. Power of the State Government to amend the Schedule- The State Government may after taking into account the Cost of production of energy, and such other matters as may be prescribed by notification, amend the provisions of the Schedule to this Act." 5. Pursuant thereto and in furtherance thereof, High Tension Supply tariff was prescribed. The State issued a G.O. bearing No. G.O.Ms No. 29 dated 31.01.1995 providing for tariff concession for High Tension industries; the relevant portions whereof are as under: "a) In the case of new High Tension Industries to be set up in the areas other than the Madras Metropolitan areas, the following concessional tariffs shall be charged for the first three years from the date, the consumer is given service connection unde....
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....perintending Engineers/Elecy. Distn. Circle are once again informed to ensure that delays do not occur beyond a reasonable time for processing the H.T. applications as H.T. services constitute major source of revenue for the Board and to bestow all efforts to achieve the target fixed for the year 95-96 without fail." 7. The flow chart annexed thereto specified the maximum period of 18 months' time to be taken from the date of filing of the application till the date of grant of connection. 8. The G.O. dated 31.01.1995 was amended on 14.02.1997 in the following terms: "H.T. Tariff - I There is increase in both demands and energy charges. For consumption of energy during peak hours viz. 6.00 AM to 9.00 AM and 6.00 PM to 9.00 PM, the energy charges are to be billed at 20% extra. This will be implemented on installation of 'Time of Day' meters. New industries set up on or after 15.2.97 are not eligible for any tariff concession. However, in respect of H.T. industries set up in areas other than Chennai Metropolitan area before 15.2.97 shall continue to avail the tariff concession until the expiry of 3 years period reckoned from date of service co....
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....ty of the Notification dated 14.2.1997 withdrawing the concessions were dismissed. b) Those petitioners who had informed the Electricity Board on or before 14.2.1997 about their readiness for getting power connection or made applications to the Board would be entitled to enjoy the tariff concessions for the full period of three years, from the date of power connection as stipulated in the Notification dated 31.1.1995. c) Those writ petitioners who had not made applications or sent intimation to the Electricity Board regarding their readiness to got power connection on or before 14.2.97 but have altered their position by establishing the industry on or before 14.2.97 would be entitled to the tariff concessions as stipulated in the Notification dated 31.1.95 "provided if they are able to establish the same before the 2nd respondent - Electricity Board. 11. Appeals were preferred there against both by the Board and the State Government. Some of the industries who have challenged the notification on the plea of applicability of the doctrine of promissory estoppel also preferred appeals. Indisputably, during pendency of the said appeals before the Division Bench of ....
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....e context of the concessional tariff granted in favour of High Tension Industries for the first three years "from the date, the consumer is given service connection?. ii) Whether the expression "set up" appearing in the proviso to clause (a) of High Tension Tariff would have to be construed in the context of the expression "shall continue to avail themselves of the said tariff concession" appearing in the proviso? iii) Whether the expression "set up" would also takes its colour from the context that the continued tariff concession could be availed by the High Tension Industries "until the expiry of the period of three years from the date on which the consumer is given service connection.? iv) Whether the expression "set up" be not construed to ensure certainty amongst the consumers who could continue to avail of the tariff concession and whether the date on which the consumer is given a service connection provides such certainty? v) Whether the Notification conferring tariff concessions could be construed liberally to extend the benefit thereof by construction of the expression "set up" and by introducing the element of uncertainty? 15. Mr. A.....
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....ise the aforesaid electric supply lines or apparatus for the purpose of tests specified in rule 65." Compliance of Rule 63 of the 1956 Rules, Mr. Ganguly submitted, is a definite parameter to assess the readiness of industry to discharge the functions for which it had been set up. The Government letter dated 1.08.1997 being clarificatory in nature, the same should be given effect to. It was furthermore contended that the subsequent notification dated 7.01.2000 whereby two Explanations were introduced is also clarificatory in nature as a bare perusal of Explanation 1 would demonstrate that it merely clarified what was inhered/ implied in the said proviso which also reflects the undertaking of the government which alone was competent to grant exemptions to concerned industries and/ or to withdraw or modify the same. It was urged that the operative part of the order of the Division Bench should be suitably modified to reflect that the setting up of an industry prior to 15.02.1997 implies that such industry was ready to discharge all the functions for which it had been set up and that it has already become a consumer having obtained High Tension service connection from 15.02.1997....
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....ch even stands accepted by the Board. It was urged that although no appeals have been preferred from the judgment of the Division Bench of the High Court, this Court in exercise of its jurisdiction under Order 41, Rule 33 of the Code of Civil Procedure may permit the respondents to raise the said contention. Reliance in this behalf has been placed on UCO Bank v. Rajinder Lal Cooper [(2007) 6 SCC 694]. 18. The High Court unfortunately did not go into the fact of each case. It proceeded on the basis that the word "set up" should be given its dictionary meaning, i.e., erect or establish in view of a decision of this Court in Ramaraju Surgical Cotton Mills Ltd (supra). The effect for a clarificatory order has also not been considered stating that the Secretary of the Government cannot clarify an amendment to the Schedule which has been made by the Governor. 19. We wish that the Division Bench would have bestowed serious considerations on the issues, as has been done by the learned Single Judge. 20. The validity of the 1978 Act is not in question. It overrides the provisions of the 1948 Act. It empowered the State Government to amend the provisions contained in the Schedule ....
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.... opined that an establishment could not be set up to be ready to commence business if it not "set up". The said view was reiterated by this Court in Kabini Minerals (P) Ltd. (supra) stating: "9. The expression "setting up" means, as is defined in the Oxford English Dictionary, "to place on foot" or "to establish", and is in contradistinction to "commence". The distinction is this that when a business is established and is ready to commence business, only then it can be said of that business that it is set up. But before it is ready to commence business it is not set up. (See CWT v. Ramaraju Surgical Cotton Mills Ltd.) 10. In the said case, it was further held that the word "set up" is equivalent to the word "established" but operations for establishment cannot be equated with the establishment of the unit itself of (sic or) its setting up." 23. What is necessary to take into consideration is that the Schedule appended to Section 3 of the 1978 Act is a part of the Act. It provides for High Tension tariff. It fixes up cut-off dates. It is a piece of subordinate legislation. A subordinate legislation validly made may have to be read in the same manner as if it ....
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.... recorded : "14. The learned Senior Counsel has produced the note file of the Government. From the file, I am able to see that the Chairman, Electricity Board himself while constructing the said expression 'set up' has stated that 'withdrawal of tariff concession to the industries set up with respect to the industries during 1994 the date of load sanction was taken into account'. The Chairman has also recommended to the effect that tariff concession which prevailed prior to 14.2.1997 can be extended to consumers who have informed readiness on or before 14.2.1997 and certified as such all Field Superintending Engineers on inspection of the industry after receipt of readiness report, and after 15.2.1997, due to the reason that it was not informed prior to 14.2.1997." 27. It does not appear that the Chief Secretary of the State had issued the letter in question upon following the procedure laid down in the Rules of Executive Business framed under Article 166 of the Constitution of India. We are, however, not much concerned therewith. It is not a case where the opinion of the Chief Secretary and/or for that matter the State was decisive. In the matter of interpretation o....
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....rm of the industrial policy, we have to read the implementing notifications in the context of the industrial policy. In such a case, the exemption notifications have to be read liberally keeping in mind the objects envisaged by the industrial policy and not in a strict sense as in the case of exemptions from tax liability under the taxing statute." 30. The word "set up", therefore, was also required to be construed keeping in view the provisions of the statute operating in the field, viz., the 1910 Act, the 1948 Act and the 1956 Rules. 31. Validity of the notifications on the ground they are unreasonable has not been raised before the High Court. We, therefore, cannot go into the issue. If that be so, it is difficult to agree with Mr. Parasaran that we should undertake an exercise to interpret the notifications in a manner which would not lead to unreasonableness. For the purpose of declaring a statute unconstitutional, foundational facts have to be laid therefor. [See M/s. Seema Silk & Sarees & Anr. v. Directorate of Enforcement & Ors. Criminal Appeal @ SLP (Crl.) No. 6812 of 2007 decided on 12th May, 2008]. Grounds are required to be raised therefor. In absence thereof it w....
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....e in a particular documentary form, and will otherwise be void, does not have such an obviously social aim as statutory provisions relating to contracts by or with moneylenders, infants, or protected tenants. Nevertheless it can be seen as embodying Parliament's conclusion, in the general public interest, that the need for certainty as to the formation of contracts of this type must in general outweigh the disappointment of those who make informal bargains in ignorance of the statutory requirement. If an estoppel would have the effect of enforcing a void contract and subverting Parliament's purpose it may have to yield to the statutory law which confronts it, except so far as the statute's saving for a constructive trust provides a means of reconciliation of the apparent conflict." Clarke LJ stated, at p 182, that where a particular estoppel relied upon would offend the public policy behind a statute it is necessary to consider the mischief at which the statute is directed. Where a statute had been enacted as the result of the recommendations of the Law Commission it *44 is appropriate to consider those recommendations. He stated that in his opinion: "the contents of that report [T....
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.... the concession is withdrawn. Unlike other notifications, no period is fixed. This Court, in a number of decisions, has considered the effect of the notifications which were applicable for a fixed period, may be three years or five years. The concession, although was to apply for a period of three years both in respect of unit as also maximum demand charges, the same was meant to be applied to all those industries who intended to set up their industries in the areas other than Madras Metropolitan areas. Indisputably, the respondents before us have started setting up their industries after the said date. It is on the aforementioned backdrop, the impugned notification dated 14.02.1997 requires interpretation. Those who had set up their industries have acquired a right, viz. the right to obtain the tariff concession once a right is accrued in their favour. What was promised to them was that they would be granted the tariff concession for a period of three years @ 60%, 70% and 80% of the consumption charges. 35. Whether by reason of the said notification dated 14.02.1997, an accrued or vested right has been taken away or not is the question. The core question, therefore, is as....
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....d that it may not cause undue hardship. What we mean to say that if construction of a statute is possible as a result of hardship is avoided, vis-...-vis, an undue hardship would be created, the court will prefer the former interpretation. The proviso is an exception to the main clause whereas all industries which were set up on or after 15th February become wholly ineligible for any tariff concession but those who had set up prior thereto shall continue to avail themselves of the said tariff concession. Legally, those who had not become consumer of electrical energy, but were the potential consumers, they had not only applied for it but they were and, in fact, some of them has also been gone into commercial production. Once they have set up the high tension industries and who had gone up for commercial production must be held to have set up the high tension industries. Once they have set up the high tension industries after 31st March, 1995, they became entitled to the benefit of concessional tariff for a period three years. Such concession was to be availed by them from the date of grant of service connection. If they had already been granted service connection, they would contin....
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....e the adjudicating authorities. The Bombay Bench was also correct in its conclusion that the circular sought to impose a limitation on the exemption notification which the exemption notification itself did not provide. It was not open to the Board to whittle down the exemption notification in such a manner. The exemption notification merely reproduced the language of Entry 8525 20 17 and since the exemption notification merely reproduced the tariff entry, the limitation sought to be imposed by the Board would tantamount also to reading the limitation into the classification itself." 40. In State of Orissa and Others v. Tata Sponge Iron Ltd. [(2007) 8 SCC 189], this Court held: "20. In view of the clear legal provision as also the aforementioned Notification dated 23-9-1992, there cannot be any doubt whatsoever that the exemption in respect of deferment of sales tax having been provided for under the Orissa Sales Tax Act as also the notification issued thereunder, the High Court, in our opinion, is correct in taking its view." 41. In State of Kerala and Others v. Kurian Abraham (P) Ltd. and Another [(2008) 3 SCC 582], it was opined : "23. Tax administration i....
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.... the authority for rescinding or modifying that notification and appellant ought to have known that the said notification was capable of or liable to be revoked, modified or rescinded at any time even before the expiry of 31.3.1981 if the 'public interest' so demanded. To hold that after the Government had issued the Notification No.66 of 1979 indicating that it was to remain operative till 31.3.1981, it could not be rescinded or modified before the expiry of that date would amount to prohibiting the Government from discharging its statutory obligation under Section 25(1) of the Act, if it was satisfied that it was in the 'public interest' to withdraw, modify or rescind the earlier notification. The plain language of Section 25 of the Act is indicative of the position that it is the public interest and public interest alone which is the dominant factor. It is not the case of the appellants that the withdrawal of Notification No.66 of 1979 by the impugned notification was not in 'public interest'. Their case, however, is that relying upon the earlier notifications they had acted and the Government should not be permitted to go back on its assurance as otherwise they would be put to ....