TaxTMI 
TaxTMI 
2019 (9) TMI 522
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....ve Scheme would offset the increased cost of production and the Petitioner would be able to compete with other similar industries in marketing its products at affordable rates, without causing any loss to the Petitioner - Company. 3. Under the Incentive Scheme, monetary and other incentives in the nature of tax subsidy or tax exemption at the rates prescribed in the scheme and other benefits were given. The document of Incentive Scheme required that the Eligibility Certificate be issued by the Implementing Agency and invariably the Implementing Agency would be the concerned District Industries Centre headed by an officer of the rank of General Manager. 4. The Petitioner made an application for issuance of the Eligibility Certificate by the District Industries Center, Amravati. The Petitioner was found eligible for getting the certificate, and therefore, by the final order issued on 20th March 2017, the General Manager, District Industries Centre, Amravati issued the Eligibility Certificate which was valid for nine years. Under the Incentive Scheme, the date from which the Eligibility Certificate shall take effect for availing of the sales tax incentives was to be specified by the....
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....GST and at the most eligible units would get refunds based on Eligibility Certificates as provided under the Government Resolution dated 12th June 2018. 8. We have gone through the document of the Incentive Scheme of 1993, placed on record. It elaboratively speaks of the incentives to be given to the Industries. The object of the Incentive Scheme is to achieve dispersal of the industries outside Mumbai­-Thane­-Pune industrial belt and to attract industries to underdeveloped and developing areas of the State. The Incentive Scheme was originally introduced in 1964 and was amended from time to time. One of the significant amendments, was in the year 1993. It extended the period of Incentive Scheme to 30th September 1998. Another significant amendment was made in the year 2007 vide Government Resolution dated 30th March, 2007. It appears that the Incentive Scheme has been further extended by few more Government Resolutions and there is no dispute about the fact that the Incentive Scheme came to be extended for further periods from time to time and it was in operation when the impugned order was passed by the Commissioner of Sales Tax. In fact, there is no document placed on re....
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....ssioner of Sales Tax. This order, therefore, would have to be quashed and set aside. 11. Apart from the curtailment of the period of Eligibility Certificate, the Petitioner has yet another grievance. The grievance is about reduction of the incentives offered under the Incentive Scheme which is in detriment to the interest of the Petitioner and also the larger societal interest. The Petitioner submits that no reduction of the incentives already offered under the Incentive Scheme in operation on the date on which the Eligibility Certificate was issued could have been made and if it has been made now, it would be in violation of the principle of promissory estoppel. 12. The learned Counsel for Petitioner submits that it is well settled law that the promise solemnly given by the State cannot be withdrawn to the detriment and the disadvantage of the person, who has acted upon it and suffered liabilities. According to the learned AGP, even if there is reduction in the incentives, it would not ultimately affect the Petitioner in adverse manner, and therefore, there is no breach of the principle of promissory estoppel. In order to resolve the issue so raised, it would be necessary for us....
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....ation to act in a manner that is fair and just or that it is not bound by considerations of "honesty and good faith"? Why should the Government not be held to a high "standard of rectangular rectitude while dealing with its citizens"? There was a time when the doctrine of executive necessity was regarded as sufficient justification for the Government to repudiate even its contractual obligations; but, let it be said to the eternal glory of this Court, this doctrine was emphatically negatived in the Union of India v. Indo­Afghan Agencies (1968) 2 SCR 366 case and the supremacy of the rule of law was established. It was laid down by this Court that the Government cannot claim to be immune from the applicability of the rule of promissory estoppel and repudiate a promise made by it on the ground that such promise may fetter its future executive action. 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 promisee and the promisee would alter his position relying upon it. But if the Government makes such a promise and the promisee acts in reliance upo....
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....acts and circumstances on account of which the Government claims to be exempt from the liability and it would be for the Court to decide whether those facts and circumstances are such as to render it inequitable to enforce the liability against the Government. Mere claim of change of policy would not be sufficient to exonerate the Government from the liability: the Government would have to show what precisely is the changed policy and also its reason and justification so that the Court can judge for itself which way the public interest lies and what the equity of the case demands. It is only if the Court is satisfied, on proper and adequate material placed by the Government, that overriding public interest requires that the Government should not be held bound by the promise but should be free to act unfettered by it, that the Court would refuse to enforce the promise against the Government. The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public in....
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.... State to the industries. The promise is that, if the industries come out of their secure shells in Mumbai­-Thane­-Pune industrial belt and set up their industrial units in diffused virgin pastures of the State, spread out in rural and remote areas, the industrial units would be eligible for various incentives offered in the Incentive Scheme. These incentives are meant for offsetting the additional investment and increase in cost of production of the industrial units so that the goods and services could be produced at competitive rates and without incurring any losses. 17. Relying upon such a promise and assurance given by the State, the Petitioner has opened its industrial unit at village Dabha by making substantial investment. The Petitioner has acted upon the promise and the promise had been given by the State with an intention to create legal relation. The Petitioner having changed its position and having made investments, has forged a legal relation with the State, and therefore, now the State would be bound by the promise that it gave to the Petitioner through the Incentive Scheme and which it confirmed it by issuing the Eligibility Certificate. 18. It would be clea....
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.... ........................................................................................; (b) ........................................................................................; (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment; (d) .........................................................................................; (e) .........................................................................................; (f) ........................................................................................." 20. Though the earlier decisions of the Hon'ble Supreme Court indicated that the courts were hardly concerned with the directive principles, they being not justiciable or enforceable in the courts of law like the fundamental rights, the duty of the courts in relation to the directive principles of the State policy came to be stressed much in later decisions, especially after 13­member Bench in Keshavananda V/s State of Kerala, (1973) 4 SCC 225. This case laid down certain broad propositions as regards fundamental rights, such as - (i) There is no disharmony bet....
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....ould have the power to strike down the same. A useful reference in this regard may be made to the observations of the Hon'ble Apex Court in paragraph Nos.3, 4 and 5 of Tinsukhia Electric Supply Co. Ltd. V/s State of Assam and Others, reported in (1989) 3 Supreme Court Cases 709. For the sake of convenience, we reproduce here a portion from the relevant observations made in paragraph No.5, which reads as follows :­ "5. Whenever a question is raised that the Parliament or the State legislature have abused their powers and inserted a declaration in a law for not giving effect to securing the Directive Principles specified in Article 39(b) and (c), the court can and must necessarily go into that question and decide. See the observations of Justice Mathew in Kesavananda Bharati Case at page 855 of the report (SCC p.896). If the court comes to the conclusion that the declaration was merely a pretence and that the real purpose of the law is the accomplishment of some object other than to give effect to the policy of the State towards securing the Directive Principles as enjoined by Articles 39(b) and (c), the declaration would not debar the court from striking down any provision....