TaxTMI 
TaxTMI 
2022 (4) TMI 1046
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2019 (annexed at Annexure A) issued by the Government of India is without competence, manifestly arbitrary, in breach of principles of promissory estoppel and violating Article 14 and 19(1)(g) of the Constitution of India; C. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith return/issue EPCG licenses and invalidation letters surrendered by the Petitioners on the basis of impugned circular dated 4.1.2019; D. Without prejudice to the above and in the alternative this Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith return the bank guarantees furnished for the EPCG licenses which have already been surrendered by the Petitioners pursuant to impugned circular dated 4.1.2019; E. Pending notice, admission and final hearing of this petition, this Hon'ble Court be pleased to suspend the retrospective operation and implementation of the impugned circular dated 4.1.2019 (annexed at Annexure A); F. Ex parte ad interi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ther refund applications of terminal excise duty had been withdrawn since the issuance of the EPCG licenses and that the invalidation letters to the writ applicants was being reviewed in light of the notification dated 18th April 2013. 7 Thereafter the writ applicants preferred a written representation before the DGFT explaining that the transmission of electricity was different from distribution of electricity and that therefore, the writ applicants were eligible for the EPCG licenses despite Para 5.01(g) of the Foreign Trade Policy. Besides this, oral representations were also made from time to time. 8 The DFGT however issued the impugned policy circular dated 4th January 2019 "clarifying" that the transmission and distribution of electricity constituted the same process of supply of electricity from one point to another and that Sr. No. 12 of the Appendix 5F of Foreign Trade Policy 2015-20 did not permit the import of capital goods for generation, transmission and distribution of power. 9 Upon on receipt of such clarification the writ applicants surrendered all the EPCG licenses and requested for release of the bank guarantee on 9th January 2019. This was acknowledged b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....mission and distribution of electricity are two separate and distinct terms as per the provisions of the Electricity Act, 2003 (for short "the Electricity Act"). Both have been separately defined and there are separate chapters in the Electricity Act dealing with the two activities. Hence the impugned "clarification" to the effect that even distribution of electricity was not permissible under the EPCG scheme even though Para 5.01(g) of the scheme only prohibited transmission of electricity is not legally tenable. (c) When technical terms are used in the statute, then such terms are to be interpreted as per the understanding of the people in the relevant industry. Hence, when transmission and distribution are separate activities for people engaged in its business, they need to be given separate meaning even while interpreting the provisions of the Foreign Trade Policy. Reliance was placed on the following judgements: (i) Collector of Central Excise, Kanpur vs. Krishna Carbon Paper Co. (1989) 1 SCC 150 (ii) Chemical and Fibres of India Ltd. vs. Union of India (1997) 2 SCC 664. (iii) Union of India vs. V. M. Salgaoncar and Bros. (P) Ltd. and Others....
X X X X Extracts X X X X
X X X X Extracts X X X X
....harashtra reported in AIR 1975 SC 1549. 17 In such circumstances referred to above, Mr. Vyas prays that there being no merit in the present writ application, the same be rejected. • ANALYSIS: 18 Having heard the learned counsel appearing for the parties and having gone through the materials on record, the question that falls for our consideration is whether the policy circular dated 4th January 2019 is only in the nature of clarification so as to have retrospective effect or whether it introduces a new substantive condition in the EPCG scheme which can, if at all, operate only prospectively? 19 It is not in dispute that the para 5.01(g) of the EPCG scheme which was introduced w.e.f. 18th April 2013 only used the term "transmission" in the prohibited list of activities. Thereafter, by a specific amendment dated 29th January 2016, the "generation" of electricity was also brought within the ambit of negative list of activities. Even then there was no reference to the "distribution" of electricity. Even in the Public Notice No. 47/2015-20 dated 6th December 2017 containing a list of capital goods prohibited under the EPCG scheme, there was no reference to distribu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e activities for the purpose of the Electricity Act and they are distinctly understood by persons such as the writ applicants who are engaged in the business involving supply of electricity. 24 It is well established by a series of judgements that the terms used in fiscal statute are to be interpreted as they would be interpreted by persons engaged in the relevant trade. Reference may be made to the judgement of the Apex Court in the case of Collector of Central Excise, Kanpur vs. Krishna Carbon Paper Co. (1989) 1 SCC 150 wherein it was held and observed as under: "9. It is well settled, as mentioned before, that where no definition is provided in the statue itself, as in this case, for ascertaining the correct meaning of a fiscal entry reference to a dictionary is not always safe. The correct guide, it appears in such a case, is the context and the trade meaning. In this connection reference may be made to the observations of this Court in CST v. S.N. Brothers, Kanpur [(1973) 3 SCC 496 : 1973 SCC (Tax) 254 : AIR 1973 SC 78] , at p. 80 Para 5 (SCC pp. 500-01, paras 4 and 5). 10. The trade meaning is one which is prevalent in that particular trade where the good....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aning of the language contained in it, but is to be construed in its popular sense, meaning, of course, by the words "popular sense" that which people conversant with the subject-matter with which the statute is dealing would attribute to it. The ordinary words in every day use are, therefore, to be construed according to their popular sense. The same view was reiterated by Story, J. in 200 Chests of Tea [(1824) 9 Wheaton US 435, 438] where he observed that the legislature does not suppose our merchants to be naturalists, or geologists, or botanists. See the observations of Bhagwati, J. as the learned Chief Justice then was, in Porritts & Spencer (Asia) Ltd. v. State of Haryana [(1979) 1 SCC 82 : 1979 SCC (Tax) 38] . But there is a word of caution that has to be borne in mind in this connection, the words must be understood in popular sense, that is to say, these must be confined to the words used in a particular statute and then if in respect of that particular items, as artificial definition is given in the sense that a special meaning is attached to particular words in the statute then the ordinary sense or dictionary meaning would not be applicable but the meaning of that type ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al features. The assessee has also filed affidavits from people in the trade to say that polymer chips of the kind manufactured by the assessee are not considered as plastics by those dealing in plastics." 26 Again in the case of Union of India vs. V. M. Salgaoncar and Bros. (P) Ltd. and Others (1998) 4 SCC 263, the meaning of the "ocean-going vessels" for the purpose of the Customs Act, 1962 was decided on the basis of the definition contained in the Merchants Shipping Act, 1958 and on the basis of how the phrase was understood in the maritime enterprises. 27 Applying such principle to the facts of the present case, "transmission" and "distribution" being separately understood in the trade concerning electricity and they having been separately defined and dealt with under the Electricity Act, the impugned circular "clarifying" that transmission and distribution are one and the same cannot be held as valid and legal. Transmission and distribution are separate activities. If the Respondents chose to include even "distribution" in the list of prohibited activities for the purpose of EPCG scheme they could have always done so prospectively by amending Para 5.01(g) of the scheme.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....016) 2 SCC 226 wherein in the context of Export Import Policy 2002-07 it was held that the policy could not have been retrospectively amended by the Government without there being any express power in this regard and that in any case the retrospective amendment of policy cannot take away vested rights of the exporters. The relevant observations of the Supreme Court read thus: "135. We have already discussed these aspects in detail. To recapitulate, it is held by us that Section 5 of the Act does not empower the Government to make amendments with retrospective effect, thereby taking away the rights which have already accrued in favour of the exporters under the Scheme. No doubt, the Government has, otherwise, power to amend, modify or withdraw a particular scheme which gives benefits to a particular category of persons under the said scheme. At the same time, if some vested right has accrued in favour of the beneficiaries who achieved the target stipulated in the scheme and thereby became eligible for grant of duty credit entitlement, that cannot be snatched from such persons/exporters by making the amendment retrospectively. In the present case, we find that Section 5 of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Amending Act in computing the period of limitation for questioning any order levying penalty. Looking to all the circumstances, it said that the Section 9(2A) cannot be said to be violative of Article 19(1)(f) and (g) of the Constitution. 31 However, when a fresh levy is imposed retrospectively by any legislation, the Courts have tended to strike down such levy as being an unreasonable restriction on the fundamental rights guaranteed under Article 19(1)(f) and (g) for the Constitution. Thus, in the case of Shew Bhagwan Goenka v. CTO [1973] 32 STC 368, the Calcutta High Court considered the West Bengal Taxation Laws (Amendment) Act of 1969, in so far as it gave retrospective operation to a new definition of "business" incorporated retrospectively by virtue of the amendment. The court observed that the object of the amendment was not to remove or rectify any defect in phraseology or lacuna or to validate proceedings which had taken place on the basis of the earlier enactment, the object was to enlarge the scope and ambit of the expression "business" by including within it transactions which without the amendment could not be brought within the meaning of the word "business" as und....