TaxTMI 
TaxTMI 
2022 (12) TMI 810
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....(C) No. 6756/2019, WP(C) No. 6759/2019, WP(C) No. 6764/2019, WP(C) No. 113/2020, WP(C) No. 1838/2020, WP(C) No. 2558/2020, WP(C) No. 2573/2020, WP(C) No. 2582/2020, WP(C) No. 2590/2020; Mr. R. Dubey, learned counsel for the petitioners in WP(C) No. 5233/2019, WP(C) No. 9196/2019, WP(C) No. 9203/2019; Ms. N Hawelia, learned counsel for the petitioners in WP(C) No. 4355/2020, WP(C) No. 4532/2020, WP(C) No. 4591/2020. Also heard Mr. S.C. Keyal, learned Standing Counsel, GST appears for all the respondents. 2. All these petitions have raised common issues and question. As such all these Writ Petitions are taken up for hearing and disposal together. Dr. A. Saraf, learned Senior Counsel leads the arguments on behalf of the petitioners. Mr. S.C. Keyal, learned Standing Counsel appears on behalf of the respondents in all the writ petitions. 3. The Petitioner in W.P(C) No. 2208/2019 is a company incorporated under the provisions of the Companies Act, 1956 having its office situated at Mayur Garden, 2nd Floor, Opp. Rajiv Bhawan, G.S. Road, Guwahati 781005, Assam and having a factory at Gopinath Bordoloi Road, Chamta Pathar, Sonapur, Guwahati, Assam. The petitioner is engaged in the bus....
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.... the provision of Indian Partnership Act, 1932 having its Industrial Unit located at East Banipur, Dhekri Gaon, Lahoal, Dibrugarh, Assam and its principal place of business at 1st Floor, Jain Enterprise Building, H.S. Road, Dibrugrah, Assam . The petitioner is engaged in the business of Manufacture of packaged drinking water. 11. The petitioner in W.P.(C) No. 2582/2020 is a Partnership firm registered under the Indian Partnership Act, 1932 having its registered office at Jail Road, Fancy Bazar, Guwahati-781001 and its factory situated at National Board Complex, Near Panikhaity Circle Office, Panikhaity, Guwahati-781023 in the district of Kamrup. 12. The petitioner in W.P(C) No. 2590/2020 is a registered partnership firm having its principal place of business at 1st Floor, Jain Enterprise Building, H.S. Road, Dibrugarh, Assam. The petitioner is engaged in the business of manufacture of billets. 13 The petitioner in W.P.(C) No. 9203/2019 is a Private Limited Company incorporated under the provision of the Companies Act, 1956 and having its registered office at Palashbari, NH-31C, P.O. Kajalgaon, District- Chirang (BTAD) , Assam-783385. The petitioner is engaged in the manufa....
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....y at ward No. 8, Hudumpur, Mauza-Chayani, Palashbari-781128 in the district of Kamrup(R). The petitioner is engaged in the business of manufacturing of ink, solvent & cleaning solutions, ink roll, filter kits etc. 20. The petitioner in W.P(C) No. 4350/2019 is a private limited company incorporated under the provisions of the Companies Act, 1956 and having its office situated at Pub-Boragaon, P.O. Garchuk, Guwahati- 781035, Assam. The petitioner is engaged in the business of manufacture and sale of multilayer plastic laminated tubes and caps. The petitioner was earlier registered under the provisions of Central Excise Act & Rules as well as under the Assam VAT Act, 2003 and the Central Sales Tax Act, 1956. 21. The petitioner in W.P(C) No. 3606/2019 is a Private Limited Company incorporated under the provisions of the Companies Act, 1956 having its registered office at 55B, Mirza Ghalib Street, Kolkata-700016 and its industrial unit at Village: Kukurmari, P.O. Dhaligaon in the district of Chirang, BTAD, Assam. The petitioner is engaged in the business of manufacturing of Calcined Petroleum Coke. 22. The petitioner in W.P(C) No. 3601/2019 is a company incorporated under the p....
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....ication No. F.No.10(1)/2017-DBA-II/NER dated 05.10.2017 issued by the Ministry of Commerce & Industry, Department of Industrial Policy & Promotion framing a scheme of budgetary support under the Goods & Service Tax regime for the units located in the States of Jammu & Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim providing for budgetary support to the eligible unit for the residual period by way of reimbursement of Goods & Service Tax paid by the unit limited to the Central Government's share of CGST and/or IGST retained after deduction of a part of their taxes to the States in so far as the same curtails the benefit as promised under NEIIPP, 2007 and Notification No. 20/2007. The said Budgetary Scheme has been challenged to be violative of the Doctrine of Promissory Estoppel and Legitimate Expectation. The said Notification dated 05.10.2017 has also been challenged on the ground that the same is contrary to the promises made under, NEIIPP, 2007. 29. The Government of India by a notification dated 24th December, 1997 was pleased to announce a new Industrial Policy Resolutions (herein after referred to as 'IPR' containing a package of incentives and conce....
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....ction on or after the 24th Day of December, 1997 and to the Industrial Units existing before the 24th day of December but which undertook substantial expansion by way of increase in the installed capacity by not less than 25% on or after the 24 day of December, 1997. The exemption contained in the said notifications in terms of para 4 of the Notification was made applicable to any of the above stated Industrial Unit for a period not exceeding 10 years from the date of publication of the Notification in the official Gazette or from the date commencement of commercial production, which ever was later. 31. The Government of India, thereafter, on 1.4.2007 announced a new Policy namely the North East Industrial and Investment Promotion Policy (NEIIPP), 2007. Vide the said Policy, the Government of India has also approved a package of fiscal concessions and other concessions for North East Region. In the said NEIIPP, 2007, on the issue of the excise duty exemption under Clause (v) it was clearly noted that "hundred percent excise duty exemption will be continued on finished products made in the North Eastern Region, as was available in NEIP, 1997. In terms of the North East Industrial....
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....cording to the Petitioner Company it made huge investments in setting up its industrial unit inspired by the fact that it will get the benefits of exemption as contemplated under the Policy of 2007 including 100% Excise Duty Exemption. The Petitioner further states that the product manufactured by the industrial unit of the Petitioner did not fall in the Negative List under Clause (x) of the Policy nor it is covered by Clause 7 of the Notification No. 20/2007-CE dated 25.04.2007 and was therefore entitled for the benefits of incentives under the said NEIIPP, 2007 and Notification No. 20/2007-CE dated 25.04.2007. According to the petitioner company, it was eligible for the exemption granted under the Notification No. 20/2007-CE in as much as the same has been accepted by the Central excise authorities which is reflected in the order No. R- 1930/ACG/2013-14 dated 21.02.2014 passed by the Assistant Commissioner of Central Excise, Guwahati, Assam. 33. The Government of India, Ministry of Finance (Department of Revenue) vide Notification No. 20/2008-CE dated 27.3.2008 amended the Central Excise Notification No. 20/2007-CE dated 25.04.2007. Vide the said Notification the excise duty r....
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....tates. 35. Vide Notification No. 21/2017-CE dated 18.07.2017, various area based exemption notifications including Notification No. 20/2007-CE dated 25.04.2007 applicable to new industrial units set up in the States of Assam or Tripura or Meghalaya or Mizoram or Manipur or Nagaland or Arunachal Pradesh or Sikkim were rescinded. Due to rescinding of the said Notification, the benefits of incentives against investment granted to the Petitioner ceased to continue with effect from 01.07.2017 in terms of the Proviso to Section 174(2)(c) of CGST Act. The direct and immediate effect of rescinding of the said Notification was that the promised exemption was curtailed to the new industrial units for the residual period of their eligibility for such exemption. 36. In continuation of the earlier industrial policies as well as the Central Excise Notifications granting exemption on the levy of central excise duty, Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) vide Notification dated 05.10.2017 framed a Scheme of budgetary support under the GST Regime to the units located in States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East inc....
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....gh framed a Scheme namely the Scheme of Budgetary Support to provide budgetary support to the existing eligible manufacturing units operating in the States of Jammu and Kashmir, Uttarakhand, Himachal Pradesh and North East including Sikkim under different Industrial Promotion Schemes of the Government of India, for a residual period for which each of the units were eligible but the same was limited to sum total of (i) 58% of the Central tax paid through debit in the cash ledger account maintained by the unit in terms of sub-section(1) of section 49 the Central Goods and Services Act, 2017 after utilization of the Input tax credit of the Central Tax and Integrated Tax. (ii) 29% of the integrated tax paid through debit in the cash ledger account maintained by the unit in terms of section 20 of the Integrated Goods and Services Act, 2017 after utilization of the Input tax credit Tax of the Central Tax and Integrated Tax. According to the petitioners, the said Scheme of Budgetary Support had therefore, curtailed the benefits of full exemption which were promised in the Industrial Policy and Notification No. 20/2007. 39. On these facts, the petitioner assailed the inaction of the Cen....
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....oppel as consistently laid down by the Apex Court. It is contended that the respondents cannot be permitted to withdraw or resile from promise made in the face of the alteration of position by the petitioners relying on the policies made under the Industrial Policy and more particularly when the Industrial Policy is still in force. The Industrial Policy clearly outlines the benefits that will accrue to an Industry like the petitioners, who fulfill the criteria and such benefits inter alia includes 100% exemptions from Central Excise Duty pay. Under such circumstances, it is strenuously urged that the Government cannot be permitted to play with the future of the industries by resiling from the promised made under the Industrial Policy and by budgetary support to the extent of 58% of Central Excise Duty pay. The petitioners unit's are located in an area which are declared to be tax free zone under the Industrial Policy which is still subsisting and therefore, the petitioner company is entitled to complete exemption from payment of Central Excise Duty for a period of 10 years from the date of commencement of production after undertaking substantial exemption as promised in the NEIIPP,....
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....equivocal promise knowing and intending that it would be acted upon by the promisee; (2) such acting upon the promise by the promisee so that it would be inequitable to allow the promisor to go back on the promise. 45. It is contended that the Apex Court further observed that that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. The Government was held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made contractual, administrative or statutory. The learned Senior counsel for the petitioner in support of his contentions has referred to para 8 and 24 of the Judgment which is extracted below: "[E]quity will, in a given case where justice and fairness demand, prevent a person from insisting on strict legal rights, even where they arise, not under any contract, but on his own title deeds or under statute." "The law may, therefore, now be taken to be settled....
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....s defined earlier by holding as under: 'If the representation is acted upon by another person it may, unless the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law, if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate Cases an equity against him to compel performance of the obligation arising out of his representation." 48. The Doctrine of Promissory Estoppel has been repeatedly applied by the Apex Court in statutory notifications. In Pournami Oil Mills v. State of Kerala [1986 Supp SCC 728 : 1987 SCC (Tax) 134] the Government of Kerala by an order dated 11-4-1979 invited small-scale units to set up their industries in the State of Kerala and with a view to boost industrialisation, exemption from sales tax and purchase tax was extended as a concession for a period of five years, which was to run from the date of commencement of production. By a subsequent notification dated 29-9-1980, published in the gazette on 21-10-1980, the State of Kerala withdrew the exemption re....
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....n. New industries set up after 21-10-1980 obviously would not be entitled to that benefit as they had notice of the curtailment in the exemption before they came to set up their industries." The aforesaid decision was followed by a three-Judge Bench in State of Bihar v. Usha Martin Industries Ltd. [1987 Supp SCC 710 : 1988 SCC (Tax) 116] where it was stated that the matter stands concluded by the decision in Pournami Oil Mills case. In Shri Bakul Oil Industries v. State of Gujarat [(1987) 1 SCC 31 : 1987 SCC (Tax) 74: AIR 1987 SC 142] it was observed in para 11 as under "The exemption granted by the Government, as already stated, was only by way of concession for encouraging entrepreneurs to start industries in rural and undeveloped areas and as such it was always open to the State Government to withdraw or revoke the concession. We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of promissory estoppel. In other words, the Government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of promissory estop....
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....therefore, had necessarily altered their position relying on these representations thinking that they would be assured of at least three years' period guaranteeing rebate of 10% on the total bill of electricity to be consumed by them as infancy benefit so that they could effectively compete with the old industries operating in the field and their products could effectively compete with their products. On these well-established facts the Board can certainly be pinned down to its promise on the doctrine of promissory estoppel." 49. In Mahabir Vegetable Oils (P) Ltd.v. State of Haryana, (2006) 3 SCC 620, the Apex Court observed that "it is beyond any cavil that the doctrine of promissory estoppels operates even in the legislative field". This was in connection with a statutory notification under the Haryana General Sales Tax Act. 50. A survey of the earlier decisions has also been made by the Apex Court in State of Punjab v. Nestle India Ltd., (2004) 6 SCC 465, wherein the law has been stated in the following terms: "25. In other words, promissory estoppel long recognised as a legitimate defence in equity was held to found a cause of action against the Government, e....
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.... of the Customs Act, 1962, could not create any promissory estoppel because such an exemption by its very nature is susceptible to being revoked or modified or subjected to other conditions. In other words, there is no unequivocal representation. The seeds of equivocation are inherent in the power to grant exemption. Therefore, an exemption notification can be revoked without falling foul of the principle of promissory estoppel. It would not, in the circumstances, be necessary for the Government to establish an overriding equity in its favour to defeat the petitioner's plea of promissory estoppel. The Court also held that the Government of India had justified the withdrawal of exemption notification on relevant reasons in the public interest. Incidentally, the Court also noticed the lack of established prejudice to the promises when it said: 'The burden of customs duty, etc. is passed on to the consumer and therefore the question of the appellants being put to a huge loss is not understandable". 52. In MRF Ltd. v. Asstt. CST, (2006) 8 SCC 702, the judgment in Kasinka Trading (Supra) was also held to be inapplicable. In the said judgment, it was held that the doctrin....
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....ngs, some judgments of the Hon'ble Supreme Court were referred to the effect that the Government can resile from the promise in the cases of supervening public interest. However, no supervening public interest whatsoever was either brought out in the agenda/minutes of the GST Council meetings nor any supervening public interest exists in the present case for curtailing the benefits. The fact that curtailment of the extent of benefits for the residual period would he hit by the doctrine of promissory estoppel was also recognized during the GST Council Meetings. 57. The learned Senior counsel for the petitioners contend that even after admitting the legal and factual position that the promise of offering incentive was unequivocal and any deviation from the same would be hit by the settled principles of promissory estoppel, the GST Council in its meeting on 30" Sept 2016 decided the matter against the settled legal position. As already stated, under the existing laws the tax exemption was granted upfront and the assessee was not supposed to pay the taxes. The basic principle has not been altered under the GST regime also. Materially it does not reckon any change in overall tax coll....
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....scheme and then liable to be reimbursed therefore never comprised any part of the overall tax kitty or net proceeds from taxes. The same procedure ought to have been continued after introduction of the GST regime. It is submitted that there is no larger equity or public interest in restricting the reimbursement to 58%. It is incumbent on the Centre to adjust the collection of taxes after factoring the entire obligation it has held out under the earlier regime. On the contrary the Central Government is purporting to leverage or work out a situation out of nowhere simply to frustrate the benefits promised to the petitioner as also similarity placed industries on the plea that as a matter of goodwill it is extending refund of entire taxes collected by it and it is upto the States to consider the balance 42%. Without prejudice to the legal position that such portion of taxes which at the outset is liable to be refunded and cannot form a part of the net proceeds, the purported devolution to State cannot be at the cost or expense, prejudice or detriment to the petitioner. It is further submitted that during the pre GST regime when there was complete exemption by virtue of Notification....
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....e manner aforesaid. In so far as Assam is concerned, as stated above, 100% outright exemption was granted from central excise duty in respect of new industrial units set up in notified areas of the State for a period of 10 years. Article 279 contains a constitutional mandate for making special provisions in respect of these States. The said constitutional mandate has been violated by the GST Council by curtailing the extent of benefits from 100% earlier allowable to only 58%. 61. The learned Senior counsel for the petitioners submits that under the pre-GST regime, Central Excise Duty was being levied by the Parliament under the Central Excise Act, 1944 in terms of Entry 94 of List-I of the Constitution. Even under the GST regime, and after the amendments made to the Constitution by the Constitution (101st Amendment) Act, 2016 both CGST as well as IGST under CGST Act and IGST Act have been levied by the Centre. Article 246A as inserted by the Constitution (101st Amendment) Act is out below: "246A. Special provision with respect to goods and services tax. - (1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the....
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.... the CGST Act, 2017, which is contrary to para 5 of the notification dated 05.10.2017. As per Section 49/ 49 A of the CGST Act, input credit of SGST is to be utilized for payment of IGST. Therefore, IGST payment will be reduced because of utilization of input credit of SGST with IGST liability. Online portal system does not allow to change any set off rule of input credit and the notification issued by Ministry of Finance dated 27.11.2017 is not at par with the notification dated 27.11.2017 issued by the Department of Industrial Policy & Promotion and portal of GSTIN which has fed to lower budgetary support to the petitioner company which is most illegal and arbitrary and not tenable in law. 64. The learned senior counsel for the petitioners submits that with the introduction of GST, Section 174(1) of the CGST Act, 2017 repealed the Central Excise Act, 1944 (except in respect of goods included in Entry-84 of List I of the Seventh Schedule of the Constitution of India) w.e.f. 01.07.2017. However, Section 174(2)(c) of the CGST Act, 2017 clearly provides that any right, privilege, obligation or liability acquired or incurred under the repealed Act, shall not be effected although th....
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....rant full benefit under the budgetary support scheme in conformity with the NEIIPP, 2007. 66. LEGITIMATE EXPECTION The learned Senior counsel for the petitioners submits that apart from the above, the Union of India having held out a solemn representation in the NEIIPP, 2007, it is illegal and arbitrary to deprive the industrial unit of the petitioners from the legitimate expectation and entitlement. The doctrine of substantive legitimate expectation is one of the ways in which the guarantee of non-arbitrariness enshrined under Article 14 finds concrete expression. 67. In support of his contentions he has pressed into service the following Judgment of the Apex Court: In Union of India vs Lt. Col. P.K. Choudhary, (2016) 4 SCC 236, the Court observed as under: "This Court went on to hold that if denial of legitimate expectation in a given case amounts to denial of a right that is guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power or in violation of principles of natural justice, the same can be questioned on the well-known grounds attracting Article 14 of the Constitution but a claim based on mere legitimate expectation without anythi....
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....st wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the Public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent." 68. In NOIDA Entrepreneurs Assn. vs NOIDA, (2011) 6 SCC 508, a two-judge bench of this Court, speaking through Justice B. S. Chauhan, elaborated on this relationship in the following terms: "39. State actions are required to be non-arbitrary and justified on the touchstone of Article 14 of the Constitution. Action of the State or its instrumentality must be in conformity with some principle which meets the test of reason and relevance. Functioning of a "democratic form of Government demands equality and absence of arbitrariness and discrimination". The rule of law prohibits arbitrary action and commands the authority concerned to act in accordance with law. Every action of the State or its instrumentalities should neither be suggestive of discrimi....
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....hat in spite there being specific powers conferred on the Central Government under section 11 of the CGST Act to exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification on recommendation of the Council, the Scheme of Budgetary Support was not framed in exercise of powers under section 11 of the CGST Act. However, there is no dispute that the said Scheme of Budgetary Support has been framed to give effect to the promises made in the NEIIPP, 2007. It is respectfully submitted that even though the said Scheme has not been framed in exercise of powers under section 11 of the CGST Act, 2017, but framing of the said Scheme can be traced to section 11 of the CGST Act and can be said to have been framed under section 11 of the CGST Act. The learned Senior counsel has strenuously urged that in this connection the petitioner relies on the judgment of the Apex Court in Assistant Commissioner of Commercial Taxes (Asst.), Dharwar and Ors. vs. Dharmendra Trading Company and Ors.,....
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....ection 11 of the CGST Act and thereby the same should be constituted to be an exemption granted by the Central Government to give effect to the Industrial Policy of 2007. Since the aforesaid Notification dated 05.10.2017 has been framed to give effect to the promises and assurances made in NEIIPP, 2007, the same cannot go contrary to the said Industrial Policy in so far as the same is contrary to the Industrial Policy, the same has be deemed illegal. In support of his contentions, learned counsel has relied upon the Judgment of the Apex Court in State of Jharkhand vs. Tata Cummins Ltd., reported in (2006) 4 SCC 57 held hat when an assessee is promised with a tax exemption for setting up an industry in the backward area as a term 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. He also relies upon the Judgment of the Apex Court in State of Bihar vs. Suprabhat Steel Ltd. reported in (1....
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....ustry, Department of Industrial Policy & Promotion curtailing the benefits as promised under NEIIPP, 2007 and Notification No. 20/2007 dated 25.04.2007 may be set aside and/or quashed and directions may be issued to the respondent authorities to extend the full benefit of exemption as promised under the NEIIPP, 2007 and Notification No. 20/2007. Submissions of the Respondents: 73. Mr. S. C. Keyal, learned standing counsel, GST, representing the respondents opposes the contentions made by the learned counsels for the petitioners disputing their contentions he submits that before 2017, the taxation system included the central taxes which included the custom duty/central excise duty, central sales tax on commodities and services, surcharge and cusses. The sales taxes included VAT, WCT etc. Under this old taxation system the Government of India announced a package of fiscal incentives and other concessions for the "North Eastern Region" namely North East Industrial and Investment Promotion Policy (NEEIIPP) 2007 w.e.f. 01/04/2007 which provided the Central Excise Duty exemption for 10 years as well as 100% Income tax exemption for 10 years. The previous tax structure has been repl....
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....tion No. 20/2007-CE had granted exemption from the Central Excise duty to the goods manufactured in the State of North East Region which was not a vested right but a privilege/incentive available to certain units subject to fulfillment of conditions prescribed therein. The existing area based Excise Duty Exemptions have become infructuous and nugatory consequent upon switch over to the GST regime. GST being a new tax, there is no one-to-one correlation with the erstwhile Excise Duty leviable on the product. However, keeping in view the likely hardship faced by industrial units that were already availing excise duty exemptions, under the new Scheme, budgetary support is sought to be provided to these units. ii. Mr. Keyal, learned standing counsel further submits that it must be noted that while considering the applicability of the doctrine of promissory estoppel, the Courts have to do equity and the fundamental principles of equity must forever be present to the mind of the Court, while considering the applicability of the doctrine. It is further held that the doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of t....
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.... continue merely because some entity is enjoying exemption from the tax. Changes in tax law, schemes, regulations, orders affecting taxes and subsidies are matters of the government policy and statues are liable to change without any legal right to recompense as there is no estoppel against the changes in the statue or policy. v. Notwithstanding, discontinuation of Central Excise Duty and consequent rendering of Central Excise exemptions nugatory, there is no violation of Article 14 of the Constitution of India because the Petitioner has not been singled out for any adverse treatment. The Scheme notified by the DPIIT is applicable to all industries units located in the State of Assam meeting a common criterion. vi. It is submitted that the plea of promissory estoppel cannot be enforced against an act done in accordance with the statutory provisions of law. under Section 174(2)(c) of the CGST Act, express provision has been made by the Parliament to provide that any tax exemption granted as an incentive against investment through a notification under, inter alia, the erstwhile Central Excise Act, shall not continue as a privilege if the said notification is rescinded and in....
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....uity and the fundamental principles of equity must forever be present to the mind of the court, while considering the applicability of the doctrine. It is further held that the doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. An exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The supersession or revocation of an exemption notification in the "public interest" is an exercise of the statutory power of the State under the law itself. It has been further held that under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. It has been observed that the withdrawal of exemption "in public interest" is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". It has....
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.... statute. Thus, the Government or public authority cannot be compelled to make a provision which is contrary to law. 79. Mr. Keyal, learned standing counsel strenuously urges that due to the repeal provisions under Section 174(2)(c) of the Central Goods and Services Tax Act, 2017, a tax incentive scheme would not continue as a privilege and the plea of promissory estoppel was not maintainable. 80. Therefore, plea of promissory estoppel cannot be enforced against an act done in accordance with the statutory provisions of law. Under Section 174(2)(c) of the CGST Act, express provision has been made by the Parliament to provide that any tax exemption granted as an incentive against investment through a notification under, inter alia, the erstwhile Central Excise Act, shall not continue as a privilege if the said notification is rescinded, and in the present case, the notification was, in fact, rescinded. Thus, in the absence of any challenge by the Petitioner to the rescission of the said notification which granted exemption or to the vires of the proviso to Section 174(2) (c) of the CGST Act, no plea of promissory estoppel is maintainable. The language used in the proviso to Se....
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.... interest" is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". (5) That once the excise notifications have been rescinded, the privilege bestowed therein extinguished and there is no one-to-one correlation between budgetary support sought to be provided under this scheme and the excise duty exemption provided earlier. This is a Budgetary Support Scheme and does not provide any exemption from taxes. The new scheme offered as measure of goodwill to fulfill the promise, only to units which were eligible for drawing benefits under the earlier excise duty exemption schemes, but otherwise had no relation to erstwhile scheme. (6) That the action taken by the Respondents is flowing from the Constitutional amendment and law passed by the competent Legislatures, and there cannot be any estoppel. No entity has the right to claim that it may be subjected to the same treatment and be entitled to the same tax related benefits forever. A tax cannot be mandated to continue merely because some entity is....
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....orever be present to the mind of the court, while considering the applicability of the doctrine. (12) That under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. It has been observed that the withdrawal of exemption "in public interest" is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". (13) That while applying the doctrine of promissory estoppel, the authority cannot be compelled to do something which is not allowed by law or prohibited by law. There is no promissory estoppel against the settled proposition of law. Doctrine of promissory estoppel cannot be invoked for enforcement of a promise made contrary to law, because none can be compelled to act against the statute. Thus, the Government or public authority cannot be compelled to make a provision which is contrary to law. (14) That the doctrine of promissory estoppel is a principle evolved by equity, to avoid in....
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....ess, in appropriate cases, to compel the Government to act in such a manner as would be necessary to enforce the contract. Logically, therefore, when the statute does not bar making of a promise or the statute does not bar the Government from granting exemption the Government must, acting upon its industrial policy, bring out a notification in terms of the taxing statute in order to keep to its promises rather than resile therefrom on the pretext that unless exemption is granted in the manner in which the statute has prescribed for granting of exemption, no enforceable contract can be made out. 89. A careful reading of the decision in Century Spinning & Manufacturing Co., (supra) shows that if the conditions precedent for application of the doctrine exist, the court may compel the Government to act in terms of its promises by forcing it to act in accordance with law, that it to say, if the law permits or does not prohibit act of granting of exemption or if the law does not prohibit the Government from acting upon the representation that it had made, Court can force the Government to act in terms of its promises by bringing, if necessary, to act in accord with law. For instance, ....
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....f notification under section 44, the State Government could not be prevented from enforcing the liability to sales tax imposed on the petitioners under the provisions of the Sales Tax. Act; (2) that the petitioners had waived their right to claim exemption; and (3) that there could be no promissory estoppel against the State Government so as to inhibit it from formulating and implementing its policies in public interest. 92. It is submitted that the Apex Court, in Motilal Padmapat Sugar Mills Co. Ltd. (Supra), rejected all the above three pleas of the Government and held that the law may, therefore now be taken to be settled as a result of this decision, that where the Government makes a promise knowing or intending that it would be acted on by the promisee and, in fact, the promise, acting in reliance on it, alters his position, the Government would be held bound by the promise and the promise would be enforceable against the Government at the instance of the promisee notwithstanding that there is no consideration for the promise and the promise is not recorded in the form of a format contract as required by article 299 of the Constitution. It is elementary th....
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....the Government flowing from the decision in Godfrey Philips India Ltd., reported in (1985) 4 SCC 369 are that if the Government possesses a power, it is bound to wield that power to enforce its promise, the limitation on the enforcement of the promise being when the statute prohibits the exercise of powers necessary for carrying out the representation made by the Government or when the overriding public interest permits the Government not keep itself within the bounds of the promise made by it. In short, as long as, by asking the Government to keep to its promise, the Court does not force the Government to act contrary to law or against supervening public interest, the Court will not be doing anything wrong. As such, when a statute prohibits or bars enforcement of the representation made by the Government, the Court would not enforce the representation against the Government, for, the Government cannot be compelled, to act contrary to the statute. Logically, therefore, when the statute contains provisions enabling the Government to grant exemption from payment of sales tax, the Court can in an appropriate case, force the Government to act in terms of its representation and it would....
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....ng incentives and concessions, this court held that since there is a power to grant an exemption or concessions under the statute the mere fact that it did not specify the power under which it was issued will make no difference and that the assessee would be entitled to the benefit of this order." 99. The decision of the three Judges Bench in Pine Chemicals (supra) too makes it clear that when an order granting exemption or reduction on payment of sales tax can be referred to an enabling provision in the relevant statute, the order granting exemption shall be deemed to have been one made under the enabling provisions of the relevant statute. 100. The learned Senior counsel for the petitioners submits that what emerges from the aforesaid decisions of the Apex Court is that if the representation made by the Government is not barred under any law or if the same is not against larger public interest, the Government will be bound by the representation that, it has made and if a person, acting on the representations made by the Government, has altered his position to his detriment in such a case, it will be no defence for the Government to say that no notification, in terms of the ....
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....urther submitted on behalf of the petitioners that the decision, in Sri Durga Oil Mills case (supra), was referred to in State of Punjab vs. Nestle India Ltd., reported in (2004) 136 STC 35 and the Apex Court observed that the said decision had no relevance, for, in Nestle India Ltd., (supra), the representations were clear and unequivocal. Furthermore, the decision in State of Bihar vs. Suprabhat Steel, reported in (1999) 1 SCC 31, is a later decision and rendered by a Bench of three Judges, as already indicated hereinabove wherein, it has clearly been held that a notification issued under the sales-tax enactment cannot go contrary to the Industrial Policy. Hence, the decision in Sri Durga Oil Mills, (supra) can be of no assistance to the respondents. 103. The learned Senior counsel for the petitioners submits that though reliance has been placed on by the respondents in the decision of the Apex Court in Kaniska Trading Vs. Union of India, reported in (1995) 1 SCC 274 and in Shrijee Sales Corporation Vs. Union of India, reported in (1997) 3 SCC 398, however, it is respectfully submitted that the aforesaid two decisions of the Apex Court were considered by the Apex Court in the ....
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....inal and irrevocable and, thereafter, it would be impermissible for the Government to resile from the promise made by it except if it can plead and prove to the satisfaction of the court that overriding public interest constrains it to withdraw the incentives promised. 106. The learned Senior counsel contends that from a combined reading of the decision Kaniska Trading, (supra), Shreeji Sales Corporation, (supra) and Pawan Alloys & Casting (P,) Ltd., (supra), it is clear that where the Government makes representation inviting investments against incentives promised by it and a person acts or; such a promise, yet the Government may, even where no overriding public interest so demands, resile from such promise by giving reasonable notice or opportunity to the promisee to resume his original position; but if it is impossible for the promisee to resume his original position or restore status quo ante, the promise would become final and irrevocable. To put it differently, the Government can, even in the absence of supervening public interest, resile from its promise until such a stage is reached, when the promise becomes irrevocable due to the fact that the promisee cannot resume his....
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.... that the decision of the Apex Court in Union of India Vs. Godfrey Philips India Pvt., Ltd reported in, (1985) 4 SCC 369 in fact supports the case of the Petitioners. In the said case the Court directed an exemption to be granted on the basis of promissory estoppel even though Rule B of the Central Excise Rules, 1944 required exemption to be granted by way of notification. In the present case, there is a specific provision in the Central Goods and Service Tax Act, 2017 empowering the Government to grant exemption and thereby the aforesaid decision of the Apex Court in Godfrey Philips India Pvt. Ltd. (Supra) helps the case of the Petitioner. 110. Learned senior counsel for the petitioners referring to the decision in the case of State of Rajasthan Vs. Mahaveer Oil Industries & Anr, reported in (1999) 4 SCC 857 relied on by the Respondents submits that it is distinguishable on facts. In the said case, the Sales Tax Incentive Scheme for Industries, 1987 was notified by the Rajasthan Government under Section 4(2) of the Rajasthan Sales Tax Act exempting subject to certain condition, now industrial units from tax under the State Act as well as under the Central Act on sale of goods m....
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....e dealing with the economic legislation, the Court while not jettisoning its jurisdiction to call arbitrary action or unconstitutional legislation should interfere only in those few cases where the view reflected in the legislation is not possible to be taken at all. In the said case, the Apex Court was examining the Constitutionality of Section 45-S of the Reserve Bank of India Act, 1934 and in that context, the Apex Court held as under: "RBI has not acted hastily. Before amending Section 45-S of the Act in 1997, it had the benefit of having with it the reports of a number of committees, all of whom had recommended that the unincorporated business firms/individuals be brought under certain discipline and if possible non-banking financial business was not to be permitted to be carried on by the unincorporated bodies. The question of restricting such financial activity by unincorporated bodies, is a question of economic policy as it involves regulation of economic activities by different constituents. In such matters of economic policy, the Supreme Court does not interfere with the decision of the expert bodies which have examined the matter." 113. As such, it is contend....
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.... made by the Apex Court in Ram Lubhaya Bagga (Supra) are not applicable in the case of the Respondents. 116. The learned senior counsel for the petitioners contends that insofar as the reliance place down the decision of the Apex Court in Shree Sidhbali Steels Ltd. Vs, State of U.P., reported in (2011) 3 SCC 193 by the Respondents, it is respectfully submitted by the petitioners that in that case, a new Industrial Policy dated 30.04.1990 was declared by the State Government assuring the grant of 33.33% hill development rebate on the total amount of electricity bills to new entrepreneurs for a period of 5 years. This period was extended by another period of 5 years to be made available to new industrial units set up till 31.03.1997. Vide Notifications dated 18.6.1998 and 25.1.1999, uniform tariffs of electricity were introduced by which the rebate so given was reduced to 17%. Post 2000, vide a Notification dated 7.8.2000, a new tariff was announced which completely withdrew the hill development rebate. A challenge to the aforesaid notifications was turned down by the Apex Court. The Apex Court was concerned with an earlier decision in U.P. Power Corpn. Ltd. Vs. Sant Steels and Al....
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..... There being no indefeasible right to the continued grant of an exemption (absent the exemption of promissory estoppel), the question of the respondent Companies having an indefeasible right to any facet of such exemption such as the rate, period etc. does not arise." 119. It is submitted by the learned senior counsel for the petitioners that the aforesaid para 26 was noticed by the Apex Court in Mahabir Vegetable Oils (P) Ltd. Vs, State of Haryana, reported in (2006) 3 SCC 620(see paras 34 and 35). It is clear, therefore, that the reliance on the decision in Shree Sidhbali Steels Ltd Vs. State of U.P. (2011) 3 SCC 193 upon the aforesaid judgment when it comes to non-application of the principle of promissory estoppels to exemptions granted under statute would be wrongly incorporated. 120. It is strenuously urged by the learned senior counsel for the petitioners that the aforesaid anomalies were noticed by the Apex Court in Manuelsons Hotels Private Limited Vs. State of Kerala and Others, reported in (2016) 6 SCC 766 and the Apex Court in the said case at paragraph 31 held as under: "It is clear, therefore that Shree Sidhbali Steels Ltd. was a case which was concern....
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....h the withdrawal of the exemption, all of them without exception immediately closed down their cigarette manufacturing units and a large majority have shifted out of the State. Clearly, if the grant of the exemption had operated as it was intended to, it would have been unnecessary to enact Section 154." However, it is submitted that such is not the case in the case in hand. Secondly, in the said case, the exemption notifications were withdrawn by the Finance Act of 2003 and the validity of the said provision of Section 154 of the Finance Act, 2003 was a subject matter of consideration before the Apex Court. In the present set of petitions, the facts are altogether different and thereby the decision of the Apex Court in R.C. Tobacco (P) Ltd & Anr. (Supra) is not applicable in the present case. 122. The learned senior counsel for the petitioners contends that the decision relied on by the Respondents in Union of India and Anr. Vs. V.V.F. Limited and Ann, reported in (2020) SCC Online SC 378 also cannot be made applicable in the present case inasmuch as in paragraph 12 of the Judgment, the Apex Court held that the decision relied on by the Respondents' Industrial Units on p....
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....res of the proviso to Section 174(2)(c) of the CGST Act, no plea of promissory estoppel is maintainable. The language used in the proviso to Section 174(2)(c) is clear and unequivocal, and leaves no room for different interpretation. 126. Mr. S.C Keyal, learned Standing Counsel, GST also submits that a common affidavit has been filed in this matter on bahalf of Central Board of Indirect Taxes (CBIT), Ministry of Commerce & Industry, Department for Promotion and Industry and Internal Trade (GST Subsidy Scheme Section). Mr. Keyal referring to the Judgment of the Delhi High Court of Hero Motocorp Vs. Union of India submits that similar issues were before the Delhi High Court which have been rejection by the Delhi High Court and the matter has travelled to Supreme Court although the SLP filed has not been finally disposed of by the Apex Court. Mr. Keyal referring to Para 35 of the Judgment of Hero Motocorp(supra) submits that although he Judgment of the Delhi High Court is not binding but the same is referred to for persuading this Court to close the writ petitions by passing similar orders. 127. The learned counsels for the parties have been heard. The elaborate pleadings and ca....
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....questioning of the constitutional vires of the GST Tax Structure and/or the constitutional amendments brought in before this Court by the petitioners. As such, the main thrust of the grievance of the petitioners are that in view of the subsisting NEIIPP, 2007 and in view of the petitioners being issued eligibility certificate and considered to be eligible industries to avail the various benefits under the NEIIPP, 2007, which benefit they were availing, the denial of the benefit goes contrary to the very principle of promissory estoppel. It is contended by the petitioners that in response to the promise made by the Government of India, they have altered their positions to their detriment by making huge financial investments in setting up the factories and in employment of personnel to run the factories and for sale of their products. The denial of the benefits under the NEIIPP, 2007 has caused severe financial losses to the petitioners industries. Such withdrawal of the promise midway without taking into consideration of the grievances of the petitioners is completely opposed to the doctrine of promissory estoppel as developed by catena of Judgments rendered by the Apex Court over t....
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....it would be inequitable for him to do so having regard to the dealings which have taken place between the parties." 30. The requirements of the doctrine of promissory estoppel have also been formulated in Chitty on Contracts^14 ("Chitty"): "4.086. For the equitable doctrine to operate there must be a legal relationship giving rise to rights and duties between the parties; a promise or a representation by one party that he will not enforce against the other his strict legal rights arising out of that relationship; an intention on the part of the former party that the latter will rely on the representation; and such reliance by the latter party. Even if these requirements are satisfied, the operation of the doctrine may be excluded if it is, nevertheless, not "inequitable" for the first party to go back on his promise. The doctrine most commonly applies to promises not to enforce contractual rights, but it also extends to certain other relationships. 4.088.....The doctrine can also apply where the relationship giving rise to rights and correlative duties is non-contractual : e.g. to prevent the enforcement of a liability imposed by statute on a company dire....
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....ideration when that is an essential part of the cause of action. The doctrine of consideration is too firmly fixed to be overthrown by a sidewind." 33. Even within English Law, the application of the rule laid down in Combe (supra) has been noticed to be inconsistent^16. The scope of the rule has also been doubted on the ground that it has been widely framed^17. Hence, in the absence of a definitive pronouncement by the House of Lords holding that promissory estoppel can be a cause of action, a difficulty was expressed in stating with certainty that English Law has evolved from the traditional approach of treating promissory estoppel as a 'shield' instead of a 'sword'^18. By contrast, the law in the United States^19 and Australia^20 is less restrictive in this regard. 34. India, as we shall explore shortly, adopted a more expansive statement of the doctrine. Comparative law enables countries which apply a doctrine from across international frontiers to have the benefit of hindsight. 35. This Court has given an expansive interpretation to the doctrine of promissory estoppel in order to remedy the injustice being done to a party who has relied on a promise.....
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....7. Under English Law, the doctrine of legitimate expectation initially developed in the context of public law as an analogy to the doctrine of promissory estoppel found in private law. However, since then, English Law has distinguished between the doctrines of promissory estoppel and legitimate expectation as distinct remedies under private law and public law, respectively. De Smith's Judicial Review^22 notes the contrast between the public law approach of the doctrine of legitimate expectation and the private law approach of the doctrine of promissory estoppel: "[d]espite dicta to the contrary [Rootkin v. Kent CC, [1981] 1 WLR 1186 (CA); R v. Jockey Club Ex p RAM Racecourses Ltd., [1993] A.C. 380 (HL); R v. IRC Ex p Camacq Corp, [1990] 1 WLR 191 (CA)], it is not normally necessary for a person to have changed his position or to have acted to his detriment in order to qualify as the holder of a legitimate expectation [R v. Ministry for Agriculture, Fisheries and Foods Ex p Hamble Fisheries (Offshore) Ltd., (1995) 2 All ER 714 (QB)]... Private law analogies from the field of estoppel are, we have seen, of limited relevance where a public law principle requires public of....
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....ctrine of promissory estoppel in private law is a promise made between two parties, the basis of the doctrine of legitimate expectation in public law is premised on the principles of fairness and non-arbitrariness surrounding the conduct of public authorities. This is not to suggest that the doctrine of promissory estoppel has no application in circumstances when a State entity has entered into a private contract with another private party. Rather, in English law, it is inapplicable in circumstances when the State has made representation to a private party, in furtherance of its public functions^26." 130. The Apex Court also examined the doctrine from the perspective of the Indian Laws and the doctrine of legitimate expectation. The Apex Court held as under: "40. Under Indian Law, there is often a conflation between the doctrines of promissory estoppel and legitimate expectation. This has been described in Jain and Jain's well known treatise, Principles of Administrative Law^27: "At times, the expressions 'legitimate expectation' and 'promissory estoppel' are used interchangeably, but that is not a correct usage because 'legitimate expectation' is a concept....
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....racterization of legitimate expectations is on a weaker footing, than in jurisdictions like UK where the courts are now willing to recognize the capacity of public law to absorb the moral values underlying the notion of estoppel in the light of the evolution of doctrines like LE [Legitimate Expectations] and abuse of power. If the Supreme Court of India has shown its creativity in transforming the notion of promissory estoppel from the limitations of private law, then it does not stand to reason as to why it should also not articulate and evolve the doctrine of LE for judicial review of resilement of administrative authorities from policies and longstanding practices. If such a notion of LE is adopted, then not only would the Court be able to do away with the artificial hierarchy between promissory estoppel and legitimate expectation, but, it would also be able to hold the administrative authorities to account on the footing of public law outside the zone of promises on a stronger and principled anvil. Presently, in the absence of a like doctrine to that of promissory estoppel outside the promissory zone, the administrative law adjudication of resilement of policies stands on a sha....
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....Corporation (Supra) reference was made in the English Law by referring to Rejina (Reprotech Pebsham Ltd) Vs. East Sessex County Council, wherein the House of Lords has held as thus: "33 In any case, I think that it is unhelpful to introduce private law concepts of estoppel into planning law. As Lord Scarman pointed out in Newbury District Council v. Secretary of State for the Environment [1981] A.C. 578, 616, estoppels bind individuals on the ground that it would be unconscionable for them to deny what they have represented or agreed. But these concepts of private law should not be extended into "the public law of planning control, which binds everyone". (See also Dyson J in R v. Leicester City Council, Ex p Powergen UK Ltd. [2000] JPL 629, 637.) 34 There is of course an analogy between a private law estoppel and the public law concept of a legitimate expectation created by a public authority, the denial of which may amount to an abuse of power... But it is no more than an analogy because remedies against public authorities also have to take into account the interests of the general public which the authority exists to promote. Public law can also take into accoun....
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....m 8 January 2015 it negated the nature of the representation which was held out in the Industrial Policy 2012. The Apex Court held that absolutely no justification bearing on the reasons of policy or public interest has been offered before the High Court or before the Apex Court for the delay in issuing a notification. The Apex Court observed that the pleadings are completely silent on the reasons for the delay on the part of the government and offer no justification for making the exemption prospective, contrary to the terms of the representation held out in the Industrial Policy 2012. It is one thing for the State to assert that the writ petitioner had no vested right but quite another for the State to assert that it is not duty bound to disclose its reasons for not giving effect to the exemption notification within the period that was envisaged in the Industrial Policy 2012. It was held that both the accountability of the State and the solemn obligation which it undertook in terms of the policy document militate against accepting such a notion of state power and the state must discard the colonial notion that it is a sovereign handing out doles at its will. Its policies give ris....
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....icle 14 of the Constitution adopts. A deprivation of the entitlement of private citizens and private business must be proportional to a requirement grounded in public interest. This conception of state power has been recognized by this Court in a consistent line of decisions. As an illustration, we would like to extract this Court's observations in National Buildings Construction Cororation (supra): "The Government and its departments, in administering the affairs of the country are expected to honour their statements of policy or intention and treat the citizens with full personal consideration without any iota of abuse of discretion. The policy statements cannot be disregarded unfairly or applied selectively. Unfairness in the form of unreasonableness is akin to violation of natural justice." 54. Therefore, it is clear that the State had made a representation to the respondent and similarly situated industrial units under the Industrial Policy 2012. This representation gave rise to a legitimate expectation on their behalf, that they would be offered a 50 per cent rebate/deduction in electricity duty for the next five years. However, due to the failure to iss....
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.... 139. The Delhi High Court upon hearing the matter rejected the contentions of the petitioner and dismissed the writ petition. The matter travelled to the Apex Court and during the hearing of the present proceedings, the Apex Court had rendered an authoritative finding in the matter. The Apex Court examined the doctrine of promissory estoppel in great detail by referring to various earlier Judgments rendered by the Apex Court. Upon due consideration of all the matter in its entirety the Apex Court held that the consistent view of the Courts has been that there is no estoppel against the legislature in exercise of the legislative function. It was held that the notification dated 18th July, 2017 withdrawing the exemption notifications was issued in pursuance of the statutory mandate as provided under Section 174(2)(c) of the GST Act. The Apex Court held that if the contentions raised by the appellants are to be accepted then it would make provisions under proviso to Section 147(2)(c) of CGST Act redundant and otiose. It was held that the legislature in its wisdom has specifically incorporated the proviso to Section 174(2)(c) providing therein that any tax exemption granted as an in....
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....e. The legislature in its wisdom has specifically incorporated the proviso to Section 174(2)(c) providing therein that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded. If the contention is accepted, it will amount to enforcing a representation made in the said O.M. of 2003 and 2003 Notification contrary to the legislative incorporation in the proviso to Section 174(2)(c) of the CGST Act. In other words, it will permit an estoppel to be operated against the legislative functions of the Parliament. We are, therefore, of the considered view that the claim of the appellants on estoppel is without merit and deserves to be rejected. 56. It is further to be noted that this Court has also consistently held that when an exemption granted earlier is withdrawn by a subsequent notification based on a change in policy, even in such cases, the doctrine of promissory estoppel could not be invoked. It has been consistently held that where the change of policy is in the larger public interest, the State cannot be prevented from withdrawing an incentive which it had granted through an e....
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.... the nature of mandamus or to pass orders and give necessary directions where the government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the government or has exercised such discretion mala fide or on irrelevant considerations or by ignoring the relevant considerations and materials or in such a manner as to frustrate the object of conferring such discretion or the policy for implementing which such discretion has been conferred. In all such cases and in any other fit and proper case a High Court can, in the exercise of its jurisdiction under Article 226, issue a writ of mandamus or a writ in the nature of mandamus or pass orders and give directions to compel the performance in a proper and lawful manner of the discretion conferred upon the government or a public authority, and in a proper case, in order to prevent injustice resulting to the concerned parties, the court may itself pass an order or give directions which the government or the public authority should have passed or given had it properly and lawfully exercised its discretion." 62. It could thus be seen tha....
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....iled to perform. All that is sought to be enforced is an obligation flowing from a contract which, as already indicated, is also not binding and enforceable. Accordingly, we are clearly of the opinion that Respondent 1 was not entitled to apply for grant of a writ of mandamus under Article 226 of the Constitution and the High Court was not competent to issue the same." [emphasis supplied] 73. It can thus be seen that unless the appellants show any statutory duty cast upon the respondent-Union of India to grant them 100% refund, a writ of mandamus as sought could not be issued. The position is reiterated by this Court in the case of K.S. Jagannathan (supra) as under: "20. There is thus no doubt that the High Courts in India exercising their jurisdiction under Article 226 have the power to issue a writ of mandamus or a writ in the nature of mandamus or to pass orders and give necessary directions where the government or a public authority has failed to exercise or has wrongly exercised the discretion conferred upon it by a statute or a rule or a policy decision of the government or has exercised such discretion mala fide or on irrelevant considerations or by igno....
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....ts, which would ordinarily include the need for making a demand unless a demand is found to be futile in circumstances, which have already been catalogued in the earlier decisions of this Court." [emphasis supplied] 76. Undoubtedly, in the present case, there is no duty cast on the Union to refund 100% of CGST. As such, we find that the relief as sought cannot be granted. 77. That leaves us with the judgments cited by Shri S. Ganesh and Shri V. Sridharan, learned Senior Counsel. 78. Insofar as the judgment of this Court in the case of Suprabhat Steel Ltd. (supra) is concerned, the question that arose for consideration was whether the Notification issued under Section 7 of the Bihar Finance Act by the State Government to carry out the objectives and the policy decisions taken in the industrial policy could be held to be bad in law if it is in contravention of the industrial policy. In the case of Tata Cummins Ltd. (supra), the question that fell for consideration was whether a Notification that was issued for implementation of the industrial policy of the State could be construed strictly or liberally. In the case of Lloyd Electric and Engineering Limit....