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Gauhati High Court · body

1993 DIGILAW 7 (GAU)

Assam Ispat Limited. v. State of Assam and Ors.

1993-01-18

R.K.MANISANA SINGH

body1993
In this application under Article 226 of the Constitution, the petitioner M/s Assam Ispat Limited has challenged the withdrawal of grant of concession nal tariff and the notice of the Assam State Electricity Board (ASEB for *hort) to disconnect electric supply for not paying charge at normal tariff rate. 2. Facts,-The Government of Assam made an Industrial Policy Scheme known as 1982 Scheme' The Scheme was valid from 15.10.82 to 31.3.85. Under the 1982 Scheme', the power subsidy was granted to the new units in the large and medium sectors by charging power tariff @ 30 paise per unit for the first three years of the commercial production. In view of 1982 Scheme the ASEB introduced a new tariff known as ''Category 13 (Special)” providing tariff rate at 30 paise per unit (KWH) for the first three years of commercial production starting within 31.3.85. A new scheme known as 1986 Scheme' was made by Government, which was put into effect from 1,4.87. Under the 1986 Scheme', industrial units are to be charged the normal tariff in force, and the said industries are to be reimbursed by the Government. It is not disputed that petitioner established the industry after the grant of concessional tariff acting upon'1982 Scheme'; that the date of commercial production of the petitioner was 9.2.85 within the prescribed period; and that the petitioner was paying the concessional tariff till 31.3.87. But, by letter dated 10.6 87, the ASEB withdraw the concessional tariff wef 1.4.87, and thereafter the ASEB, vide, bill dated 3.6.87, billed the petitioner at normal tariff rate. The ASEB also issued notice dated 24.6.87 to the petitioner to disconnect the electric supply for non-payment of the bill. 3. Mr. A. Saraf, learned counsel for the petitioner, has argued that the petitioner was entitled to the benefit of the concessional tariff at 30 paise per unit for a period of three years commencing from 9.2.85 and ending with 8.2.88, and, therefore, it could not be withdrawn. Mr. NN Saikia, learned counsel for the ASEB, has contended that the change of tariff or amendment of the tariff is the policy matter of the ASEB and, therefore, it cannot be challenged, and that, with grant of concessional tariff, the agreement to pay the normal tariff does not cease to exist. The submission of Mr. Mr. NN Saikia, learned counsel for the ASEB, has contended that the change of tariff or amendment of the tariff is the policy matter of the ASEB and, therefore, it cannot be challenged, and that, with grant of concessional tariff, the agreement to pay the normal tariff does not cease to exist. The submission of Mr. BK Pathak, learned counsel for the Udyog Sahayak/Vikash, is that 1982 Scheme' was criticised and, therefore, in the meetings of Working Group held on 25.5.87 and 28.5.87, it was resolved that the ASEB would charge normal tariff rate, however, subsidy amount would be reimbursed by the respective Udyog Sahayaks. 4. The question which arises for consideration is whether the concessional tariff could be withdrawn on the facts and in the circumstances of the case. 5. It is now well settled that exemption granted by the Government is by way of concession and that if the exemption notification gave exemption for a particular or specified period and the industry was commissioned after the date of exemption order but before the exemption was withdrawn, the said industry would be entitled to the benefit of the exemption for the period specified in the exemption order though the exemption was withdrawn before the expiry of that period by invoking the doctrine of promissory estoppel, (see Bakul Oil Industries vs. Gujarat, (1987) 1 SCC 31 ; State of MP vs. Orient Paper Mills, (1990) 1 SCC 176 ; Pouraami Oil Mills vs. Kerala, (1986) Supp SCC 728 (AJR 1937 §C 590); Amrit Banaspati Co Ltd vs. Punjab, (1992) 2 SCC 411 an^ Pine Chemicals Ltd vs. Assessing Authority, (1992) 2 SCC 683 . 6. The above principle shall be applicable to the present case considering the fact position stated above, Therefore, the petitioner would be entitled to the benefit of the concessional tariff from 9.2.85 to 8.2 88. 7. Let me now examine the contention of the learned counsel for the ASEB that the change of tariff is a poljcy matter of the ASEB and, as such, it cannot be challenged, and that, with the grant of concessional tariff, the agreement to pay normal rate has not ceased to be operative. I am unable to accept his submissions. 7. Let me now examine the contention of the learned counsel for the ASEB that the change of tariff is a poljcy matter of the ASEB and, as such, it cannot be challenged, and that, with the grant of concessional tariff, the agreement to pay normal rate has not ceased to be operative. I am unable to accept his submissions. I approach the matter as follows, In Bakul Oil Industries vs. State of Gajarat, (1987) 1 SCC 31 , it has been held : "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 view of the above decision of the Supreme Court, concessional tariff granted could be withdrawn without offending the rule of promissory estoppel. The decision of the Supreme Court in M/s Andhra Steel Corporation vs. APSEB, AIR 1991 SC 1456 on which the ASEB relies, is not against this proposition and on the facts and in the circumstances of that case the Court has held that withdrawal of grant of concessional tariff could not be held illegal, and the promissory estoppel could not be established as it was not the case that industries were established after grant of concessional tariff. These being the position, Andhra Steel Corportaioo (supra) shall not be applicable to the present case and, therefore, the contention of Shri Saikia cannot be accepted. 8. Proceeding further, the doctrine of 'legitimate expectation' shall also be attracted in the present case. With regard to doctrine of 'legitimate expectation', in Narendra Kumar vs. Union of India, AIR 1989 SC 2138 , the Supreme, Court summarised the observations made in Exparte Khan, (1981) 1 All ER 40, in the following terms : “A circular or self made rule can become enforceable on the application of persons if it was shown that it had created legitimate expectation in their minds that authority would abide by such a policy guideline. However, the doctrine of legitimate expectation applies only when a person had been given reason to believe that the State will abide by the certain policy or guideline on the basis of which such applicant might have been led to take certain actions. This doctrine is akin to the doctrine of promissory estoppel." In Council of Civil Service Unions vs. Minister for the Civil Service, (1984) 3 ALL 1 ER 935, Lord Fraser said : "But even where person claiming some benefit or privilege has no legal right to it, as a matter of private law, he may have a legitimate expectation of receiving the benefit or privilege, and, if so, the Courts will protect his expectation by judicial review al a matter of public law." And Lord Diplock said : "It must affect such other person either (a).. or (b) by depriving him of some benefit or advantage which either (i), he has in the past been permitted by the decision maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational ground for withdrawing it on which he has been given an opportunity to comment or (ii) ..." 9. In the above view of the matter, the petitioner who is claiming concessional tariff, may not have legal right to it, but the petitioner was granted the concessional tariff till 31.3.87. In other words, the petitioner was permitted by the ASEB to enjoy the benefit, that is, to pay the concessional tariff till it was withdrawn wef 1.4.87. Therefore, the petitioner had the legitimate expectation to be permitted to continue to pay the concessional tariff for the remaining period of the three years. In such a situation, the Court has to protect the petitioner's expectation. For these reasons, the contentions of the learned counsel for the respondents cannot be accepted. 10. For the foregoing reasons, the petition is allowed. Accordingly, the impugned communication dated 10.6.87 withdrawing the concessional tariff, bill dated 3.6.87 and the disconnection notice dated 24.6.87 are quashed. The Board shall prepare fresh bills at the rate of 30 paise per unit from 1.4.87 to 8.2.88 and the Government of Assam shall reimburse the ASEB. If there is any excess payment made by the petitioner, the said amount shall be adjusted against the present and/or future bills. The Board shall prepare fresh bills at the rate of 30 paise per unit from 1.4.87 to 8.2.88 and the Government of Assam shall reimburse the ASEB. If there is any excess payment made by the petitioner, the said amount shall be adjusted against the present and/or future bills. Interim order is merged in this judgment. No costs.