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1997 DIGILAW 83 (GAU)

Necem Cements Limited v. State of Assam

1997-05-13

J.N.SARMA, V.DUTTA GYANI

body1997
V. Dutta Gyani, C.J. (Acting)— This writ appeal is presented against order dated 10.4.97 passed by learned Single Judge of this Court in Civil Rule No. 150 of 1997 thereby refusing the petitioner's prayer for grant of interim stay. Hence, this writ appeal. 2. We have heard Mr. AR Borthakur, senior counsel assisted by Mr. P. Borthakur and Mrs. B. Acharyya for the petitioners-appellants and also heard the learned Govt. Advocate for the respondent State of Assam. 3. The appellant is a limited company registered under the Companies Act having its registered office at Dispur, Guwahati. This company is primarily engaged in manufacturing and marketing of cement. The appellant company filed this writ petition under Article 226 of the Constitution of India claiming grant of sales tax exemption for a period of 7 years and also prayed for stay of orders dated 25.7.95 Armexure C series passed by the respondent No.4. By order dated 8.11.96, the learned Single Judge directed issuance of notice calling upon the respondents to show cause as to why a Rule should not be issued as prayed for. The learned Govt. Advocate opposed the prayer for grant of stay. The learned senior counsel appearing for the appellant stressed the need for grant of interim stay. The learned Single Judge by the same order directed the respondents not to realise the amount assessed, and the case was to be listed on 26.11.96. 4. It is the appellant's case that the respondents have not filed any return while the petition has been pending as it is. In the meanwhile the appellants have received a notice dated 7.3.97 from the Superintendent of Taxes (Recovery) and Bakijai Officer, respondent No.5 calling upon the appellant to deposit Rs. 1,39,50,002.00 within 7 days from the date of receipt of the notice. The notice has been filed as Annexure Y to this appeal and Y/1 is the notice of demand notifying to the appellant that in the return for period ending assessment yeai 1995-96 a sum of Rs. 1,39,50,002.00 was determined as payable on account of tax. penalty and interest, the appellant was therefore required to pay the amount on or before 8.12.96. A challan in quadruplicate was also enclosed for the purpose. This is followed by the notice dated 7.3.97 in Annexure Y to the petition. 5. Mr. Borthakur appearing for the appellant stressing and highlighting the industrial policy of the Govt. penalty and interest, the appellant was therefore required to pay the amount on or before 8.12.96. A challan in quadruplicate was also enclosed for the purpose. This is followed by the notice dated 7.3.97 in Annexure Y to the petition. 5. Mr. Borthakur appearing for the appellant stressing and highlighting the industrial policy of the Govt. of Assam, the incentive scheme of 1991, submitted that the appellant being a continuing industry ever since 1986. is entitled to grant of incentives particularly including the reduction of sales tax as detailed in clause 8 of Part III of 1986 policy. According to him the denial of this benefit to the appellant is wholly arbitrary, illegal and contrary to all notions of fair play. It is violative of doctrine of promisory estoppel, the appellant company having made substantive investments in view of the provisions held out in the Industrial Policy of 1986 and the benefit having been extended to the appellant upto 30th August, 1993 under the 1986 incentive scheme. Since the appellant is a continuing industry as defined, the appellant is entitled to exemption of sales tax from 1993 at least for two years and reduction of Assam General" Sales lax from 12 percent to 4 percent. The learned Govt. Advocate appearing for the respondent on the other hand, maintained that the appellant having already enjoyed the benefit under the said scheme is no more entitled to such benefit and no stay in the matter of collection of revenue, should be granted. 6. The challenge to the demand notice Annexure Y is two fold. Firstly, that it is violative of the principles of promosory extoppel. Secondly, in State of Andhra Pradesh, the State Govt. has reduced the rate of tax on cement by 50% so as to enable the mini cement units to overcome the crisis. Placing a photostat copy of the judgment decided by the Supreme Court in Sh.Malaprabha Co-operative Sugar Factory Ltd vs. Union of India & another in Civil Appeal No.122-123 of 1981 decided on 28.1.97. It was urged that in an identical matter, though relating to sugar industry, the Supreme Court had directed the Union of India to refix the sugar price and give the sugar industry its due. The opening paragraph of the above order itself explains the circumstances which let to pass fresh order for issuance of amended notification by 31st December 1993. It was urged that in an identical matter, though relating to sugar industry, the Supreme Court had directed the Union of India to refix the sugar price and give the sugar industry its due. The opening paragraph of the above order itself explains the circumstances which let to pass fresh order for issuance of amended notification by 31st December 1993. it was a case of challenge to the fixation of price of levy sugar, governed by pricing policy of 1966 and Orders issued under section 3 of the Essential Commodities Act. The photocopy placed on record is an order passed on IA 5-6 of 1995 in the Civil Appeals No. 122-123 of 1981, the judgment is reported in (1994)1 SCC 648 . The order placed does not help the appellant, it turns on its own facts. There was an earlier judgment of the Supreme Court containing certain directions to issue amended notification fixing price of levy sugar. It was not done. Subsequently, certain clarifications sought, review petitions filed and was rejected by the Court. The Court, by this order made it clear that the direction given by it in para 109 of the judgment is quite clear, and the doubt or confusion sought to be created was the result of unwillingness on the part of the Govt. to carry out the direction, hence once again the direction to-the Govt. to issue amended order or notification. 7. In the developing economy and with a view to achieve certain level of industrialisation, there have always been certain incentives, exemptions and subsidies offered or granted by the welfare State, but these concessions are time bound and not permanent. It is now being realised that these very subsidies cut at the healthy growth of economy and making the industries more and more dependent rather than self-sufficient. Above all, it is a matter of fiscal policy of the State concerned 8. It is now being realised that these very subsidies cut at the healthy growth of economy and making the industries more and more dependent rather than self-sufficient. Above all, it is a matter of fiscal policy of the State concerned 8. Now, coming to the question of promissory estoppel as raised by the learned counsel, for the appellant, even if one were to take the whole gainus of case law right from Union of India vs. Indo Afgan Trading Agencies, AIR 1968 SC 718 , which has been relief upon or referred to in several other subsequent judgments as reported in (1985) 3 SCC 38 , (1985) 4 SCC 369 , (1986) 1 SCC 133 , (1988) 3 SCC 570 , (1991) 1 SCC 761 , (1992) 2 SCC 411 , (1993) 4 SCC 25 upto (1993) Suppl 3 SCC 326 and the latest available reported case (1996) 6 SCC 634 and (1996) 11 SCC 199 , the basis position that emerges is that apart from the legal limitations imposed on the operation of the doctrine of promissory estoppel, it is a matter to be decided at the final stage and not by way of an order on interim relief sought by the petitioner. In MP Sugar Mills vs. State of UP, AIR 1976 SC 621 , the Govt. granted sales tax exemption on certain products for a period of three years. But the Govt. withdrew the concession after a party had set up a plant in reliance of the concessions. It was held that the Govt. was bound by its promise. However, in Jit Ram vs. State of Haryana, AIR 1980 SC 1285 , the Supreme Court held that the State cannot be prevented form levying a duty on certain goods by promissory estoppel. The view of Bhagwati J, in the MP Sugar Mills case to the contrary was criticised by Kailasam J, who observed that the plea of promissory estoppel could be relied on only when the official concerned acts within the scope of his authority. But, Jit Ram (supra) has been overruled in Union of India vs. Godrej (India) Ltd, AIR 1986 SC 806 . 9. The law on the point is very clear. The interim relief sought by the petitioner appellant, is dependent on and subject to adjudication of his claim which is yet to be done. But, Jit Ram (supra) has been overruled in Union of India vs. Godrej (India) Ltd, AIR 1986 SC 806 . 9. The law on the point is very clear. The interim relief sought by the petitioner appellant, is dependent on and subject to adjudication of his claim which is yet to be done. It has also been laid down that no such interim order be passed which has the effect of giving the final relief, and lastly in matters relating to revenue collection by the State which deprives to the State at least temporarily, of its revenue, such stay orders should be avoided. These are but certain basic principles deducible from the following cases (1) (1994) 2 SCC 70 (Union Territory of Chandigarh vs. PU Suresh), (2) (1992) 4 SCC 167 (State of Jammu & Kashmir vs. Md. Yakub), and (3) AIR 1993 SC 2647 (Secretary & Commissioner, Home Deptt vs. R. Kumbakkum), and to crown then all is the latest (1997) 1 SCC 156 (State of MP vs. MV Vyavsya & Co.), clearly and categorically holding that when there is no finding that the State had acted in contravention of law or it failed to perform any statutory duty, the High Court would exceed its jurisdiction in passing interim order which results in substantial loss to the State. 10. Incentives, subsidies and other concessions is a part of industrial growth, economic planning and its impact in relation to objectives laid down in the Constitution which focusses in its attention on the aspiration of teeming millions of this country. Planning is essential for healthy growth of economy stated in simple terms it means what should be done in a given situation? Careful consideration of resources, alternatives available and working out economically possible and viable, if at a certain point of time certain incentives offered, for industrial growth and development of a particular area, it does not necessarily mean that it must be continued for all times to come. Of course, it can not be allowed to be abruptly snapped, altered or withdrawn before the expiry of the term/period for which offered, to the dertiment of one who has acted upon it. In the case at hand, the main petition is still pending. This appeal is against an interim order refusing to grant stay against recovery. Of course, it can not be allowed to be abruptly snapped, altered or withdrawn before the expiry of the term/period for which offered, to the dertiment of one who has acted upon it. In the case at hand, the main petition is still pending. This appeal is against an interim order refusing to grant stay against recovery. For the reasons stated above, this appeal is liable to be dismissed, it is accordingly dismissed with no order as to cost. The hearing of the petition be expedited.