JUDGMENT 1. - The State of Rajasthan to accelerate the pace of Industrial Development had introduced a scheme in the year 1990, called the State Capital Investment Subsidy Scheme for New Industries (here-in-after called as the Scheme of 1990) which had come into operation w.e.f. 1.4.1990 and was to remain in force up to 31.3.1997 as per the extended period. Certain incentives and subsidies were allowed to the interpreneurs for establishing the Industries. The subsidy was announced to be continued for small and medium scale Industries. However, there was certain change made in the Scheme of 1990 in the year 1994. While continuing the subsidy in case of small and medium scale industries, it was declared that in case of large industries, the first unit to be set up in a Panchayat Samiti would also be eligible for the subsidy. 2. The petitioner established its industry in village Maharajpura Tehsil Niwai District Tonk which was a large unit. Even though the petitioner completed all conditions in regard to the investment and claimed to be declared as the new unit as per the policy, but the petitioner was denied the subsidy primarily on the ground that in the Panchayat Samiti where the industry of the petitioner had been established, there was already an industry M/s. National Engineering Industries Ltd. which was established in the year 1983 and, therefore, the petitioner's industry was not the first unit to be established and thus was not entitled to any subsidy under the Scheme of 1990 or under any other notification issued in the year 1994. 3. The request of the petitioner was ultimately rejected vide Annexure-10 dated 2.9.1996 wherein it was ordered that Clause 4(h) had been amended vide Clause 4(d) vide amendment of Scheme dated 7.6.1994 wherein it was mentioned that only those large industries would fall for the entitlement of the subsidy if such industry was the first industry to be established and, therefore, while interpreting Clause 4(d) as introduced in June 1994, the Industries Department of Government of Rajasthan held that any industry having come into production after 31.3.1995 would fall for the entitlement of such concession if it is the first industry to be established in the Panchayat Samiti. It was observed that Clause 4(h) of the Scheme was not applicable, further observing that another industry M/s. NBC is already producing the similar material which is a large industry and, therefore, the industry of the petitioner is not entitled to any such concession of subsidy under the scheme. 4. The case of the petitioner is that the petitioner is an oil seeds based large unit consisting of solvent extraction plant and refinery at village Maharajpura, Tehsil Niwai District Tonk. However, all the information as required by the Government were supplied from time to time and the denial of the subsidy to the petitioner on the ground that a large scale unit named NBC had been established in the year 1983, much prior to the announcement of the subsidy scheme of 1990 and holding that the unit of the petitioner does not fall to be the first unit in the Panchayat Samiti was challenged. It was stated that the scheme of 1990 had come into operation w.e.f. 1.4.1990 and had been announced to be applicable for the new and eligible industrial units. 'New Industrial Units' have been defined under the scheme itself as 'an industrial unit set up during the operative period of this scheme, if it commences commercial production on or after 1.4.1990 and is found eligible under the scheme.' It is the case of the petitioner that the petitioner unit had been set up after the announcement of the scheme. It was further represented that even as per the amended industrial policy of 1994 in June 1994, it was observed that the subsidy would be continued for small and medium unit industries and in case of large units, the first unit to be set up in the Panchayat Samiti would be eligible for the subsidy and, therefore, the scheme of 1990 could only be made applicable prospectively and could not apply to the units which had been set up years before the promulgation of the scheme of 1990. 5. The State had formulated the scheme in the year 1990 for new industries by way of notification. The operative period was made from 1.4.1990 to 31.3.1997. It was made applicable for the new and eligible industrial units for Electronics and Telecommunications in whole of the State of Rajasthan except in the areas falling under the Municipal limits of certain cities. The State had formulated the scheme in the year 1990 for new industries by way of notification. The operative period was made from 1.4.1990 to 31.3.1997. It was made applicable for the new and eligible industrial units for Electronics and Telecommunications in whole of the State of Rajasthan except in the areas falling under the Municipal limits of certain cities. Certain new and eligible industrial units were brought under the ambit of the scheme. 6. Under Clause 4(d), 'Eligible Industrial Units' means an undertaking engaged or proposed to be engaged in the manufacture of items/articles listed in Annexure-A to the notification, and under clause 4(h) 'New Industrial Units' means an industrial unit set up during the operative period of the scheme, if it commences commercial production on or after 1.4.1990. It was further mentioned that if the investment of atleast 25% of the project cost has been made up to the dosing date of the scheme, the unit would be eligible for the benefit provided such unit starts commercial production within three years after the closing date of the scheme. Vide Annexure-3, scheme was further amended declaring that the large scale industrial units except the first unit shall not be entitled to receive such subsidy. A further amendment was made to Clause 4(h) vide Annexure-4 dated 8.6.1994 stating that in case at least 25% project cost has been invested before the closing date of the scheme and have started commercial production within three years after the dosing date of the scheme, such unit shall also fall under the Industrial Unit for the purpose of the scheme. The relevant provisions of the Scheme of 1990 & 1994 are reproduced as under: "THE STATE CAPITAL INVESTMENT SUBSIDY SCHEME FOR NEW INDUSTRIES, 1990 NOTIFICATION With a new to accelerate the pace of industrial development in the State the Government of Rajasthan is pleased to introduce the following scheme. 1. Title The Scheme shall be known as the 'State Capital Investment Subsidy Scheme for New Industries, 1990.' 2. Operative Period. This scheme shall come into operation with effect from 1st April, 1990 and shall remain in force up to 31st March, 1997. 3. Applicability of the Scheme. 1. Title The Scheme shall be known as the 'State Capital Investment Subsidy Scheme for New Industries, 1990.' 2. Operative Period. This scheme shall come into operation with effect from 1st April, 1990 and shall remain in force up to 31st March, 1997. 3. Applicability of the Scheme. This scheme will be applicable in (a) the whole of the State of Rajasthan for the new and eligible Industrial units in Electronics and Telecommunication and (b) the whole of the State of Rajasthan except in the areas falling under Municipal limits or urban improvement limits of the cities of Ajmer, Alwar, Bhilwara, Jodhpur and Udaipur and urban agglomeration limits of Jaipur and Kota for other new and eligible Industrial units. "Provided that such other new and eligible Industrial units and the existing units carrying out expansion or diversification, located in the Industrial Areas developed by the State Government or its Corporations shall be eligible for Capital Investment Subsidy irrespective of the fact that the Industrial Area is located within the Municipal limits or Urban Improvement limits of cities of Ajmer, Alwar, Bhilwara, Jodhpur and Udaipur and Urban Agglomeration limits of Jaipur and Kota." 4(d) "Eligible Industrial Unit" means an undertaking engaged or proposed to be engaged in the manufacture of items/articles listed in Annexure-A to this notification, except those which are declared ineligible under Annexure-B to this notification. Provided that electronics software production units, tissue culture and floriculture units would also be eligible." AMENDMENT AS BROUGHT VIDE ANNEXURE-3 ON 7.6.1994. The following additional proviso shall be inserted after Clause 4(d) of the Scheme: "Provided further that large scale industrial units except the first unit set up in a Development Block (Panchayat Samiti) shall not be eligible." 4(h) "New Industrial Units" means an industrial unit set up during the operative period of this scheme. The Industrial unit will be deemed to have been set up during the operative period of the scheme, if it commences commercial production on or after 1.4.1990 and is found eligible under this scheme. Date of commencement of the commercial production will be the 61st day after the day on which the raw material is for the first time put in the process of production including trial production. Date of commencement of the commercial production will be the 61st day after the day on which the raw material is for the first time put in the process of production including trial production. However, a unit making investment of atleast 25% of the project cost before the closing date of the scheme and starting commercial production within a period of 3 years after the closing date of the scheme would also be a new industrial unit for the purpose of the scheme and would be entitled for capital investment subsidy as per the provisions of, the scheme, provided the unit is otherwise eligible for the scheme." 7. Annexure-1 'Extension of the Scheme' as brought in the year 1994 reads as under : "Subsidy would be continued for small and medium scale industries, in case of large industries, the first unit to be set up in a Panchayat Samiti would also be eligible for subsidy. Expansion and diversification in case of medium scale industries would be taken out of the Subsidy Scheme. Also, subsidy would not be available in Urban areas above 1 lac of population. As per the current scheme, the eligibility is governed by the start of commercial production. As a result, a unit coming into operation after the cut-off date (March, 1997) would not be entitled for any benefit. As a measure of further relief to such units, it has been decided that if investment of at least 25% of the project cost has been made upto the closing date of the scheme, the unit would be eligible for benefit provided such unit starts commercial production within a period of 3 years after the closing date of the scheme. This would be applicable to industries otherwise eligible under the extended scheme." 8. It is not disputed that the petitioner unit which is a large unit had invested 40% of the investment upto 31.3.1995 i.e. more than the required investment of 25% and had become operational in May 1996. The petitioner had started the establishment in village in the middle of 1991 which was admittedly in a Panchayat Samiti which is also not denied. As per the documents produced, the petitioner had invested Rs. 471.41 lacs not of total cost of Rs. 1,216 lacs as per annexure-2 and immediately after fulfilling the conditions had moved the State Level Committee to sanction the subsidy amounting to Rs. As per the documents produced, the petitioner had invested Rs. 471.41 lacs not of total cost of Rs. 1,216 lacs as per annexure-2 and immediately after fulfilling the conditions had moved the State Level Committee to sanction the subsidy amounting to Rs. 20 lacs as per Annexure-5. The Additional information as required was also submitted vide Annexure-6 on 10.11.1995. The petitioners' application was rejected on 15.12.1995 vide Annexure-7. Further representation was made on 10.5.1996 (Annexure-8) stating therein that the petitioner had invested more, than 25% of the total cost of the project and also had started commercial production within three years thereafter and had fulfilled the conditions in regard to the investment and production as per the policy within the stipulated period. Further representation was submitted on 17.8.1996 (Annexure-9) which was rejected vide Annexure-10. 9. It is the submission of the petitioner that the operative period of the scheme being up to 31.3.1997 and much prior to the period of the dead end of this date, the petitioner had started the commercial production. It was further submitted that as per Annexures 2 and 3 and as per Para 14.1.2 of the Policy of 1994 as reproduced above, the only units which could have been excluded were the units which had to come into operation after the date of closing of the scheme i.e. 31.3.1997. It is further submitted that even if there was any other unit established in the year 1983, the new scheme of 1990 was meant for the new units and the petitioner fairly fell within the ambit of the scheme. 10. To support the contention, the petitioner relies on the decision in the case of Mangalore Chemicals & Fertilisers Limited Vs. Deputy Commissioner of Commercial Taxes and others 1992 Supp.(1) SCC 21 and Pawan Alloys & Casting Pvt. Ltd. Vs. U.P. State Electricity Board & Ors. (1997) 7 SCC 251 . 11. In the case of Mangalore Chemicals & Fertilisers Ltd. (supra) it was held that the industries established prior to certain date were not governed by those altered conditions when altered subsequently and the altered conditions would not be attracted to such industries. The basic question was decided whether the subsequent notification can undo the eligibility for the concession stipulated and conferred under the 1969 notification. It was observed as under: 'The contentions in the High Court was somewhat different from those urged before us. The basic question was decided whether the subsequent notification can undo the eligibility for the concession stipulated and conferred under the 1969 notification. It was observed as under: 'The contentions in the High Court was somewhat different from those urged before us. Before the High Court the Revenue asserted that the very conditions of eligibility for entitlement to these concessions stood modified under a subsequent Notification of January 12, 1977 and that appellant did not satisfy the altered conditions of eligibility. The question, therefore, was whether entrepreneurs who had commenced their ventures period to January 12, 1977, could be held to be governed by the terms of the later Notification of January 12, 1977. This question, in principle, had been settled by a decision of this Court in Assistant Commissioner of Commercial Taxes (Asst.), Dharwar Vs. Dharmendra Trading Co. (1988) 3 SCC 570 . The question that arose there pertained to another condition stipulated in the same Notification of January 12, 1977. This court held that industries established prior to that date were not governed by those altered conditions. Though in the present case the alterned conditions set up against appellant was a different one, on the principle decided in Charmendra Trading Company case the altered conditions would not be attracted. But the High Court took a different view of the matter. It held, in our opinion, quite erroneously, that the principle of the earlier decision of this Court was not applicable because it was rendered in the context of another condition in the 1977 notification. What fell for decision was not whether a particular condition was or was not applicable; but the very basic question was whether a subsequent notification could undo the eligibility for the concession stipulated and conferred under the 1969 notification. Shri Narasimhamurthy with his usual fairness said that he found it difficult to support the approach of the High Court to the question. The main point on which the case turned is thus settled in favour of the appellant." 12. The case of Pawan Alloys & Casting Pvt. Ltd. (supra) was a case of promissory estoppel. Shri Narasimhamurthy with his usual fairness said that he found it difficult to support the approach of the High Court to the question. The main point on which the case turned is thus settled in favour of the appellant." 12. The case of Pawan Alloys & Casting Pvt. Ltd. (supra) was a case of promissory estoppel. It related to the rate schedules which were incorporated in the notifications amongst others, contained an item pertaining to incentives to new industries wherein 10% rebate was to be provided on the amount of bill pertaining to the energy charges, for a period of three years from the date of commencement of supply. This term was modified by the Electricity Board by notification and argument was raised that the Board was not entitled to prematurely withdraw the rebate by its notification dated 31.7.1986. It was observed as under : 'If the State or a statutory authority or an executive authority of the State or its limb like the State Electricity Board covered by Article 12 functioning on behalf of the State in exercise of its legally permissible powers had held out any promise to a party, who relying on the same has changed its position not necessarily to its detriment, and if this promise does not offend any provision of law or does not fetter any legislative or quasi-legislative power inhering in the promisor, or is not otherwise opposed to public policy, then on the principle of promissory estoppel the promisor can be pinned down to the promise offered by it by way of representation containing such promise for the benefit of the promisee.' 13. In the present case, a new industrial unit hasoeen defined under clause 4(h). It has been clearly mentioned that a unit having investment of at least 25% of the project cost before the dosing of the date of the scheme and starting commercial production within a period of three years after the dosing of the date, shall be new industrial unit. For the reason that it had invested 25% of the project cost and also started production before the closing date of the scheme. The unit of the petitioner did fall under the definition of the 'new unit'. 14. For the reason that it had invested 25% of the project cost and also started production before the closing date of the scheme. The unit of the petitioner did fall under the definition of the 'new unit'. 14. The next found for debarring the petitioner to receive the incentive or subsidy as per Scheme of 1990 i.e. there was already a large unit established in the year 1983 and, therefore, the petitioner unit cannot be considered to be the first unit as incorporated in the scheme of 1994. In my opinion this submission cannot be sustained in the eyes of law. The scheme of 1990 was made operative from 1.4.1990 and any unit falling under the definition of new industrial unit was entitled to such subsidy under the scheme if new industry was established. Even in 1990 scheme, there was no difference of a large, medium or small industry, but it was added for the first time in the month of June 1994 to the effect that the first industry established for production falling within the preview of the scheme shall be entitled to the subsidy. In my opinion, on both counts the petitioner must succeed, i.e. (1) the scheme of 1990 was applicable to the petitioner and he had started establishing the industry in the mid 1990 and, therefore, a promissory estoppel had created a right in the petitioner as per the scheme of 1990 and even if any condition of being the first unit in the Panchayat Samiti is incorporated in the year 1994, that cannot be made applicable to the petitioner. (2) assuming that cause of being first industry in the Panchayt Samiti is made applicable to the petitioner, in that situation also, the industry of the petitioner could not be debarred to receive the subsidy only on the ground that in the year 1983 there was another industry in the area as the scheme of 1990 was applicable to new units. 15. The first unit of industry means and shall mean, 'the first industry established after formation of the scheme and shall be prospective in nature.' Had the intention been otherwise, the scheme could have provided in itself that in case any such industry is already in existence, in that situation, the new industry in that line would not be entitled to any such subsidy, but it is not so provided. The interpretation now being given by the respondent in the impugned annexures cannot be sustained in the eyes of law and, therefore, the impugned orders are to be quashed. 16. In alternative the counsel for the respondents relies on the case of Sales Tax Officer and another Vs. M/s. Shri Durga Oil Mills & another AIR 1998 SC 591 on the point that the principle of promissory estoppel is not applicable since the Government could change the policy in public interest. The facts of the case of Sales Tax Officer (supra) are not applicable to the facts of the present case and are clearly distinguishable. In the aforesaid case the method and manner of granting exemption had been laid down in Section 6 of the Orissa Sales Tax Act. Section 6 specifically provides that exemptions granted by notification could be modified or withdrawn by the State Government at any point of time. The State in that case had initially issued the exemption notifications under Section 6, but subsequently decided to withdraw the exemption notification in respect of some of the industries which had commenced production after 1.4.1977. It was held that the State Government was fully competent to do so under the provisions of Section 11 of the Act. For the reason that when the petitioner in that case had set up its Oil Mill and was granted exemption from sales tax, it should have known that the notification granting exemption of tax under 5.6 could be withdrawn at any point of time and, therefore, plea of promissory estoppl was without any basis as the estoppel could not be made applicable against the Statute. The facts in the present case of the petitioner are different and distinguishable. The Government had framed the scheme in the year 1990 which was to commence from 1.4.1990 and was to end on 31.3.1997. Industries were earmarked for grant of subsidy. Even a decision was taken that any industry which had invested 25% of capital investment before dosing of the scheme, started production within three years of dosing of the scheme, would be entitled to such subsidy. The petitioner had fulfilled both the conditions. It did fell under the provisions of the scheme for grant of subsidy. Even a decision was taken that any industry which had invested 25% of capital investment before dosing of the scheme, started production within three years of dosing of the scheme, would be entitled to such subsidy. The petitioner had fulfilled both the conditions. It did fell under the provisions of the scheme for grant of subsidy. Even though all those industries which were falling under 1990 scheme and fulfilling the conditions wee entitled to such subsidy but further clause was added in the year 1994 to the effect that so far large industries are concerned only that unit would be entitled to the subsidy which is the first unit in the area. Any industry established before the scheme of 1990 could not and did not fall in the new industrial unit as defined under the Scheme of 1990. It was the petitioner unit which did fell under the definition of the 'New industrial Unit' and, therefore, could not be debarred from receiving the incentives or subsidy on the scheme on the ground as mentioned in the impugned order. 17. For the reasons mentioned above, the writ petition is allowed with the direction to the respondents to reconsider the case of the petitioner in the light of the above said observations and release the subsidy to the petitioner within three months of the receipt of the certified copy of this order as per its entitlement and in case the order is not complied with within the stipulated period, the petitioner shall be entitled to interest for delayed payment . 10% p.a. No order as to costs..Petition Allowed. *******