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Jharkhand High Court · body

2013 DIGILAW 1132 (JHR)

ACC Limited v. State of Jharkhand

2013-10-01

PRASHANT KUMAR

body2013
JUDGMENT Prashant Kumar, J. These writ applications filed by ACC Limited for issuance of appropriate writ and direction commanding the respondent-State to payment of incentive and subsidy to the petitioner as sanctioned by the State Government, vide letter no. 2318 dated 21.07.2003(Annexure-6). 2. It is stated that the State of Jharkhand after coming into existence had formulated and notified Jharkhand Industrial Policy, 2001 (herein after referred as the Policy) with a view to prepare conducive atmosphere for maximizing industrial investment, acceleration of industrial development, proper utilization of natural resources, mines and mineral and exploration activities. Aforesaid Policy contained the provisions for providing incentives, such as capital investment subsidy, subsidy on interest and VAT concessions/refunds for giving impetus to the industrial growth. Clause 29.11 of the Policy makes provision for giving incentives to Mega Units. It provides that special packages shall be formulated for the new projects with direct investment of more than Rs.50 crores on case to case basis. Clause 17 Annexure-1 of the Policy classified different areas of the State in the following three categories viz Category-'A' (least backward), Category-'B' (backward) and Category-'C' (most backward). Clause 22 of the Policy further provides for Identical Incentives Packages for mega industrial units, which are undertaking expansion/diversification or modernization with a view to increase their production. 3. It further appears that the State Government by order as contained in Memo no. 1885 dated 10.06.2003 classified Mega Industrial Units into following three categories for grant of capital investment incentive/subsidy :- (i) New Industrial Units :- In which capital investment of more than Rs.50 crores has been made or is being made in terms of the Industrial Policy,2001. (ii) Existing Industrial Units :- Presently functioning industrial units in which capital investment of Rs.50 crores have been made or is being made in terms of the policy by way of expansion/ diversification / modernization. (iii) Loss making, existing & functioning industrial units : Those existing and functioning industrial units which are not sick, but are incurring cash losses continuously since last two years. In such industrial units, capital investment of more than Rs.50 crores has been or is being made for expansion / diversification / modernization in terms of the Policy. 4. Petitioner-ACC Limited is a company incorporated under Indian Companies Act, having its registered office at Mumbai. In such industrial units, capital investment of more than Rs.50 crores has been or is being made for expansion / diversification / modernization in terms of the Policy. 4. Petitioner-ACC Limited is a company incorporated under Indian Companies Act, having its registered office at Mumbai. It is stated that ACC Limited is engaged in the business of cement production and its number of production units spread all over the country, including two at Jharkhand, one at Sindri in the district of Dhanbad and another at Jhinkpani in the district of Singhbhum West. It is stated that present writ applications are preferred on behalf of its unit at Jhinkpani, known as Chaibasa Cement Works. 5. It is stated that Jhinkpani Unit of ACC Limited has been functional since last 60 years and situated in most backward area, in the State of Jharkhand. Thus, the same falls under category 'C' of Clause 17 of Annexure-1 of the Policy. 6. It is stated that Jhinkpani Unit of ACC Limited is an old unit and incurring cash losses, since last five years, thus, urgently requires expansion/ diversification/ modernisation. Accordingly, petitioner gave proposal to the Chief Minister, Jharkhand on 29.10.2002 for investment of more than Rs. 270 crores for modernisation of unit by installing 1.20 M.T. semi-dry process clinkering plant at Chaibasa and discontinuing the operation of the old obsolete wet process kilns. It further gave proposal to set up a new 15-20 MW Captive Power Plant to support its operations. It is further stated in the said letter that clinkering units would also ensure continuity of its Sindri Cement Grinding Plant by catering to its main and basic raw-materials i.e. clinker which is also under threat of drying up from its current sources. In the said letter, petitioner prayed that State Government should grant sales-tax and other incentives to cement manufactured out of clinkering done at Chaibasa Cement Plant, as a package for reviving a sick unit on the brink of closure. 7. It then appears that petitioner vide letter dated 26.02.2003 requested the Chief Secretary, Govt. of Jharkhand for granting incentives in terms of Clause 29.11 of the Policy for modernisation of its Chaibasa clinkering and cement grinding plant by making investment of Rs. 270 crores. It then appears that another letter written to Secretary (Industries), Govt. 7. It then appears that petitioner vide letter dated 26.02.2003 requested the Chief Secretary, Govt. of Jharkhand for granting incentives in terms of Clause 29.11 of the Policy for modernisation of its Chaibasa clinkering and cement grinding plant by making investment of Rs. 270 crores. It then appears that another letter written to Secretary (Industries), Govt. of Jharkhand on 17.5.2003 for giving incentives and subsidies to the petitioner for modernisation of its Chaibasa clinkering and cement grinding plant. 8. Thereafter, Department of Industries, Govt. of Jharkhand brought a proposal before the Cabinet for granting following incentives to the petitioner for modernisation of its Jhinkpani Unit, which are as follows : S. No. Provision Due amount A. Capital Investment Incentive Subsidy after the date of commencement of commercial production (As per the Para "ga" of Order Memo no. 1885 Rs. 15.00 crores B. Electricity Duty Exemption for 11 years from the commencement of commercial production (estimated on the basis of the project application) Rs. 5.40 crores C. Interest subsidy for 11 years from commercial production (upto the ceiling of Rs.1 crores per annum Rs. 11.00 crores D. Capital Investment Subsidy to be paid in the next financial year upto the maximum limit of amount paid as additional incremental sales tax to the government till 11 years by the Unit (Chaibasa & Sindri) (Estimated) Total Rs. 82.6981 crores 9. It is further stated that Cabinet approved aforesaid proposal of the Industry Department in its meeting dated 16.07.2003, subject to the condition that incentives on sales tax will depend on the amount of additional sales tax, actually paid by the Company. It appears that the decision of the State Government communicated to the petitioner by the Director of Industry Department vide his letter no. 2318 dated 21.07.2003 (Annexure-6). 10. It is stated that after receiving aforesaid letter of the Industry Department, petitioner invested huge amount towards modernisation of its Jhinkpani Unit and had completed modernisation process in the next two years. It is stated that after completion of modernisation work, petitioner informed the Industry Department about the same for inspection. It is stated that thereafter, Department of Industries set up a committee for inspection of petitioner's work. Aforesaid Committee, after inspection, vide its letter no. 529 dated 01.03.2006 reported that after modernisation petitioner's Unit commenced commercial production with effect from 09.08.2005. 11. It is stated that thereafter, Department of Industries set up a committee for inspection of petitioner's work. Aforesaid Committee, after inspection, vide its letter no. 529 dated 01.03.2006 reported that after modernisation petitioner's Unit commenced commercial production with effect from 09.08.2005. 11. Thereafter, petitioner filed an application on 03.03.2006 for grant of capital investment subsidy in terms of letter no.2318 dated 21.07.2003. It is stated that Department of Industries granted exemption to the petitioner from paying electricity duty for 10 years from the date of commercial production, which the petitioner is availing. It is stated that petitioner's application for grant of capital investment subsidy had been kept pending for about more than five years inspite of several reminders and pursuance. Constrained with the same, petitioner filed first writ petition bearing W. P.(C) No. 4633 of 2010. 12. In the aforesaid writ petition, a counter affidavit filed by the respondent -State, wherein stand of the State Government is that the petitioner's Unit is eligible for incentives as an existing unit and not as a loss making existing and functional industrial unit, because petitioner's unit was not incurring cash losses for the financial year 2003-04 and 2004-05 i.e. since last two years from the date of commercial production. 13. It is further stated by the petitioner that the Director (Industries) vide his letter no. 1162 dated 20.05.2011 had raised following new objections : (a) it is the Chaibasa clinker plant which is under expansion/modernisation eligible for incentive and not the Sindri grinding plant; (b) the product under consideration is clinker and not cement and (c) equivalent amount of tax needs to be calculated in the form of clinker for which C.A. certificate needs to be submitted duly supported with documentary evidence. It is stated that petitioner filed a representation protesting new objections, raised by the State Government and claimed that petitioner is entitled to get incentives as per decision of the State Government. It is stated that later on the State Government granted capital investment incentive/subsidy applicable to existing industries, which petitioner received under protest and filed second writ application bearing W.P.(C) No. 5513/2011. 14. In the counter-affidavit, the State Government stated that after receiving the request of the petitioner-company for grant of incentives/subsidies, the application of the petitioner scrutinized by Screening Committee constituted under the Chairmanship of Chief Secretary, Jharkhand. 14. In the counter-affidavit, the State Government stated that after receiving the request of the petitioner-company for grant of incentives/subsidies, the application of the petitioner scrutinized by Screening Committee constituted under the Chairmanship of Chief Secretary, Jharkhand. It is stated that the Committee on considering the entire issue concluded that petitioner's unit did not incur cash losses, since last two years (2003-04 and 2004-05) from the date of its commercial production, thus, is not a loss making existing & functional industrial unit, rather it comes within the category of existing functional industrial unit. Accordingly, the Screening Committee recommended that petitioner's company is entitled to capital investment subsidy of Rs.7 crores applicable to existing functional unit which is undertaking expansion/modernisation. Aforesaid recommendation of the Screening Committee approved by the Cabinet. It is submitted that the petitioner's company applied for incentives and modernisation of its clinker plant at Jhinkpani. Thus, petitioner is entitled to get capital investment subsidy on the amount paid towards additional incremental sales tax to the Government for sale of on clinker by the Chaibasa Unit. It is stated that petitioner is not entitled to get capital investment subsidy on incremental sales tax on the sale of cement either by Chaibasa Unit or Sindri Unit. Accordingly, it is stated that petitioner is required to give details for getting capital investment subsidy on incremental sales tax on clinker, so that the same may be calculated and given to the petitioner. 15. Mr. T.R. Andhyarujina, learned Sr. Counsel appearing on behalf of petitioner, submits that the contention of Industry Department that petitioner is eligible for incentive as Existing functional industrial unit and not as a loss making existing functional industrial unit is not sustainable. He submits that admissibility of benefits by way of capital investment incentives and all other incentives would be determined on the basis of facts existing on the date of application for such incentives. He submits that such benefits can not be made admissible from the date of commercial production after modernisation. It is submitted that application for grant of incentives as per industrial policy by the petitioner's Jhinkpani Unit was as a loss making unit, suffering cash losses since last five years. Thus, petitioner's unit comes within the definition of category "III " of Mega Units i.e. loss making existing and functional industrial unit. It is submitted that application for grant of incentives as per industrial policy by the petitioner's Jhinkpani Unit was as a loss making unit, suffering cash losses since last five years. Thus, petitioner's unit comes within the definition of category "III " of Mega Units i.e. loss making existing and functional industrial unit. It is submitted that if admissibility of incentive would get determined from the facts existing as on the date of commencement of commercial production, then the entire provisions contained in Industrial Policy will become superfluous and unworkable, because the eligible assessee will be unaware at the time of making application, as to whether at the time commencement of commercial production, it remains a loss making company or become a profit making company. It is further submitted that the Director (Industries) in his letter dated 21.07.2003 (Annexure-5) has not stated that if on the date of commercial production the status of the unit changed from loss making unit to profit making unit, then the benefits sanctioned to the petitioner as loss making unit would not be available or the same will be modified. 16. It is further submitted that the contention of the Government that the incentive would be available only with respect of taxes paid on the sale of clinker and not on the sale of cement, is not tenable. It is further submitted that clinker is an intermediate product, which is not usually sold except in negligible quantities. It is cement, which is the final product of both the units and is intended to be sold. Therefore, capital investment subsidy, linked to refund of incremental sales tax, is applicable to the sale of cement, which is final product of the petitioner's unit. It is further submitted that in the application for incentive petitioner stated that it wants to modernise its Chaibasa clinker and grinding plant. It is further submitted that the Cabinet also considered the proposals for giving incentives to the ACC Cement Jhinkpani for its modernisation. It is also clear from Annexure-6 that Government sanctioned special package to ACC Cement Jhinkpani for making capital investment on expansion/diversification/modernization in the light Clause 29.11 of the Policy. There is no stipulation in the sanction letter dated 21.07.2003 (Annexure-6) that special package sanctioned only for clinker, rather sanction letter stipulates that the special package sanctioned for ACC Cement Jhinkpani. It is also clear from Annexure-6 that Government sanctioned special package to ACC Cement Jhinkpani for making capital investment on expansion/diversification/modernization in the light Clause 29.11 of the Policy. There is no stipulation in the sanction letter dated 21.07.2003 (Annexure-6) that special package sanctioned only for clinker, rather sanction letter stipulates that the special package sanctioned for ACC Cement Jhinkpani. Meaning thereby that incentives based on sales-tax is available to the petitioner's company on the final product i.e. cement. Accordingly, it is submitted that contention of State Government that petitioner is not entitled to capital investment subsidy on the amount paid to the State Government as additional incremental sales tax on the sale of cement is misconceived and liable to be rejected. 17. It is further submitted that the contention of State Government that refund of taxes shall be limited to incremental taxes on the sale of cement produced by Chaibasa plant on the ground that Chaibasa clinker plant was under expansion/modernization and not Sindri plant, is not sustainable. It is submitted that petitioner in all its representations requested the Government to sanction special incentives including sales tax incentives on the sale of cement manufactured both at Chaibasa and Sindri Plant, out of clinker produced at Chaibasa. It is then submitted that in the said representation, it was stated that existing Chaibasa manufacturing Unit is the only source of clinker for both Chaibasa and Sindri Units. Thus, modernization of Chaibasa Unit required for the continuity of both Chaibasa and Sindri Units. It is submitted that proposal was for survival of cement manufacturing units of Chaibasa as well as Sindri. It is submitted that Director Industry considered the representation of petitioner and granted incentives to both Chaibasa and Sindri Units, which has been mentioned in the letter dated 21.07.2003. It is submitted that decision of the respondents in restricting the incentives only to Chaibasa Unit is against the principles of promissory estoppel and/or legitimate expectation. Thus, the same cannot be sustained. It is submitted that on the basis of express sanction granted by the State Government, petitioner invested huge amount for modernization of its plant at Chaibasa and altered its position. Therefore, now, it is not open for the State Government to modify the eligibility and/or promise without giving any opportunity of hearing to the petitioner. It is submitted that on the basis of express sanction granted by the State Government, petitioner invested huge amount for modernization of its plant at Chaibasa and altered its position. Therefore, now, it is not open for the State Government to modify the eligibility and/or promise without giving any opportunity of hearing to the petitioner. Accordingly, it is submitted that suitable directions be issued to the respondents/State for sanctioning incentives as promised by it. 18. On the other hand, Sri Ajit Kumar, Addl. Advocate General, submits that petitioner claims incentives on the basis of Jharkhand Industrial Policy, 2001. He further submits that it is clearly mentioned under Clause 29.2 of the Industrial Policy that incentives shall be admissible only to those units, which comes into commercial production during the period this policy remains effective. He further submits that the State Government had framed rules for giving incentives to Mega Units. Under Jharkhand Mega Project Incentives Rule 3.2, it is specifically mentioned that benefit under this rule shall be available to those units, which have gone into commercial production after it undertakes expansion/diversification/modernization. He submits that Rule 3.3 of the aforesaid Rules shows that benefit under these rules shall be available to weak and loss making units, which has gone into commercial production. He submits that it is not in dispute that petitioner's unit started commercial production on 09.8.2005. Accordingly, it applied for incentive/subsidy. It is submitted that application of the petitioner was scrutinized and it was found that status of the unit had changed from loss making unit to profit making unit, because unit did not incur cash losses since last two years from the date of commercial production (09.8.2005). It is submitted that accordingly, Screening Committee constituted under the Chairmanship of Chief Secretary recommended that petitioner's unit be given investment subsidy applicable to category (II) industry i.e. existing functional industry and not as category (III) units i.e. loss making, existing and functional industrial units. It is submitted that accordingly Rs.7 crores sanctioned to the petitioner as investment subsidy. It is further submitted that from the representation of petitioner, it manifests that petitioner was willing to undertake modernization of its clinker plant at Jhinkpani, Chaibasa. It is submitted that accordingly Rs.7 crores sanctioned to the petitioner as investment subsidy. It is further submitted that from the representation of petitioner, it manifests that petitioner was willing to undertake modernization of its clinker plant at Jhinkpani, Chaibasa. Under the said circumstance, petitioner is entitled to get capital investment incentive or subsidy on the amount paid to the State Government as additional incremental sales tax on the sale of clinker and not on the sale of cement. It is further submitted that petitioner admits that it wants to modernise and/or diversify its Chaibasa unit. It is also an admitted position that no diversification/modernization took place in Sindri Unit. Accordingly, it is submitted that as per Clause 22 of the Jharkhand Industrial Policy only Chaibasa Unit is entitled to get incentive. The Claim of the petitioner that it is entitled to get capital investment subsidy on the amount paid to the State Government as incremental sales tax on the sale of cement produced from Sindri unit is against the Industrial Policy, therefore, it is illegal. Learned Additional Advocate General submitted that it is well settled that promissory estoppel could not be invoked to compel the State Government to do an act prohibited by law. Accordingly, it is submitted that writ application filed by the petitioner has no merit, therefore, the same is liable to be dismissed. 19. Having heard the submissions, I have gone through the records of the case and various documents submitted on behalf of both the parties. From the pleadings of the parties and rival contention raised on behalf of them, following three points emerges for determination in these writ applications :- (1) Whether petitioner is eligible for incentive/subsidy as existing functional industrial unit (category II unit) or loss making, existing and functional industrial unit (category III unit) ? (2) Whether plea of the State Government that petitioner is entitled to get tax relief only on the sale of clinker and not on the sale of cement is sustainable ? (3) Whether petitioner is entitled to get capital investment subsidy on the amount paid to the State Government as additional incremental sales tax on the sale of cement produced both by the Chaibasa and Sindri units or only by Chaibasa Unit ? 20. Re: Question No.1. (3) Whether petitioner is entitled to get capital investment subsidy on the amount paid to the State Government as additional incremental sales tax on the sale of cement produced both by the Chaibasa and Sindri units or only by Chaibasa Unit ? 20. Re: Question No.1. As noticed above, as per Clause 29.11 of the Industrial Policy, special package has been formulated for Mega Units which intend to invest more than Rs. 50 crores. Clause 22 of the Policy prescribe incentive to mega units which undertake expansion/diversification /modernization and it is stated that said industrial unit is entitled to get identical incentive as to newly established unit depending upon incremental production. The State Government by issuance of order as contained in Memo no. 1885 dated 10.6.2003 had categorises Units into three categories. Category (I) relates to new industrial units, category (II) relates to existing industrial unit which wants to undertake expansion/diversification/modernization by making capital investment of more than Rs.50 crores, whereas Category (III) relates to those industrial units which are loss making, existing and functional industrial units. It is stated that industrial units, which are functional but incurring cash losses continuously since last to years, will fall in the Category-III industrial unit. If such industrial units want to invest more than Rs.50 crores in lieu of expansion/diversification/modernization, they are entitled to get incentives as per Industrial Policy. 21. Petitioner filed applications vide Annexations-2, 3 and 4 for incentives applicable to the Category (III) Mega Industrial Unit i.e. loss making existing and functional Industrial Unit. In those applications, the petitioner stated that its Chaibasa clinker and cement grinding plant is operational since last 55 years and is no longer financially viable given its obsolete technology and uneconomic size, coupled with poor availability of cement grade limestone. It is further stated that the aforesaid plant incurring very heavy losses since last more than five years, which had put the very survival of the plant in jeopardy. It is further stated that petitioner wants to modernise its Chaibasa unit through a capital investment of approximately Rs. 270 crores by installing a new 1.2 MT clinker plant and by setting up a new 15-20 M.W. captive power plant to support its operation. Accordingly, petitioner requested the State Government for sanctioning of incentives as applicable to Mega Units under Clause 29.11 of the Industrial Policy. 270 crores by installing a new 1.2 MT clinker plant and by setting up a new 15-20 M.W. captive power plant to support its operation. Accordingly, petitioner requested the State Government for sanctioning of incentives as applicable to Mega Units under Clause 29.11 of the Industrial Policy. It is relevant to mention that State Government has considered the proposal of petitioner and sanctioned special package available to category (III) Mega Units i.e. loss making existing and functional industrial units situated in most backward area of the State of Jharkhand. 22. It appears that after sanction of special package, petitioner invested more than Rs.300 crores for modernization of its clinker plant at Chaibasa and setting up a captive power plant. It further appears that thereafter, commercial production started on 09.8.2005. It also appears that thereafter, petitioner filed applications for granting incentive/subsidy as mentioned in the sanction order (Annexure-6). 23. It appears that State Government after scrutinizing the applications of the petitioner come to the conclusion that unit had not incurred cash losses during financial year 2003-04 and 2004-05. Thus, status of the unit has changed from loss making unit (Category-III unit) to profit making unit (Category-II unit). Accordingly, State Government modified its stand taken in Annexure-6 and decided that petitioner's unit comes under category (II) of Mega Industrial Unit and not under category (III) i.e. loss making existing and functional unit. The aforesaid decision of State Government prima facie appears to be incorrect. 24. In my view, the crucial date for qualification to get sales tax and other incentives as category (II) or Category III unit is the date of information to the State Government regarding expansion/diversification/modernization. It is specifically mentioned in Clause 8 to Annexure-1 of the Industrial Policy that in order to qualify for sales tax and other incentives, a unit should undertake expansion/diversification/modernization and should sent prior intimation before undertaking expansion/diversification/modernization programme to concern officer of Industry Department. Order as contained in memo no.1885 dated 16.06.2003 also laid down the guidelines and it is mentioned that proposal from Industrial Units will be processed according to the said guideline. Thus, for categorising an industrial unit, which is undertaking expansion/diversification/ modernization, it is necessary to see whether on the date of intimation, said unit is a loss making unit or is a profit making unit. Thus, for categorising an industrial unit, which is undertaking expansion/diversification/ modernization, it is necessary to see whether on the date of intimation, said unit is a loss making unit or is a profit making unit. Thus, if on the date of intimation the industrial unit is a loss making existing and functional unit from last two years, then the same falls under Category (III) of the Mega Industrial Unit. 25. If the contention of the State Government that admissibility of incentive will depend on the facts existing on the date of commencement of commercial production is accepted, then entire provisions made for giving incentive to category (III) industrial unit will become superfluous and unworkable, because no unit which is functional on the date of intimation could assess as to whether it will remain loss making unit till commencement of commercial production after modernization or not ? More over, according to order contained in Memo no.1885 dated 16.6.2003 the State Government will consider and process to grant incentive or subsidy to any industrial unit on receipt of intimation for expansion/ modernisation/diversification. Under the said circumstance, categorisation of an industry can be made only on the date on which the industry gave intimation for undertaking expansion/diversification/modernization. In this case also Government did so and sanctioned incentives and subsidies in the year 2003 vide Annexure-6. 26. In view of discussion made above, the action of the State Government in changing the status of the petitioner's unit from loss making unit to profit making unit is not correct, because on the date of intimation for expansion/diversification/ modernization, petitioner's unit was a loss making unit, because it incur cash losses since last five years. Thus, I hold that petitioner's unit entitled to get capital investment incentive/subsidy as Category (III) Mega Industrial Unit i.e. loss making, existing and functional industrial unit. 27. Re: Question No.2 Petitioner's applications as contained in Annexure-2, 3 and 4, reveals that petitioner prayed for incentive/subsidy for undertaking modernization of Chaibasa clinker and cement grinding plant. Annexure-2, further reveals that petitioner prayed for exemption from sales tax and other incentives on cement manufactured out of clinker produced at Chaibasa cement plant. From perusal of the proposal placed before the Cabinet (Annexure-5), it is clear that Cabinet considered special package for expansion/ diversification/modernization of ACC Cement Jhinkpani and approved the same. Thereafter, the Director Industry vide his letter no. From perusal of the proposal placed before the Cabinet (Annexure-5), it is clear that Cabinet considered special package for expansion/ diversification/modernization of ACC Cement Jhinkpani and approved the same. Thereafter, the Director Industry vide his letter no. 2318 dated 21.7.2003 sanctioned special package as mentioned in the said letter for expansion/diversification/ modernization of ACC cement Jhinkpani. In the said letter, it is no where mentioned that the package sanctioned to ACC cement Jhinkpani unit confine to clinker and it would not applicable to cement . It is an admitted position that final product of the petitioner's unit at Chaibasa is cement, manufactured from clinker. Under the aforesaid circumstance, contention of the State Government that petitioner is entitled to incentive on the amount paid to the State Government as sales tax on the sale of clinker and not on the sales of cement is hereby rejected. Accordingly, I concluded that petitioner is entitled to get capital investment subsidy on the amount paid to the State Government as incremental sales tax on the sale of clinker and cement. 28. Re: Question no.3 As noticed above, an industrial unit which undertakes expansion/diversification/ modernization is entitled to get incentive according to Clause 22 of the Jharkhand Industrial Policy, 2001. Clause 22 of the Industrial Policy runs as follows : UNITS UNDERTAKING EXPANSION/ DIVERSIFICATION/ MODERNIZATION: Such units would be given identical treatment as new units only in respect of their incremental production due to their expansion/diversification/modernization. All such incentives admissible to such units which are covered by the definition of expansion/diversification/modernization as given in the Annexure, shall be provided. Thus, as per Clause 22 of the Policy, the incentive admissible to only such unit, which undertakes expansion/diversification/modernization. Admittedly, no expansion/ diversification/modernization took place in the Sindri unit of the petitioner. 29. It is true that in, the sanction order dated 21.7.2003 (Annexure-6), it is mentioned that capital investment subsidy to be paid in the next financial year upto the maximum limit of amount paid as additional incremental sales tax to the Government till 11 years by the Unit (Chaibasa and Sindri) provided that above amount shall depend on the additional sales tax actually paid by the company. 30. 30. In view of the aforesaid stipulation, Sri T.R. Andhyarujina, learned counsel for the petitioner submits that petitioner had incurred huge amount in the modernization of its Chaibasa plant under legitimate expectation that it will get capital investment subsidy on the amount paid as incremental sales tax on the sale of cement from Chaibasa Unit and Sindri Unit. Therefore, State Government is bound by its promise on the principle of promissory estoppel. Thus, liable to release aforesaid incentives on the amount paid to the State Government as sales tax on the sale of cement by Chaibasa and Sindri Units. The aforesaid contention of Sri Andhyarujina can not be accepted in the facts and circumstances of this case. 31. It is well settled that Government is bound to fulfill its promise, if the promisee acted in reliance of it, alters his position. It is equally well settled that promissory estoppel cannot be invoked to compel Government or even a private party to do an act prohibited by law. Reference in this connection may be made to "M/s Motilal Padampat Sugar Mills Vs. State of Uttar Pradesh and others" reported in 1979(2) SCC-409. 32. In the instant case, as noticed above, according to Clause 22 of the Jharkhand Industrial Policy, only those units are entitled to get incentive, which undertake expansion/diversification/modernization. Admittedly, no expansion/diversification/ modernization took place in the Sindri Unit of ACC Limited. Under the said circumstance, Sindri Unit can not claim incentive and/or subsidy on the basis of a promise as contained in Annexure-6, which is against the law (Industrial Policy). Under the aforesaid circumstance, State Government cannot be compelled to give capital investment subsidy to the petitioner on the amount paid as additional incremental sales tax on the sale of cement by Sindri unit on the ground of promissory estoppel, because said demand and/or promise by the State Government is against Industrial Policy. 33. Hon'ble the Supreme Court in Bannari Amman Sugars Ltd.Vs Commercial Tax Officer and others reported in 2005(1) SCC-625 has held as follows : "A person may have a "legitimate expectation" of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. The expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. The doctrine of legitimate expectation has an important place in the developing law of judicial review. It is, however, not necessary to explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who can not point to the existence of a substantive right to obtain the leave of the court to apply for judicial review. It is generally agreed that "legitimate expectation" gives the applicant sufficient locus stand for judicial review and that the doctrine of legitimate expectation to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallised right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words, where a person's legitimate expectation is not fulfilled by taking a particular decision then the decision-maker should justify the denial of such expectation by showing some overriding public interest. 34. Thus, on the ground of legitimate expectation, a person can claim judicial review of the action of administrative authority, who resile from its promise. A person cannot claim relief straight way from the administrative authority on the basis of doctrine of legitimate expectation. He can only claim that the authority, who took decision for negativing a promise, should give him a fair hearing. 35. In the instant case, as noticed above, petitioner is knowing that according to industrial policy only those units are entitled to get incentive on payment of sales tax, which undertake expansion/diversification/modernization. From perusal of Annexure-9, it is clear that the State Government had written to the petitioner to clarify as to how it claims subsidy on the amount paid as additional sales tax to the State Government on the sale of cement by Sindri unit because it is the Chaibasa Clinker Plant which undertaken expansion/diversification/modernization eligible for incentive and not the Sindri Grinding Pant. It appears that petitioner gave its reply to the aforesaid letter (Annexure-9). It appears that petitioner gave its reply to the aforesaid letter (Annexure-9). Under the said circumstance, right to fair hearing before taking a decision for negativing the promise had been given to the petitioner. 36. In view of aforesaid facts and circumstances, since the promise to pay aforesaid incentive on the sales tax to the Sindri Unit is against the Industrial Policy, petitioner can not claim the same on the basis of principle of legitimate expectation. Accordingly, aforesaid contention raised on behalf of the petitioner is hereby rejected. In view of the discussion made above, I hold that petitioner is not entitled to get capital investment subsidy on the amount paid as additional incremental sales tax to the Government on the sale of cement by Sindri unit. Petitioner is only entitled to aforesaid capital investment subsidy on the amount paid as additional incremental sales tax on the sale of cement & clinker by Chaibasa Unit. 37. In the result, these writ applications are partly allowed. The State Government is directed to pay capital investment subsidy to the petitioner treating it as loss making, existing and functional mega industrial unit, as promised by it in Annexure-6. The State Government is further directed to give capital investment subsidy to the petitioner on the amount paid as additional incremental sales tax to the Government on the sale of cement and clinker made by Chaibasa unit. Prayer of the petitioner for grant of capital investment subsidy on the amount paid as additional incremental sales tax to the Government on the sale of cement by its Sindri Unit is rejected. Petitioner is directed to file application in prescribed form for capital investment subsidy on incremental sales tax paid by its Chaibasa Unit on the sale of clinker and cement. The State Government is directed to give aforesaid incentive to the petitioner within three months from the date of application filed by the petitioner in prescribed form. Petition partly allowed.