- DATE OF JUDGEMENT: 1st December 2020
- JUDGES: Justices D. Y Chandrachud, Indu Malhotra
- PARTIES: State of Jharkhand and Ors ( Petitioner) | Brahmputra Metallics Ltd., Ranchi and Anr. ( Respondent)
SUBJECT
The judgement deals with the issue of rebate/deduction as under the terms of Clause 35.7(b) of the Industrial Policy 2012. This appeal arises from a judgment of the High Court of Jharkhand.
AN OVERVIEW
1. The Supreme Court while allowing a petition instituted by the respondents under Article 226 of the Constitution, the Division Bench struck down the last paragraph of a notification dated 8 January 2015 issued by the State government giving prospective effect to the rebate/deduction from electricity duty offered under the Jharkhand Industrial Policy, 2012.
2. The State is in appeal to challenge the judgment dated 11 December 2019.
3. The SC agreed with the conclusion given by the High Court that the respondent was entitled to an exemption from electricity duty.
4. It also directed that the notification shall be deemed to be in effect from 1 April 2011, when the Industrial Policy 2012 was enforced with retrospective effect.
IMPORTANT PROVISIONS
1. The Industrial Policy 2012 was notified by the State government on 16 June 2012. Clause 32.10 provided an exemption from the payment of 50 per cent of the electricity duty for a period of five years, for captive power plants established for self-consumption or captive use.
2. Clause 38(b) stipulated that notifications enforcing the terms of the industrial policy would be issued within a period of one month by the Departments of the State government.
3. Though the Industrial Policy 2012 which was notified on 16 June 2012 envisaged that notifications by the Departments of the State government would be issued within one month, there was a failure to comply with the schedule. In order to give effect to the exemption from electricity duty, a notification under Section 9 of the Bihar Act 1948 was necessary. Section 9 recognizes the power of the State government to grant exemptions.
ISSUES
1. Whether the respondent is entitled to claim a rebate or deduction of 50 per cent of the amount assessed towards electricity duty for FYs 2011-12, 2012-13 and 2013-14?
2. On what basis did the respondent claim its entitlement?
ANALYSIS OF THE JUDGEMENT
1. In this case, since the exemption mentioned above was made prospective the respondent (and other similar units) would receive the benefit of the exemption from electricity duty for a much lesser period. Faced with this situation, the respondent instituted writ proceedings before the High Court of Jharkhand in August 2019.
2. Further, placing reliance on the doctrine of promissory estoppel, the respondent sought, in its submissions before the High Court, one of two reliefs or directions. First, the respondent claimed that the clause in the notification making it prospective should be effaced since it was contrary to the representation that was held out by the Industrial Policy 2012. . Alternately, the respondent sought a direction that it would be entitled to an exemption from electricity duty for a period of five years from the date of the issuance of the notification (the period of five years being the envisaged period under the Industrial Policy 2012).
3. The High Court held that a promise was made by the State government to give the benefit of an exemption of 50 per cent in electricity duty for a period of five years, for self-consumption or captive use, to all new and existing industrial units setting up captive power plants in the State of Jharkhand. The High Court observed that it was not the case of the State government that it did not intend to give the benefit to these industrial units since, as a matter of fact, it had issued a notification, though belatedly, on 8 January 2015. It was on the doctrine mentioned above that the High Court concluded that the notification dated 8 January 2015 issued by the Commercial Tax Department of the State government ought not to be construed with prospective effect and the clause making it prospective would have to be struck down.
4. The state government went into appeal and made the following submissions that in terms of the rebate/concession admissible under the Industrial Policy 2012, the respondent was required by Column 6(iv) of Form-III to raise a claim for exemption from the payment of electricity duty and in all the three returns which were furnished by the respondent, a rebate/deduction was sought only towards "auxiliary consumption", which was accepted and allowed by the assessing officer; The submission that the notification under Section 9 of the Bihar Act 1948 was belatedly issued on 8 January 2015 is not available to the respondent since two of the three assessment orders were issued eleven months and twenty-three months after the issuance of the notification.
5. The counsel appearing for the appellant submitted that An alternative and efficacious statutory remedy of an appeal under Section 9A of the Bihar Act 1948 was available to the respondent against the orders of assessment, and hence the High Court should have refused to allow recourse to the extra-ordinary writ jurisdiction and an alternative and efficacious statutory remedy of an appeal under Section 9A of the Bihar Act 1948 was available to the respondent against the orders of assessment, and hence the High Court should have refused to allow recourse to the extra-ordinary writ jurisdiction.
6. The counsel appearing for the respondent supported the judgement of the HC and submitted the following and argued that the act of the State government in making the exemption notification prospective in effect from 8 January 2015 is in derogation to the promise held out by the State in its Industrial Policy 2012. As regards the submission that there has been a delay in instituting the
7. Writ petitions before the High Court under Article 226:
(a) The issue of delay has not been raised by the State government either before the High Court or in the Special Leave Petition; (b) Once the High Court entertained the writ petition on merits, this Court ought not to interfere on the ground of delay alone, particularly when the judgment of the High Court is legally sustainable;
(c) Delay by itself in filing a Writ Petition may not defeat the claim unless the position of the opposite party has been so altered that it cannot be retracted on account of a lapse of time or inaction of the writ petitioner. The State has neither pleaded nor argued any change in its position and this is a case where the opposite party has not been put through any hardship because of the delay in approaching the High Court.
CONCLUSION
After hearing the arguments from both the sides the court upheld the claims by the respondent and allowed for the appeals. The court also agreed to the decision of the HC that the respondent was entitled to an exemption from electricity duty, although for the reasons indicated in this judgment. Further, it stated that the after hearing the matter on the relief, it ordered that the relief granted would stand confined to FYs 2012-13 and 2013-14. The order was disposed of with no costs.
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