Rajasthan High Court - Jodhpur
State (Finance) & Ors vs Shree Cement Limited & Ors on 6 December, 2016
Bench: Gopal Krishan Vyas, P.K. Lohra
[1]
[SAW NOS.1719/2011 & 644/2012]
IN THE HIGH COURT OF JUDICATURE FOR
RAJASTHAN AT JODHPUR
1. SPL. APPEAL (WRIT) NO.1719/2011
1. State of Rajasthan, through the Principal
Secretary (Finance), Finance Department, State
Secretariat, Jaipur.
2. The Principal Secretary (Finance), Finance
Department, Government of Rajasthan, State
Secretariat, Jaipur.
3. The Secretary, Finance, Finance Department,
(Tax Division), Government of Rajasthan, State
Secretariat, Jaipur.
4. The Commissioner Commercial Taxes,
Government of Rajasthan, Kar Bhawan,
Ambedkar Circle, Jaipur.
5. The Commercial Taxes Officer, Office of
Commercial Taxes, Special Circle, Kar Bhawan,
Civil Lines, Ajmer.
-----Appellants respondents:
Versus
[2]
[SAW NOS.1719/2011 & 644/2012]
1. Shree Cement Limited, Registered Office;
Bangur Nagar, Post Box No.33, Beawar 305901,
District Ajmer.
2. Shri Suresh Chandra Maheshwari son of Shri
Bajrang Lal Maheshwari (an Indian national and
share-holder and Sr. General Manager
(Taxation) of Respondent No.1 Company), aged
53 years, resident of 5, Vardhman Colony,
Gayatri Nagar, Beawar - 305901, District Ajmer
(Rajasthan).
-----Respondents petitioners.
3. The Principal Secretary, Industries Department,
Udyog Bhawan, Tilak Marg, Jaipur.
4. State Level Screening Committee, through its
Member Secretary, The Commissioner of
Industries Udyog Bhawan, Tilak Marg, Jaipur.
5. The Commissioner (Investment & NRI), Bureau
of Investment Promotion, Rajasthan (BIP)
Udyog Bhawan, Tilak Marg, Jaipur.
-----Proforma respondents:
CONNECTED WITH
[3]
[SAW NOS.1719/2011 & 644/2012]
2. SPL. APPEAL (WRIT) NO.644/2012
1. Shree Cement Limited, Regd. Office: Bangur
Nagar, Post Box No.33, Beawar - 305901, District
Ajmer (Rajasthan) through its Asstt. Vice
President (Legal) & Power of Attorney Holder -
Shri S.L. Bhansali, S/o Late Shri Pukh Raj Bhansali
Aged 54 Years, Resident of A-8, Shree Vihar,
Shree Cement Limited, Bangur Nagar, BEAWAR -
305901, Distt. Ajmer (Raj.)
2. Shri Suresh Chandra Maheshwari S/o Lae Shri
Bajrang Lal Maheshwari, (an Indian national and
share holder and Asstt. Vice Preisent (Taxation)
of the Appellant No.1 Company,) aged 54 years,
R/o 5, Vardman Colony, Gayatri Nagar, Beawar -
305901 Dist. Ajmer (Rajasthan)
-----APPELLANTS:
Versus
1. State of Rajasthan through the Principal
Secretary (Finance), Finance Department, State
Secretariat, Jaipur, Rajasthan.
2. The Principal Secretary (Finance), Finance
Department, State Secretariat, Jaipur,
Rajasthan
[4]
[SAW NOS.1719/2011 & 644/2012]
3. The Secretary (Finance), Finance Department
(Tax Division), Government of Rajasthan, State
Secretariat, Jaipur, Rajasthan.
4. The Principal Secretary, Industries Department,
Udyog Bhawan, Tilak Marg, Jaipur - 302 005,
Rajasthan.
5. State Level Screening Committee, Through its
Member Secretary, The Commissioner of
Industries, Udyog Bhawan, Tilak Marg, Jaipur -
302 005, Rajasthan.
6. The Commissioner (Investment & NRI), Bureau
of Investment Promotion, Rajasthan (BIP),
Udyog Bhawan, Tilak Marg, Jaipur - 302 005,
Rajasthan.
7. The Commissioner, Commercial Taxes, Govt. of
Rajasthan, Kar Bhawan, Ambedkar Circle,
Jaipur, Rajasthan.
8. The Commercial Taxes Officer, Office of
Commercial Taxes, Special Circle, Kar Bhawan,
Civil Lines, Ajmer, Rajasthan.
-----RESPONDNETS:
[5]
[SAW NOS.1719/2011 & 644/2012]
_______________________________________
MR.M.S. Singhvi, Sr. Advocate with Mr. V.K Mathur and
Mr. Hemand Dutt, for the State of Rajasthan.
Mr. S. Ganesh, Sr. Advocate with Mr. U.A. Rana and
Mr. Ramit Mehta, for the Shree Cement Ltd.
_______________________________________
HON'BLE MR. GOPAL KRISHAN VYAS,J.
HON'BLE MR. P.K. LOHRA,J.
JUDGMENT
REPORTABLE
Date of Judgment :: 6th Dec., 2016
BY THE COURT: (Per Hon'ble Mr. Justice G.K. Vyas, J.):
D.B. Civil Special Appeal (Writ) No.1719/2011 has been filed by the State of Rajasthan to challenge the order dated 11.10.2011 whereby the learned Single Judge set aside the impugned order dated 31.3.2009 passed by the Principal Secretary, Finance Department, Government of Rajasthan, Jaipur and passed the following directions:
[6]
[SAW NOS.1719/2011 & 644/2012] "45. Therefore, on an analysis of factual matrix and legal position, this Court is of the opinion that the present writ petition deserves to be allowed accepting the various contentions raised on behalf of the petitioner which merit such acceptance and the same is hereby allowed and the impugned order of the Principal Secretary, Finance Department dtd. 31.3.2009 is liable to be quashed and the same is hereby quashed and it is directed that the petitioner company would continue to be given increased rebate/subsidy of 75% of the additional tax liability under the notification dtd.2.12.2005 for a period of 7 years in pursuance of Entitlement Certificates already issued in its favour for both the units at Ras, Pali and Bhiwadi, Alwar and withdrawal notification dtd. 28.4.2006 and clarification dtd. 22.5.2008 would not come in way of the petitioner company in getting such increased rebate/subsidy. The respondents shall release the arrears of such subsidy and allow set off thereof of against additional tax liability within a period of one month from today failing which the petitioner company would be entitled to interest also thereon @9% per annum. Cost are however made easy."[7]
[SAW NOS.1719/2011 & 644/2012] In D.B. Civil Special Appeal (Writ) No.644/2012 preferred by the appellant Shree Cement Company Ltd. the company has prayed for reliefs, in addition to the relief granted in the judgment dated 11.10.2011 passed in SB Civil Writ Petition No.4790/2009 and specifically prayed for following directions:
"As per submissions made herein above, the Appellants respectfully prayed that, in addition to the reliefs granted in the Judgment dated 11.10.2011 passed in SB CWP No.4790/2009 (Annex.-2) this Hon'ble Court may be pleased to:
a. Grant interest in favour of the Appellant Company herein at the rate of 12% per annum or at such other rate as this Hon'ble Court may deem fit, on the arrears of subsidy amount, for the period for which the subsidy has been wrongfully withheld by the Respondent i.e. starting from 15 days after the respective dates of application for grant of subsidy for the period October, 2008 to June, 2011 and the subsequent quarters on which dates the subsidy sanction order were required [8] [SAW NOS.1719/2011 & 644/2012] to be passed and ending till the date of actual set-off with tax liability; and b. Pass any other Order(s) that this Hon'ble Court may deem fit in the facts and circumstances of the case."
Succinctly stated facts of the writ petition would reveal that the petitioner-respondent Shree Cement Company Ltd. is a public limited company incorporated and registered under the Companies Act, 1956 and is engaged in the business of cement manufacturing. The petitioner no.2 of the writ petition Sh. Suresh Chandra Maheshwari is Indian National and share holder of Shree Cement Company Ltd., who is working as Senior General Manager (Taxation) in the company. The petitioner-respondent Shree Cement Company Ltd. preferred SBCWP No.4790/2009, in which the order dated 31.3.2009 passed by the Principal Secretary- Finance, Government of Rajasthan, Jaipur (hereinafter referred to as 'PSF' for short) was challenged whereby two revision/applications dated 18.7.2008 submitted by the Commissioner, Commercial Taxes, Jaipur were accepted and the decisions of the State Level Screening [9] [SAW NOS.1719/2011 & 644/2012] Committee (hereinafter referred to as 'SLSC' for short) dated 29.7.2006 and 27.6.2007 granting upfront subsidy of 45% of Sales Tax or VAT and remaining 30% of interest and wage/employment subsidy over and above, the additional tax generated due to so- called expansions made by the company, were set aside. The PSF directed the SLSC to consider the cases afresh and to issue new eligibility certificate to the extent of original dispensation as provided under Clause 7 and existing prior to amendment made on 2.12.2005 to the petitioner company. The petitioner- respondent Shree Cement Company Ltd. was also aggrieved against the direction of PSF by aforesaid order to the Assessing Authority to make a re- assessment of tax liability and to take steps to recover tax in excess of its eligibility in terms of the new Eligibility Certificate to be issued by SLSC, so also, challenged the clarification of the Finance Department (Tax Division) dated 22.5.2008.
As per the facts of the case, the Government of Rajasthan with a view to encourage investment in the State of Rajasthan promulgated a Scheme know as [10] [SAW NOS.1719/2011 & 644/2012] 'Rajasthan Investment Promotional Scheme' on 28.7.2003 (RIPS-2003). The said scheme came into force w.e.f. 1.7.2003 and remained in force upto 31.3.2008, but later on, extended upto 31.3.2009 by amendment dated 15.3.2007 and further extended upto 31.3.2011 vide amendment order dated 6.8.2008. The RIPS-2003 was amended from time to time and vide amendment dated 22.10.2003, subsidy upto 75% was provided for higher investment and it was further amended on 2.12.2005, whereby the sub-clause (vi) and (vii) to Clause 7 were inserted in the RIPS-2003 whereby 75% subsidy to the new and existing cement unit, which were under expansion upon fulfilling certain conditions envisaged in the same clause was allowed. The petitioner-respondent Shree Cement Company Ltd. registered its option for grant of subsidy upto 75% as per the amendment dated 2.12.2005 under the RIPS- 2003 on 10.12.2005.
An application dated 24.1.2006 for grant of subsidy under clause 7(vii) of RIPS-2003 was duly received on 30.1.2006.
[11]
[SAW NOS.1719/2011 & 644/2012] As per contention of the petitioner-respondent Shree Cement Company Ltd. the investment made was at Rs.303.91 crores with additional employment of 650 persons, financed through secured loan of Rs.224.25 crores. According to company all required conditions stipulated for expansion under clause 7(vii) were fulfilled, therefore, SLSC in due course, granted eligibility certificate to the said expansion in its meeting held on 29.7.2006 and entitlement certificate no.2/37 for a period of seven years from 21.12.2005 (which is the date of commencement of commercial production as defined in RIPS-2003), was issued to the company. The petitioner-respondent Shree Cement Company Ltd. was also allowed subsidy including upfront subsidy from 21.12.2005 to April, 2008 for the said expansion at Ras. The petitioner-respondent Shree Cement Company Ltd. registered its other options for proposed expansions at Ras and Khushkhera on 28.1.2006 and 9.2.2006 involving investment of Rs.450 crores in each, which were duly registered on 28.1.2006 and 16.2.2006. The company also proposed for setting up captive power plant at Ras, so also, stated that the [12] [SAW NOS.1719/2011 & 644/2012] commercial production is likely to be commenced in second quarter of 2007. As per the averments made in the writ petition by the company for grant of subsidy an application was moved on 12.5.2007 in which is incorporated that the total cost under expansion projects assessed by the financial institutions at Rs.1165 crores to be financed by availing loans to the extent of Rs.901 crores and balance through internal accruals.
In the application, it is also stated that additional employment of 392 numbers will be generated owing to expansions making total number to 2567 employees. According to the petitioner-respondent Shree Cement Company Ltd. the State Government issued notification dated 28.4.2006 whereby the sub-clauses (vi) and (vii) of clause 7 of the RIPS-2003 were deleted. The SLSC in its 16th meeting held on 27.6.2007 after due consideration of all relevant facts for expansions made by the petitioner-respondent Shree Cement Company Ltd. granted eligibility certificate under clause 7(vii) of RIPS-2003. While doing so, the SLSC considered that options were registered within limitation period as per [13] [SAW NOS.1719/2011 & 644/2012] notification dated 2.12.2005 when it was in full force prior to premature amendment dated 28.4.2006 whereby the clauses 7(vi) and (vii) were deleted. The SLSC issued entitlement certificate no.2/66 dated 27.6.2007 for a period of seven years from 26.3.2007 to 25.3.2014 in favour of the petitioner-respondent Shree Cement Company Ltd. According to the petitioner-respondent Shree Cement Company Ltd. the subsidy was granted upto 75% till April, 2008 including upfront subsidy of 45% and remaining 30% of interest and wages/employment subsidy over and above, additional tax generated due to expansions made by the petitioner-respondent Shree Cement Company Ltd.
The Finance Department, Government of Rajasthan on 22.5.2008 issued amendment order putting the cement plant of capacity above 200 MT. per day both new and expansions in negative list, making it ineligible for subsidy under RIPS-2003 and simultaneously issued a "clarification" dated 22.5.2008 stating therein that there is some ambiguity with regard to the interpretation of admissibility of subsidy relating to notification dated 2.12.2005 under sub- [14]
[SAW NOS.1719/2011 & 644/2012] clauses (vi) and (vii) of Clause 7. Further, it is stated that in no case, the subsidy would be payable. Meaning thereby, the Finance Department negated the notification dated 2.12.2005 itself as is of no consequence and as if, never issued. Aforesaid fact were intimated to the petitioner-respondent Shree Cement Company Ltd. vide letter dated 27.1.2009 of the Finance Department for review of SLSC decision dated 29.7.2006 and 27.6.2007. A meeting was fixed before Principal Secretary, Finance on 5.2.2009, but alognwith intimation letter, no reasons were assigned nor any document was enclosed, therefore, the petitioner-respondent Shree Cement Company Ltd. requested the authorities of Finance Department to provide the same and sought document on that date. The petitioner-respondent Shree Cement Company Ltd. received show cause notice dated 9.2.2009 intimating for review of the decisions of the SLSC because according to the Finance Department the grant of subsidy was not in accordance with law as pointed out by the Commercial Taxation Department. [15]
[SAW NOS.1719/2011 & 644/2012] Two applications, both dated 18.7.2008, bearing nos. 108 and 109, filed by the Commissioner of Commercial Taxation before the Secretary, Finance (Revenue), Government were sent to the company in which the decisions of SLSC were questioned on the ground that members of SLSC were not aware of material fact of deletion of clause 7(vii) of the RIPS- 2003 vide notification dated 28.4.2006, which is further supported by clarification dated 22.5.2008.
The petitioner-respondent Shree Cement Company Ltd. raised preliminary objections vide reply filed on 3.3.2009 for initiation of proceedings on the ground of jurisdiction of PSF to review the decisions of SLSC and acting as revisional authority without any order issued by the State Government in this behalf. Reply was also filed on merit with the request for adjudication of preliminary objections prior to hearing. The PSF vide letter dated 13.3.2009 rejected the preliminary objections of the petitioner-respondent Shree Cement Company Ltd. raised at the time of hearing on 3.3.2009. On 26.3.2009 the petitioner- respondent Shree Cement Company Ltd. again [16] [SAW NOS.1719/2011 & 644/2012] submitted its reply reiterating the preliminary objections and also submitted reply on merit.
The Principal Secretary, Finance passed an order dated 31.3.2009 accepting both the applications dated 18.7.2008 submitted by the Commissioner, Commercial Taxation and quashed the orders of SLSC dated 29.7.2006 and 27.6.2007 for expansions made by the company granted under clause 7(vii) of RIPS-2003 and issued directions to the SLSC to reconsider and issue new eligibility certificate to the extent that only original dispensation existing prior to amendment dated 2.12.2005 in the scheme. The assessing authority also directed to make re-assessment of the tax liability and take steps to recover tax paid in excess of new eligibility certificate issued by the SLSC.
Being aggrieved with the decision of PSF dated 31.3.2009, the petitioner-respondent Shree Cement Company Ltd. preferred writ petition being No.4790/2009 challenging the said order.
In the writ petition, a detailed reply was filed by the appellant State of Rajasthan, but learned Single Judge quashed the order dated 31.3.2009, which is [17] [SAW NOS.1719/2011 & 644/2012] under challenge in the special appeal no.1719/2011 filed by the State of Rajasthan.
The learned Sr. Advocate Sh. M.S. Singhvi, assisted by Sh. Hemant Dutt vehemently argued that findings given by the learned Single Judge for quashing the order dated 21.3.2009 are totally wrong and contrary to law because no vested right created to the respondent Shree Cement Company Ltd. under the amendment notification in RIPS, 2003 dated 2.12.2005 by virtue of principle of "promissory estoppel" and "legitimate expectation". Further, for the reason that there is no foundation and material available on record to sustain those findings, the representations do not in any manner co-relate issuance of amendment dated 2.12.2005, which notification as per the order of revisional authority, was issued on account of increase in the rate of sales tax on cement from 19% to 28% on the same day. It is also submitted that writ of certiorari cannot be issued unless there is error apparent on the face of record in the order impugned. The order impugned dated 31.3.2009 passed by the Secretary, Finance, Government of Rajasthan is well [18] [SAW NOS.1719/2011 & 644/2012] reasoned order and the same was passed after taking into consideration entire facts and law, therefore, no interference was required for judicial review, but learned Single Judge committed a gross error while interfering in the order passed by the revisional authority while giving erroneous finding.
According to learned counsel for the appellant the subsidy cannot be claimed as a matter of right. The subsidy and incentive are provided by the Government for development of industrial growth of the State, but as per the verdict given by the Hon'ble Supreme Court in a number of judgments, the subsidy cannot be claimed as a matter of right. It is also pointed out that factually there is no foundation in the writ petition, when project of the petitioner-respondent Shree Cement Company Ltd. was conceived and when the same was finalized, therefore, in absence of specific finding for establishment of project and finalization of project, the respondent Company cannot be permitted to claim subsidy as a matter of right under the scheme. The operative period of RIPS scheme, 2003 introduced on 28.7.2003 was from 1.7.2003 to [19] [SAW NOS.1719/2011 & 644/2012] 31.3.2008 and was further extended upto 31.2.2011. The RIPS scheme, 2003 was applicable for all investments as well as existing units for expansions. It is true that the petitioner-respondent Shree Cement Company Ltd. requested the State Government to grant 75% sales tax and incentives subsidy for that various representations were filed by the petitioner- respondent Shree Cement Company Ltd., but it is not correct that amendment in the scheme for grant of subsidy 40% to 75% was made to satisfy any assurance to the company. It is true that on 2.12.2005 sub-clauses (vi) and (vii) were inserted in clause 7 of RIPS, 2003 whereby it was provided that amount of subsidy shall be subject to maximum of 75%. The petitioner-respondent Shree Cement Company Ltd. submitted option for expansion of the unit at Ras, Tehsil Jaitaran where commercial production in the said first unit was commenced from 17.12.2005 and tax on commercial production was paid for the first time on 21.12.2005. The petitioner-respondent Shree Cement Company Ltd. moved an application to the SLSC for grant of subsidy under RIPS, 2003 on 10.12.2005. [20]
[SAW NOS.1719/2011 & 644/2012] While inviting attention towards the fact that petitioner- respondent Shree Cement Company Ltd. moved an application to SLSC for availing benefit under the amendment notification dated 2.12.2005 showing investment of Rs.450 crores and stated that commercial production likely to commence in the year 2007 on 9.2.2006, the petitioner-respondent Shree Cement Company Ltd. submitted option for grant of subsidy under the amended notification dated 2.12.2005 for setting up a unit at Ras and granite unit at Kushkheda. The land was leased out by RIICO to the petitioner-respondent Shree Cement Company Ltd. on 24.2.2006 upon consideration of Rs.7,78,09,744/- and amount of Rs.31,37,700/- towards stamp duty.
As per contention of learned counsel for the appellant on 1.4.2006, Rajasthan Value Added Tax (VAT) Act came into force whereby the rate of VAT on cement was reduced from 28% to 12.5%, therefore, as a consequence of reduction of tax on cement, sub- clauses (vi) and (vii) introduced in the RIPS, 2003 were came to be deleted. After deletion of the said [21] [SAW NOS.1719/2011 & 644/2012] clauses, SLSC issued certificate on 29.7.2006 for grant of subsidy to the petitioner-respondent Shree Cement Company Ltd. under the notification dated 2.12.2005, but SLSC committed a grave error because SLSC ignored the notification dated 28.4.2006 whereby the said amendment made in the RIPS, 2003 was deleted. The learned Senior Counsel vehemently argued that it was the duty of SLSC to take into consideration the notification dated 28.4.2006 whereby the amendment notification dated 2.12.2005 whereby sub-clauses (vi) and (vii) were inserted in clause 7 of RIPS, 2003 were deleted. Therefore, while exercising revisional jurisdiction, the Secretary Finance, Government of Rajasthan, accepted the revision petition vide order dated 21.3.2009 filed by the Commercial Department and quashed the decisions of SLSC dated 29.7.2006 after providing an opportunity of hearing to the petitioner-respondent Shree Cement Company Ltd. and considering their all arguments, therefore, at the time of deciding the writ of certiorari, the learned Single Judge ought to have considered the fact that in the writ of certiorari, the order cannot be quashed [22] [SAW NOS.1719/2011 & 644/2012] unless there is error apparent on the face of record, but learned Single Judge quashed the well reasoned order dated 31.3.2009 passed by the Secretary, Finance, Government of Rajasthan, Jaipur. Therefore, on this count, the judgment impugned in this appeal dated 11.10.2011 deserves to be quashed.
Learned Senior Advocate further submits that subsidy cannot claim as a matter of right because it is provided by the Government in public interest for development of industrial growth, but at the same time, no one can claim subsidy as a matter of right in view of various judgments of the Hon'ble Supreme Court, but learned Single Judge committed an error while observing in the judgment impugned that subsidy can be claimed as a matter of right under the scheme framed by the Government.
While inviting attention towards the pleadings, it is submitted that there is no foundation in the writ petition that any investment was planned by the petitioner-respondent Shree Cement Company Ltd. only on the basis of notification dated 2.12.2005. It was the duty of the petitioner-respondent Shree [23] [SAW NOS.1719/2011 & 644/2012] Cement Company Ltd. to plead all correct facts, when project was conceived and the same was finalize, therefore, in absence of such pleadings, the petitioner- respondent Shree Cement Company Ltd. was not entitled to claim subsidy as a matter of right under the amendment made in RIPS, 2003 vide notification dated 2.12.2005. It is also argued that no minimum subsidy was ensured, which is evident from the scheme itself, which is only subject to maximum limit of 75%. In the clauses of scheme, it is specifically mentioned that amount of subsidy shall be subject to maximum limit of 75%, therefore, on this count also, the petitioner- respondent Shree Cement Company Ltd. is not entitled for any relief for subsidy upto 75%.
Learned counsel for the appellant submits that the State Government has power to withdraw subsidy at any time in public interest as per clause 14 of the RIPS, 2003, which provides for review or modification of the scheme. The essence of the said clause is that Finance Department of State Government reserve right to review or modify the scheme as and when needed in public interest. For withdrawal of subsidy upto 75% [24] [SAW NOS.1719/2011 & 644/2012] there was legal and valid reason to delete sub-clauses
(vi) and (vii) inserted vide notification dated 2.12.2005 due to change in the rate of tax on same as well as introduction of the VAT from 1.4.2006. The learned Single Judge committed an error in rejecting the said argument that subsidy was withdrawn on account of reduction of sales tax. The amendment notification dated 2.12.2005 was issued for granting benefits in respect to same nature only and it was withdrawn for the reason that rate of tax on cement was also reduced from 28% to 12.5%, therefore, it is apparent that learned Single Judge has completely ignored clause 14 of the scheme of 2003, which provides for reviewing or modification in the scheme.
Learned Senior Advocate submits that another error has been committed by the learned Single Judge while accepting the ground of promissory estoppel because from the facts pleaded in the writ petition the doctrine of promissory estoppel is not applicable in this case because expansion, which is made by the petitioner-respondent Shree Cement Company Ltd. in the light of RIPS, 2003 as prevailing and was not at all [25] [SAW NOS.1719/2011 & 644/2012] related to the additional subsidy allowed vide notification dated 2.12.2005. There is no foundation in whole of the writ petition when the quotations were invited for expansion, when production were commenced and final, therefore, any investment made de-hors the amendment dated 2.12.2005 would not form the basis for invoking doctrine of promissory estoppel. The petitioner-respondent Shree Cement Company Ltd. cannot claim subsidy as matter of right. The subsidy upto 75% on tax was granted for the reason that earlier sales tax on cement was 28%, however, on the introduction of VAT, the tax on cement was reduced from 28% to 12.5%, therefore, there was no occasion to provide subsidy to the petitioner- respondent Shree Cement Company Ltd. on a tax of 12%. If the subsidy could not have been reduced, the State Government, which is a welfare State would have suffer huge revenue losses because the investment carried out by the petitioner-respondent Shree Cement Company Ltd. in the first phase was approximately Rs.303.91 crores and in the second phase, it was approximately Rs.683.38 crores. On other hand, the [26] [SAW NOS.1719/2011 & 644/2012] benefit availed by the petitioner-respondent Shree Cement Company Ltd. under the head of subsidy comes to Rs.353.44 crores, if 75% of subsidy as ordered by the learned Single Judge is to be granted then the additional burden of approximate Rs.250 crores is to be paid by the State Government. In view of the above, it is submitted that the finding given by the learned Single Judge in the judgment impugned for restoring the order passed by the SLSC deserves to be quashed because as per the provisions of the scheme neither any vested right created to the petitioner-respondent Shree Cement Company Ltd. nor the principle of promissory estoppel can apply to maintain the order passed by the SLSC, but learned Single Judge committed grave error while quashing the order passed by the revisional authority vide order dated 31.3.2009. The learned counsel for the appellant-State invited attention of this Court towards various judgments to substantiate his arguments, which are as follows:
A. Writ of certiorari cannot be issued unless there is error apparent on the face of record: [27]
[SAW NOS.1719/2011 & 644/2012]
(i) 1980 (4) SCC 336 : Mukunda Bore Vs. Bangshidhar Buragohain;
(ii) 1984 (2) SCC 488 : Bishnu Ram Borah Vs. Parag Saikia
(iii) 2007 (2) SCC 468 : State of Raj. Vs. H.V. Hotels B. Subsidy cannot be claimed as a matter of right nor it is vested right:
(i) 1987 (1) SCC 31 : Shri Bakul Oil
Industries Vs. State of Gujarat
(ii) 1995 (1) SCC 274 : Kasinka Trading &
Anr. Vs. UOI
(iii) 1995 (6) SCC 53 : Arvind Industries Vs. State of Gujarat
(iv) 2004 (7) SCC 673 : State of Rajasthan Vs. J.K. Udaipur
(v) 2008 (13) SCC 213 : Kusumam Hotels (P) Ltd. Vs. Kerala SEB
(vi) 1996 (5) SCC 268 : PTR Exports (Madras) Vs. UOI
(vii) 996 (2) SCC 438 : S.B. International Ltd. Vs. Director General F.T. C. Withdrawal of subsidy is permissible in public interest:
(i) 1995(1) 274 : Kasinka Trading & Anr.
Vs.UOI.
[28]
[SAW NOS.1719/2011 & 644/2012]
(ii) 1999(4) SCC 357 : State of Rajasthan Vs. Mahavir Oil Industries.
(iii) 2004(7) SCC 673: State of Rajasthan
Vs. JK Udaipuir
(iv) 2011(3) SCC 193 : Shri Sidhbali Steels
Vs. State of UP
(v) 2011 (3) SCC 778 : State of Haryana
Vs. Mahabir Vegetable Oil
D. Promissory estoppel is not applicable in the present matter:
(i) 2004(7) SCC 673: State of Rajasthan Vs. J.K. Udaipur
(ii) 2005(1) SCC 625: Bannari Amman Sugars Vs. CTO
(iii) 2006(2) SCC 545 : State of Bihar Vs. Project Uchcha Vidya
(iv) 2008(13) SCC 213 : Kusum Hotels Vs. Kerala State Electricity
(v) 2011(3) SCC 193 : Shri Sidhbali Steels Vs. State of U.P.
(vi) 2011(3) SCC 778 : State of Haryana Vs. Mahabir Vegetable Oil
(vii) 2011(9) SCC 286 : Andhra Pradesh Diary Development's case
(viii) 2016(4) SCC 134 : Kothari Vs. State E. Revisional jurisdiction:
(i) 2000(2) SCC 718 : Malabar Industrial Company Vs. CIT [29] [SAW NOS.1719/2011 & 644/2012]
(ii) 1973 (3) SCC 482 : Smt. Tara Devi Vs. CIT, Calcutta F. Provisions of law on the date of consideration:
(i) 2000(2) SCC 536 : Kolhapur Cane
Sugar Vs. UOI
(ii) 1981 (2) SCC 205 : State of T.N. Vs.
Hind Stone
(iii) 1999(7) SCC 314 : UOI Vs. Indian
Charge Chorome
(iv) 2011 (5) SCC 142 : Coal India Ltd. Vs.
Ananta Saha
On aforesaid grounds, it is submitted that the judgment impugned deserves to be quashed.
Per contra, learned Senior Counsel Sh. S. Ganesh submits that the petitioner-respondent Shree Cement Company Ltd. is entitled to claim 75% subsidy (which is subsidy equal to 75% of the sales tax) and the same is founded and based on three distinct pillars, each of which stands on its own, independent to the other two pillars, therefore, even if one of three pillars remains intact and standing, then petitioner-respondent Shree Cement Company Ltd. would be entitled to grant subsidy in pursuance of certificate issued by SLSC. [30]
[SAW NOS.1719/2011 & 644/2012] Learned counsel for the petitioner-respondent Shree Cement Company Ltd. submits that on promissory estoppel, the learned Single Judge has rightly quashed the order passed by the Secretary, Finance dated 31.3.2009. While inviting attention towards the fact, it is submitted that on representations filed by the petitioner-respondent Shree Cement Company Ltd. to the Chief Minister, Government of Rajasthan, meetings were held with the Chief Minister on 7.2.2005, 7.5.2005 and 21.5.2005 and in the budget speech on 24.3.2005, the factual report was submitted on the basis of request made by the petitioner-respondent Shree Cement Company Ltd., thereafter, 75% subsidy was made available to the petitioner-respondent Shree Cement Company Ltd. with certain conditions. The petitioner-respondent Shree Cement Company Ltd. had established its cement unit at Kushkhera upon the said promise and assurance given by the State Government. So far as the Ras unit was concerned, the entire investment thereon was made after meeting with the Hon'ble Chief Minister in the month of April, 2004. The major portion [31] [SAW NOS.1719/2011 & 644/2012] of the total investment and entire investment on phases of plant and machinery was made after budget speech dated 24.3.2005. Therefore, the petitioner- respondent Shree Cement Company Ltd. became entitled to enforce said assurance and promise, even if, no amendment had been made to the RIPS, 2003 on 2.12.2005 and, even if, no order had been passed in favour of the petitioner-respondent Shree Cement Company Ltd. by the SLSC. The learned counsel for the petitioner-respondent Shree Cement Company Ltd. vehemently argued that all investments were made upon assurance given by the Government, therefore, the doctrine of promissory estoppel will apply in this case for grant of subsidy upto 75%. The learned counsel for the petitioner-respondent Shree Cement Company Ltd. further argued that under clause 7(vii) of RIPS, the exercise of the option by a qualifying industrial unit before 28.4.2006 gave rise to a vested and crystallized right to receive 75% subsidy for a period of seven years. The unit exercising this option had a firmed and fixed right to receive entitlement certificate from the SLSC within 33 days of the [32] [SAW NOS.1719/2011 & 644/2012] application for grant of subsidy in respect of concerned new unit/expansion in respect of which, there had been exercise of the option to avail the benefits under sub- clause (vi) and (vii) of Clause 7 during the period said clauses remained part of RIPS, 2003 and to which right of the unit to avail of 75% subsidy for a period of 7 years accrued. According to the learned counsel for the petitioner-respondent Shree Cement Company Ltd. the subsequent deletion of sub-clause (vii) of Clause 7 do not nullify or, in any, manner affect the pre-existing, vested rights, entitlement, liabilities or disabilities. The vested right under clause 7(vii) would exist even if there was no assurance or promise made by the Chief Minister to grant 75% subsidy.
Learned counsel for the petitioner-respondent Shree Cement Company Ltd. submits that the case for grant of 75% subsidy was decided by the SLSC by two orders issued on 29.7.2006 and 27.6.2007 on the ground that petitioner-respondent Shree Cement Company Ltd. exercised option and proceeded on footing when Clauses 7(vi) and (vii) were part of RIPS, 2003. The deletion of sub-clauses (vi) and (vii) on [33] [SAW NOS.1719/2011 & 644/2012] 24.4.2006 do not in any manner interfered with or affect the pre-existing vested and crystallized rights of petitioner-respondent Shree Cement Company Ltd. to get 75% subsidy in terms of options already exercised and registered to avail benefit under said sub-clauses. According to the learned counsel for the petitioner- respondent Shree Cement Company Ltd. the impugned revisional order dated 31.3.2009 by which the orders of SLSC dated 29.7.2006 and 27.6.2007 were quashed was per-se not only contrary to law but bad in law, therefore, the said revisional order is null and void. The learned Single Judge accepted the plea of pre- existing, vested and crystallized rights upon which SLSC issued the certificate for grant of subsidy upto 75%, therefore, the judgment impugned in this appeal is perfectly in consonance with law.
Learned Senior Counsel Sh. S. Ganesh submits that even if one of the above pillars remained intact and standing, then petitioner-respondent Shree Cement Company Ltd. would be entitled to 75% subsidy eve if the two other pillars are for any reason struck down by this Court. The learned Single Judge upheld the [34] [SAW NOS.1719/2011 & 644/2012] existence of each of the said three pillars, therefore, quashed the order passed by the revisional authority in which there is no illegality.
The learned counsel for the petitioner-respondent Shree Cement Company Ltd. further argued that revisional jurisdiction was not available to be exercised as the order passed by the SLSC was not erroneous, more so, the orders passed by the SLSC in favour of the petitioner-respondent Shree Cement Company Ltd. on 29.7.2006 and 27.6.2007 were just and proper because the only view possible at any rate was exercised by the SLSC to issue the orders dated 29.7.2006 and 27.6.2007, therefore, the argument for exercising revisional jurisdiction, is on the face of record, is fallacious. In support of above arguments, it is submitted that application for grant of subsidy was moved under clause 7(vii) of the RIPS, 2003 and on the date, SLSC passed the order, though clause 7(vii) was deleted before 28.4.2006, but there was no question to exercise revisional jurisdiction because in the scheme there is no revisional power left with the State Government to set aside the order passed by the SLSC. [35]
[SAW NOS.1719/2011 & 644/2012] The learned counsel for the petitioner-respondent Shree Cement Company Ltd. submits that upon assurance given by the State Government, huge investments were made and, thereafter, the government fulfilled the assurance and issued notification on 2.12.2005, whereby subsidy for sales tax was granted upto 75% but subsequently, it was deleted vide notification dated 28.4.2006, but in between this period, establishment of two units were in progress, therefore, even if the notification dated 2.12.2005 providing subsidy upto 75% was deleted subsequently vide notification dated 28.4.2006 the members of the SLSC after due application of mind granted benefit of subsidy upto 75% vide order dated 29.7.2006 and 27.6.2007, but Secretary, Finance, Government of Rajasthan upon revision petition filed by the Commercial Taxes Department illegally exercised its power and quashed the orders issued by the SLSC. In the impugned judgment, the learned Single Judge while accepting the ground of promissory estoppel and vested right quashed the order of revisional authority [36] [SAW NOS.1719/2011 & 644/2012] dated 31.3.2009, therefore, there is no force in this appeal.
The written submissions are filed by appellant as well as the petitioner-respondent Shree Cement Company Ltd. and in support of their grounds, number of judgments have also been cited by both the parties. We have considered the arguments as well as the written submissions filed by both the parties, so also, perused the judgments cited by both the parties.
The learned Senior counsel Sh. S. Ganesh assisted by Sh. Ramit Mehta, Advocate invited our attention towards following judgments in support of their grounds of promissory estoppel, legitimate expectation, vested right, exercising impermissible revisional jurisdiction and contemporaneous exposition to quash the decision of Principal Secretary, Finance dated 31.3.2009 whereby Principal Secretary quashed and set aside the eligibility certificate dated 29.7.2006 and 27.6.2007 whereby SLSC granted subsidy upto 75% in pursuance of Clause 7(vi) and (vii) of the RIPS, 2003. The judgments on the aforesaid grounds are as follows:
[37]
[SAW NOS.1719/2011 & 644/2012] A. PROMISSORY ESTOPPEL AND LEGITIMATE EXPECTATION:
i. State of Rajasthan & Anr. Vs. Surendra Mohnot & Ors. 2014(14) SCC 77 ii. Dai-ichi Karkaria Ltd. Vs. Union of India & Ors. 2000(4) SCC 57 iii. Motilal Padampat Sugar Mills Co.(P) Ltd.
Vs. State of Uttar Paresh & Ors. AIR (79) SCC 621 iv. MRF Ltd., Kottayam Vs. Asstt.
Commissioner (Assessment) Sales Tax & Ors. 2006(8) SCC 702 B. VESTED RIGHT:
i. Shanker Lal Verma & 13 Ors. Vs. The RSEB 1999(1) WLC (Raj.) 1 ii. Madras High Court, The Chairman Vs. Kanimozhi 2014 LAB IC 4007 iii. Raghuveer Singh Saxena Vs. United India Insurance Co. Ltd. & Ors. 2014(2) RLW 1047 (Raj):
iv. Girish Chandra & Ors. Vs. State of
Rajasthan & Anr 2013 Lab IC 645 :
v. Prem Kumar & Ors. vs State of Rajasthan
2007 (3) ILR (Raj.) 95
C. EXERCISING IMPERMISSIBLE REVISIONAL
JURISDICTION:
i. Commissioner of Income- Tax, Mumbai Vs.
Contimeters Electricals P. Ltd. (2009) 317 ITR 249 (Delhi) ii. Commissioner of Customs, Mumbai Vs. Toyo Engineering India Ltd. 2006 (7) SCC 592 [38] [SAW NOS.1719/2011 & 644/2012] iii. Bagsu Devi Bafna Vs. Commissioner of Income Tax & Ors. 1966 (62) ITR 506 iv. S.L. Srinivasa Jute Twine Mills (P) Ltd. Vs. UOI & Anr. 2006(2) SCC 740 v. Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax, Kerala State vi. 2000 (243) ITR 83=2000(2) SCC 718 vii. Commissioner of Income Tax Vs. Max India Ltd. 2007(295) ITR 282 (SC) viii. Surya Devi Rai Vs. Ram Chander Rai & Ors 2003(6) SCC 675 D. CONTEMPORANEOUS EXPOSITION:
i. Collector of Central Excise, Guntur Vs. Andhra Sugar Ltd. Venkataray Purama Same Judge as in Doypack (1989) Supp, (1) SCC 144 ii. Dunlop India Ltd vs UOI & Ors. (1989) Supp(2) SCC 699 iii. Indian Metals and ferro Alloys ltd. Cuttak vs Collector of Central Excise, Bhubaneshwar (1991) Supp (1) SCC 125 iv. J.K Industries Ltd.& Anr. Vs UOI & ors.
(2007) 13 SCC 673 v. Splentex Industries Ltd. &Anr. Vs UOI &ors. (2016) 1 SCC 780 vi. Commissioner of Income Tax (Central)-I, New Delhi Vs. Vatika Township Pvt. Ltd. (2015) 1 SCC 1 vii. (Pepsico India Holding Pvt. Ltd. Vs. Grocery Market and Shops Board & Ors (2016) 4 SCC 493:
viii. Desh Bandhu Gupta & Co. & Ors. Delhi Stock Exchange Association Ltd. AIR 1979 SC 1049 [39] [SAW NOS.1719/2011 & 644/2012] ix. K.P. Varghese Vs. Income Tax Officer, Ernakulam & Anr. AIR 1981 SC 1922 Both the parties submitted number of written submissions in support of their grounds. We have considered the arguments as well as the written submissions filed by both the parties and perused the judgments cited by both the parties.
Upon consideration of pleadings and RIPS, 2003, it emerges from the facts that to promote the industrial sick units, more particularly, cement manufacturing units in the State of Rajasthan, the State Government issued a scheme known as RIPS, 2003 vide notification dated 28.7.2003.The said scheme was operative w.e.f. 1.7.2003 to 31.3.2008. In the said scheme sub-clause (7) was inserted for providing subsidy to the eligible units making new investment during operative period of the said scheme in the form of interest subsidy and wage subsidy subject to a maximum limit of 50% of the tax payable and deposited under the Rajasthan Sales Tax Act, 1994 and the Central Sales Tax Act, 1956 and the Value Added Tax Act as and when introduced in the [40] [SAW NOS.1719/2011 & 644/2012] State. The Value Added Tax Act, 2003 came into force in the State of Rajasthan with effect from 1.4.2006, as per scheme in case of investment made for Modernization/Expansion/ Diversification, the amount of subsidy shall be subject to a maximum of 50% of the additional amount of Rajasthan Sales Tax and the Central Sales Tax or VAT payable or deposited whichever is higher, in any of the three immediately preceding years known as base years. In the scheme, a proviso to Clause 7 (i)(b) was inserted, whereby it is provided that maximum limit of 50% prescribed under clause 7(i)(a) and clause 7(i)(b) may be raised by the BIDI (Board of Infrastructure Development and Investment Promotion, Government of Rajasthan) to 60% in such cases where the investment exceed to Rs.100 crores, but are less than or equal to Rs.200 crores; and this maximum limit may be raised further to 75% in cases where the investments exceed Rs.200 crores. Clause 7(iii) provided that the subsidy shall be available to the investors for seven years from the date of first repayment of interest in case of Interest Subsidy, and first payment of wages/ employment in [41] [SAW NOS.1719/2011 & 644/2012] case of wage employment subsidy and in case of expansion/modernization/diversification, the unit shall be eligible for subsidy under the scheme from the date of payment of sales tax over and above the highest sales tax paid in the immediately preceding three years before such expansion/modernization/diversification.
Upon perusal of amendments, it will reveal that vide notification dated 2.12.2005 sub-clauses (vi) and
(vii) were inserted in the RIPS, 2003 for new cement unit having investment exceeding Rs.400 crores and with a minimum regular employment of 200 persons, the amount of subsidy shall be subject to a maximum limit of 75% of the tax payable or deposited under Rajasthan Sales Tax, 1994 or Value Added Tax Act (as and when introduced in the State) and Central Sales Tax Act, 1956 for a period of 7 years from the date of the commencement of production, subject to certain conditions. Under sub-clause (vii) of clause 7, it is provided that notwithstanding anything contained in sub clauses (i) to (v) of the scheme, in case of investments for expansion of existing cement unit having investment exceeding Rs. 200 crores and with a [42] [SAW NOS.1719/2011 & 644/2012] minimum regular employment of 100 persons, the amount of subsidy shall be subject to a maximum limit of 75% of the additional tax (calculated by taking the average of last 3 years) payable or deposited under Rajasthan Sales Tax Act, 1994 or Value Added Tax Act (as and when introduced in the State) and Central Sales Tax Act, 1956 for a period of 7 years from the date of commencement of production, subject to certain conditions.
The petitioner-respondent Shree Cement Company Ltd. claimed right of subsidy under the scheme under sub-clause (vii) of Clause 7 whereby the interest subsidy and wage subsidy, an upfront subsidy to be paid to the extent of 75% of the RST/VAT/CST was allowed to such eligible units having made investment exceeding Rs.200 crores with further condition that minimum regular employment of 100 persons. The petitioner-respondent Shree Cement Company made investment over Rs.200 crores in aforesaid two expansion units at Pali and Bhiwadi and therefore, fell within the aforesaid clause 7 (vii) of the amending notification dated 2.12.2005. As per [43] [SAW NOS.1719/2011 & 644/2012] contention of petitioner-respondent Shree Cement Company Ltd. as per the condition No.1 of clause 7
(vii), the investor was required to make an option before the Member Secretary of the SLSC to avail benefit under the Scheme within 180 days of aforesaid amendment. The petitioner- respondent Shree Cement company Ltd. exercised such option vide its letter dated 10.12.2005 immediately after the said amended notification vide its letter dated 30.1.2006 for its Ras Clinker unit situated in District Pali where as per the company, the Company has invested Rs.285.98 crores upto 31.10.2005 as against total project cost of Rs.490.41 crores. The said option for both the units was again reiterated vide communication dated 9.2.2006 addressed to the Commissioner of Industries, Member Secretary of SLSC, Jaipur for clinker unit at village Ras, Tehsil Jaitaran, Dist. Pali and grinding unit of village Kushkheda, Tehsil Bhiwadi with total new investment of approximately Rs.450 crores.
It is also admitted fact that another notification dated 28.4.2006 whereby Clause (vi) and clause (vii) inserted in RIPS, 2003 vide notification dated [44] [SAW NOS.1719/2011 & 644/2012] 2.12.2005, were deleted after about 5 months after insertion of the said clause. In the notification dated 28.4.2006 only one line amendment was made which says "Sub-clause (vi) and (vii) of clause 7 of the said Scheme shall be deleted." The petitioner- respondent Shree Cement Company Ltd submitted before the learned Single Judge that neither any reason nor any preamble containing such reasons for such deletion of these clauses was brought on record, in fact, deletion of sub-clauses (vi) and (vii) of Clause 7 in RIPS, 2003 vide notification dated 28.4.2006, is the reason for present litigation. According to the petitioner-respondent Shree Cement Company the said deletion was made vide notification dated 28.4.2006 was communicated to all the concerned authorities including the Commissioner, Commercial Taxes Department. The 10th meeting of SLSC was held on 29.7.2006 after about 3 months of said deletion, the SLSC is comprising of Commissioner Commercial Taxes, Executive Director, RFC, Sr. Dy. General Manager, RIICO and Commissioner of Industries as Member Secretary. The case of the petitioner- [45]
[SAW NOS.1719/2011 & 644/2012] respondent Shree Cement Company Ltd. was considered in the meeting for grant of benefit in the form of subsidy upto 75% under the RIPS, 2003 as per amendment notification dated 2.12.2005 and a decision was taken in favour of the petitioner-respondent Shree Cement Company Ltd. to the effect that "The unit has requested that its investment is covered under the order issued by the Finance Department on 2.12.2005"
whereby sub clause (vi) and (vii) were added in clause 7 of the Scheme. The Unit has made an investment of more than Rs.200 crores and has provided employment to more than 100 persons, therefore, they are entitled under the special dispensation provided for cement units vide F.D. Order dated 2.12.2005." "The SLSC, perused the facts of the case and after considering all relevant facts, decided to grant the eligibility certificate to the petitioner-respondent Shree Cement Company Ltd., for interest subsidy @5% and wage/employment subsidy @25% for a period of 7 years to start with commencement of commercial production/operation as per clause 4(b) of the Scheme. Further, held that the amount of subsidy will be subject to maximum limit of [46] [SAW NOS.1719/2011 & 644/2012] 75% of the additional tax (calculated by taking an average of last three years) deposited under RST Act, 1994/VAT and CST Act, 1956. Consequent to the aforesaid decision dated 29.07.2006 by the SLSC, an Entitlement Certificate was also issued to the petitioner-respondent Shree Cement Company Ltd. by Commissioner of Industries and Member Secretary of SLSC on 8.9.2006 for a period of seven years for the subsidy to the extent of 75% for first expansion unit of Pali. The SLSC again met on 27.6.2007 in which the case of second unit situated at Bhiwadi of the petitioner-respondent Shree Cement Company Ltd was considered after about eleven months of the previous meeting. In the said meeting of SLSC comprising of higher authorities, namely, Commissioner, Commercial Taxes Department, Managing Director of RIICO, Dy. Secretary, Finance and Commissioner of industries considered the case of the petitioner-respondent Shree Cement Company Ltd for its Kushkheda, Tehsil Bhiwadi grinding unit and in the consideration despite referring to amending notification dated 28.4.2006, deleting Clauses (vi) and (vii) from clause 7, the SLSC took a [47] [SAW NOS.1719/2011 & 644/2012] conscious decision that petitioner-respondent Shree Cement company Ltd had exercised its option prior to deletion of clause 7(vii) vide notification dated 28.4.2006, therefore, covered by the previous amending notification dated 2.12.2005 and, therefore, entitled to increase benefit of subsidy to the extent of 75% under the first amending notification dated 2.12.2005 because the petitioner-respondent Shree Cement Company Ltd. is fulfilling the conditions of making investment of more than Rs.200 crores and providing employees more than 100 persons. The SLSC held that the petitioner- respondent Shree Cement Company Ltd entitled to the benefit upto 75% of subsidy for a period of 7 years and issued Entitlement Certificate in prescribed form No. 6 in favour of the petitioner-respondent Shree Cement Company Ltd., for its Bhiwadi unit for a period of 7 years from 26.3.2007.
Upon consideration of aforesaid facts, it is abundantly clear that in the scheme RIPS 2003 introduced by the State of Rajasthan vide notification dated 28.7.2003 the said scheme was amended vide notification dated 2.12.2005 whereby sub-clauses (vi) [48] [SAW NOS.1719/2011 & 644/2012] and (vii) were inserted in clause 7 of the RIPS, 2003, but subsequently, the said provision was deleted just after five months vide notification dated 28.4.2006, but SLSC granted entitlement certificate to the petitioner- respondent Shree Cement Company Ltd granting subsidy upto 75% for both the units situated in Pali and Bhiwadi. In the SLSC all the higher authorities of the government were present and after due application of mind issued eligibility certificate in favour of the petitioner-respondent Shree Cement Company Ltd even after deletion of amendment vide orders dated 29.7.2006 and 27.6.2007. It is worthwhile to observe that in the writ petition although notification dated 28.4.2006 was challenged, but the said prayer was not pressed by the respondent company.
After issuance of those certificates by the SLSC, the subsidy upto 75% was allowed for a period of about two and half years, out of 7 years entitlement, but a clarification was issued on 22.5.2008 in RIPS by the Tax Division of Finance Department, Government of Rajasthan and in pursuance of the said clarification, the benefit of subsidy upto 75% was extended to the [49] [SAW NOS.1719/2011 & 644/2012] petitioner-respondent Shree Cement Company Ltd under the entitlement certificate.
The petitioner-respondent Shree Cement Company Ltd raised an objection that in the garb of said notification issued on 22.5.2008 the benefit already granted to the petitioner-respondent Shree Cement Company Ltd. cannot be withdrawn because as per principle of promissory estsoppel, the vested right of the petitioner-respondent Shree Cement Company Ltd. cannot be withdrawn in casual manner. Upon receiving such objection, two revisions petitions under clause 13 of the RIPS, 2003 were filed by the Commissioner, Commercial Taxes Department before the Finance Secretary, Government of Rajasthan on 18.7.2008. In the revision petition, a prayer was made by the Commissioner, Commercial Taxes Department to invoke revisional powers to set aside decisions dated 29.07.2006 and 27.06.2007 of the SLSC under clause 13 of the RIPS, 2003, in which there was provision akin to section 263 of the Income Tax.
The Principal Secretary, Finance Department after providing an opportunity of hearing to the [50] [SAW NOS.1719/2011 & 644/2012] Commissioner, Commercial Taxes department as well as the petitioner-respondent Shree Cement Company Ltd., set aside the order of SLSC vide order dated 31.3.2009 while exercising revisional jurisdiction provided under clause 13 of RIPS, 2003. Although petitioner-respondent Shree Cement Company Ltd raised an objection that revision petition is not maintainable, but the Principal Secretary, Government of Rajasthan passed an order on 31.3.2009 and quashed the eligibility certificates while overruling the preliminary objections of the petitioner- respondent Shree Cement Company that revision petition filed by the Commissioner is not maintainable.
The petitioner-respondent Shree Cement Company Ltd. preferred writ petition before this Court in which the learned Single Judge after hearing final arguments, quashed the order of Principal Secretary Finance, Government of Rajasthan dated 31.3.2009 on the ground that under the amendment notification dated 2.12.2005 vested right created in favour of the petitioner-respondent Shree Cement Company Ltd [51] [SAW NOS.1719/2011 & 644/2012] cannot be taken away on the principle of promissory estoppels and legitimate expectation.
In the writ petition filed by the respondent company, the claim was made for 75% subsidy, which is said to be denied by the State of Rajasthan in view of withdrawal notification dated 28.04.2006. The claim was based upon the fact that so many cement plants established in the State of Rajasthan prior to 1998 were granted 75% sales tax exemption by the respondent State.
But after 1998 no cement plant was established for the reason that the State Government stopped granting 75% subsidy/exemption even though the Rajasthan possesses the largest reserve of good quality of limestone as compared to other States. In the month of February 2003, 35% sales tax exemption was granted to the respondent company if it is established the proposed Raas Cement plant by 31 st of December, 2005. Since this did not render viable, the respondent company did not establish the Raas plant at that time, and made a representation to provide 75% sales tax incentive because establishment would not be viable on [52] [SAW NOS.1719/2011 & 644/2012] the basis of mere 35% sales tax exemption. As per respondent-company, this position absolutely made it clear to the State Government by its letter dated 15.05.2004. The State Government in July, 2003 issued Rajasthan Investment Promotion Scheme, 2003 (RIPS 2003) and offered 50% subsidy to the eligible units including the cement units.
On 22.10.2003, a provision was added for higher incentive at 75% through BIDI, in its discretion if the investment exceeded Rs.200 crores. Inspite of above provision, no new cement unit come up in response to the above sales tax incentive limited by way of only wages subsidy and interest subsidy subject to actual.
According to respondent company, the entire cement industries in Rajasthan made appeal to the State Government that without 75% subsidy no new cement unit/plant is likely to come up in Rajasthan. According to respondent, the representative of the company met the Hon'ble Chief Minister in the month of April, 2004, and once again pointed out that Shree Cement Ltd. would be in a position to invest new cement unit only if 75% tax incentive is granted. [53]
[SAW NOS.1719/2011 & 644/2012] According to respondent, the Hon'ble Chief Minister assured it, that its prayer will be considered for grant of said benefit and thereafter, relying upon the assurance of the Hon'ble Chief Minister, as recorded in the letter dated 15.05.2004, the respondent Company started incurring expenditure of civil construction and land acquisition/development from the month of April-May 2004 onwards. According to respondent company, it also started placing orders for part of plant and machinery required for Raas unit, which required long lead period for delivery.
The respondent-company pleaded in the writ petition before the learned Single Judge that the Chief Minister of State of Rajasthan clearly indicated that she was in principal to consider the grant of 75% subsidy to enable new cement units to be established.
While inviting attention towards the Budget Speech delivered on the floor of State Legislature on 24.03.2005, it was argued before the learned Single Judge that the Hon'ble Chief Minister gave an assurance that a new package would be framed for cement plants with 75% subsidy. According to [54] [SAW NOS.1719/2011 & 644/2012] respondent company, the aforesaid factual averments were not denied by the appellant State in the reply filed in the writ petition, nor contradicted in the counter claim. According to respondent company, a major portion of capital expenditure of Raas Unit was incurred only after 24.03.2005 and that unit ultimately commenced commercial production only towards the end of December, 2005. Meaning thereby, as per company, the Raas unit was established in pursuance to the promise and assurance given by the State. According to respondent company vide letter dated 12.04.2005 addressed to the Hon'ble Chief Minister, it was informed that for Raas unit, the activity had started for establishment of new cement unit on the basis of assurance given by the State Government for sales tax incentive up to 75%, which is necessary to make the project viable. No reply was given by the State of Rajasthan for communications sent by the respondent company on 12.04.2005 and 21.04.2005, but on 27.04.2005 the State Government issued a notice for convening a meeting on 06.05.2005 alleging therein that "special package for cement industries has [55] [SAW NOS.1719/2011 & 644/2012] to be formulated by the Government as per Budget 2006-07 announcement."
The second meeting was convened for the same purpose on 17.05.2005. With regard to all the expenditure on the second expansion including grinding unit of Khushkhera, framed up and was incorporated only after 02.12.2005. As per respondent company the State Government actual honoured its promise by amending the RIPS 2003 on 02.12.2005 while inserting an amendment in RIPS, 2003, whereby 75% sales tax incentive was granted as the new cement unit would not be viable without that incentive. The respondent company claimed its right up to 75% as per verdict of the Hon'ble Supreme Court in the case of Nestle reported in 2004 (6) SCC 465, in which a speech was made by the Chief Minister at a public gathering followed by the Budget Speech and while considering the speech given by the Chief Minister followed by Budget speech, held that it constitutes a promise and assurance by the State Government, on which the pea of promissory estopple could be found. [56]
[SAW NOS.1719/2011 & 644/2012] Learned counsel for the appellant submitted that all the facts stated in the writ petition did not make out any case of any promise being made to grant minimum subsidy of 75% and even the notification dated 02.12.2005 does not assure grant of minimum subsidy. It is also pointed out that neither the Budget speech nor in any other letter, the State Government suggested or promised grant of subsidy up 75%.
To consider the ground of promise and assurance upon which the respondent company is claiming its right for 75% sales tax exemption, first of all we have perused the RIPS, 2003.
The scheme known as RIPS, 2003 was introduced by the State Government on 28.07.2003 with a view to provide investors to an attractive opportunity to make investment in the State of Rajasthan. Initially the said scheme came into operation w.e.f. 01.07.2003 and remained in force upto 31.03.2008. The scheme was made applicable to all new investors and investments made by the existing units, entrepreneurs for modernization/expansion/diversion, subject to condition that such units shall commenced commercial [57] [SAW NOS.1719/2011 & 644/2012] production/operation owing in such investment during the operative period of the scheme.
In Para 5 of the said scheme, some eligibility conditions were provided and in Para 7, provision for subsidy was incorporated. It is worthwhile to observe that the said scheme was initially meant to remain in force upto 31.03.2008, but it was subsequently extended upto 31.03.2009 by amendment dated 15.03.2007 and further extended upto 31.03.2011 by amendment order dated 06.08.2008. The RIPS, 2003 was amended vide notification dated 02.12.2005, whereby sub-clauses (vi) and (vii) of Clause-7 were inserted in the RIPS 2003, which stipulated the provision for 75% subsidy to new and existing cement units, which was under expansion upon fulfilling certain conditions provided in the same clause. The sub- Clauses (vi) and (vii) inserted in Clasue-7 vide amendment dated 02.12.2005, reads as under:
"(vi)- Notwithstanding anything contained in sub clauses (i) to (v) above, in case of new cement unit having investment exceeding Rs.400 crores and with a minimum regular employment of 200 persons the amount of [58] [SAW NOS.1719/2011 & 644/2012] subsidy shall be subject to a maximum limit of 75% of the tax payable or deposited under Rajasthan Sales Tax, 1994 or Value Added Tax (as and when introduced in the State) and Central Sales Tax Act, 1956 for a period of 7 years from the date of the commencement of production, subject to the following conditions, namely-
1. The investor shall submit an option to the Member Secretary, SLSC to avail benefit under this scheme within 180 days of this amendment;
2. The unit shall start commercial production within 5 years of filing of application for option; and
3. The sum total of 75% subsidy shall be calculated in the following manner: -
(a) Subsidy of 45% of the Rajasthan Sales Tax or Value Added Tax and Central Sales Tax shall be allowed upfront on the basis of actual tax liability; and
(b) The remaining subsidy to the extent of 30% of Rajasthan Sales Tax or Value Added Tax and Central Sales Tax liability shall be allowed in form of interest subsidy, [59] [SAW NOS.1719/2011 & 644/2012] wage/employment subsidy out of which interest subsidy shall be limited to 5% of the documented rate of interest and the amount actually paid as interest shall not include penal interest, and wage/employment subsidy. A unit not claiming any interest subsidy can claim wage/employment subsidy to the extent of 30% subject to other conditions under this amendment.
4. The claim of the subsidy shall be as per the provisions of this scheme.
(vii). Notwithstanding anything contained in sub clause (i) to (v) above, in case of investments for expansion of existing cement unit having investment exceeding Rs.200 crores and with a minimum regular employment of 100 persons, the amount of subsidy shall be subject to a maximum limit of 75% of the additional tax (calculated by taking the average of last 3 years) payable or deposited under Rajasthan Sales Tax Act, 1994 or Value Added Tax Act as and when introduced in the State) and Central Sales Tax Act, 1956 for a period of 7 years from the date of commencement of production, subject to the following conditions, namely- [60]
[SAW NOS.1719/2011 & 644/2012]
1. The investor shall submit an option to the Member Secretary, SLSC to avail benefit under this scheme within 180 days of this amendment;
2. The unit shall start commercial production within 5 years of filing of application for option; and
3. The sum total of 75% subsidy shall be calculated in the following manner: -
(a) Subsidy of 45% of the Rajasthan Sales Tax or Value Added Tax and Central Sales Tax shall be allowed upfront on the basis of actual tax liability; and
(b) The remaining subsidy to the extent of 30% of Rajasthan Sales Tax or Value Added Tax and Central Sales Tax liability shall be allowed in form of interest subsidy, wage/employment subsidy out of which interest subsidy shall be limited to 5% of the documented rate of interest and the amount actually paid as interest shall not include penal interest, and wage/employment subsidy. A unit not claiming any interest subsidy can claim wage/employment [61] [SAW NOS.1719/2011 & 644/2012] subsidy to the extent of 30% subject to other conditions under this amendment
4. The amendment of subsidy shall be as per the provisions of this Scheme."
The respondent company registered its option for package announced under the aforesaid amendment made in the RIPS, 2003 on 10.12.2005 and filled the application for grant of subsidy under Clause (vii) of Clause-7 of RIPS 2003 on 24.01.2006, which was duly received on 30.01.2006. As per respondent company, an investment of Rs.3039.1 crores with additional employment of 650 persons spending Rs.224.25 crores was also made. Therefore, all the requirements and the required conditions stipulated for expansion case under sub-Clause (vii) of Clause 7 upon which the SLSC in due course, granted the eligibility of the said expansion in its 10th meeting held on 29.07.2006, and issued Entitlement Certificate No.2/37 for a period of seven years w.e.f. 21.12.2005.
The respondent company registered its other option for proposed expansion at Raas and Khushkhera, [62] [SAW NOS.1719/2011 & 644/2012] on 28.01.2006 and 09.02.2006 involving investment of Rs.450 crores. It was also proposed for setting up of captive power plant at Raas. The respondent company filed an application for grant of subsidy on 12.05.2007. The total purchase cost under expansion project was assessed by the Financial institution as Rs.1,01,165 crores. With an additional employment of 395 numbers was generated growing up of expansion making the total number of 2567 employees.
After registration of the options by the respondent company, while the application filed on 30.01.2006 was under consideration, in the meantime, the respondent State Government issued an order on 28.04.2006, whereby the State Government deleted the sub-clauses
(vii) of Clause-7 of RIPS 2003. However, in the 16 th Meeting, the SLSC (State Level Screening Committee) which was held on 27.06.2007, in which after considering all the relevant facts, held the respondent company entitled for availing of Clause (vii) and 7 of RIPS, 2003. The SLSC considering that options were registered within limitation period as per Notification dated 02.12.2005 when it was in full force and prior to [63] [SAW NOS.1719/2011 & 644/2012] premature amendment dated 28.04.2006, whereby sub-Clause (vii) of Clause 7 was deleted.
According to respondent company, the respondent company commenced its commercial production within stipulated period from the date of registering option stood fulfilled the criteria of the investment exceeding Rs.200 crores and minimum additional employment of 100 employees was made by the company. Therefore, the SLSC issued Entitlement Certificate No.2/66 dated 27.6.2007 for a period of 7 years from 26.03.2007 to 25.03.2014 to the respondent company.
Upon consideration of above facts, undoubtedly both the certificates were issued by the SLSC after issuance of amendment notice dated 28.04.2006 on 29.07.2006 and 27.6.2007 knowingly well that provision has already been deleted. The amendment notice dated 28.04.2006 is quoted herein below for ready reference: -
"GOVERNMENT OF RAJASTHAN FINANCE DEPARTMENT (TAX DIVISION) [64] [SAW NOS.1719/2011 & 644/2012] No.F.12 (63)FD/Tax/05 Jaipur, Dated 28.4.2006 ORDER In partial modification of this Department's order No. F.4 (18) FD/Tax-Div/2001 dated 28.7.2003 (as amended from time to time) the Government makes the following amendments in the Rajasthan Investment Promotion Scheme, 2003 (hereinafter referred to as 'the scheme'); namely;
AMENDMENT
1. Sub-clause (vi) and (vii) of clause 7 of the said Scheme shall be deleted.
Sd/-
(Subir Kumar) Deputy Secretary to the Govt.)"
It is true that for grant of subsidy up to 75% under amendment dated 02.12.2005, the options were submitted by the respondent company on 24.01.2006 and 28.01.2006 under the RIPS 2003. First option was registered on 10.12.2005 and application was filed on 24.01.2006 under sub-Clause (vii) of Clause 7 of RIPS 2003 and the second option for proposed expansion at Raas and Khushkhera was filed on 28.01.2006 and [65] [SAW NOS.1719/2011 & 644/2012] application was filed on 09.12.2006, at that time, the amendment was in existence. It is also admitted fact that those applications were considered by the SLSC in its 10th Meeting held on 29.07.2006 and the second application was considered in 16th Meeting by the SLSC on 27.06.2007. Before both these dates, the amendment notification dated 28.04.2006 was already issued. Meaning thereby, it was not in existence when the case of the respondent company for grant of subsidy up to 75% was considered and entitlement certificate was granted by the SLSC in favour of SCL.
The respondent company make out a case before the SLSC that the vested right accrued to the company because applications were filed for grant of subsidy up to 75% in between the period when the amendment was in existence and the said amendment was made by the State Government after giving assurance to cement units. In the said scheme i.e. RIPS 2003, there is provision in Clause 13, which provides for revision by the State Government and further there is a provision of review and modification of the Scheme under Clause [66] [SAW NOS.1719/2011 & 644/2012]
14. Both these clauses are quoted herein below for ready reference: -
"13. REVISION BY THE STATE GOVERNMENT:
(a) The State Government in Finance Department may suo motu or otherwise revise an order passed by any Screening Committee wherever it is found to be erroneous and prejudicial to the interest of the State revenue, after affording an opportunity of being heard to the beneficiary industrial unit.
(b) No order under the sub-clause (a) shall be passed by the State Government after the expiry of a period of five years after the date by which the benefits under this scheme are fully availed of.
14. REVIEW OR MODIFICATION OF SCHEME:
The State Government in the Finance Department reserves the right to review or modify the Scheme as and when needed in public interest."
On 22.05.2008, the State Government issued a clarification on a reference being made by the Commercial Taxes Department clarifying in case of six [67] [SAW NOS.1719/2011 & 644/2012] cases cited, the subsidy is allowable under the Notification dated 02.12.2005 upon its deletion on 28.4.2006. The said Clarification dated 22.05.2008 is also quoted herein below for ready reference:
"GOVERNMENT OF RAJASTHAN FINANCE DEPARTMENT (TAX DIVISION) No.F.12 (20)FD/Tax/2005 pt.
Dated : 22.05.2008 The Government launched the Rajasthan Investment Promotion Policy, 2003 (hereinafter referred to as 'the scheme') vide this department's order no. F.4 (18)FD/Tax/2001 dated 28.07.2003 (amended from time to time). It has been brought to the notice of the Government that there is some ambiguity relating to the interpretation of admissibility of subsidy with regard to cement industry under RIPS-
2003. To bring in more clarify, the State Government in exercise of powers conferred in Clause 11 of the said Scheme, clarifies the issues as follows: -
CLARIFICATION [68] [SAW NOS.1719/2011 & 644/2012] Reference from the Commercial Taxes Department has been received regarding interpretation of the admissibility of subsidy (for new cement units having investment exceeding Rs.400 crores and with a minimum regular employment of 200 persons) raised to a maximum limit of 75% of tax payable or deposited by inserting sub- clause (vi) in Clause 7 of RIPS-2003 vide FD Order No.F.12 (20) FD/Tax06-Pt. dated 02.12.2005, subject to conditions, inter alia, that the investor shall submit an option to the Member Secretary, SLSC to avail benefit under the scheme within 180 days of the amendment and shall start commercial production within 5 years of filing of the application for option. Similar provision was made for the investments for expansion by the existing cement units having investment exceeding Rs.200 crores and within a minimum regular employment of 100 persons by inserting sub-clause (vii) in Clause 7 of the Scheme. These provisions of the scheme were deleted vide FD Order dated 28.04.2006.
State Government hereby clarifies that the benefits under the deleted provision cannot be granted on and after 28.04.2006, that is to reiterate that none of the types [69] [SAW NOS.1719/2011 & 644/2012] enumerated at Sl. No.1 to 6 below, qualify for benefits under deleted sub-clause (vi) and (vii) of clause 7 of RIPS-2003 on or after 28.4.2006:
1. Where the option was submitted before 28.04.2006 and benefits were also granted by SLSC before 28.04.2006.
2. Where the option was submitted before 28.04.2006 and benefits were granted by SLSC after 27.04.2006.
3. Where the option was submitted before 28.04.2006 and benefits have not been granted by SLSC.
4. Whether the option was submitted after 27.04.2006 but within 180 days of 02.12.2005 and benefits has not been granted by SLSC.
5. Where the option was submitted after 27.04.2006 but within 180 days of 02.12.2005 and the case has not been considered by SLSC, and
6. Where the option was submitted after 27.04.2006 but within 180 days of 02.12.2005 and the unit has still not applied for the benefits.
Kindly ensure necessary action accordingly. [70]
[SAW NOS.1719/2011 & 644/2012] By Order Sd/-
(S.S. Rajawat) Spl. Secretary to Government"
Against the said clarification, representations were made by the respondent company. During the pendency of the representation, the State Government (Taxation Division of Finance Department) issued an order on 30.09.2008, whereby following amendment was made, which reads as infra: -
"GOVERNMENT OF RAJASTHAN FINANCE DEPARTMENT (TAX DIVISION) No.F.12 (20)FD/Tax/2005- Pt.
Dated 30.09.2008
ORDER
In partial modification of this
department's order F.4 (18) FD/Tax-
Div/2001 dated 28.7.2003 (amended from [71] [SAW NOS.1719/2011 & 644/2012] time to time), the Government makes the following amendments in the Rajasthan Investment Promotion Scheme, 2003 (hereinafter referred to as "the Scheme"); namely: -
AMENDMENTS
(i) In sub-clause (iii) of clause 7 of the Scheme after the existing provisos, the following proviso shall be added, namely:-
"Provided further that the investment made or committed before 22.05.2008 or under MOU signed during Resurgent Rajasthan Summit for both new cement unit or under expansion, having capacity more than 20 tons per day, shall be eligible for subsidy under this clause on the condition that such unit shall start commercial production by 31.03.2011."
(ii) In clause 8 of the Scheme after the existing provisos, the following proviso shall be added, namely: -
"Provided further that the investment made or committed before 22.05.2008 or under MOU signed during Resurgent Rajasthan Summit for both new cement unit or under expansion, having capacity more than 200 tons per day, shall be eligible for [72] [SAW NOS.1719/2011 & 644/2012] exemption under this clause on the condition that such unit shall start commercial production by 31.03.2011."
By Order Sd/-
(S.S. Rajawat) Deputy Secretary to Government"
The said notification was challenged by the respondent company by way of filing writ petition before this Court being SBCWP No.6968/2009- Shree Cement Ltd. Vs. State & Ors. The aforesaid writ petition was decided vide order dated 18.02.2009 while directing the respondent company to deposit the outstanding dues raised by the respondent and permitted to file an application for deciding the matter of subsidy on the same day. The respondent company was granted time to file application within fifteen days in accordance with law and liberty was granted that in the event of passing any order upon representation, the company will be liberty to challenge the same.
On 24.02.2009, the respondent company filed an application before the Taxation Officer, Ajmer. [73]
[SAW NOS.1719/2011 & 644/2012] The Commissioner, Commercial Taxes, Govt. of Rajasthan filed a revision under Clause 13 of the RIPS, 2003 against the order issued by SLSC in its meeting held on 29.07.2006 and 27.06.2007, in which notices were issued to the respondent company and after providing opportunity of hearing and considering the arguments, the Secretary Finance passed an order on 31.03.2009 whereby the Principal Secretary, Finance Department, Government of Rajasthan, quashed both the orders issued by the SLSC while accepting the revision application and passed following order, which reads as under:
"The first decision of SLSC dated 29.7.06 had extended benefits of up front tax subsidy to a unit for which, investment was certainly not propelled by the insertion of clause 7 (vi) and (vii). The investment was made much earlier and cannot be said to have been motivated by the new scheme. Accordingly, the unit cannot claim eligibility under the scheme as has been discussed in detail above. There is also, therefore, no question of promissory estoppels and the Applicant Company cannot get any benefit thereof. As regards the second decision of [74] [SAW NOS.1719/2011 & 644/2012] the SLSC dated 27.6.07, for various arguments stated above, the Applicant Company can derive no extraordinary benefit beyond what it has been enjoying under the original provisions of Clause 7 of RIPS 2003. When the decision of the SLSC was given on 26.6.07, the enabling provisions of Clause 7
(vi) and (vii), already having been deleted on 26.04.08, did not exist in the scheme. It is also pointed out here that there are only two such orders of the SLSC pertaining to the same Applicant Company which have sought to obtain benefits under the provisions of Clause 7 (vi) and (vii) of RIPS 2003, which lasted for a mere five months.
58. I hereby accept both the revision applications dated 18.7.08 submitted by the Commissioner, Commercial Taxes seeking revision of the decision of the SLSC dated 29.7.06 and 27.6.07. These decisions are hereby quashed and the SLSC is directed to consider these two cases afresh and issue new eligibility certificates to the extent that only the original dispensation as provided under Clause 7, and existing prior to the amendment made on 2.12.05, shall continue to be enjoyed by the Applicant Company. The Assessing Authority shall make a re-
assessment of the tax liability of the [75] [SAW NOS.1719/2011 & 644/2012] Applicant Company as mentioned above and take necessary steps to recover tax in excess of its eligibility in terms of the new eligibility certificates to be issued by the SLSC.
Pronounced on 31.3.09.
Sd/-
C.K. Mathew Principal Secretary, Finance Government of Rajasthan"
Upon consideration of the facts and pleadings, it emerges that the order of Principal Secretary, Finance, Government of Rajasthan dated 31.3.2009 was challenged before the learned Single Judge by the respondent company on the ground of promissory estoppel, legitimate expectation, vested right, so also, the jurisdiction to entertain the revision petition filed by the Commercial Taxation Department.
The learned Single Judge while accepting the arguments on the ground of promissory estoppel, legitimate expectation and vested right quashed the order of Principal Secretary, vide judgment dated 11.10.2011, which is under challenge in this special appeal.[76]
[SAW NOS.1719/2011 & 644/2012] In this special appeal following issues emerge for consideration, upon which our adjudication is as follows:
A. Whether the learned Single Judge rightly applied the "principle of promissory estoppel" to quash the order impugned dated 31.3.2009?
B. Whether the respondent company is entitled for the relief prayed on the ground of "legitimate expectation"?
C. Whether any "vested right" remained in existence even after deletion of clause 7(vi) and (vii) of RIPS, 2003 vide notification dated 28.4.2006?
D. Whether the ground raised by the respondent company with regard to doctrine of "contemporanea expositio" will apply in this case or not?
E. Whether the order passed by the Principal Secretary, Finance exercising revision petition can be interfered in the writ of certiorari prefered by the respondent-company?[77]
[SAW NOS.1719/2011 & 644/2012] A. Whether the learned Single Judge rightly applied the principle of promissory estoppel to quash the order impugned dated 31.3.2009?
To consider the applicability of promissory estoppel, upon which the learned Single Judge quashed the order dated 31.3.2009 passed by the Principal Secretary, Finance, Government of Rajasthan, Jaipur, the doctrine of promissory estoppel is required to be perused.
The principal of promissory estoppel is a rule of evidence incorporated in Section 115 of the Indian Evidence Act, 1872. It is true that principle of promissory estoppel is where one party has by his words or conduct made to the other a clear and unequivocal promise, which is intended to create legal relations or effect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it. It is not necessary, in order to attract the applicability of the [78] [SAW NOS.1719/2011 & 644/2012] doctrine of promissory estoppel that the promisee acting in reliance of the promise, should suffer any detriment. The only thing necessary is that the promisee should have altered his position in reliance of the promise.
In the light of the aforesaid mentioning of doctrine of promissory estoppel, first of all, it is necessary to observe that respondent company expressly not pressed the prayer to quash the order/notification dated 28.4.2006 whereby the clause 7(vi) and (vii) was completely deleted from RIPS, 2003. Meaning thereby, the prayer to quash the said deletion was waived by the respondent company, therefore, on this ground, the respondent company was not entitled for any relief on the principle of promissory estoppel. However, upon examination of finding of the learned Single Judge based upon principle of promissory estoppel it emerges that learned Single Judge relied upon the fact that SLSC issued entitlement certificates on 29.7.2006 and 27.6.2007, much after the date of deletion of clause 7(vi) and (vii), whereby SLSC being the prescribed authority under RIPS, 2003 provided in sub-clause (vi) [79] [SAW NOS.1719/2011 & 644/2012] of RIPS, 2003 in its meeting held on 10 th after due consideration granted subsidies as applied by the respondent company, the committee decided to grant the eligibility certificate to the RAS unit of Pali for subsidies under clause 7(vii) of RIPS, 2003 for the period of seven years from 21.12.2005, so also the SLSC in its 16th meeting decided to grant eligibility certificate to the unit for subsidies under clause 7(vii) of the RIPS, 2003 for the period of seven years from 26.3.2007 for the investment done by the respondent company and its having commenced commercial operation within permitted period after registering options for Kushkheda, Alwar. The learned Single Judge observed that SLSC deliberated that since the options have been registered by the respondent company much before deletion of sub-clauses (vi) and (vii) vide order dated 28.4.2006, the petitioner-respondent-
company is entitled to subsidy as per clause 7(vii) of RIPS, 2003.
In our opinion, the finding of the learned Single Judge on the principle of promissory estoppel is not in consonance with law for the reason that the order of [80] [SAW NOS.1719/2011 & 644/2012] deletion dated 28.4.2006 was challenged, but not pressed by the petitioner-respondent-company itself before the learned Single Judge. Therefore, Principal Secretary, Finance Department, Government of Rajasthan has rightly held that there was no question for the SLSC to ignore the said deletion of the provision or to interpret the said deletion in favour of the respondent-company so as to grant benefit of subsidy under the provision, which was not in existence. It is also one of the important aspect of the case that in between 2.12.2005 to 28.4.2006 no such benefit of subsidy upto 75% was allowed by the State Government or SLSC to any of the unit in the State of Rajasthan.
The core question arises in the present appeal whether 75% subsidy within clause 7(vii) of RIPS, 2003 can continue after deletion of clause 7(vii) vide notification dated 28.4.2006?
To consider the said aspect of the matter, we have examined the arguments of both the parties. [81]
[SAW NOS.1719/2011 & 644/2012] The petitioner-respondent Shree Cement Company Ltd. claimed its right on the basis of judgment of the Hon'ble Supreme Court in the case of Srinivasa Jute Twine Mills Pvt. Ltd. Vs. Union of India reported in 2006(2) SCC 740. The said case was related to Section 16(1)(d) of the Employees Provident Fund Act, 1952, which confer the benefit of "infancy protection" of a new industrial undertaking for a period of five years. Section 16(1)(d) was omitted w.e.f. 22.9.1997, at that time, Srinivasa Jute Twine Mills had availed of "infancy protection" for only two years. The PF authorities sought to contend that as Section 16(1)
(d) was no longer in the statute book, it was not permissible for Srinivasa Jute Twine Mills, to claim the benefit of "infancy protection" for the balance period of three years. In aforesaid case, the Hon'ble Supreme Court rejected the contention and held that vested right to infancy protection for five years had come into existence when Section 16(1)(d) was on the statute book and that vested right continued even after the omission or deletion of Section 16(1)(d), but in this case, according to the appellant-State subsidy cannot [82] [SAW NOS.1719/2011 & 644/2012] be claimed as a matter of right. Subsidy is an incentive provided by the State Government and the Hon'ble Supreme Court in number of judgments held that subsidy cannot be claimed as a matter of right. In addition to aforesaid judgment, the petitioner- respondent Shree Cement Company Ltd. claimed its right in view of the judgment rendered by this court in Shanker Lal Vs. Rajasthan State Electricity Board, 1999 (1) WLC (Raj.) 1 and judgment of Hon'ble Supreme Court in the case of Richa Misra Vs. State of Chhattisgarh & Ors reported 2016 (4) SCC 179 so also in the case of State of Punjab & Ors. VS. Shreyans Industries Ltd & Ors reported in 2014 (4) SCC 769 and in the case of District Collector, Vellore District Vs. K. Govindaraj : 2016 (4) SCC 763.
After perusing the judgments cited by both the parties, first of all it is required to be observed that subsidy can be granted by Welfare State for development of industrial sector and in original RIPS, 2003 scheme, the subsidy upto 50% was already granted, but on 2.12.2005 an amendment was made whereby clause 7(vi) and (vii) was inserted in the RIPS [83] [SAW NOS.1719/2011 & 644/2012] Scheme whereby provision for granting 75% subsidy was incorporated. Meaning thereby, the percentage of subsidy already allowed upto 50% was enhanced to 75%, but same was deleted vide notification dated 28.4.2006. Meaning thereby, the provision for grant of subsidy upto 75% under RIPS, 2003 remained in currency for five months and in between that period, no order or entitlement certificate was issued by the SLSC to allow subsidy upto 75% to the respondent Shree Cement Company or any other unit. Before the learned Single Judge, the respondent company claimed its rights on the ground of promissory estoppel and vested right. There is no doubt that as per principle of promissory estoppel and legitimate expectation and vested right created under the statute or a scheme, cannot be taken away, but at the same time, the reason for insertion and deletion for enhancement of percentage of subsidy is required to be seen at the time of adjudication.
Upon assessing the law laid down by the Hon'ble Supreme Court in various pronouncements cited by the learned counsel for the parties, this Court cannot lose [84] [SAW NOS.1719/2011 & 644/2012] sight of the fact that in this case the question of enhancement of subsidy from 50% to 75% is involved. In our opinion, the State Government being welfare state requested to act in public interest to consider the financial condition of the State so as to grant subsidy for industrial development. The subsidy cannot be granted for the benefit of individual because public money is required to be utilized by the State for welfare of public. It is true that under original RIPS, 2003 all eligible units fall within the scheme were entitled to claim subsidy upto the percentage provided initially, but here in this case, the subsidy was enhanced in one point of time vide amendment in the RIPS Scheme, 2003 vide notification dated 2.12.2005, but same was deleted vide notification dated 28.4.2006, but respondent company has claimed subsidy as a matter of right knowingly well that the provision of subsidy upto 75% is not in existence. It is admitted fact of the case that both the meetings of SLSC were not conducted prior to 28.4.2006 when the amendment made in the scheme on 2.12.2005 remained in currency upto 28.4.2006. All the judgments upon [85] [SAW NOS.1719/2011 & 644/2012] which the respondent Shree Cement Company Ltd is claiming its right on the ground of promissory estoppel and vested right on the ground that SLSC in which the officers of the Finance Department were the member and those officers were having knowledge that amendment made on 2.12.2005 has already been deleted on 28.4.2006, in spite of that, they issued entitlement certificate granting subsidy upto 75% for seven years.
To consider the argument of promissory estoppel and vested right, we have perused all the documents and find that in none of the document any express assurance was given by any of the competent authority of the State of Rajasthan or Chief Minister for granting subsidy upto 75%. All the judgments cited by the learned counsel for the respondent Shree Cement Company Ltd. are not related for enhancement of percentage to grant subsidy, therefore, in our opinion, none of the judgment cited by the learned counsel for the respondent company can come to the rescue of the respondent company to get benefit of amendment dated 2.12.2005, which was subsequently deleted vide [86] [SAW NOS.1719/2011 & 644/2012] amendment notification dated 28.4.2006 in the RIPS Scheme, 2003.
In our opinion, the Finance Secretary, Government of Rajasthan was justified in quashing the entitlement certificate issued by the SLSC on 29.7.2006 and 27.6.2007 much after the deletion of provision because no authority has a right to ignore the existing provision so as to grant benefit which is against the public interest, therefore, it cannot be said that any error was committed by the Finance Secretary while exercising the revisional power to set aside orders passed by the SLSC for grant of entitlement certificate.
In view of the above discussion, we are of the firmed opinion that the finding of the learned Single Judge to quash the order dated 31.3.2009 passed by the Principal Secretary, Finance, Government of Rajasthan, Jaipur is contrary to law and against the public interest because it is not a case in which the principle of promissory estoppel will come to the rescue of respondent company to get the benefit of subsidy [87] [SAW NOS.1719/2011 & 644/2012] upto 75% under RIPS, 2003 on the basis of mis- interpretation of the provision by the SLSC. B. Whether the respondent company is entitled for the relief prayed on the ground of legitimate expectation?
To consider the finding of the learned Single Judge on the ground of legitimate expectation, first of all, it is required to be understand what is "legitimate expectation". As per settled principle of law, the legitimate expectation is not a legal right. It is an expectation of a benefit, relief or remedy that may ordinarily flow from a promise or established practice. The term 'established practice' refers to a regular, consistent predictable and certain conduct, process or activity of the decision-making authority. The expectation should be legitimate, that is, reasonable, logical and valid. Any expectation which is based on sporadic or casual or random acts, or which is unreasonable, illogical or invalid cannot be a legitimate expectation. Not being a right, it is not enforceable as such. More so, it is a concept fashioned by courts, for judicial review of an administrative action. It is procedural in character based on the requirement of a [88] [SAW NOS.1719/2011 & 644/2012] higher degree of fairness in administrative action, as a consequence of the promise made, or practice established.
In the present case, the respondent company has claimed its right to get subsidy on the basis of entitlement certificate issued by the SLSC on 29.7.2006 and 27.6.2007. Undisputedly, the day on which, the prayer of the respondent company was considered by the SLSC, the order/notification dated 28.4.2006 whereby clause 7(vi) and (vii) of RIPS, 2003 was completely deleted, therefore, no provision was in existence in the RIPS, 2003 for grant of 75% subsidy.
The appellant State specifically pleaded before the learned Single Judge as well as in this appeal that on 1.4.2006, the Rajasthan Value Added Tax (VAT) came into force whereby the rate of VAT on cement was redcued from 28% to 12.5%, therefore, as a consequence of reduction of tax on cement, sub-clause
(vi) and (vii) of Clause 7 introduced in the RIPS, 2003 vide notification dated 2.12.2005 in RIPS, 2003 was deleted but, the SLSC while issuing entitlement [89] [SAW NOS.1719/2011 & 644/2012] certificate on 29.7.2006 completely ignored the fact of deletion of the provision and issued entitlement certificate but in the second meeting when entitlement certificate was issued on 27.6.2007, the notification dated 28.4.2006 whereby sub-clauses (vi) and (vii) of Clause 6 of RIPS, 2003 were deleted was though taken into consideration, but without application of mind or to adjudicate the consequences of the said notification, the SLSC granted entitlement certificate to avail 75% subsidy for 7 years, therefore, orders passed by the SLSC even after withdrawal of enhanced subsidy is vague and cryptic and so called reasons are contrary to RIPS Scheme and power of State to annual or alter percentage of subsidy. As such revisional authority has rightly examined the matter thread-bare to record its conclusion in correct perspective.
In view of the above, the finding of the learned Single Judge to quash the order dated 31.3.2009 on the ground of legitimate expectation is completely erroneous for the reason that decision was taken by the Government in public interest to delete the clause 7(vi) and (vii) vide notification dated 28.4.2006. It is [90] [SAW NOS.1719/2011 & 644/2012] worthwhile to observe that benefit under RIPS, 2003 was not completely rescinded vide notification dated 28.4.2006 because in the amendment notification dated 2.12.2005, the subsidy was enhanced from 50% to 75% was deleted vide notification dated 28.4.2006, the said provision remained in existence for five months only and in that period, none of the company was given such benefit. Therefore, on the ground of legitimate expectation, the respondent company was not entitled to get any benefit. More so, the respondent company was not even entitled to raise this ground because the prayer for quashing order/notification dated 28.4.2006 whereby clause 7(vi) and (vii) of RIPS, 2003 was deleted was not pressed before the Single Judge.
C. Whether any vested right remained in existence even after deletion of clause 7(vi) and
(vii) of RIPS, 2003 vide notification dated 28.4.2006.?
To consider the ground of vested right raised by the respondent company to claim 75% subsidy upon entitlement certificate issued by the SLSC on 29.7.2006 [91] [SAW NOS.1719/2011 & 644/2012] and 27.6.2007, we have considered the legal proposition of "vested right".
The "vested right" is a right belonging completely and unconditionally to a person as a property interest which cannot be impaired or taken away (as through retroactive legislation) without the consent of the owner.
Admittedly, for industrial development, the State Government framed scheme known as RIPS, 2003 in which for industrial development, subsidy was allowed upto 50% to the new units established in the State of Rajasthan. It is true that number of representations and prayers were made by the respondent company to the State Government for enhancement of subsidy upto 75%. It is also true that certain documents are filed alongwith the writ petition, so also, it is argued by learned Senior Counsel Sh. S. Ganesh that at the floor of assembly, it was expressed by the Hon'ble Chief Minister for granting such subsidy upto 75%, but there is no documentary evidence on record to prove the fact that any assurance was given in writing by the State [92] [SAW NOS.1719/2011 & 644/2012] Government to the respondent company. The respondent company after filing representations and upon some statement of Hon'ble Chief Minister on the floor of Assembly presumed that subsidy upto 75% will be is allowed, therefore, respondent-company invested the finance.
In our opinion, such presumption of the respondent company was totally unfounded, so also, it is apparent from the facts that respondent company was intended to establish cement plant as Khushkhera and Ras because RIPS, 2003 was already introduced by the Government in which provision for grant of subsidy upto 50% or in certain circumstances, upto 75% was already in existence. In view of above reason, it is obvious that there was no right created in favour of the respondent company because entitlement certificates were issued after deletion of provision vide notification/order dated 28.4.2006.
In our opinion, after deletion of provision for grant of 75% subsidy, no jurisdiction is left with the SLSC to ignore and to misinterpret the order of deletion dated [93] [SAW NOS.1719/2011 & 644/2012] 28.4.2006 at the time of deciding application for entitlement certificate upto 75% filed by the respondent company. It is true that officers who were sitting as member of the SLSC were the officers of Finance Department of the State Government, but this Court cannot lose its right of the fact that every officer when exercising its jurisdiction vested under any scheme should consider the intention of the legislature to insert and to delete the provision in the scheme, but here in this case, while granting first entitlement certificate, the order of deletion dated 28.4.2006 was completely ignored and in second meeting, though it was considered, but wrongly interpreted without application of mind by the SLSC. Therefore, it was felt necessary by the Commercial Taxation Department to invoke clause 13 and 14 of the RIPS, 2003 in which there is provision of revision and review for quashing the orders of SLSC.
Upon perusal of order impugned dated 31.3.2009, it is apparent that Principal Secretary, Finance, Government of Rajasthan applied its mind thoroughly and in well worded judgment while exercising revisional [94] [SAW NOS.1719/2011 & 644/2012] jurisdiction under clause 13 and 14 of RIPS, 2003 quashed the order of entitlement certificate issued by the SLSC in which there is no error. The ground of vested right taken by the respondent company thus is not sustainable in law, therefore, we hold that finding of the learned Single Judge to quash the order dated 31.3.2009 passed by the Principal Secretary, Finance deserves to be quashed.
D. Whether the ground raised by the respondent company with regard to doctrine of contemporanea expositio will apply in this case or not?
To consider the aforesaid question, first of all, we are required to understand what is "contemporanea expositio". The contemporanea expositio is a guide for interpretation of documents or statutes. It is one of the important external aids for interpretation. However, great care is required to be taken in its application. When a document was executed between two parties, their intention can be known by their conduct at the time and after the execution of the instrument. Where the words of the deed are ambiguous, the court may call in the acts done under it as a clue to the intention [95] [SAW NOS.1719/2011 & 644/2012] of the parties. Their acts are the result of usages and practices in the society. Therefore their acts are useful as an external aid to interpretation of the deed. This principle may also be applied in case of statutes.
Here in this case, the learned counsel for the respondent company raised the ground that amendment dated 2.12.2005 whereby new cement unit having investment exceeding Rs.400 crores with a minimum regular employees of 200 persons, the amount of subsidy shall be subject to a maximum limit of 65% of the tax totally or deposited under Rajasthan Sales Tax Act, 1994 or Value Added Tax Act (as and when introduced in the State) and Central Tax Act, 1956 for a period of seven years from the date of commencement of production subject to certain conditions was incorporated. The said notification was issued by the Finance Department and in the SLSC all the Government officers and of Industries Department and Finance Department were the members. Meaning thereby, the provision for grant of subsidy upto 75% was issued by the authorities of the Finance Department, Government of Rajasthan and those [96] [SAW NOS.1719/2011 & 644/2012] authorities were also sitting in the meeting of SLSC being members and those officer after due application of mind passed the order dated 28.4.2006 whereby the notification dated 2.12.2005 was deleted and granted entitlement certificate upto 75% therefore there is no question to say that any error was committed by them because as per doctrine of contemporanea expositio the provision was interpreted by the authorities, who introduced the said amendment for grant of subsidy upto 75%. According to respondent company if entitlement certificates were issued in favour of the company for grant of subsidy upto 75% while considering the deletion of the provision by the same authorities, then it cannot be questioned.
The learned Single Judge held that members of SLSC were right in granting entitlement certificate in favour of the respondent company while giving right interpretation of the provision in favour of company.
We have minutely perused the judgment of the learned Single Judge, so also, the order passed by the [97] [SAW NOS.1719/2011 & 644/2012] Principal Secretary, Finance, Government of Rajasthan dated 31.3.2009.
Upon consideration of facts and reasons, we are of the view that even though number of judgments are cited by the petitioner-respondent Shree Cement Company Ltd. for the claim of subsidy upto 75%, upon the doctrine of contemporanea expositio, we are unable to accept the plea that respondent Shree Cement Company Ltd. is entitled for subsidy upto 75% under the amendment made on 2.12.2005 which remains in currency upto 28.4.2006 because in the said period neither SLSC considered the prayer of the petitioner- respondent Shree Cement Company Ltd. nor any order for entitlement was passed in their favour.
All the judgments cited by the learned counsel for the petitioner-respondent Shree Cement Company Ltd. to support the finding given by the learned Single Judge are for the purpose of interpretation of law but upon the facts of present case neither petitioner- respondent Shree Cement Company Ltd. fulfilled eligibility conditions mentioned in the RIPS, 2003 for [98] [SAW NOS.1719/2011 & 644/2012] the purpose of granting 75% subsidy nor at the time of giving entitlement certificate by the SLSC, the provision was in existence.
In view of the above, we are of the firmed opinion that "contemporanea expositio" will not apply in this case.
E. Whether the order passed by the Principal Secretary, Finance exercising revision petition can be interfered in the writ of certiorari field by the respondent-company?
Admittedly, the respondent company preferred writ of certiorari before this Court to challenge the order dated 31.3.2009 passed by the Principal Secretary, Finance while exercising revisional jurisdiction, so also, amendment made in RIPS, 2003 vide notification dated 28.4.2006 whereby clause 7(vi) and (vii) were deleted, but during the course of argument, the respondent company did not press the prayer to challenge the notification/order dated 28.4.2006 passed by the Government whereby sub- clause (vi) and (vii) of Clause 7 of RIPS,2003 was deleted and admittedly at the time of granting [99] [SAW NOS.1719/2011 & 644/2012] entitlement certificate by the SLSC that provision for grant of subsidy upto 75% was not in existence, but in first meeting while ignoring the amendment, the SLSC granted benefit of subsidy upto 75% and issued entitlement certificate on 29.7.2007 in favour of the respondent company and while issuing the second entitlement certificate on 27.6.2007, a wrong interpretation was given taken for deletion of provision, that too, without application of mind to the order dated 28.4.2006 granted entitlement certificate upto 75%.
In our opinion, both the entitlement certificates issued by the SLSC dated 29.7.2006 and 27.6.2007 were completely in contravention of the notification dated 28.4.2006 because the provision which was inserted vide notification dated 2.12.2005 was purposefully deleted due to introduction of Value Added Tax in Rajasthan w.e.f. 1.4.2006 in which tax rate was changed from 28% to 12.5% on cement.
We have perused the specific provision of revision and review inserted in the scheme under clause 13 and 14 of the RIPS, 2003 in which it is more than clear that [100] [SAW NOS.1719/2011 & 644/2012] at the time of introducing RIPS, 2003 purposely clauses 13 and 14 were inserted so as to check the illegality or error committed by the Screening Committee to grant entitlement certificate. Here in this case, although in the State level screening committee, the officer of the Finance Department and Industries Department were members and scheme was also formulated by the officers of the Finance Department of State Government, then also it cannot be said that there was no jurisdiction with the Principal Secretary to entertain revision petition because provision was expressly incorporated in clause 13 that the State Government in Finance Department may suo motu or otherwise revise an order passed by any State level screening committee wherever it is found to be erroneous and prejudicial to the interest of State revenue after providing an opportunity of being heard to the beneficiary industrial unit. Here in this case, the SLSC committed a grave error granting subsidy upto 75% to the respondent company in its meetings held on 29.7.2006 and 27.6.2007 after deletion of the provision, therefore, in our opinion, Principal Secretary, [101] [SAW NOS.1719/2011 & 644/2012] Finance has rightly exercised its power to entertain the revision petition. It is also required to be observed that the order of revisional authority is well worded order while considering all aspects of the matter and considering the most important aspect of the case that SLSC granted benefit of subsidy upto 75% under the provision which was not in existence. Therefore, apparently, no error was committed by the Principal Secretary of Finance Department, Government of Rajasthan while allowing the revision petition. There was no reason to interfere with the order of revision dated 31.3.2009 whereby two revision petitions filed by the Commercial Taxation Department, Government of Rajasthan were allowed and the entitlement certificates dated 29.7.2006 and 27.6.2007 issued by the SLSC were quashed.
It is settled principle of law that in public interest the State Government can provide incentive to the industrial sector to develop industrial growth but at the same time, it has to be considered by the State Government that benefit should not be granted contrary to public interest. Here in this case, the [102] [SAW NOS.1719/2011 & 644/2012] decision of the State to delete the provision for grant of subsidy upto 75% was based upon strong valid reason that in the State of Rajasthan, the Rajasthan Value Added Tax Act (VAT) came into forced on 1.2.2006 and rates of VAT on cement were reduced from 28% to 12.5%. The clause 7(vi) and (vii) was incorporated by way of notification dated 2.12.2005 but after applicability of Rajasthan Value Added Tax (VAT) Act w.e.f. 1.4.2006 it is felt necessary to delete the said provision because VAT on cement was reduced from 28% to 12.5%.
In view of the above discussion, we hold that the learned Single Judge has committed an error while holding that petitioner-respondent Shree Cement Company Ltd. has vested right by virtue of principle of promissory estoppel and legitimate expectation to get subsidy upto 75% on the basis of entitlement certificate issued by the SLSC because the State Government is framing scheme from time to time to grant certain benefits and concession in the form of subsidy to the industrial development, but here in this case, upon perusal of entire record, it is obvious that till deletion [103] [SAW NOS.1719/2011 & 644/2012] of provision vide notification dated 28.4.2006, none of the eligibility conditions were fulfilled by the respondent Company but ignoring those facts, the SLSC issued entitlement certificate on 29.6.2006 and 28.7.2007 much after the deletion of the provision by way of notification dated 28.4.2006.
We have no hesitation to conclude that specific provision has been incorporated under clause 13 of the RIPS, 2003 to check the action and orders of SLSC while exercising revisional power, therefore, it cannot be said that any error was committed by the Principal Secretary, Finance of State Government to quash the orders passed by the SLSC, therefore, the judgment impugned in this appeal is not sustainable in law.
Consequently, the special appeal (DBSAW No.1719/2011) filed by the State of Rajasthan is allowed. The order passed by the learned Single judge dated 11.10.2011 is hereby quashed and the judgment given by the Principal Secretary, Finance, Government of Rajasthan while exercising revisonal power dated 31.3.2009 is hereby restored.
[104]
[SAW NOS.1719/2011 & 644/2012] In view of the fact, that the judgment of the learned Single Judge dated 11.10.2011 has been quashed and judgment of the Principal Secretary, Finance, Government of Rajasthan dated 31.3.2009 has been restored, therefore, the special appeal (DBSAW No.644/2012) filed by the appellant Shree Cement Company Ltd. is hereby dismissed.
( P.K. LOHRA ),J. ( GOPAL KRISHAN VYAS ),J. cpgoyal/-(PS)