Gujarat High Court
Ajanta Exhibitors vs State Of Gujarat And Ors. on 1 May, 1991
Equivalent citations: (1992)1GLR136
Author: J.M. Panchal
Bench: J.M. Panchal
JUDGMENT J.M. Panchal, J.
1. A common question, namely, whether remission of, electricity duty payable under the provisions of the Bombay Electricity Duty Act, 1958, granted by the Government, by a Notification, for a specified period, can be rescinded by subsequent notification even as regards the unexpired part of the period specified in earlier notification, arises for consideration in both these petitions filed under Article 226 of the Constitution of India and therefore we propose to dispose of both the abovereferred petitions by this common judgment.
2. The above referred question arises for consideration in the following facts:
The petitioner in each petition is a partnership firm registered under the provisions of Indian Partnership Act, 1932, and is carrying on business of taking Cinema films on hire basis, exhibiting the same, taking theatres on rental basis, constructing theatres etc. The petitioner in Special Civil Application No. 1106 of 1980 is the owner of a Theatre called "Ajanta Cinema", situated at Ring Road, Surat, whereas the petitioner in Special Civil Application No. 623 of 1981 is the owner of a theatre called 'Suraj' Cinema situated at Begumpura, Surat.
3. Section 3 of the Bombay Electricity Duty Act, 1958 provides for levy and payment of electricity duty, whereas Sub-section (3) of the said Section empowers the Government to reduce the rate of duty or to remit the duty, by a notification in the official Gazette in respect of such class of consumers or such class of premises in such area and for such period as the State Government may specify in the Notification.
4. The rate of electricity duty for energy consumed for the use of Cinema houses or theatres is provided under Clause (e) of Part I of the Schedule. In exercise of the powers conferred by Sub-section (3) of Section 3 of the Act, the Government of Gujarat. Industries, Mines and Power Department issued Notification No. GHU 142/ELD/1068/10721-K-IV dated 1-1-1969 remitting in the entire State of Gujarat with effect on and from 1-1-1969, the electricity duty payable under Clause (e) of Part I in the Schedule to the Act, in respect of energy consumed by the air-conditioning plants used in the Cinema houses or theatres for the period of five years from 1-1-1969 or from the date on which the air-conditioning plants were put into operation, whichever was later, in respect of Cinema houses or theatres wherein the air-conditioning plants were put into operation on or after 1-1-1969.
5. As per the condition No. 2 of the said Notification, the eligibility certificate for such purpose was required to be obtained from the Collector Electricity Duty, Ahmedabad.
6. It is the case of the petitioner that after installation and commissioning of air-conditioning plants in the petitioner's respective Cinemas the petitioner in each petition applied for obtaining an Eligibility Certificate for exemption from payment of electricity duty for the air-conditioning plant. In Special Civil Application No. 1106 of 1980 the Collector of Electricity Duty, Ahmedabad, issued a certificate dated 18-1-1974 certifying that M/s. Ajanta Cinema, Surat were eligible for exemption from payment of electricity duty in respect of energy consumed by the air-conditioning plant used in their cinema house for the period 28-12-1972 to 27-12-1977 minus the period lapsed between the date of operation of air-conditioning plant, ie., from 24-9-1973 to 27-12-1973 subject to the conditions enumerated in the said certificate, whereas in Special Civil Application No. 623 of 1981, the Collector of Electricity Duty, Ahmedabad issued a certificate dated 22-8-1972 certifying that M/s. Suraj Cinema, Surat were eligible for exemption from payment of electricity duty in respect of energy consumed by the air-conditioning plant used in their cinema house for the period from 23-3-1972 to 22-3-1977 subject to conditions enumerated therein.
7. The Government of Gujarat, Industries, Mines and Power Department issued a Notification No. GHU/76/32/ELD/1075-10953-K, dated 1-4-1976 rescinding the aforesaid Government Notification dt. 1-1-1969. The Collector of Electricity Duty, Ahmedabad addressed a letter No. Cinema/General/280 dated 2-4-1976 to the Surat Electricity Co. Ltd. which is the licensee, authorised to supply electricity in the area of supply, where Cinemas in question are situated, intimating that the benefit of remission of duty granted to the Cinema houses or theatres for energy consumed for air-conditioning plant was withdrawn from 1-4-1976 and accordingly duty was leviable in such case from 1-4-1976 at the rate of 10 paise per unit as prescribed in the amended schedule to the Electricity Duty Act, 1958. A copy of the said letter was also endorsed to the petitioner in each case. From April, 1976 to December 1977 the respondent No. 3 charged to the petitioner in Spl. Civil Application No. 1106 of 1980 electricity duty totalling to Rs. 34,113.26 ps. in respect of the energy consumed by the air-conditioning plant used in the petitioner's Ajanta Cinema whereas the respondent No. 3 charged to the petitioner in Special Civil Application No. 623 of 1981 the electricity duty from April 1976 to 22-3-1977 totalling to Rs. 22,179.90 ps. in respect of the energy consumed by the air-conditioning plant used in the petitioner's Suraj Cinema. The petitioner in each petition represented to the respondents Nos. 2 & 3 that they were not liable to pay electricity duty in respect of electric energy consumed by the air-conditioning plant during the period from 1-4-1976 to the unexpired part of the period specified in respective certificates and by Advocate's registered letters demanded from respondents, the refund of the said amount of electricity duty, but as respondents did not refund the amount the petitioners have filed respective petitions before this Court, with a prayer that the respondent should be commanded to refund the said amount to the petitioner. In Special Civil Application No. 1106 of 1980, the petitioner has prayed to command the respondent to refund to the petitioner Rs. 34,113.26 ps. recovered as electricity duty by the respondent No. 3 from the petitioner in the respondent No. 3's Electricity Bills with interest at the rate of 12% whereas in Special Civil Application No. 623 of 1981 the petitioner has prayed to command the respondent to refund to the petitioner Rs. 22,179.90 ps. recovered as electricity duty by the respondent No. 3 from the petitioner in the respondent No. 3's Electricity Bills with interest at the rate of 12%. Except the above referred prayer, no other prayer has been made in either of the petitions.
8. So far as above referred facts are concerned, they have not been denied by the respondents. However, in Special Civil Application No. 1106 of 1980 an affidavit-in-reply has been filed by Shri M.I. Khumri, Collector of Electricity Duty, Gujarat State, justifying the action of the respondents.
9. The learned Counsel Shri Vakil for the petitioner submitted that having regard to the provisions of Sections 7 and 20 of the Bombay General Clauses Act, 1904, notwithstanding recession of the Government Notification dtd. 1-1-1969, the previous operation of the Notification dtd. 1-1-1969, things duly done or suffered thereunder and rights, privileges, obligations and liabilities acquired, accrued or incurred thereunder are not affected and the benefit of remission of duty granted to the Cinema houses or theatres for energy consumed for air-conditioning plant could not have been withdrawn from 1-4-1976, even as regards the unexpired part of the period of five years in respect of the Cinema houses and theatres wherein the air-conditioning plant were put into operation before 1-4-1976. It was submitted by the learned Counsel that the recession of prior notification and substitution of it by another notification tentamounts to repeal of prior notification and therefore consequences of repeal under the General Clauses Act, would apply, and therefore the respondents were not justified in collecting the duty as regards unexpired period of five years in respect of Cinema houses and theatres wherein the air-conditioning plants were put into operation before 1-4-1976. A faint submissions was made that the respondent's claim would be bad on the principle of promissory estoppel, but it was later on given up in view of the frequent judicial pronouncements on that point.
10. Shri Vakil, based the above referred arguments on the provisions of Sections 7 and 20 of the Bombay General Clauses Act. Section 7 of the Bombay General Clauses Act, 1904 reads as under:
Section 7. Where this Act, or any Bombay Act (or Gujarat Act) made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not.
(a) revive anything not in force or existing at the time at which the repeal takes effect; or
(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or
(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or
(d) affect any penalty, forfeiture, or punishment incurred, in respect of any offence committed against any enactment so repealed; or
(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liabilily, penalty, forfeiture or punishment as aforesaid, and any such investigation legal proceedings, or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if the repealing Act had not been passed.
Section 20 of the said Act reads as under:
20. Where by any Bombay Act (or Gujarat Act) a power to issue any notification, order, scheme, rule, by-law or form is conferred, then expressions used in the notification, order, scheme, rule, by-laws or form, if it is made after the commencement of this Act, shall, unless there is anything repugnant in the subject or context, have the same respective meanings as in the Act conferring the power.
Apart from the fact that Section 7 applies to any Bombay Act or Gujarat Act repealing any enactment made earlier and not to any notification issued by the Government, we are of the view that subsequent Notification dated 1-4-1976 does not affect any right privilege, obligation or liability acquired, accrued or incurred upto 1-4-1976. In the case of Bombay Conductors and Electricals Ltd. and Anr. v. Shri K. Chandramouli, Under Secretary to the Government of India and Anr., reported in 1984 (Vol. 55) Sales Tax Cases 162, the Government of India, Ministry of Finance, Department of Revenue had issued Notification dated 18-4-1980 in exercise of power conferred by Sub-section (1) of Section 25 of the Customs Act, 1962, exempting aluminium wire rods or aluminium ingots falling within Chapter 76 of the First Schedule to the Customs Tariff Act, 1975 when imported into India from the whole of the duty of Customs leviable thereon under the said Schedule to the Customs Act, and the whole of the additional duty leviable thereon under Section 3 of the Customs Tariff Act, and it was directed that the said Notification would be in force upto and inclusive of the 30th September, 1980. Subsequently in exercise of the above referred powers, the Central Government rescinded the above referred exemption Notification by another Notification dated 29-8-1980. The said action was challenged by the petitioners on two grounds, firstly that the time bound exemption notification which was to ensure for the benefit of the importers from 18th April, 1980 to 30th September, 1980, could not be rescinded on 29th Augest, 1980, and secondly that the action of the Central Government was bad having regard to the doctrine of promissory estoppel. Negativing the above referred contentions, the Full Bench of the Delhi High Court has held that the character of the Notification is legislative and that in law estoppel is unknown to a statute. It is further held that if the Central Government in public interest decides to grant exemption at one moment and decides to withdraw it at another, the Court cannot compel it to continue the exemption beyond time the Government thinks it necessary in the public interest to do and this principle applies to the power to issue notification whether they are time bound or not. We are also of the same view. The above referred Full Bench judgment of the Delhi High Court was approved and followed in the case of Wellworth Plastics and Chemicals and Ors. v. State of Kerala and Ors., reported in 1984 (Vol. 57) STC 360; and in the case of Bikaram Industry v. State of Jammu and Kashmir and Ors., reported in 1985 (Vol. 59) STC 25.
11. We are of the view that in fact by Notification dated 1-4-1976, earlier Notification dated 1-1-1969 is rescinded only prospectively and it does not effect any right, privilege, obligation or liability acquired, accrued or incurred before 1-4-1976. The normal effect of repealing a statute is to obliterate it from the statute book as completely as it had never been passed and it must be considered as a law that never existed. It cannot be said that by Notification dated 1-4-1976 the earlier Notification dated 1-1-1969 is repealed for if that had been so, the petitioner would not have been granted remission of the electricity duty from the date of installation of the air-conditioning plant to 1-4-1976 and therefore even otherwise, principles governing repeal of an enactment would not apply to Notification dated 1-4-1976. By subsequent Notification the earlier period of five years is sought to be curtailed and in fact, remission of the electricity duty has been granted to the petitioners from the date of installation of the air-conditioning plant to 1-4-1976. Therefore, we are of the view that if any recovery is made after 1-4-1976, it would not be illegal.
12. On true interpretation of Section 7 of the Bombay General Clauses Act, 1904 we are of the view that the provisions of the said Section 7 would apply to a case of Bombay Act or Gujarat Act repealing an earlier enactment and not to notification issued under any such Act. In the case of Raj Bahadur Mathur v. Union of India, reported in 1972 Lab.IC 1206, the Division Bench of Orissa High Court has held that the distinction has been made between a Central Act, enactment, regulation and rules and the rules framed by the President in exercise of the powers conferred by the proviso to Article 309 of the Constitution do not constitute Central Act enactment or regulations within the meaning of Section 3(7), (19) and (5) of the General Clauses Act, 1897. It has been further held by the Division Bench that as the rules do not fall in any of this category, Section 6 of the General Clauses Act, 1897 has no application. In the present case also the provisions of Section 7 of the Bombay General Clauses Act, 1904 would have no application to the Notification dated 1-4-1976 that rescinded the earlier Notification dated 1-1-1969.
13. However, Shri Vakil, relied on judgments in (1) Tamboll Bhogilal Chhotalal v. Mohanlal Chunilal Kofhari reported in 59 BLR 274, (2) The Income-lax Officer, Alleppy v. M.C. Pannoose and Ors., , (3) The Cannanore Spinning and Weaving Mills Ltd v. Collector of Customs and Central Excise, Cochin and Ors., , and (4) Hukam Chand v. Union of India and Ors., , in support of the proposition that notwithstanding recession of the Government Notification dated 1-1-1969, things duly done or suffered thereunder and rights privilege, obligations and liabilities acquired, accrued or incurred thereunder are not affected.
In the case of Tamboli Bhogilal Chhotalal (supra) a suit for possession of agricultural lands was filed against Tamboli Bhogilal and another in Civil Court, as notification was issued under Section 88, Sub-section (1) Clause (d) of the Bombay Tenaney and Agricultural Lands Act, 1948. It was contended by the defendants that the tenancy rights which were acquired by them under the Act and had vested in them could not be taken away by a notification issued under Clause (d) of Sub-section (1) of Section 88 of the Act and therefore Civil Court would not have jurisdiction to try and decide the suit. The suit was decreed by the the trial Court and appeal filed by the defendants was dismissed. Allowing the Second Appeal filed by the defendants, it has been held that the State Government is competent to issue notification under Section 88(1)(d) of the Bombay Tenancy and Agricultural Lands Act, 1948, reserving certain lands for unban, non-agricultural or industrial development, however the said competence is prospective and not retrospective and it does not extend to the taking away of the already vested valuable rights of the tenants. From the said judgment it becomes clear that the rights of the tenant were recognized and protected by the provisions of the Bombay Tenancy and Agricultural Lands Act, 1948 itself and not by notification and therefore the said valuable rights which conferred statutory status to individuals could not have been taken away retrospectively by the Government by issuing notification under Section 88(1)(d) of the Act. In the facts of the present case no such right of remission is recognized under the provisions of the Bombay Electricity Duty Act, 1958 unless it is granted by the Government by issuing appropriate notification. In view of this, we are of the view that the judgment cited by Shri Vakil does not help the petitioner.
14. In the case of Income Tax Officer, Alleppy (supra) one Kunchacko of Alleppy allowed the income-tax dues from him to fall into arrears. The Income Tax Officer took steps to recover the arrears through the Tahsildar. Certain shares standing in the name of the assessee were attached by the Tahsildar. The first respondent Pannoose claimed to have obtained a decree for a certain sum against the assessce. He also got the shares standing in the name of the assessec attached in execution proceedings. Pannoose filed a petition under Article 226 of the Constitution in the High Court of Kerala in which he challenged the action taken by the revenue officials including the Tahsildar for getting the shares, which had been attached and sold for satisfaction of the income-tax dues of the assessee. The learned single Judge held that the notification empowering the Tahsildar to exercise power of a Tax Recovery Officer under the Act with retrospective effect was invalid. Consequently the attachment made by the Tahsildar were quashed. This view was affirmed by a Division Bench in appeal. The Honourable Supreme Court of India held that by issuing notification in exercise of powers conferred under Section 2(44)(ii), the State Government could not invest the Tahsildar with the powers of a Tax Recovery Officer with effect from a date prior to the date of the notification, i.e., retroactively or retrospectively and consequently, attachment of shares belonging to assessee in order to recover arrears, by the Tahsildar, subsequent to 1st April, 1962 was invalid.
15. In the facts of the present case no notification has been issued empowering the Collector of Electricity Duty, Ahmedabad, to recover the electricity duty with retrospective effect. What is sought to be done by the Collecter is to give effect to the subsequent notification dtd. 1-4-1976 by which the earlier notification dtd. 1-1-1976 has been rescinded. Thus, we are of the view that the said judgment also does not help the petitioners.
16. In the case of the Camnanore Spinning and Weaving Mills Ltd. (supra) it has been held that in Notifications dtd. June 13, 1962 and September 15, 1962, the word "hank" had not been used in a technical sense and further held that the rule making authority had not been vested with the power under the Central Excises and Salt Act to make rules with retrospective effect purported to be given which was beyond the powers of the rule making authority. In the facts of the present case no rule has been framed by the respondents nor any retrospective effect is sought to be given to the rule, and therefore the said case also does not help the petitioners.
17. In the case of Hukam Chand (supra), he was allotted certain agricultural lands situated in an urban area under the provisions of the Displaced Persons (Compensation and Rehabilitation) Act, 1954. Subsequently Rule 49 of Displaced Persons (Compensation and Rehabilitation) Rules, 1955 was amended and explanation was added to it and the amendment was given retrospective effect. After addition of explanation to Rule 49 proceedings were initiated for cancellation of allotment on the ground that in view of the Explanation which incorporated the policy, the land which could be allotted under Rule 49 was only rural land and not land situated in urban area. Repelling the argument of the Union of India, it has been held by the Honourable Supreme Court that there is nothing in Section 40 of Displaced Persons (Compensation and Rehabilitation) Act, 1954, from which power of the Central Government to make retrospective rules may be inferred. It is held that in the absence of any such power, the Central Government acted in excess of its power in so far as it gave retrospective effect to the Explanation to Rule 49. The Supreme Court further held that Rule 49 could not operate retrospective and would be effective for the future from the date it was added. From the observations made by the Honourable Supreme Court of India, it becomes clear that a vested right conferred by a statute was sought to be affected retrospectively by adding explanation to the rule. In the facts of the present case no right of remission has been conferred by the provisions of the Bombay Electricity Duty Act unless it is granted by the Government by issuing notification and the Notification dated 1-4-1976 which has rescinded the earlier Notification dated 1-1-1969 is not retrospective in character, but is prospective and therefore said ruling has no application to the facts of the case. Thus, the authorities which have been cited at the bar by learned Counsel for the petitioner does not help the petitioners.
18. No other point has been urged on behalf of the petitioners.
Having regard to the facts and circumstances of the case in the two/petitions, we are of the opinion that no ground has been made out by the petitioners in these two petitions for granting relief prayed for. Therefore, rule is discharged in both the petitions, but in the facts and circumstances of the case there shall be no order as to costs.