Allahabad High Court
M/S Hindustan Coca Cola Beverages Pvt. ... vs The Commissioner Of Commercial Taxes ... on 15 March, 2019
Author: Saumitra Dayal Singh
Bench: Saumitra Dayal Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD RESERVED/AFR Case :- SALES/TRADE TAX REVISION No. - 222 of 2018 Applicant:- M/S Hindustan Coca Cola Beverages Pvt. Ltd. Opposite Party:-The Commissioner of Commercial Taxes & Anr. Counsel for Applicant:- Rahul Agarwal Counsel for Opposite Party:- C.S.C. Hon'ble Saumitra Dayal Singh, J.
1. The present Revision, filed by the assessee, arises from an order passed by a Full Bench of the Commercial Tax Tribunal, dated 24.07.2018 in Appeal No. 11 of 2011, whereby that Tribunal has confirmed the order dated 22.01.2011 passed by the Divisional Level Committee, Meerut, that has limited the monetary limit of exemption granted to the assessee under Section 4-A of the Uttar Pradesh Trade Tax Act, 1948 (hereinafter referred to as the 'Act') and Section 8 of the Central Sales Tax Act, 1956 (hereinafter referred to as the 'Central Act'), to the Fixed Capital Investment made by the assessee, upto the date of withdrawal of the exemption notification.
QUESTIONS OF LAW:
2. The assessee has pressed the following questions of law:
"(i) Whether in absence of any statutory provision enabling the DLC to review its earlier decisions/orders and in view of the law laid down by the Hon. Supreme Court in
a) Harbhajan Singh v. Karan Singh AIR 1966 SC 641,
b) Patel Narshi Thakershi and others v. Shri Pradyumansinghji Arjunsinghji, (1971) 3 SCC 844 and
c) Haryana State Industrial Development Corporation Limited Vs. Mawasi & others (2012) 7 SCC 200, the Tribunal below was justified in holding that the DLC was competent to review the Eligibility Certificate issued earlier to the revisionist on 22.01.2001 and curtail the amount of exemption that the revisionist was entitled after a long lapse of 10 years?
(ii) Whether in view of the long line of decisions of the Hon. Supreme Court
a) beginning from Motilal Padampat Sugar Mills Co. Ltd. Vs. State of U.P. & others (1979) 2 SCC 409, Pournami Oil Mills Vs. State of Kerala and another (1987) 65 STC 1 and
b) ending with Devi Multiplex and another Vs. State of Gujarat and others (2015) 9 SCC 132 and Manuelsons Hotels Private Limited Vs. State of Kerala and others in (2016) 6 SCC 766 the Tribunal below was justified in holding that the State of U.P. was competent to withdraw the benefit of an exemption notification at any time and that the principle of promissory estoppel was inapplicable in such cases?
(iii) Whether the denial of the benefit of the exemption promised by Notification dated 21.02.1997 and extended by the EC dated 22.01.2001, in respect of the additional investments made by the revisionist towards setting up later phases of its plant on and from 22.09.1999 (the issuance of the withdrawal notification) by the DLC decision dated 22.01.2011, as upheld by the Tribunal, would be contrary to principles of promissory estoppel and unsustainable in law?
BACKGROUND FACTS:
3. Earlier, on 31.03.1995, the Government of Uttar Pradesh issued two notification nos. 780 and 781 to grant exemption (under the Act and Central Act), to 'New Units', established inside the State of Uttar Pradesh, having their date of starting production falling between 01.04.1995 to 31.03.2000. The exemption from tax under the Act as also the Central Act was provided up to a monetary limit expressed as a percentage of the total Fixed Capital Investment expended to set up the 'New Unit'. As a pre-condition for grant of exemption, there was no prescription of any minimum amount of Fixed Capital Investment.
4. Thereafter, on 21.02.1997, the Government of Uttar Pradesh issued two other notification nos. 640 and 641 to grant exemption (under the Act and Central Act) to 'New Units' having their date of starting production falling between 01.12.1994 to 31.03.2000. These two notifications are hereinafter referred to as the 'New Notifications'. However, it may be noted here itself, the pre-existing notification nos. 780 and 781, both dated 31.03.1995, were not withdrawn. In fact, under the 'New Notifications', the date of starting production was pushed back by one year to 01.12.1994. Also, a further condition was added to restrict the benefit under the 'New Notifications' to minimum Fixed Capital Investment of Rs. 50 crores with a further stipulation to allow the same benefit of exemption to the further Fixed Capital Investment made during the next five years from the date of starting production.
5. Since the dispute canvassed in the present revision application is with respect to 'New Notifications' dated 21.02.1997, it would be fruitful to extract its relevant parts as published in the gazette:
(Hindi version) "vr,o] vc] mRrj izns'k O;kikj & dj ,sDV] 1948 ¼mRrj izns'k ,sDV la[;k 15 lu~ 1948½ dh ftls vkxs vf/kfu;e dgk x;k gS] /kkjk 4 & d ds v/khu vf/kdkj dk iz;ksx djds jkT;iky ?kks"k.kk djrs gS fd] & 1- ¼d½ vuqyXud ds LrEHk 2 esa mfYyf[kfr {ks=ks es LFkkfir fdlh ubZ bdkbZ es fofufeZr eky ds lEcU/k esa ftuds mRiknu izkjEHk djus dk fnukad 1 fnlEcj] 1994 dsk ;k mlds i'pkr iMrk gks] fdUrq 31 ekpZ] 2000 ds i'pkr ugh] ,sls eky ds fodz; /ku ij ckjg o"kZ dh vof/k ds fy;s ;k vuqyXud ds LrEHk 3 es ;Fkk & fofufnZ"V dj ls ,slh NwV ;k dj dh nj es dEkh ds vuqrks"k dh vf/kdre /kujkf'k izkIr gksus rd] tks Hkh igys gks] mlds fofuekZ.k }kjk] ;FkkfLFkfr] dksbZ dj ns; ugh gksxk ;k ?kVk;h x;h nj ij dj ns; gksxkA vof/k dh x.kuk] izFke fcdzh ds fnukad ls ;k mRiknu izkjEHk gksus ds fnukad ls N% ek= O;rhr gks tkus ds vuqorhZ fnukad ls] buesa tks Hkh igys gks] dh tk;sxh( ¼[k½ ... ... ...
¼x½ ... ... ...
2. ... ... ... ...
3- dj ls NwV ;k dj dh nj es deh dh lqfo/kk vf/kfu;e dh /kkjk 4&d esa fufnZ"V 'krksZ ds vfrfjDr] fuEufyf[kr 'krkZsa ds v/;k/khu gksxh & ¼d½ fd ubZ bdkbZ ds #i esa bdkbZ dk ipkl djksM #Ik;s ;k vf/kd dk fLFkj iwath fofu/kku gks] ;k bdkbZ foLrkj] vk/kqfudhdj.k] fofo/khdj.k ;k cSdoMZ bUVªhxs'ku es ipkl djksM #Ik;s ;k vf/kd dk vfrfjDr fLFkj iwath fofu/kku djrh gksA bl foKfIr ds iz;kstu ds fy, vkSj dj ls NwV ;k dj dh nj es deh dk ykHk fn;s tkus ds iz;kstu ds fy, Hkh fLFkj iwath fofu/kku tks foLrkj vk/kqfudhdj.k] fofo/khdj.k ;k cSdoMZ bUVªhxs'ku dh n'kk es ,sls fofu/kku ds izFke fnu ls] vkSj ubZ bdkbZ dh n'kk esa mRiknu izkjEHk djus ds fnukad ls iakp o"kZ dh vof/k ds nkSjku fd;k tk;] fLFkj iwath fofu/kku eas lfEefyr fd;k tk;xk( ¼[k½ ... ... ...
¼x½ ... ... ...
¼घ½ ... ... ...
¼M.½ ... ... ...
¼p½ fd] mDr bdkbZ lEcaf/kr dj fu/kkZj.k vf/kdkjh dks egkizcU/kd] ftyk m|ksx dsUnz] {ks= fodkl vf/kdkjh ¼m|ksx½] lEcfU/kr vkS|kSfxd fodkl izkf/kdj.k] jsat ds mij ;k la;qDr funs'kd m|kssx] ;k lEcfU/kr vkS|kSfxd fodkl izkf/kdj.k ;k vij ;k la;qDr funs'kd m|ksx] tSlh Hkh fLFkfr gks] }kjk bl fufeZr Lohd`r ik=rk izek.k & i= izLrqr djss( ¼N½ fd bl foKfIr ds v/khu dj ls NwV ;k dj dh nj esa deh fdlh bdkbZ dks rHkh miyC/k gksxh tc mlds }kjk de ls de ipkl djksM #i;s dk] ;FkkfLFkfr] fLFkj iwath fofu/kku ;k vfrfjDr fLFkj iwath fofu/kku tSlk fd iSjk 3 ds [k.M ¼d½ eaas fofufnZ"V fd;k x;k gS] vof/k ds Hkhrj dj fn;k x;k gksA ;fn fdlh bdkbZ }kjk bl izdkj fofu/kku ugh fd;k tkrk gS rks ;g vkjksfir 'kkfLr] ;fn dskbZ gks] nsus dk nk;h gksxk vkSj bdkbZ }kjk izkIr dh x;h lEiw.kZ dj dh lqfo/kk ml ij C;kt ds lkFk Lohd`r dj ds #i esa bdkbZ ij ns; gksxk] vkSj mlds }kjk Hkqxrku fd;k tk;sxk] fQj Hkh ,slh bdkbZ bl foKfIr ds v/khu] lqfo/kk izkIr djuk izkjEHk djus ds iwoZ jkT; ljdkj ds i{k es viuh lEifRr ij izFke ;k f}rh; Hkkj l`ftr dj nsrh gS tks mlds mi;qZDr nkf;Ro dks vkPNkfnr djus ds fy, Ik;kZIr gS( ¼t½ ........
¼>½ fd bdkbZ izR;sd ,sls dj fu/kkZj.k o"kZ] ftlds nkSjku dj ls NwV ;k dj dh nj esa deh vuqeU; gks] dks lekfIr ds i'pkr~ fdUrq bdkbZ ds lEcfU/kr izkf/kdkjh }kjk mlds rqyu&i= ds vuqeksnu ds rhl fnu ds Hkhrj izR;sd dj fu/kkZj.k o"kZ ds lEcU/k esa fdlh pkVZMZ ,dkmUVsaUV ls izkIRk izek.k & i= dj fu/kkZj.k izkf/kdkjh dks izLrqr djsxkA ,sls izek.k&i= eas fuEufyf[kr fooj.k gksaxsA ¼d½ dj fu/kkZj.k o"kZ eaas fd;k x;k vfrfjDr fLFkj iwath fofu/kku( ¼[k½ 1 fnlECkj 1994 ls ;k mlds i'pkr~ ,sls dj fu/kkZj.k o"kZ dh lekfIr rd fd;s x;s lap;h vfrfjDr fLFkj iwath fofu/kku] vkSj ¼x½ dj fu/kkZj.k o"kZ ds nkSjku vkSj 1 fnlEcj] 1994 ls ;k mlds i'pkr~ ,sls dj fu/kkZj.k o"kZ dh lekfIr rd bdkbZ }kjk izkIr dh xbZ dj ls NwV ;k dj dh nj esa deh dh /kujkf'k( ¼rz½ bl foKfIr ds v/khu dj ls NwV ;k dj dh nj esa deh dh lqfo/kk] ,slh vkS|ksfxd bdkbZ dks miyC/k ugh gksxh ftls jkT; ljdkj }kjk foKfIr fd;k tk;A (English version) "Now, therefore, in exercise of the powers under Section 4-A of the Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948), hereinafter referred to as the Act, the Governor is pleased to declare that:-
1(a) in respect of goods manufactured in a new unit established in the areas mentioned in column-2 of the Annexure the date of the starting production whereof falls on or after December 1, 1994 but not later than March 31, 2000, no tax shall be payable, or, as the case may be, the tax shall be payable at the reduced rates by the manufacturer thereof on the turnover of sales of such goods for the period of twelve years or till the maximum amount of tax relief by such exemption from, or reduction in the rate of, tax as specified in column-3 of the Annexure is achieved, whichever is earlier. The period shall be reckoned from the date of the first sale or the date following the expiration of six months from the date of starting production, whichever is earlier;
(b) ... ... ...
(c) ... ... ...
2. ... ... ...
3. The facility of exemption from, or reduction in the rate of tax shall be subject to the following conditions in addition to the conditions referred to in Section 4-A of the Act:-
(a) that the unit will have a fixed capital investment of rupees fifty crore or more as a new unit or making an additional fixed capital investment or rupees fifty crore or more in expansion, modernisation, diversification or backward integration. The fixed capital investment which is made during the period of five years commencing from first day of such investment, in the case of expansion modernisation, diversification or backward integration, and from the date of starting production in the case of new units will be included in fixed capital investment for the purpose of this notification and also for the purpose of exemption from, or reduction in the rate of, tax benefit;
(b)... ... ...
(c)... ... ...
(d)... ... ...
(e)... ... ...
(f) that the said unit furnishes to the assessing authority concerned an eligibility certificate granted in this behalf by the General Manager, District Industries Centre, Area Development Officer (Industry) of concerned Industrial Development Authority, Additional or Joint Director Industries of the range or Additional Director or Joint Director Industries of the concerned Industrial Development Authority, as the case may be;
(g) that the exemption from, or reduction in the rate of, tax under this notification shall be available to a unit only when fixed capital investment or as the case may be, an additional fixed capital investment of atleast rupees fifty crore is made by it as specified in clause (a) of para 3. If the investment is not so made by a unit, it shall be liable to pay penalty, if any, imposed and the entire tax benefit availed by the unit together with interest thereon shall become due and be payable by the unit as admitted tax, such unit shall however before it starts availing facility under this notification creates first or second charge on its property in the favour of the State Government, sufficient to cover its aforesaid liability;
(h) ... ... ...
(i) that the unit shall after close of every assessment year during which exemption from, or reduction in the rate of, tax is admissible but not later than thirty days of the approval of its balance sheet by concerned authority of the unit submit to the assessing authority a certificate from a chartered accountant in respect of each assessment year. Such certificate shall contain the following details:-
(a) additional fixed capital investment made during the assessment year;
(b) cumulative additional fixed capital investment made from or after December 1, 1994 up to the close of such assessment year; and
(c) amount of tax exemption from, or reduction in the rate of, tax availed by the unit during the assessment year and from or after December 1, 1994 up to the close of the such assessment year;
(d) the facility of exemption from, or reduction in the rate of, tax under this notification shall not be available to such industrial unit as are notified by the State Government."
6. By further notification nos. 3114 and 3115, both dated 30.09.1997, the State Government amended the maximum period of exemption under the 'New Notifications', from 12 years to 15 years.
7. The assessee claims to have set up a 'New Unit' to manufacture non alcoholic beverages-waters, including mineral waters and aerated waters, containing added sugar or other sweetening matter of flavoured and mineral water and aerated waters only at Village Dasna in District Ghaziabad, occasioned by the promise held out by the State Government under the 'New Notifications'. It made an investment in excess of Rs. 50 crores. In this regard, though the assessee has not produced (in these proceedings), a copy of the exemption application as may have been filed by it, it has been stated that such application was filed by it on 26.04.1999. In that regard, paragraph 7 of the affidavit filed in support of the stay application accompanying the revision, reads as under:
"7. That the revisionist applied for grant of eligibility certificate under Notification No. 640/641 dated 21.02.1997 in Statutory Form 46 prescribed under Rule 25 to the G.M., DIC, Ghaziabad on 26.04.1999 showing first date of sale as 24.03.1999 and fixed capital investment of Rs. 96.53 crores which was later amended to Rs. 102.09 crores as on 27.03.2000."
8. Admittedly, by another notification no. 1340 dated 01.07.1999, the State Government first withdrew the benefit of exemption under the old notification nos. 780 and 781, both dated 31.03.1995 to 'New Units', engaged in manufacture of the commodity 'cold drinks'. However, according to the assessee, it's claim for exemption remained unaffected, as the same had been made not under notification nos. 780 and 781, both dated 31.03.1995, but under the subsequent 'New Notifications'.
9. While the assessee's application for grant of exemption remained pending, on 29.09.1999, the State Government issued other notification nos. 2008 and 2009 and withdrew the benefit of exemption under Section 4-A of the Act, under the 'New Notifications', to 'New Units', engaged in manufacture of the commodity 'cold drinks' (hereinafter referred to as the 'Withdrawal Notifications'. For ready reference, the contents of notification no. 2009 dated 29.09.1999, read as under:
"IN exercise of the powers under sub-section (5) of section 8 of Central Sales Tax Act, 1956 (Act no. 74 of 1956) read with section 21 of the General clause Act, 1897, (Act no. 10 of 1897) and in partial modification of notification no. TT-2-641/XI-9(460)-94-Act-74-56 Order-97, dated February 21, 1997, the Governor is pleased to direct that with effect from date of publication of this notification in the Gazette exemption from or reduction in the rate of tax to units manufacturing cold drinks, having a fixed capital investment of rupees fifty crore or more as new units, or making an additional fixed capital investment of rupees fifty crore or more in expansion, modernisation, diversification or backward integration shall not be granted."
10. It may also be noted, the language of the two notification nos. 640 and 641, in all material aspects, is identical. The only difference being, while notification no. 640 relates to exemption under the Act, while notification no. 641 relates to exemption under the Central Act. Similarly, notification nos. 3114 and 3115, both dated 30.09.1997 as also notification nos. 2008 and 2009, both dated 29.09.1999 are identical. The only difference being that notification nos. 3114 and 2008 relate to the Act, while notification nos. 3115 and 2009 relate to the Central Act.
11. In such facts and law, the District Industries Centre (DIC), appears to have made a report to the Divisional Level Committee stating it had examined the claim of exemption made by the assessee with reference to notification no. 1340 dated 01.07.1999, but that notification related to the (old) exemption notification nos. 780 and 781, and not the 'New Notifications'. Undeniably, that report had been submitted in plain ignorance of the pre-existing 'Withdrawal Notifications'. The Deputy Commissioner, Trade Tax also submitted a similar report to the Deputy Director (Industries), dated 03.01.2001.
12. On 21.01.2001, the Divisional Level Committee through its Convener/Joint Director (Industries), granted the Eligibility Certificate to the assessee with respect to the Fixed Capital Investment, (upto 19.02.1999), as disclosed by the assessee in its application dated 26.04.1999. While the assessee claimed to have made the application for grant of exemption only with reference to the 'New Notifications', curiously the Eligibility Certificate, in the first place, traced its issuance not under those notifications but under the (Old) notification no. 780 dated 21.03.1995. Thus, the Eligibility Certificate first, read as under:
"eS izekf.kr djrk gwa fd loZJh fgUnqLrku dksdk dksyk ckVfyax izk0 fy0 elwjh jksM] eqykoBh ftyk xkft;kckn dh bdkbZ 'kkldh; foKfIr la[;k O;k0 d0&2&780@X;kjg&9¼226½@94 m0 iz0 vf/k0 15&48 vkns'k & 95 fnukad 31-03-95 ;Fkkla'kksf/kr jkT; foKfIr la[;k O;k0 d0&2&2760@ X;kjg 6¼1½@86 m0 iz0 vf/kfu;e&15&48&vkns'k&95 fnukad 16 uoEcj rFkk foKfIr la[;k O;k0 d0&2&780@X;kjg&9¼226½@94 ,sDV&74&56 vkns'k&95 fnukad 31-03-95 rFkk la'kksf/kr la[;k O;k0 d0&2&2761@X;kjg & 6¼1½@86 ,sDV 74&56 vkns'k 95 fnukad 16-11-95 dks vuqlyaXud&2 eas mfYyf[kr izdkj dh bdkbZ;ksa ls fHkUu gSA vr% jkT; O;kikj dj ,oa vUrjkZT;h; O;kikj dj ls NwV@ fcdzh dh nj esa deh dh lqfo/kk izkIr djus ds fy, iw.kZr;k ik= gSA ,slh fLFkfr esa O;kikj dj vf/kfu;e dh /kkjk 4d ,oa bl lEcU/k esa tkjh fd, x, 'kklukns'kksa ,oa foKfIr;ks ds izkfo/kkuksa ds vuqlkj eS mDr bdkbZ dh jkT;@vUrjkZT;h; O;kikj dj ls NwV@O;kikj dj dh nj ls deh dks lqfo/kk iznku fd, tkus ds fy, fuEukuqlkj ik= ?kksf"kr djrk gwaA"
13. As to the exemption granted, the same was recorded in the Eligibility Certificate on the following terms:
"4- vr% bdkbZ O;kikj dj NwV@dj dh nj esa deh dh lqfo/kk dh ik= fnukad 24-03-1999 ls fnukad 23-03-2014 rd vFkok LFkk;h iwath fofu/kku ds 150 izfr'kr ¼vFkkZr vf/kdre½ 1]20]23]32]964-00 /kujkf'k rd buesa tks igys gks mijksDr 'kkldh; foKfIr;ka fnukad 31-03-95 ds vuqyXud&1 vFkok Hkkx&1 vFkok foKfIr fnukad 16-11-95 ds vuqyXud&1 Hkkx¼2½ ds LrEHk 2]3]4 rFkk 5 esa fofufnZ"V izkfo/kkuksa ds vuqlkj gksxhA"
14. Also, perusal of the Eligibility Certificate discloses, against the claim of investment of Rs. 120 crores made by the assessee, the Divisional Level Committee initially accepted and thus granted the benefit of exemption against the Fixed Capital Investment of Rs. 80,15,55,309/- only.
15. Then, at the bottom of the Eligibility Certificate, a Note was appended as below:
"uksV&bdkbZ dks NwV dh lqfo/kk foKfIr la0 640 rFkk 641 fnukad 21-02-97 rFkk foKfIr la[;k 3113 rFkk 3114 fnukad 30-09-97 ds vUrxZr ns; gksxhA mDr mfYyf[kr foKfIr fn0 21-02-97 ds izLrj&3 ds vuqlkj fLFkj iwath fofu;kstu dh /kujkf'k esa 18-02-2004 rd fd;k x;k fLFkj iawth fofu;ksu lfEefyr gksxkA ftls dj fu/kkZj.k vf/kdkjh foKfIr fn0 21-02-97 ds izLrj 3¼>½ ds vuqlkj lfEefyr dj ifjofrZr djsaxsA "
16. Later, that Eligibility Certificate was amended on 12.12.2003 whereby the figure of Fixed Capital Investment (made upto 19.02.1999), was amended and increased from Rs. 80,15,55,309/- to Rs. 94,07,34,979/-. Consequently, the monetary limit of exemption was enhanced from Rs. 1,20,23,32,964/- to Rs. 1,41,11,02,468/-.
FACTS GIVING RISE TO DISPUTE U/S 10-B OF THE ACT:
17. Upto this point, there is no dispute between the parties. Thereafter, on 10.02.2004, the assessee filed an application before its assessing authority, namely the Deputy Commissioner (Assessment), Trade Tax, Najibabad claiming exemption on further Fixed Capital Investment made by it to the tune of Rs. 51,58,69,747/-, during A.Y. 1999-2000. Thereafter, by an order dated 30.06.2004, purportedly under Section 4-A of the Act, that authority enhanced the monetary limit of exemption granted to the assessee, by Rs.76,31,84,416/- being 150 percent of Rs.50,87,89,611/-, the Fixed Capital Investment accepted to have been made within a period of five years from 19.02.1999 (the date of starting production). Consequently, he enhanced the total monetary limit of exemption granted to the assessee to Rs. 2,17,42,86,885/-.
18. The above order occasioned the issuance of a notice under Section 10-B of the Act by the Joint Commissioner (Executive). By order dated 29.05.2008, the Joint Commissioner (Executive) set aside the order dated 30.06.2004, on the reasoning - under Rule 25 of the U.P. Trade Tax Rules, 1948, the jurisdiction to issue the Eligibility Certificate vested in the Divisional Level Committee alone and no delegation of that power was permissible in law. Therefore, the order passed by the Assessing Officer was found to be lacking in jurisdiction. However, the Joint Commissioner (Executive) did not dispute either the eligibility to exemption or the quantum of additional exemption claimed by the assessee that had been allowed by the Assessing Officer, by his order dated 30.06.2004.
19. The assessee first challenged the aforesaid order dated 29.05.2008 by means of a writ petition. However, the same was later dismissed as withdrawn in view of the alternative remedy of appeal being available to the assessee. It then filed an appeal before the Tribunal against the order dated 29.05.2008 being Appeal No. 2 of 2009. It was decided by order dated 21.08.2009 whereby the Tribunal upheld the order of the Joint Commissioner (Executive), dated 29.05.2008. It further held, the power to amend the Eligibility Certificate vested solely in the Divisional Level Committee.
20. At the same time, the Tribunal observed, there was no objection as to the eligibility or quantification of exemption on such further Fixed Capital Investment. Again, the above observations, were made without reference to the 'Withdrawal Notifications'.
21. After making such observations, the Tribunal held, the enhancement to the monetary limit of exemption was not illegal but that the Assessing Officer of the assessee had no jurisdiction to grant the same. Therefore, in the opinion of the Tribunal, the Assessing Officer should have referred the matter to the Divisional Level Committee to amend the assessee's Eligibility Certificate. Consequently, the Tribunal directed the Assessing Officer to refer the matter to the Divisional Level Committee under clause ३(झ)/(3)(i) of the 'New Notifications'.
22. The assessee felt aggrieved by the aforesaid order of the Tribunal. It carried the matter in revision before this Court being Sales/Trade Tax Revision No. 119 of 2009. The same was disposed of on 15.03.2010, with the following order:
"The Tribunal has passed an order on 21.8.2009, in which it has directed that the Divisional Level Committee is the authority which is authorised to make corrections in the eligibility certificate. The Tribunal has accepted the fixation of the fixed capital investment made by the assessing authority for a sum of Rs.50,87,89,611/- for the period ending on 18.2.2004. Counsel for the revisionist states that the direction issued by the Tribunal has not been complied as yet. Learned standing counsel does not counter this but states that on account of filing of this revision it has not been done.
The order passed by the Tribunal may be complied with within a period of one month from the date of the production of a certified copy of this order is placed before him.
This revision is disposed of. "
23. Upon the order passed by the Tribunal, the Divisional Level Committee called for a fresh report. On 26.07.2010, the Joint Commissioner (Trade Tax), made a recommendation in the negative, i.e. against grant of further exemption to the assessee, in view of the 'Withdrawal Notifications'. On 22.01.2011, the Divisional Level Committee passed the order on the claim of further exemption made by the assessee. It limited the claim of exemption to the amount of further Fixed Capital Investment made by the assessee from the date of starting production being 19.02.1999 upto 28.09.1999 i.e. till immediately before the issuance of the 'Withdrawal Notifications'.
24. Thus, against a total claim of further Fixed Capital Investment of Rs. 50,87,89,611/- (during the further period of 5 years - 19.02.1999 to 18.02.2004), the Divisional Level Committee accepted that claim to the extent of further Fixed Capital Investment of Rs. 27,40,17,692/- that had been made by the assessee upto 28.09.1999, i.e. upto the date immediately preceding the issuance of 'Withdrawal Notifications'. Also, the Divisional Level Committee had already made an amendment to the earlier Eligibility Certificate and recorded the figure of original Fixed Capital Investment at Rs. 94,07,34,979/- instead of Rs. 80,15,00,000/- earlier recorded. Thus, the Divisional Level Committee computed the total amount of Fixed Capital Investment made by the assessee eligible for grant of exemption at Rs. 1,21,47,52,671/- (Rs. 94,07,34,979/- plus Rs. 27,40,17,692/-). It computed the monetary limit of exemption available to the assessee at 150 percent of that amount being Rs. 1,82,21,29,007/-. It thus deprived the assessee of exemption with respect to the further Fixed Capital Investment of Rs. 23,47,71,919/-, made beyond 28.09.1999.
25. The assessee challenged the aforesaid order before the Tribunal in Appeal No. 11 of 2011. Dismissal of that appeal has given rise to the present revision.
PROCEEDINGS BEFORE THE TRIBUNAL:
26. Before the Tribunal, the assessee first submitted, since the Divisional Level Committee had, by its first order dated 22.01.2001, already held the assessee to be entitled to exemption with respect to further Fixed Capital Investment made upto the date 18.02.2004, it had no power to review that order. The Tribunal negated the submission on the reasoning that while passing the order dated 22.01.2001, the Divisional Level Committee had not considered the effect of notification nos. 2008 and 2009, both dated 29.09.1999, by which the facility of exemption to manufacturers of cold drinks had been withdrawn. In such fact, the Tribunal further reasoned, the Divisional Level Committee had not itself reviewed the order dated 22.01.2001 by way of suo motu exercise of power but it has passed the order dated 22.01.2011 upon the matter being remanded to it by the Tribunal. Thus, the first ground of challenge was rejected by the Tribunal.
27. Second, the assessee had invoked the principle of promissory estoppel to resist the withdrawal of exemption. Here, it was submitted, the assessee having altered its position to its prejudice and having thus acted on the promise held out, under the 'New Notifications' by making heavy investment to set up the New Unit, the benefit of exemption could not have been withdrawn. In that regard, reliance was placed on various precedent. That contention was also negated by the Tribunal in view of the 'Withdrawal Notifications'. Then, referring to a decision of the Supreme Court in State Level Committee & Anr. Vs. Morgardshammar India Ltd., (1996) 1 SCC 108, it was concluded, the exemption provision had to be strictly construed and that the State Government had acted within its right to withdraw the notification.
28. Heard Shri Bharat Ji Agarwal, learned Senior Advocate and Shri Rahul Agarwal, Advocate, for the assessee and Shri B.K. Pandey, learned Standing Counsel for the State.
SUBMISSIONS ON QUESTION NO. 1:
29. Learned counsel for the assessee have first addressed on question no.1 as noted above. They contend, the claim of exemption made by the assessee had been dealt with and decided by the Divisional Level Committee by its order dated 22.01.2001. There existed no power with that authority to review that order. As to the limited power of review, it has been contended, the same was confined to a fact-situation where the exemption application may be rejected by the Divisional Level Committee. It would give rise to a limited right of review to the assessee, in that circumstance alone.
30. Referring to the Note appended to the Eligibility Certificate dated 22.01.2001 (stating, the assessee would be entitled to exemption on further Fixed Capital Investment to be made by him till 18.02.2004), and Rule 25(3)(c) of the Uttar Pradesh Trade Tax Rules, 1948, it has also been submitted, the order dated 22.01.2001 passed by the Divisional Level Committee was final as the revenue did not prefer any appeal against the same. The only remedy available to the revenue (against the order dated 22.01.2001) was to file an appeal before the Tribunal. That remedy having not been availed, the order dated 22.01.2001 attained finality. Reliance was placed on the decisions of the Supreme Court in Harbhajan Singh Vs. Karan Singh, AIR 1966 SC 641; Patel Narshi Thakershi & Ors. Vs. Shri Pradyumansinghji Arjunisinghji, (1971) 3 SCC 844 and; Haryana State Industrial Development Corporation Limited Vs. Mawasi & Ors., (2012) 7 SCC 200.
31. In the alternative, it has been submitted, even if the power of review was to be assumed to be exiting with the Divisional Level Committee, yet, the question of eligibility and quantification of exemption had already been examined and decided in the proceedings under Section 10-B of the Act (arising from the earlier order passed by the Assessing Officer dated 30.06.2004).
32. Referring to the observations made by the Tribunal in the appeal arising from that order as also the observations made by this Court in the earlier Trade Tax Revision filed by the assessee (CTR No. 1191 of 2009), it has been submitted, the issue of eligibility and quantification of exemption on further Fixed Capital Investment made by the assessee, stood determined in its favour upon due consideration of all relevant facts and it was not open to the Divisional Level Committee to take any different view.
33. Still alternatively, it has been submitted, by their very nature, issues of eligibility and quantification of exemption were wholly disputed and debatable. They did not fall within the parameters of a patent error that may be rectified by taking resort to the power of review.
34. As to the existence or otherwise of conditional grant of exemption under the 'New Notifications', Sri Rahul Agrawal had, in all fairness, placed before the Court, conflicting publications of the 'New Notifications', made in different texts. He therefore, suggested to the Court to examine the texts published in the official gazette as those were not available to him. Yet, his submission in that regard was that condition ३(त्र)/3(i)(d) was a condition to be fulfilled by the assessee at the time of filing the certificate under Clause ३(त्र)/3(i)(d) of the 'New Notifications'. It did not refer to or make conditional the rights arising to the assessee under those notifications with respect to the further Fixed Capital Investment made by it within five years from the date of starting production which in any case had been gone into and granted by the Divisional Level Committee, on 21.01.2001.
35. Thus, it has also been submitted, the limited remand made by the Tribunal (in the proceedings arising from Section 10-B of the Act) was only to allow the proper authority to make the amendment in the Eligibility Certificate and not to allow that authority to de novo determine the eligibility or quantification of exemption. That issue stood decided both by virtue of the Note appended to the original Eligibility Certificate dated 22.01.2001 as also by virtue of the observations made by the Tribunal and the order of this Court dated 15.03.2010.
36. In reply, according to the learned Standing Counsel, the submissions advanced by learned counsel for the assessee are misconceived inasmuch as the exemption under Section 4-A of the Act, is subject to the provisions and conditions of the Act read together with the notification issued thereunder. Merely because the 'Note' had been appended to the Eligibility Certificate dated 22.01.2001, it did not create any law in favour of the assessee, de hors the statutory law, i.e. the principal legislation - the Act and the notification issued thereunder.
37. Thus, it has been vehemently asserted, the exemption granted under the aforesaid notifications was conditional i.e. except where the State Government may otherwise notify under Clause ३(त्र)/3(i)(d) of the 'New Notifications'. Insofar as, in the present case, the State Government did issue notification nos. 2008 and 2009, both dated 29.09.1999 and withdrew the benefit of exemption under the 'New Notifications' to New Units, engaged in the manufacture of the commodity 'cold drinks', the right to claim that exemption stood withdrawn.
38. Therefore, it has been submitted, the Divisional Level Committee, was a creature of the Statute vested with the jurisdiction to examine and grant Eligibility Certificates in accordance with law (i.e. the Act and the notification), to such units that fulfilled the conditions of that law. It could not have exceeded the jurisdiction by making any observation to grant exemption in excess of the legal entitlement, found existing on the date of issue of the Eligibility Certificate.
39. Then, it has been submitted, once the Tribunal remanded the proceedings for an order to be passed by the Divisional Level Committee, in any case, the entire issue was laid open before the Divisional Level Committee and it could not be said that the Divisional Level Committee could not examine the issue of eligibility to exemption on further Fixed Capital Investment made after the date of starting production.
SUBMISSIONS ON QUESTION NOS. 2 & 3:
40. With respect to question nos. 2 and 3, learned counsel for the assessee has submitted, reading the exemption notifications in entirety specifically Clause 3(a), it is clear that the promise made was composite and single being grant of exemption on the total Fixed Capital Investment (in excess of Rs.50 crores), made by assessee to set up a 'New Unit' - up to five years of its starting production. The fact that none of the authorities has doubted, to any extent, the total Fixed Capital Investment actually made by the assessee or the fact of the further Fixed Capital Investment made up to cut off date 18.02.2004, clearly, the assessee had acted upon the promise held out by the State and it cannot be prejudiced by the 'Withdrawal Notification', dated 29.09.1999. In this regard, reliance has been placed on Pournami Oil Mills Vs. State of Kerala & Anr., (1987) 65 STC 1 and Motilal Padampat Sugar Mills Co. Ltd. Vs. State of U.P. & Ors., (1979) 2 SCC 409.
41. By way of second limb to the aforesaid submission, it has been urged with vehemence, any other interpretation so as to allow the State to withdraw the benefit of exemption to a unit that had already acted upon the promise held out under the 'New Notifications' would, in any case, violate the bar created by the proviso to Section 4-A(6) of the Act. In this regard, the provision of Section 4-A(6) of the Act, is noted as below:
"4-A. Exemption from trade tax in certain cases.- (1) ... ... ...
(2) ... ... ...
(3) ... ... ...
(4) ... ... ...
(5) ... ... ...
(6) Where the State Government is of the opinion that the purpose for which the facility of exemption from or reduction in the rate of tax was granted under this section has been fulfilled or that the continuation of such facility is no longer in public interest or is against the public interest, it may, by notification, withdraw such facility granted to any industry, dealer or class of dealers;
Provided that no such facility shall be withdrawn with retrospective effect."
42. Thus, it has been submitted, that bar has to be read to restrain the State Government from depriving an assessee the benefit of any part of the exemption already granted. No bifurcation of the amount of exemption may be permissible so as to allow the State to deny exemption on the Fixed Capital Investment made after the date of issuance of the 'Withdrawal Notification'. The promise held out being one and the assessee having acted on the same, the proviso to section 4-A(6) of the Act would prevent the State from resiling from or withdrawing any part of the promise made as that would have a retrospective effect. Reliance was also placed on the decisions of the Supreme Court in Mahabir Vegetable Oils (P) Ltd. & Anr. Vs. State of Haryana & Ors., (2006) 3 SCC 620, MRF Ltd., Kottayam Vs. Assistant Commissioner (Assessment) Sales Tax & Ors., (2006) 8 SCC 702, Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector & Etio & Ors., (2007) 5 SCC 447, State of Bihar & Ors. Vs. Kalyanpur Cement Ltd., (2010) 3 SCC 274, Devi Multiplex & Anr. Vs. State of Gujarat & Ors. (supra), Manuelsons Hotels Pvt. Ltd. Vs. State of Kerala & Ors., (2016) 6 SCC 766 and State of Haryana & Ors. Vs. Mahabir Vegetable Oils Pvt. Ltd., (2011) 3 SCC 778 . Also, heavy reliance was also placed on the Division Bench decision of this Court in Vacmet India Ltd. Vs. State of U.P. & Ors. [Writ Petition (M/B) No. 27962 of 2016, decided on 22.03.2018].
43. Elaborating his submissions, Sri Rahul Agarwal submited, the test of retrospectivity of the notification dated 29.09.1999 must be considered in the background of homogeneous fact but not just reference to the particular facts of the assessee's case. In this regard, it has been tried to be illustrated as below:
"(a) Supposing a unit invests Rs. 40 crores till 29.09.1999 and starts commercial production.
(b) The parent notification dated 21.02.1997, prescribes a minimum threshold of Rs. 50 Crores before EC can be issued.
(c) Since no cut-off/freezing date is prescribed, it is open to the unit to make an application to the DLC for issuing the EC when it starts commercial production.
(d) If the reasoning of DLC/CTT is to be accepted, no EC can be issued at all to the unit. Any investment made by the unit after 29.09.1999 cannot attract the benefit. Because the parent notification 640 and 641 prescribed minimum investment criteria of Rs. 50 crore, an EC cannot be issued for Rs. 40 crores that had been invested till 29.09.1999.
(e) The unit had already invested Rs. 40 Crores; the unit is entitled to the benefit promised to it by the Government since it has altered its position in response to a promise extended to it by the Government, but would not be entitled to any benefit on account of the withdrawal/curtailment notification of 29.09.1999.
(f) Such an interpretation would make the notification dated 29.09.1999 retrospective, violate the proviso to Section 4A(6) as also the principle of promissory estopple which it expounds."
44. In view of the stand taken by the State that the promise held out was conditional in view of the Clause ३(त्र)/3(i)(d) of the 'New Notifications', it has been submitted, the State never made it known whether the withdrawal notification would apply to all units (including existing units) or to those that were set up subsequently. Therefore, the clear intention that otherwise exists made that notification applicable to units established subsequent to 29.9.1999. The withdrawal of the exemption notifications is also urged to be wholly unjust, inequitable and unfair.
45. Responding to the above, learned Standing Counsel would submit, the promise itself being conditional, and the State Government having acted to restrict the benefit of exemption only for the period prior the date of issuance of the 'Withdrawal Notification', there did not arise any question of retrospective enforcement of the 'Withdrawal Notification'. It has also been submitted that the promise made, was in any case, in two parts. First, the assessee was made entitled to claim exemption with respect to the initial Fixed Capital Investment made by it to establish a 'New Unit'. Second, further exemption was made available to such of those assessees who having been found entitled in the first place (upon making investment in excess of Rs.50 crores) made further investment during the next five years following the date of starting production. For that reason also, it has been submitted, no retrospective withdrawal of exemption was made in the present case, inasmuch as the State Government had not withdrawn the exemption on any part of the investment that may have been made by the assessee prior to the issuance of the 'Withdrawal Notification'.
46. Then, specifically as to plea of promissory estoppel, it has been submitted, in any case, the assessee had not discharged the burden to establish, it had acted on the promise held out in the 'New Notifications' qua the investment of Rs. 23,47,71,919/- made after 29.09.1999, the date of issuance of the 'Withdrawal Notification' or that the 'New Unit' was incomplete or could not function unless that further investment were to be first made.
DISCUSSION AND FINDINGS:
QUESTION NO. 1:
47. Having heard learned counsel for the parties and having gone through the record of the case, as to the first question of law, in Harbhajan Singh Vs. Karan Singh (supra), in proceedings under the Consolidation of Holdings Act, Harbhajan Singh filed two copies of an application under Section 42 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948, before the Director. While the Director of Consolidation of Holdings passed an order on 17.02.1958 on one copy of that application, directing it to be put up with previous papers, he passed another order on the second copy of that application on 03.04.1958, by which he repelled the challenge raised by Harbhajan Singh. Thereafter on 29.08.1958, the Director again passed an order on the first copy of the application by which he set aside the order of the Assistant Director. In such circumstances, a question had arisen whether the Director had any power to review his order dated 03.04.1958 by which he had earlier rejected the application filed by Harbhajan Singh. It was in that context of law and facts that the Supreme Court held - in absence of any express power of review, subsequent order dated 29.08.1958 passed by the Director was ultra vires and without jurisdiction.
48. In the present case, that ratio is inapplicable as would be elaborated below (in later paragraphs). The claim for exemption filed by the assessee with respect to the additional Fixed Capital Investment made by it, subsequent to the date of starting production being 19.02.1999, had not been made and in any case, had not been considered or decided by the Divisional Level Committee when it passed the original order and issued the Eligibility Certificate on 21.01.2001. In fact, that Eligibility Certificate had been issued upon consideration of the application made by the assessee for grant of exemption on the basis of Fixed Capital Investment of Rs. 96.53 crores only. It was later corrected and enhanced.
49. In Patel Narshi Thakershi & Ors. Vs. Shri Pradyumansinghji Arjunisinghji (supra), the ratio laid down is - the power of review is not inherent and that if the principal authority did not have the power to review its order, its delegate could never have reviewed such order either. In Haryana State Industrial Development Corporation Limited Vs. Mawasi & Ors.(supra), the ratio enunciated is again the same - the power of review is a creature of Statute and no Court or quasi judicial body or administrative authority can review its judgment and order or decision, unless legally empowered to do the same. As noted above, in view of the reasoning proposed to be adopted in the instant case, since there did not exist any prior order for grant of exemption to the assessee with respect to additional/further Fixed Capital Investment made by it post the date of starting production i.e. 19.02.1999, that ratio would also not be attracted.
50. As to the true nature of the order dated 22.01.2001 passed by the Divisional Level Committee, it must be first noted, in the context of the scheme of statutory exemption, first, there must exist a law granting exemption. Such law clearly existed in the present case under Section 4-A of the Act read with the 'New Notifications' as amended by notification nos. 3114 and 3115, both dated 30.09.1997. However, by mere existence of such law, no right got vested in or flowed to the assessee - to avail exemption from payment of tax. For an eligibility of exemption to arise, the assessee was required to fulfill certain substantive and also procedural pre-conditions, prescribed by law. In Mentha & Allied Products Ltd. & Anr. Vs. State of U.P. & Anr., (1996) 23 STR 245, in the context of a notification issued under Section 4-B of the Act granting concession/exemption from payment of tax on purchase of certain raw materials etc, a Division Bench of this Court held that in matters of taxation, exemption may not be claimed as a matter of right but that it may be claimed in accordance with law.
51. Therefore, it is accepted, upon issuance of the 'New Notifications', a right was created to claim exemption. However, that right was not an unconditional or absolute right vested with the assessee. The right created was, in the first place, subject to the assessee complying the immediate terms and conditions of Section 4-A of the Act read with exemption notifications (noted above). Thus, the assessee was required to make the necessary investments (in this case, in excess of Rs. 50 crores) to claim exemption and start production in a time bound manner. There were other conditions attached which when fulfilled, the assessee would be entitled to issuance of the Eligibility Certificate on which it may be granted the exemption, to the extent provided therein.
52. Then, as to procedure, the assessee was further required to apply for grant of Eligibility Certificate, to the Divisional Level Committee on the prescribed form in the prescribed manner. Such an application was to be considered by the Divisional Level Committee, both as to the correctness of facts stated therein; the eligibility to exemption flowing therefrom and; the extent of exemption granted, in light of the pre-existing law. Only thereafter the Eligibility Certificate could be granted with respect to the Fixed Capital Investment established or proven by the assessee, that would give rise to the exemption in accordance with law. Thus, neither the assessee could claim nor the Divisional Level Committee could itself grant any new or further right to the assessee contrary to the 'New Notifications' read with Section 4-A of the Act or a right not conferred by the Act or the notification.
53. The Divisional Level Committee remained a quasi judicial authority, conferred with the power to consider and, if found fit, grant/issue the Eligibility Certificate to such assessee/applicant who may have proved to have fulfilled the conditions of the 'New Notifications' and the Act. The Divisional Level Committee was not the delegate of the legislature who could grant or create an exemption.
54. Then, under the exemption contemplated in the 'New Notifications', there existed two possibilities or options to claim the exemption. In the first place, exemption contemplated was to such 'New Units' as may have been established upon investment of more than Rs. 50 crores within the stipulated period. The entire Fixed Capital Investment would be eligible to exemption subject to it being made before the date of starting production. By way of a possibility or option, it was provided, such an eligible assessee, would, thereafter be entitled to further investment with respect to the further Fixed Capital Investment that he may make in the 'New Unit' (already established by it), in the next five years from the date of starting production. That (second) exemption would become available only on the fulfillment of the conditions for grant of Eligibility Certificate with respect to the initial investment made in excess of Rs. 50 crores.
55. Thus, by way of example, even an assessee who may have visualized a single 'New Unit' against Fixed Capital Investment of Rs 100 crores to come into production in different phases, though he would start availing the exemption upon making investment of Rs.50 crores subject to the 'New Unit' starting production, however, he would remain bound to make further investment of Rs.50 crores, after commencement of production, over the next five years to avail the benefit of exemption on that further investment also.
56. By way of a second situation, another assessee may be visualised who may have planned to and who may have invested Rs.50 crores only in the 'New Unit'. Thereafter, he may choose to make further investment in that 'New Unit' of another Rs.50 crores within the next five years from the date of starting production. Even, in that case he would be entitled to exemption on the entire amount of Rs.100 crores.
57. However, since under Clause ३¼p½/3(f) of the 'New Notifications' read with section 4-A of the Act, actual exemption may be granted by the assessing authority upon the assessee producing the Eligibility Certificate and not otherwise, in either case, two or more Eligibility Certificates would have to be issued by the Divisional Level Committee. First, with respect to initial investment in excess of Rs. 50 crores made before starting production and the subsequent Eligibility Certificate/s with respect to further investments made during next five years from starting production. Also, unless the first Eligibility Certificate may come into existence with respect to production commenced before the cut-off date, upon making initial investment of Rs 50 crores, there would arise no occasion or situation to claim exemption on further investment made over period of next five years.
58. Coming to the facts of the present case, the assessee had itself disclosed, as stated in paragraph 7 of the affidavit in support of the stay application (in the present case), that it had filed only one application before the Divisional Level Committee claiming exemption on 26.04.1999, wherein it disclosed the total investment of Rs.96.53 crores that was subsequently amended to Rs.102.09 crores, made before starting production. To that extent, there is no dispute. Therefore on 24.06.1999, the assessee only applied for grant of exemption on its total Fixed Capital Investment of Rs.102.09 crores. Upon that Eligibility Certificate being issued the assessee first became entitled to claim further exemption with respect to further Fixed Capital Investment, made in the next five years from starting production.
59. Neither the assessee had made any investment in excess of that amount up to 19.02.1999 i.e. the date of starting the production nor it made any claim with respect to the same in its solitary application dated 26.04.1999. That claim having been made only with respect to the investment specified in the application, the Divisional Level Committee that was the quasi-judicial authority could only have examined that limited and definite claim. It did not have any jurisdiction or the material or the occasion to consider the eligibility of any other or further claim by the assessee. In fact, no claim having been made or contemplated by the assessee on that date, with respect to any Fixed Capital Investment made by it after 19.02.1999, the Divisional Level Committee had no jurisdiction or authority to pass any order with respect to the same. No other application having been filed by the assessee before the Divisional Level Committee, prior to 21.01.2001, for grant of any exemption with respect to further Fixed Capital Investment made after the date of starting production, any observation or Note that the Divisional Level Committee that may have made with respect to a claim, that had till then not even been made by the assessee, would be non est or without jurisdiction or a complete nullity or a declaration of no legal impact/consequence. It is only a mere reiteration or statement of the law as contained in the 'New Notifications' including Clause ३(त्र)/3(i)(d), and not adjudication of any claim for exemption allowed. Therefore, the Note so made has to be read as giving the right to the assessee to claim further exemption subject to the State Government having not withdrawn the same.
60. In fact, the Divisional Level Committee did not consider and it did not make any order to grant exemption to the assessee with respect to any investment made by it after 19.02.1999. A bare perusal of the Eligibility Certificate, a copy of which has been annexed to the present revision, reveals that the Divisional Level Committee, after noting the date of starting production and other details, granted exemption to the assessee only with respect to the Fixed Capital Investment of Rs. 80,15,55,309/- with reference to the application dated 26.04.1999. That figure was subsequently corrected by order dated 12.12.2003 to Rs.94,07,34,979/-. It was the figure of Fixed Capital Investment made prior to the date of starting production. It is also not the case of the assessee that any part of the investment that may have been made by it subsequent to 19.02.1999 had been considered or included in that figure, noted in that Eligibility Certificate.
61. It was also not the case of the assessee that it had made a single application for grant of exemption on the total investment made by it in setting up the 'New Unit' for the entire permissible period up to 18.02.2004. Again, it was also not the case of the assessee that it made a single composite investment or that the unit could not have come into existence except upon the investment being complete. Though, arguments to the contrary have been sought to be advanced by learned counsel for the assessee, however, there is no factual premise to support the same.
62. As noticed above, the assessee's own case even in the present revision was of having filed a single application for grant of exemption, on 26.04.1999, claiming exemption on Fixed Capital Investment of Rs.96.53 crores which was later corrected to Rs.102.09 crores. Therefore, before the date 21.01.2001, there never arose any satisfaction of the necessary pre-condition for grant of further exemption with respect to further Fixed Capital Investment expended in the next five years from starting production.
63. Therefore, the Note on which heavy reliance has been placed by learned counsel for the assessee to resist the subsequent order is really non est or of no legal consequence. It was a hollow declaration of the law no better than the recital of that law contained in the 'New Notifications' with the only improvement being to fix the cut-off date of the further Fixed Capital Investment. No rights were examined or adjudicated. Neither the quantum nor the nature of further Fixed Capital Investment made by the assessee was discussed nor determined as may give rise to an enforceable right of exemption. Therefore, plainly, the said Note appended to the Eligibility Certificate did not confer any right to the assessee to claim exemption of any specified amount. Therefore the Note was not an order in the eyes of law. For it to be an order, the Note must have contained a determination of the specified claim for exemption.
64. Once the Note is found to be a nullity and, in any case, not an order, the principle being invoked by learned counsel for the assessee that the same could not have been reviewed, is found to be wholly misconceived. There was no pre-existing order granting exemption to the assessee with respect to further Fixed Capital Investment made by it, post the date of starting production.
65. Therefore, the subsequent order dated 21.01.2011 was not an order passed in exercise of review jurisdiction but was an independent order passed on the subsequent application. The further submissions advanced by learned counsel for the assessee that the issue adjudicated by the Divisional Level Committee by it's order dated 22.01.2011 was debatable, does not arise for any separate or further consideration as upon the proper application being filed, the Divisional Level Committee had original jurisdiction to decide the eligibility to exemption claimed by the assessee on further Fixed Capital Investment made by it within five years from starting production.
66. Insofar as it has also been submitted in this context, that the earlier order of the Trade Tax Tribunal dated 21.08.2009 was an order of limited remand and that the Joint Commissioner (in exercise of its power under Section 10-B of the Act), the Tribunal (in appeal) and this Court (in revision) had not questioned the quantification of further exemption made by the Assessing Officer in his order dated 30.06.2004, is equally misconceived. Once it is accepted by the assessee, and rightly so, that the order dated 30.06.2004 passed by the Assessing Officer was without jurisdiction as the Assessing Officer had no authority to grant the exemption, and under Clause ३(p)/3(f) of the 'New Notifications', exemption can be granted only against the Eligibility Certificate granted by the Divisional Level Committee, any observations as to eligibility or quantification of the exemption made by the Assessing Officer and on which certain observations may have been made by the revisional authority or the Tribunal or even this Court, would confer no rights in favour of the assessee.
67. Also, even otherwise, in the proper proceedings for grant of exemption by the Divisional Level Committee, the Assessing Officer is one of the functionaries who is required to submit his report. Therefore, the observations made by that authority in the order passed by him (without jurisdiction), cannot be placed on a higher pedestal, in the proceedings before the Divisional Level Committee. So also, the observations made by the Commissioner or the Tribunal or this Court cannot be read to have conferred any higher status on the same.
QUESTION NOS. 2 &3:
68. Coming to question nos. 2 and 3, while there can be no dispute to the principle of promissory estoppel being available to the assessee in the context of tax exemption notifications and that principle is far too well settled to be doubted or disputed, it remains to be seen whether there was a breach of promise on part of the State as may have prejudiced the assessee.
69. Besides the specific conditions imposed in the 'New Notifications' with respect to the quantum of investment; period of investment; place where the 'New Unit' was to be set up, and other conditions, a perusal of the Hindi publications of the 'New Notifications' makes plain that an additional condition was stipulated in the those notifications under clause ३(त्र). Under the Hindi notification, clause (3) is in ten parts, which have been numbered ¼d½, ¼[k½, ¼x½, ¼घ½, ¼M.½, ¼p½, ¼N½, ¼t½, ¼>½ aand ¼rz½. Clearly, each of the sub-clauses of clause (3) of the notification contains an independent condition. Also, sub-clause ¼>½ of clause (3) requires the assessee to submit a certificate at the end of each assessment year. By way of further stipulation, the said sub-clause provides that the certificate must contain information specified therein. These have again been numbered as ¼d½, ¼[k½, ¼x½. Three conditions have been enumerated. Thereafter, clause (त्र) appears. The alphabet त्र is the tenth alphabet while the alphabet ¼x½ is the third. Therefore, it clearly appears that sub-clause (त्र) is a separate sub-clause of clause (3) which has been erroneously published in a manner suggestive of it being the fourth condition to be fulfilled by the assessee while issuing the certificate under sub-clause ¼>½.
70. Even otherwise, under sub-clause ¼>½, the certificate is required to contain information being quantum of additional Fixed Capital Investment made during the assessment year; cumulative additional Fixed Capital Investment made from 01.12.1994 upto the end of the assessment year and an amount of tax exemption already availed on or after 01.12.1994, upto the close of the assessment year. Plainly, all these conditions refer to special facts in the knowledge of the assessee. Therefore, the same have been required to be disclosed by the assessee for the purpose of availing exemption. However, the stipulation contemplated under sub-clause (त्र) is not such a fact.
71. Clause (त्र)only states that the exemption granted under the notification in question would not be available to such units as may be specified by the State Government. Clearly, by its very nature, the same is a stipulation of law, created by the State Government in the nature of a condition for grant of exemption. It is not a waiver of any right sought by the State Government, from the assessee. By introducing that stipulation/condition, the State Government, at the very beginning, made it known to all that the exemption being granted under the 'New Notifications' may not be available to such Units as may be notified by it, subsequently.
72. The fact that in the English publication of the notification, the aforesaid sub-clause (त्र) appears as sub-clause (d) of sub-clause (i) of Clause 3 and has been numbered consecutively, in alphabetical order, after condition nos. (a), (b) and (c) with respect to the certificate required to be furnished by the assessee would make no difference inasmuch, a plain reading of the two publications of the same notification, one in Hindi and the other in English and in the context of the subject matter of sub-clause ३(त्र)/3(i)(d), the same is only a stipulation of law or a condition of grant of exemption, dependent on action by the State Government and not a stipulation required to be met by the assessee while issuing the certificate.
73. In this regard, as discussed above, under Clause ३(त्र)/3(i)(d), the right to claim exemption was made conditional by the State Government, from the very beginning that is on the date of issuance of the 'New Notifications' itself. It is the assesee's own case that it had acted on the aforesaid 'New Notifications'. Therefore, it is necessarily admitted to the assessee that it acted on the conditional promise held out by the State Government whereunder the promise contained in the main part of the 'New Notifications' was made subject to it being withdrawn by the State Government with respect to such industries as the State Government may notify.
74. Then, as has again been noted above, it was the assessee's own case that in the first instance, it only claimed to have set up its 'New Unit' against an investment of Rs.96.53 crores. It was corrected to Rs.102.09 crores. It made the application for grant of exemption (against that investment alone), on 26.04.1999. It was granted exemption against the Fixed Capital Investment of Rs. 94,07,34,979/-, that investment having been made upto the date 19.02.1999 and not later.
75. As discussed above, the case of the present assessee fell in the second category of investments (noted above), whereunder the assessee made an initial investment in excess of Rs.50 crores on the promise held out by the State Government and started its production on 19.02.1999. On that date the promise of exemption had not been withdrawn. The State has admittedly honoured it's promise and granted the exemption to the assessee on that investment. Even more, the State Government has honoured its promise even with respect to further investment made by the assessee during the period 19.02.1999 to 28.09.1999 i.e. up to the date prior to withdrawal of the 'New Notifications', with respect to 'New Units' engaged in manufacture of the commodity 'cold drinks'.
76. The State Government had not only reserved to itself the power to withdraw the 'New Notifications' qua such industries as it may notify, but, as a fact, it did withdraw those notifications with respect to 'New Units' engaged in manufacture of cold drinks, with effect from 29.09.1999.
77. For the assessee to succeed on the plea of promissory estoppel, the burden lay on it to establish that it had altered its position to its detriment by acting on the promise held out by the State Government under the 'New Notifications', qua the further Fixed Capital Investments made by it subsequent to its date of commencing production. Though, the assessee was successful in establishing, it had altered its position and thus made investment in excess of Rs. 94,07,34,979/- to set up the 'New Unit' and it was further successful in establishing it made further investment of Rs. 27,40,17,692/- up to 28.8.1999, no part of those investments has been excluded while granting exemption to the assessee. As to the further investment that the assessee made after issuance of the 'Withdrawal Notifications' being Rs. 23,47,71,919/-, there is nothing on record to establish that such investment was inseparably linked to the investment either of Rs. 94,07,34,979/- or Rs. 27,40,17,692/- (for which Eligibility Certificate has already been granted) or that the assessee stood committed to make that investment, on the date of issuance of the 'Withdrawal Notification'.
78. Plainly, it was for the assessee to establish that it got committed to make an entire investment including the investment of Rs. 23,47,71,919/-(made after 29.09.1999), as it had acted on the promise held out by the State Government. In the first place, the promise itself was conditional being subject to withdrawal of the exemption notification by virtue of Clause ३(त्र)/3(i)(d) of the new notifications. Second, it was the assessee's own case that it had only made an investment of Rs. 102.09 crores on which it claimed exemption under the 'New Notifications'. That being the admitted case of the assessee, a heavy burden lay on the assessee to thereafter establish that the further investment made by it was inseparably linked to the investment made up to 19.02.1999. No documentary evidence whatsoever was adduced by the assessee at any stage of the proceedings to establish such fact. Even oral evidence to that effect is lacking. Therefore, the Divisional Level Committee and the Tribunal have not erred in not allowing the assessee any exemption on the amount of Rs. 23,47,71,919/- being the further Fixed Capital Investment made by the assessee after 28.09.1999. In short, in the context of investment of Rs. 23,47,71,919/-, the assessee had failed to establish that it had altered its position to its prejudice by acting on the promise held out by the State Government.
79. The principle of promissory estoppel being a rule of evidence, it can never override a statutory intervention. Insofar as statutory intervention had been made effective prospectively and not retrospectively by means of a delegated legislation, there does not survive any further scope for deliberation on that count.
80. Insofar as the judgment in the case of Vacmet India Ltd. Vs. State of U.P. & Anr. (supra) is concerned, the Court first extracted the principle of promissory estoppel as explained in State of Bihar & Ors. Vs. Kalyanpur Cement Ltd., (2010) 3 SCC 274. It referred to paragraph no. 35 of that judgment which reads as below:
35. In our opinion, the aforesaid statement of law covers the submissions of Dr. Dhavan and Mr Dwivedi that in order to invoke the aforesaid doctrine, it must be established that:
(a) a party must make an unequivocal promise or representation by word or conduct to the other party;
(b) the representation was intended to create legal relations or affect the legal relationship, to arise in the future;
(c) a clear foundation has to be laid in the petition, with supporting documents;
(d) it has to be shown that the party invoking the doctrine has altered its position relying on the promise;
(e) it is possible for the Government to resile from its promise when public interest would be prejudiced if the Government were required to carry out the promise;
(f) the Court will not apply the doctrine in abstract."
81. In the facts of the present case, while condition nos. (a) and (b) extracted above are clearly satisfied against the State, however, condition no. (c) is found to be lacking, inasmuch as there are no documentary or other evidence shown to the Court to establish that the assessee had acted on the promise held out by the State Government, viz-a-viz the further Fixed Capital Investment of Rs. 23,47,71,919/-. That investment has neither been shown to have been committed at the initial stage nor at the stage of obtaining the Eligibility Certificate dated 21.01.2001 nor it has been shown to be inseparably linked to or to be a composite part of the total investment. In absence of such plea or evidence, the foundation laid by the assessee on the principle of promissory estoppel is very weak and shaky as it is based on mere general assertions and assumptions. Then, as to Clause ३(त्र)/3(i)(d), again in view of the above, the assessee failed to establish that it had altered its position to its prejudice with respect to further Fixed Capital Investment of Rs. 23,47,71,919/- before issuance of the 'Withdrawal Notification'. It was for the assessee to plead the facts and lead the evidence to establish the link between the promise made and the prejudice caused. Since the assessee failed to discharge that burden, the plea of promissory estoppel could not be successfully set up by it.
82. Then as to clause (e) in view of specific clause ३(त्र)/3(i)(d), in the instance case, the State Government had reserved to itself the right to withdraw the exemption notification subject to notification being issued in that regard. That condition being fulfilled, no further obligation may be pressed against the State Government in such fact. Also, no specific challenge was ever laid by the assessee to the issuance of the 'Withdrawal Notification' dated 29.09.1999. Consequently, it appears that the challenge raised in the present proceedings was more abstract being based on general principles and not specific.
83. Then, Vacmet India Ltd. Vs. State of U.P. & Anr. (supra) was a case where the industry had been set up pursuant to the original Government Order dated 01.06.2006. The withdrawal of the benefit was made with respect to those units also by much subsequent notification dated 18.11.2011. In the first place, the promise found to have been made in that case was not conditional. Then, the subsequent withdrawal of the benefit necessarily included in it the withdrawal of the benefit with respect to the investment originally made that had also resulted in exemption being granted earlier. In the instant case, no part of the exemption that became available to the assessee under the Eligibility Certificate dated 21.01.2001, has been withdrawn. Not only that, the assessee had been allowed further exemption on additional/further Fixed Capital Investment made by it till the issuance of the withdrawal notification dated 29.09.1999. Therefore, the similarity sought to be drawn by learned counsel for the assessee between the facts of the present case that in the case of Vacmet India Ltd. Vs. State of U.P. & Anr. (supra), does not exist.
84. Examined in this light, in view of the conditional promise held out that the clear stipulation under clause३(त्र)/3(i)(d) whereby the State Government retained the power to withdraw the exemption; the fact that the State Government actually withdrew the exemption in exercise of the same and; the fact that the assessee failed to discharge the burden to establish it had altered its position to its prejudice in making the further Fixed Capital Investment of Rs. 23,47,71,919/- crores and in complete absence of any documentary or other evidence in support of that claim by the assessee, the decisions that have been cited by learned counsel for the assessee to invoke the principle of promissory estoppel in the cases of Pournami Oil Mills Vs. State of Kerala & Anr. (supra), Motilal Padampat Sugar Mills Co. Ltd. Vs. State of U.P. & Ors. (supra), Mahabir Vegetable Oils (P) Ltd. & Anr. Vs. State of Haryana & Ors. (supra), MRF Ltd., Kottayam Vs. Assistant Commissioner (Assessment) Sales Tax & Ors. (supra), Southern Petrochemical Industries Co. Ltd. Vs. Electricity Inspector & Etio & Ors. (supra), State of Bihar & Ors. Vs. Kalyanpur Cement Ltd. (supra), Devi Multiplex & Anr. Vs. State of Gujarat & Ors. (supra), Manuelsons Hotels Pvt. Ltd. Vs. State of Kerala & Ors. (supra) and State of Haryana & Ors. Vs. Mahabir Vegetable Oils Pvt. Ltd. (supra) are wholly distinguishable in view of the distinction of facts noted above.
85. As to the example sought to be relied by learned counsel for the assessee as part of his submissions, suffice it to state that, in the present case, the assessee has not been deprived of exemption because he could not complete his investment of Rs. 50 crores before the date of withdrawal. That case may stand on a completely different footing. Insofar as the assessee had been granted exemption on his investment made in excess of Rs. 50 crores, the example taken by learned counsel for the assessee, is wholly irrelevant.
86. In view of the fact that the withdrawal of the promise held out is by way of an act of delegated legislation and not by way of administrative or quasi-judicial action, there never arose any need or requirement to first issue a show cause notice to the assessee to make known the intention to withdraw the existing notification. No other obligation was cast on the State Government in that regard. Being a piece of delegated legislation, it was only required to satisfy the test of legality and not of natural justice or to provide for explanations and resolutions in all contingencies. By withdrawing the exemption notification, the State Government amended the law. It's consequences are for the authorities and the Tribunal as also for this Court to adjudicate in case of disputes.
CONCLUSIONS:
87. In view of the above, question no. 1 is answered thus : while the Divisional Level Committee does not have the power of review, yet, in the facts and circumstances of the present case, there did not pre-exist any order of the Divisional Level Committee to grant exemption to the assessee for the period after the date of its starting production. Therefore, the subsequent order dated 22.01.2011, depriving the assessee of exemption from the date of withdrawal of the exemption notification was not an order passed upon review of the earlier Eligibility Certificate dated 21.01.2001.
88. Insofar as question nos. 2 and 3, they are answered thus : The promise held out by the State Government being conditional and the State Government having reserved to itself a power to withdraw the exemption [under clause ३(त्र)/3(i)(d)] of the relevant exemption notification, the action of prospective withdrawal of exemption with effect from 29.09.1999 by a valid delegated legislation was not barred on the principle of promissory estoppel as the assessee failed to establish how it altered it's position (to it's prejudice), on such conditional promise viz-a-viz the further Fixed Capital Investment made subsequent to the date 28.09.1999.
89. Thus, the present revision is dismissed. No order as to costs.
March 15, 2019 AHA/Abhilash/Prakhar/Shubham