M/S The West Coast Paper Mills Limited vs The Government Of Karnataka on 15 July, 2010

[Cites 11, Cited by 1]

Karnataka High Court

M/S The West Coast Paper Mills Limited vs The Government Of Karnataka on 15 July, 2010

Bench: Anand Byrareddy

 

IN THE HIGH COURT 01: KARNATAKA AT %
BANGALORE F=

DATED11nsTHE1€"DAY(»uULY,mnQ f g
BEFORE: % i%% VnM
THEH0Nwx£nm@JuSmcEAﬁANpByRAREppﬁ f
\MRrrPETrn(»¢No,3u%Bk3F2009(T4E8) 5'
BETWHBBV: f x ' " a'"" 
M/s The West Coast P£}i5B.[ 
Represented by its '  _   iv   
Deputy General Mzmagel' (I;i;;is(jr1),:  " 

S1'i.D.K. P1'abha_£<;a1f_, V   . 
Aged about       

Cc)rpu_tate Off.ifc§:,  _  _

"C hz111d_1'a}:' i:f;1n"}  .Fio()'i*;. '  .. '
NoJ(vA,KauuﬁmJaxut,*-*
Bangmon5a5e0o01;_'¢$ ." PETTTHDNER

  {."Sh5l_i1 R=. \./. P1"L:iSV:i(i';')3\(iv()cate:)

"ﬁNDf"'

1. Th.e"C;<>ve1'1'1me11£ of K211'z1utaE<a

 Rcp:'esen't€d by its Chief Secretary.
 'vs/'iLdhfa.11a Soudha,
2:-:1.gz11(_):'e W» 560 001 .

6



2. The Department 0fFi11anc.e,
Represeiited by its Prineipzll Secretary,
Vidhana Soudha.

Bzmgalore -- 560 (301.

3. The Department of I11dust1'ies &
Commercse,   
Government of Kai"m1tz1k;.1,   
Represented by its Joint Directo1.'(}D:)«,V  A
49, Khanija Bhavan,  - 2
Race C0ui'se. Road,

Bangalore -- 560 001.

4». The C()ini11issi()ne:' 0 E"--CL'.) an i'z1ei*Lf'i;«1[4Tiirzesi,-_
V.T.K. Buiiding, T V   -  *
Kailidzisa Road.  V   _ _ _
G'c1i1di}il'1£ig£iI',        
Bangai<)1*e--_.5--6f) " _:   " V'

5. The V D'épm.;;--i: C0 i*}fiiii9_S'i'e1 r (sf Ct)imnei'ciai

Taxes,*.Tra.ii'siteioit,'f..Z *   ..
Dharwz1'd.u * % '  "    RESPONDENTS

(By._§«iSil1ri. K.E\"/L..i_ViSVliivziyogiswamy, High Court Government

skit-l:=\--E

  This Peiition is filed under Articles 226 and 227 of

$16.uC()l:ISfiI.ﬁ£i()l1 of India, praying to quash the order bearing

V'  I204 CSL 2008 dated I4.(}9.2()09 passed by the 2"
 I'eS;:§(;>nde.:1I Vide A;nnexu1'e--M and etc.,

3



This petition 11'.-wing been heard and reserved on
E8.(3.2(}l() and coming on for pmnouncement of m'de:'s this day,
the Court deiivered the E1)1!(iwiiig:-- " 

ORDER

Heai'd the learned Counsel .'f('J]"».T_h'€ §'_)€tivt4i!(§iI'i€31' the V learned Government AciV()C21[€t

2. The facts hrie't'l_v The peti_ti.(mer V 8 "thunder the Compzmies Aett'E95(n under the i(hereinafte1' referred to ' the KST tote' Centrai Sales Tax. Act, 1956 (he.1_?eiiunafte1' ' the CST Act' for brevity) and the Added Tax Act, 2003 (hereirtafter referred to H tot.' brevity).

" Tiie Government of Karnataka had extended a package of "IE'1'.ff§AE"1[i\'('3S and e(')nce.s.<i0ns to the petitioner vide Order dated ~~.----:17.8.1994 and incentives' in the form of defeimeitt of the 3 payment of taii under the KS'? Act and the CST Act was extended to the petitioner f.'1'0m the 3-e'ears 1994 to 2()()V5";.,The petitioner was entitied to avail of sales tax def'et'~t~*n.e:at. project of expansion, :node1'ni7,ati0n and dive.1's.ift'c;1ti'en of the-.. petitioner'-s plant »» which were p1'(3_g1'z1,1-nnied'zundet? What termed as Phase--E. and Phase g,Ei,.._spread._0Vue1' the' j:ie:t.iQe! .i.9_94--.V ; 2(')()6. The base tax Iiabihty fixe_g1 W'»2-1_s 'in a stz':11.0fRs,2i.44 crere per annum.

The pet.it.£.nne:' htj_)Awev'e';:. e41i'v,i;~;;1ged"«a'v further expansion and 1110d'e;'nj.Z.-ftti(in1::_3e.f' 't-heir existing: unit and therefore, had app1'()aC.he:d,_ the VSizzle'Goyettnment for the grant of fresh incentives and'e0nces:';ic5ns. The Government, by its ordetf, €26.41-.;'()(')()'V«gfanted the -request. The said further ex_pai11:;..ifn-1 xiv':-is~.itji.entit'ied by the petitioner as Phase "F11. The '53t)\f€I'l1I11€:3{ of Karnataka had, pursuant to the order ti:.:t.e_i '2(§.4.2t)(t)(), issued a notificatitan dated 5.6.2.()()0, hhhekbtendittg the deferment of the taxes payable under the KST 6 Act, in respect of the goods inzintti'actui'ed and sold by the petitioner in respect of Phase--iII of the petitioner's planit"»i'()i' a period of tweive. years from 2002 to 2()i4 st1bj_e;e1t"«t.Qv.eert;1ii*:. restrictions and conditions eritirnerated [h8i"€i.P.;""Ai§d ()'i1::§«.i.i*nii__'c'ii~~«.. terms, by another n.otifieation also <i;1tet:j}".u6.2U()O.extei':de_d"ithe deferment of tax payable tli3(iet"'t.lj€ CST 'Act in of the,"

goods inanufactui'ed z=m__d sold tbyhtlie'=petitiorrer,_in_,respect of Phase -HI for .21 simiiar pe.1'iod of ftxit/ivei_\V/'e.tyf:V211=s_ as above. The Gov--ei'n..n1eii;t' li(')v;:ever~,..i"_--ehanged its investment policie.:s;'i'and_d5iscoii;:inLted'--tl1e irrcerztives and concessions with ef1"eet7fi'oifii' !t.vf:}.Z€}€)();_ "Howe.'*ver, Saies Tax incentives were eontinu.edi"*.i_ni .re§p_eCtg owfﬁeiwhat were termed "pipe~iine pi'()J_i.eet"s'u'. of Wh._i_el1 the petitioner was one. subject to the $t>iiditiffri that such projects were compieted and commerci_ai pl'(?i_L"iI,'Ii(,'iivtiiifﬁ(_).iifivli'it3i1CC(i before i.i.2()()2. This was extended on the__repre.:;;.en"t"-ittiori of the industrial units c:on.eerned, by an order dated ~.2i4;3.i2{)04, the Government extended the period upto ff 3tf)i.it';«-...20{}4, insofar as the petitioner concerned. 8 By at Ce1'tii'icz1£e dated 2(}.5.2('}()4, the Departm__ent of Endu.~;tries and Commerce, endorsed that the petit«ijt'me_4'i=_'had invested 123,223.73 Cmre on fixed assets in 1'€Sp6t':i:t:'()fi V' of the ;_Ji'0_ject and that the petiti():1ei"W:1s' «e.iigii&bIe.ft5i'= i('i53:f€i~'Ali"11€i'iii"i£{ on pay1'i'ie11t of sales tax, both under t'h__ei"K_ST and Act, on the side of goods' l.]121I1i['i'.f§3.iCtLl1'€d by__it~f(;)1' period of tweive years from thevciate of' c()1:m'11.e:tc'eii1ent of eommerciai production, from 26.t3.2.()Q?,"to_tiieie§<te--'ittiii'7i._8{}% of the vaiue of t'ixedt=issets_ .Witi:1._t_he. LlSit€:1'vi--1]g*.111'-Of' i'e.f'v,m"is to bring about at uniform sy.stem__ot7_tz1x;itit)n-..kI;:)Wn Crowds and Services Tax by the year 2()1i(}., the t'a.te"~()'t'_t'ét--x_";5t1y21bie under the CST Act was sought to be":'edu:.:.e'd in ofder' to bring ebotit uniformity and it wzis thiﬁs'ebj'ect that tti1ieiT:1xatit)n Laws (Amendment) Act, 2007, £()v«.2'1m iei1£.4i:"'-;'.ue1{Iii-til~p!'t')\-'iSi<I')1}:s of the CST Act was intrtziduced. By virtue ().ff't'tit:ti;' with effect tifoln 1.4.2()(}7, in respect of the sake of g0()ds":fetei'1"eci to in Sub--secti0n (3) of Section 8 of the CST » Aet",«..by £1. dﬁiéliff-1' E10 {:1 1'egistered dealer in the COLIFSB of iI1E{;'!.'--Stt1[€ 5 trade, the rate of tax was fixed at 3 'Z2. It also substittited Section 8 ._ wl1ei'eb_\/ sazhsectltin (l) thereof would not apply to any sale in t.he course of i11te1~--state trade unless t:hx€:'v._t.leéile1' selling the gt)0d._s' furnishes :1 declaration by the i'e'gf_{i'Ste1'e.tiV'dea»lVei' to whom the gt)ot'ls are .~;t.)ltE. And ut'ide"i*'$u«h;s--ect.§t>:i(2) theretit', tax payable by :1 dealer on his. tu:'h0\}e1*"i?€latii1g,."_t0"the s'2~tle'a0l"--.. goods in the ct)urse of i11tei'--statee».ti'ade, ntit~.fztl'lei-ﬁg Wlthill sub- section (1) shall be at [llLj§..i";.|U"3 zippiliteabie._t't;:..the sale or purchase- of such goods inside thc...::1t::513--tjt3pi'i2tte "S't£1te'~l.'tin'éler the sales tax law t>fthatst_;1éf_e. Q' It-_ is 4_ct5nteVntle.d't»th}étt..nwi.th the above amendment, if 21 dealer we1'e"~.t0' eVffeet'-._tlie'l interwstate sale of goods of the de;~;.c:.:':ip;il:.)n ~rel'e_:*i'ed"'t0"above. the rate of tax was at the rate of 1.4.2007. Whereas the rate of tax prior to tl12It..__date.~vJ;té~*tit 4%. And ztccording to the reeommehdatitms of the E1ii'px§we1'ed Committee on Value Added Tax, the rate of ' pztyztble under the CST Act would be ;3r0gres:sive'ly reduced V' l% every yea-tr 1'e.s;ult'ing in :1 Nil rzlte of tax as at l.4.20l(). It is comended than under Sub-clause (iv) of Clause (D of {he Gm-'er11ment Order dated 26.4.2()0(), referred to hereinabove. reads ;;1.~; foimws:

" (iv) For I116 Period 2002. to 2.006 V base. tax liabiiity to be :n;_1iAz1t;_1_ine.d_«b}?

unit wil} c(m{inue {0 be R,$.4.gf14 e1'd1'e{ﬁner 4' annum . H.owever_'_, f1'($'m_"'Septem%éee': 2 2006 , when the I ai':'1<;:1 T"i~! phase expires _. Ehe bziase -."L_i':1xV"-»e,_shaI1 automaticali '£0 .'Rds".8.'8--4_ crore or Rs,4_.44 c1"0s--e--..;)]:t1s 'a.vee1'age'vta'X' [fiability **** yeiéaisisv.;:>1'£.d1=--_t0 Se';3€Ve1'f1be1' 2006 over

-.and "aVri'i§;we'e<:1'()1'e ,whichever is ' gh'ighe1''''--' V_And t'f1v:»xtVV":;y_i3}:)p'iica'1'i0n of Ehe above f0:'1_nu}a, the base "=max"~1iébi.i"i.ty;"pL:1'sL1z1rif"t'(.i the e<)1n1T1iSsi0ning of Phase M-III of the V' "g3:j"eje}ct, worE<r;< out to '.1 sum of R5,] L21. cmre per ann'u.n1.,._"Sin'ce this is higher than Rs.8.84 cmre per annum dd dasﬁper the Gm/-'ernme11t Order dated 26.4.20()0, the 10 petitioner is iiabie to discharge. the base tax liabiiity at the higher figure of R.'\'.i1.2E crore, or Rs 93.46 lakh pe1*ei._iiioV:ath instead of Rs."/'3.68 iakh per month, if the base _ Rs.8.84 crore in accordance with theMGoVemmen--t.:Ortier"dated" 26.4.2{)(}O. it is contended that prior ''to__ i.4.'200'7..theiiijeitivtioiier hatiﬂ' effected sales of paper and p'¢'i})ff)_lT__ijV:)A.('?.E.l_I'd:'$_V in the tioutjse of inter- state trade to the extent tiifi 62°}2:._o:t'A.vits sates against its sale eligibie tot;.::>t'i Uljdeﬁjiithé F?ttrthe1', the petitioner has effeete»-d., _i.1i'I;x*..f')}'-§ti:E31't".--', to tE.":'e~ve§{tent of 60% to 7i % of its total series if(_")!.'i[h6i&}1l1'€5C€"C.C.ii'ﬁgig1SS6SS1H€ﬂt years. In View of the fact that Iv"Zi1E8_tj'vf it':_1xi'*payabie under the KST Act stood rediuced.,"et(3 witheiffect from 1.6.2008, the total tax iiabiiity itttegii'opetiiteitviitter under the CST Act was reduced pl'O'§3._()1'tiﬁ)failftciy with each succeeding year . In the resuit, the H pe.*iti(mVe--1'. was liable to pay a higher amount towards the base "t:aX'i'ii;1bi]ity than the amotmts received from collection of sales 2 ""t"t1x under the CST Act. To wit, with the proposed reduction in 6» 11 the. rate of tax under the CST Act to a nil rate with effect from l.4.2()l(.), the petitioner would not be able to retain attiyailltattiit by way of taxes under the CST Act. In the 1'esul«t:_.._tl2ei'e no incentive, in the form of taxes collected by thepe~t,i.ti'oAne1". objective under the Governmeiit. Oi:t1c1' bC14£l'i€dl4'26i.'4.2090 illusory. I'1'0nical.ly, thot1»gh.__ the7._state ;gowjje.tfntne_i1t compensated for the loss of i'eve'n;1e--,stiffe'1*<:d.l_hy itfiunder the CST Act, the incentive "whi(:Ah7_prQt11[5teﬁl- tlhc.>>pet.iti()ne1' to make huge investinents; is tal.<,e'h"awlay."

,F"acer.i:iwitlttihe. £tb(:)V'€l sit'ua»tLo'h, a request was made vide letter tiated_ 23.(7.).-';l.)t)7 'i'[t)_ifi"--1§3 'D€pa1"[1T16f}t of Finance, to modify the VGovei'n'tnent.Qtdiezjsdated 26.4.2()()(l, by reducing the base tax... l'ia%bi.lit3{.eonseL§'u'ent upon the reduction in the rate of tax »--t_iln't;le;?__vtll:e CST Act. A request was also made t.o grant an--~..i_nte_rest_free sales tax loan to the extent of reduction in so fat' as liability under the CST Act as regards the expanded capacity '1_o'f'tthe petitioner's unit. The petitioner had also sought for a "'f)ei'st)z)2tl hearing before an)grdet was made. However, the 'I2 De;3ai"tment of Finance had, without affmding; a hearing to the petitioner, informed the C0l'ﬂl'ﬂiSSiOl1€l' of C<)inmercia1*'T;-txes that the request of the petitioner was rejected ~ in the..fol:I_(;-x$;$~iii'g. E€1'I1]S I "tax i'ef'omis have l:§3dUC€d:. the . taX'V liability and lhei:efo1'e 7con1ptirisoii'_;hi.'A' quantum of etince5::;.tions in pre aii:1d_";post reform era is. not aptpi-'o_:p:7i2ite..'_' .

This was conveyed to the petitionéi:"on_'I'7g'l.,2008. in the ;~a1boy»e' cir_cui'1'i3t;anee.S',Ce.__w}*it petition in WP 3881/"2{_)()8_ V2315 'E'i,'e.t§"isieiioreithis eoui't. which was allowed at the initial stagze iitseit",_t"£;aA' i.3.2{)O8, with 21 direction to the Fin.:.hce'Dep21t'tment toi'ect>h.$sider the matter. Nineteen months ' ltitet', by i2ti.1"<:1i'aC§ei' dated l4.9.?.()O9, the Finance Department has i-eieictted the'j_i'eqtiest of the petitioner. It is in this background that the .'f3rt°,titi()l1Ci' is before this court.

3. The 1C-211'f1€d counsel for the petitioner, while .. __reitei'ating the abtwc sequence. gfgevents, would contend that 14 the rate of tax under the CST Act, the incentive avaitelbtcto the pt":{iEi()ﬂﬁ3l' curtailed.

The ice-11'nc3d coiinsei for the petitioner "Aie'Iie.5:'i..:(ii:1iii following decisions to c.<_mEend LInde1':¥"' A ._ (ca) Um'(m of India as'. iS'1:/63125;. * Ir;rcw/1(z}fj_0m':I (Zf'3CIIV"'l!\.[L!VI(1/1 C'e;7z.v , and C-li'l.()I/'l.€i", 1 .')89(39) EL-T (I3) Sr! Neelczkcznrem M-4'c'1':';: I ~ . ,SraIe amatczka, 98 STC 305 ii i ' (C) J.Sr1'r'czng(1:_fz iliiifxrii/?.f?I':'f.'. v.\*i.L 5'2zle?ii"' Tt1;r§'O--,{j.'}l'€2', I0 5' TC 25 7, (cl) Bc1jajiT5f12fi[2:) Lif%i.'éIce(i..1b.*.§*;. C()rrzm.:'.s';i'1'(2n(Jr of Income Tax, 1 96 1TR:_1 V i i ' ( cc') C nmmiis'.:'.1ior::?i' sjgfA(}ir.'11-#11:'rcrial Tu..m\' 12.5". 1n.dLz.s'Ir1'c:l C 0511 ,,I;;;%az%'m~,i_;rz.i-e.s~;i' ;:.z'4i STC 365, ' "PQI2.gf/3l':flL]i.?fi;éfL;'[. C'czrb0m?c: Gas Private Lirnited vs. Srare of ._*5Amm:é2i~i%i.1érgé;ia;»I;, /41 57c 16}, (3) .51'./{Ié?i,.,".f ' jlvar/c/Iciml vs. Tam Cmnnzii1...s' Lz'm1'Ied, 145 STC ~ , i3J40,"" .

(11)i,4A.s'1;iSIc1r'zI Cwm--nIIs'.s'1'm1er ('C[cu'm.s' TribLm.(2l} LTU vs'. Amara Ragja BaI2'er'fc).\' 1J1m'red, ('2()O.9)24 VST536. 15 That from a reading of the above judgements, the principle of law that may be stated is that, while construing a pI'0Vl.Si()11 granting exemption from taxation the ultimate ».obj_eet in providing the incentive becomes relevant and vvouild . be gathered from an overall et>11speetus,.t)f' the _-seihemie. "Also. exemption notification must be e<)it§'i.ruedihiaviing A'i'e.gard»vt't>..tli}€:

purpose and object with which t.!V1vae"..notifi'<i:tt_io'a.use-ei{s.;to"achieve" and an i11terp1'etation whieh 11'1ake3--. the iiexeinptitm illusory and has the effect of ivimz b .t.on_ei~-hastd .antl7taRin2 awa b the other should be'i'avr;)_itle(i; < -

lt c::oht'eiitie[d . 'that' V. the Government Order dated

26.{l:;j2()(}(j) has the base tax liability at Rs.8.84 crore or ».RV$L4'l4é%'.€}T{f'Ef¢"'p]US average tax liability of three years prior to Septe'|iiber3.".2(){lfi; over and above Rs.4.44 erore, whichever was higher, This being at a time when the rate of tax was 4% under Act. When the rate of tax under that Act stood " pijogressively reduced each sue ' éding year M it stood to reason 16 that the tax Eitibility ought to have been re-fixed by adopting the Rule of Proportion, as applied by 21 Division Benchof the Bombay High Court in the case of Cr)mrnissz'm1ei- Qff'$§iVZe.s'~Tc':.;x 1-'. Bc?rc.ir 0:! If?c;'£-z'.S'fi'l'£'.S', 36 STC 473. This has~beeii":iippiiie-iii and followed by at Division Bench of th_is'eo'tii-tiinoi' VCISLIAg(1f"b(lI/1i(<'S in State ()']('Kiii£?T'I:ICIICl/('C33 2805 AKLJ.

It is further pointed <)_ti:t"'-..tha.I_» the.' «.C_iovei'i?mient. of K€il'1iﬂ{Eli<ﬂ in exercise tit'"poweitptinéiet"Se::Atiitin E9C of the KST Act, had issued _v'aii_ious;tiioti'f7iCati'oifis_ gi'>:intiing exemptions and deferme'rii:'~of:";21x_e's§:,paiyabie undeﬁthe KST Act, to various inchish-i';ii shits. _1'3irii)i1"~.tV(ii)'v.i_:.3i-.2iQ{}5. It is pointed out that though the notificatioiis wVe--i'ei'ivssitied under the provisions of the KS"? period oif""'ei<emption spiiied over to the period toveirneii'-«.b itiiei_}VA"i" i'e<rime.. Pursuant to the introduction of :2 [iiie"'«4\/Ail"',¢tC~'i,ii(1li and with effect from i..4.20()5, in order t.o H cibv-*_izttei'tiie difficulties i'ac:ed by the industrial units enjoying the fiieinefits under the above notifications, the Government had u""i'ssued certain further notifications in exercise of its power 5 17 under the VAT Act. These notii'icati.ons are detitiied by the petitioner at pai'a1gr;1phs 4i(a) and (h) of the petition. in other words, the G()\--"€I"l1ITi€l1i has, in order to continue to gi_'vei'efi""ect to exemptions or det'ei'n1ent granted earlier underjithev A' and to give effect to the Industrial poi.icy*otf the S_tzitte;v the ziijmie notificzttions have been issued. V This also on the i'oc)ting.'th;i1't'~_ the Government took into 21ecoti'ntV"t'h:it under the.E;;cl"ie1ne of the VAT Act, the units enjosiing theibehefi.ts.ig'i:anteLi under the KST Act, would not be in ti pos-_itioVn to iivaii. ti1e_':ha'iance portion of the e,xei_hpti()1:5(>i*}de_fei*i'nerat,""the"Government had issued the above not it'i.cations';- .V Z A * it is*;~1<_iso coVi':te.hde.dthat there is another instance wherein ti1e..«§itate~ Govei-n~--rne_nt has acted to obviate and reconcile the 'efi'ect thehiconsistency in the benefit or exemption granted it'nde'r the being deprived under the VAT Act.

The petitioner contends that reference may he made to E4 of the KVAT Act, which provides for 21 special Z 18 rebate in respect of certain input Tax Restricted Goods and the said provision reads as under:

"H. Siaeciai Rebating Scheme:

Deduction of iE3§)vu'{'W'1'&}X' sijtatii "lie: "

ailnwetl on §m1'chas;e of goods s1':>eci£Tted.. tn (5) and ((3) of sub--secti01tf__21) of Sectitna E I, to extenl oi' the input tax ciiétgge-ti at S than four percent or 'c1I1},'y_'1__()VV\V:,'\"='&',[" rate 'c1S I}"i'.i}='_b€ E notified by the C}':.)"\.".t3l7f§tI}(.'::AI1E.':'. V It is contended that pE.ll"SLt2i'E}:E1 to t.he'j9_'1't3zg:fessive reduction of tax payabj~e"'«t1Vt§de:':=__Se;:ttt3r: CST Act, the GOW31-1"m1e'nf of }'(;.gm;1[e;:vigV;1Vc.__Ksrtsued N0tificatic)ns, reducing the notified rate-«.pre.sc1-i'bed.Vunder Section .14 of the Act in tandem, Wi{'iY,§jh¢~.tN0[iﬁCEiI'it')1ii*S"§SSl.l('3d under the CST Act, which reads as ' -

19 OTIFXC AT] ON N0. FD S07 CSL 2007 (IX). Bangal(>re dated E" April. 2008 Ka1'nat2tka Gazette, Ext1'a0rcli11z-11'y N0328. dz-tletii V "

01.04.2003 In exercise of the powers c();nfe1'1<;':'Cle SE;»r:ti'0nlll 4 ' T ' the Karnutai<a Value Acldedfagft {K21r;1:1lt'.=:1Ai<1t'V/illct l 32 of 2004). rear! with Section"-2:l'l"ol:' the ll§l;s.r.11l21tV21l;_i':_; ll Clauses Act, l899 Ka1'11atz1ka1_.lA<'£_ 'ill o1'.l899)_ar1_r;l in superxession or the :§i_§:1it'ic:7{no;g.N(*;;._Et3"«;sQ7 CSL 2007 (IV), dated 24m Mawll, 2063, 1trlelrslove;§1'a:i.¢n£_qr Kamtataka hereby n0tifieS tltat d3edu;:'t'-1c;:j:.x cf 'i1tpt1t' té1x'v:sl{21ll be allowed (all (ll:fgt;:é)tlstl'§pecifle'(l"ir§"lCl21uses (5) and (6') of l§a,_th-xecti0rrl(a1'}'-.E 1' ol the extent of the input tax chtlrgfelcl at three percent or such lower rate be"V-t1t)t1'f_'ieti'"lly the Central Government under the'prQvistrt'(:stgbjsection {1} of Section 8 of the Central V Act, 1956 (Central Act 74 of 1956), with effect "i"1:':(:5'i1.Tl_lEl1li iii;-gt. day or April. '2{}08"'.

" It is~'€:Lj0riAieei1ded tlmt 11 reading of Section M of the KVAT Act a:.1cl7the above N0tifica1ti01'1 makes it clear tlmt the State Gt)\}e1'r:Ir1ent has sought to implement the same by taking into 8 20 account the pl'()gl'€S§i\*"("3 1'eduction in the rate of tax prescribed under Section 8(1) of the CST Act. in other words, in order to give effect to the said scheme, the Government of Ka15né1»take had issued the z,1fore.<;aiti Notification.

it is theref'ore contended thttt the_"';':')()\«i:t)1'I1'ii1t3l'i-t' of Karnat:.-tka has stepped in, from time :toa.t'iinc.._ 'i~n§"('wk'in's,;;.'ttii'.e' provisions of the KST Act to that'~Encei1tii'xies'Cir1'--vthe ~t'orn_1 w L' ofexemptions and deferinent wAh-iclj"we're_ made' twailztgble under the KST Act, could be c(')ntii2f:'ue{%..1.fi'1§ier:ti1e'tKVAT Act. {it is €1ir:t';.. contendietil that there would be no loss of revenueto 4' the State* if"-«.t.lie"felevant Government Order is iiltitijtieti, as th'e..Stttte i:.~§c:ompe1'1sated for the loss of revenue on ,' aecotantoot' reouctitiii of the rate of tax under the CST Act. It igigointed out that under the impugned order, it is e1'i'c)nc()t1':g_ly found that the petitioner had sought for reduction of base tax liability from R5,} 1.21 crore to Rs. 8.84 crore. On the contre1'y, the petitioner has sought that the base tax 3 21 liability be fixed on a pro--rata basis, conseqtient to the reduction in the rate prescribed under the CST Act.

It is therefore. praiyed that the petition be z1Ei(_xi;:Qe'Ci:iV:~ _

4. Per contra it is contended t)n'*be.haif of' the'R.eventte eta, V follows :

While reiterating the itbove and' reproducing the reasons gn.e"d"b'ytithe"'ED.epartinent"of finance in rejecting the request of the petitiioner'4'-fit contended that th_e petitioneﬁs' 'unit-i estahxlisihetti '--i'ri~.t.he year E959 and the coinpany hz1dVei'ijoyyed _E.E1'§i_V.'i1"1C6ﬂiiV6 in the form of deferment pztyinent oftax Vcoiiecteci" Iineziei" expansion program for 12 years Q' t'rt)v_1ini,it}94-2()()oi'n. 1f__e__gpect of Phase--[ and Phase-H. The total ' t.2ix"def'e.ijirieht itmnefit avaiied was to the tune of Rs.'/5.57 Crore. iC_v'iS.i%iﬂbln.ilt6d that the expansion under Phase-III was 1115:) pi'(;-viided with 21 tax incentive. in the form of deferment iphzliyziient of tax coiiected froin 2002-2()1_4 by Government it "Orders subject to the condition that the petitioner pay saies tax 22 of Rs.4.4-4 Crore plus av-'e1'age tax liability of 3 years prior to commission of Phase-ill of expansion program or Crore per £II'll'1E,Im which ever is higher. When Pha.se~l.l£e-iVia's;._ commissioned. t.he base sales tax liability, xxr;a.s..,$2§o1fke.d' out at ' Rs.l l.2i Crore per annum as per tliea Ggwseiinrneht.'Ord'ei~»..sdat¢.ctf

26.()4.20{)(_) read with Notiiicatitiiiiigdated 1 aiitdif.

connected Government Orders an_dii"Nt_)ti.fieations,V i? it is also contended rlthati'-as ji.*es'L--:lft of the introduction of the KVAT Act _i":IV'(}.l__l} l.§«"i.iiZ?i_i(i)t'3'£";, tiheﬁpetit~ione'r was eligible for d€dE.|CIi0lT"G~f_lljipElii::ii§.1'}<. p'a.id--.on while calculating the net tax i'pay:1_bie._ Batonthat'amount, the base tax liability was not inereaseiil tlie. G'o_veri'iment it. would have violated the V' --. te1'"ms' anti Conditi_()i1is"'o'f the Government Order dated 26.4.2000 19ie:r;di Notification dated 05.06.2000.

I:,_;is SLl'bl1'l..lil6(i that having enjoyed tax deferment benefits H front l99¥l~2.{){)7, the petitioner is not in a position to chal_lenge the' "Government Order before this Court, on the plea that 5 23 pzrfpable injustice has been done by the Government in rejecting his request for specie! concessions over and above ?v_v"}1.2._it'--._w'--:;s envisage.d in the Government Orders and Notifications .isVs'ueL!i.t€;r V' grant tax incentives for Phases E to II} htian the ye.ai*"}i99§"t;--fEt contended that the Government t)fV__K;1;.'nt1taka~_i ha1vs'~gr':;nte.d'~. certain concessions and ineentixfes to the ipe,tit'it>.i'te1'°:g' unit and there no i11fringe:h'ent'~.. of .'iE1l1nVV i"'E.'t;_i'.dé"ri'1.1e11t211 right in the petition.er"s case.__The C().ﬂICt1'ti{)ﬂ._()f t.1ie;pie*tijtio'ne1.' that the rate of tax underthe been. rethieed and consequentiy a£'t'ectii1g__its t£eif'e1'5:ner)t t:i§ceS~i\t'it_h 1'e,éa1'd to its working eapitai is not within thei'i*m.,:i)d?,oboﬁthe Government of Karfnataka, since the pI1ttsi_rig«...out, of tztixes Vpityztble under the CST Act is one of the':t33.xE1ﬁef:)vi'rns inii'od.nee.d by the Government of India. When i the Gg)V'ei'it1inenit*~of K£tl'l1dt£1k'¢l itseif is in 21 financiai crisis due to global r'er;e's:i§;Vioh, special concession requested by the petitioner czlnnet considered by the Government and the petitioner has i' the taxes deferred since "1994 as per the terms and 3 24 condi.tions ofthe relevant Government Orders and Notifications issued thereto.

The Counsei for the respondent relies on deCi$ji'o_n . the Supreme Court in Rcz_ja.s'r/tan. S'p_im.zi1ig ctgtrfiiiW'c:ki;>irigVMif§.s' vs. Ct.2[iec.'r<)r* of Cemrczi E..t'('iSe, Jczipliirr, 476 (SC), wherein the Stip1'erne'--vCj(:111V1't 1ii1:;__heEdit!3zit'~-e§(e':'nption i' notification must be Sffiéitiy cioh'strtied""i1i1d the""rna"nufacturer should bring, himseif squ2u*eiiy"ivvit.h.iiii ambit of the notific:ation and noi_ext,errdede rne-i:?rn.i.n_gf can be given to the exempted'"n~otAi"ificzitiiiis-it a"r1d'=it has"rete"ibe construed strictly. A 1'equestii".for'._ modificrittioniT'--o'i"V_. notification at the middle of availment period ris..'r1(1t'E1iii;g: but .21 prayer for speciai concession over:' are "above was offered and accepted by the pet~i£ion.ei*i,._" As_i.sLich, the petitioner cannot seek for specie} ct)r1«::ess___ion. as '<1 matter of ri grit.

is contended that, the Goverrrment of Ka1'natai<a, by issuing the Government Order l'ﬁf€l'l'€d to supra, has not 5 25 promised aiiything with regard to the Special concession and had not held out a promise of modification in case of any change in the rate of tax under the CST Act and ti"iet'e_"'i«s_i1o estoppef against such statute. E: is contend*e_d' if concession granted by the Gm'ei"im'1e'nt"of ilialfliaitiiiéélV'[V0~V?[h€"

petitioner i_s a beneficial one which c..an'n_ot betV<;;11est.i'oned"*or3 challenged before this Court. It is=al's»o ct)ittettde'd--that}_by virtue of the said GOVBFIEm€fl{i._01'd€I_i the i"G.ove'i*ni'nent of Karnataka has not offered o1'Aopi't)inised..to=.the._petit"ione1\~..iaiiiterest free loan to the extent of--._ re;éE'tticti<.)1i. of centrali' sales tax of expanded caipacity. Tl'lie.i'et1~i'e.,Athief"pet"i't.ione.r cannot seek any relief a matter of iiight. .

_B"y_w'ay (f)f"i*e.ftily, it is pointed out by the counsel for A tlie;~pe'ti.tVionve:' ftl1a~t the respondents are in error in stating that the total._ de.fei'miént of tax availed is in a sum of Rs.75.57 Crore whe1'eas'*'the actual sates tax defeated is at Rs.66.68 Crore and i"fuirit¥ie1' Rs.22.29 Crore has been i'e--paid to the State V i"Ciovemment.

Z 26 it is contended that the respondents have reiterate_d the facts of the case and have broadly summarizzed st)In_(;'*v.of«._tl"--.e contentions taken by the petitioner in the Writ-jl3etitioor1e-ittizti* V"

therefore it does not call for any Re'j<)i-;--i(ie1f.--. A But, it is pointed out that: in vieW._of' the ity;itin;;tinvctio_i;i of the Karnataka Value Added from 0 E. 04.2005, the petitit)ne1i"««it>t"eli ttheceeuctioii of Input Tax paid on pui'cliases Tax payable and ct)nseque.uitl§'y,4" liability fixed by the Go'v'ev:'ninte.nt;iiGtde.i*'jtleitecli 2'e;e4':2tii.() was justifiable. It is tinged the provides for the deduction of liiput_Tax \}vhi._l'e v£?£t.iCUl'Ei{l'I"l;"; the Net Tax payable. However, "it. is "not a';(_I(3"Cl1J'(,'[l()llitlti"lllCh is specially made available to the iiipetitiieciner,:i*b_tit isvextended to all dealers registered under the Act,"'««b(i)th"i_n:"' the case of determent and exemption. ' Ct;:.nset]t1eVn'tly, the respondents are in error in contending that _i_1~_thi"e.ipetitioner, by virtue of the operation of the KST Act, is 3 27 eiigibie for any speciai concession whereby the petitioner is additionally benefiteci in any way.

it is contended that a iequest to re~«fix liabiiity and to grant an interest free' ioan .:()"'thie>eXte:':tV of reduction insofar as iiabiiity under the CS"? _fegar:d:.:.¢tiie' expantied capacity of the petitionetfs unit" was niade;,__S'i'ne.e;: due * ' to the reduction in the rate of taV)(:--«§)it:€":;Ci"ib_€d Ltncievi-.AASe.eti(>n 8(1) of the CST Act. with eft'eeft'itfi*(>:nt.()fIi».i)4.i2(§O7n{ the tax. liability of the petitioner u{1£i't§i"Eh€ reduce proportionateiy with €'cl,L'h'"'SU§VCjC€dVi:i§.g'- ye-a1';--. Conaeqiueiitiy, it was contended that by appi:'eati_on o'i'«th"e..fo;:qi1;..121 prescribed in the Government OI'd€1f_Ci£1I6(iii'2'5.Q4~..200i/)';_iIii€.:VPCIi{iOI]€I" would be iiabie to pay a ,...highei' a_m()u.nt tovva1'Ci's;"the base tax liability than the amounts ,-.rec.{e.ivezijfyolni i:o1_',1eetion of sales tax under the Central Act and Liitixnateiy; Apetitioner wili not be able to retain any amounts it :'"b_y;wa)i oftaxes under the CST Act.

5 29 In Sn'.:'Vece!czk(mIe>.s'/1wara Oz"! Indu.s'Irie.s', supra, this Court whiie refe.rr_ing to the foliowing authorities :

(1) Cape Brand_}.== S'_\.'-nc'[t'c:aIe vs. Irzlcmcl Revem-ac? Cf'w..:jnmf&s'ikmérs ' /1921]] KB 64.

11) Urzion of Irzdia vs. IxVr)r>c1'TVP't'qt2.e?;-,v"l;v:'tﬁirec1,STC 251, L') Collector of Central E..tC?f.A$€; B})):§1[)£:%§'"f;{;f,1bP(1I'[€ Exporrs (P) Limired, / S7:*._C' I cl) C()I3':'ff'l'f;T,',§E;f)'}'fIéi;~.4.!'i'£i/1I'(I Pmclcem vs. Officer-

zn--c5"2*zmg-ze (Cf}if:;if%"5)"xégiizzuﬁ-'.__Pfzigah, [1976]] 05 [TR 133,

e) I1§i"c:n_,gcz[rH3eV-.C/1'er3?1ic..'£2!.s*'cmc! Fertilizer-'.s' Limited vs. Depury A of'&r)n1r-11c)r(:'ial Tcrxes, [199]]83 STC 234, ~h2i:s-_<:'c)zVicl{1'C1ed~,ﬁ':§ foi'l0ws :

. The f(>llm~w':-mg prirzcipZe.s' relating I0 ii?fI'cery3reIc1li('2:2 of e.xc2:m)tt'r)r'z prr)vi,s'ir)nus' in ta.xc1I1'(m laws " c):77(2r'gc{f}"(2r7t thee c1e'c':Is'ion.s' rejbrr'€c1 I0 ct/7()ve?:

Z» 31 ( H) it is (IN-it-'(I_\'.5'_f'()f" the ]')t'f'.S'(m' dcttft--ttzfttg the [Jet-zeﬂt of (.'.\'t'I'tIpIf(3tl It') (:'le(tt'.'__\,* e,s'tt.tb[i,s'h that he is entitled to the e.'.*.'en'tpt:'w'z and t/uls' bm't1'et'z'ct.tm1r)t be .s'lzt_'fted rm 1'/tel reve,m.te. "

F-u1"the1; the apex court in the case of State.Cf~J[tcz.}ftE'cz_t1t2' V'; Tara C t.mmz:'r'z.s' Ltd, has held thus:

"At-1 exempttnrt 'f';''().??? V» ;J_ttj5t1ttJrzt A"'t;_'f 5:1,): 1 v.ttn'd._e't".:z;t.: enct.(,'tment 113' an c'.tc»tt1.;)tt't:hV..jmttt. ttu' ]l'(t:l:)it'.ff'_)4'. T2'-zeref&')re_. ex-'er;\' xrtznft c'.x'cJt:t1[it.{t>tt'--r'zt}tt'fic'ctti(5n"fizzyto be read .s'trtTt't/_y. Ht)14-s«*e15e't'?_ \~'i.'fl(?.T;j:t' ' .<-m'~--m=,s~é.s~.s~e.e is pr'0mt'setZ wit}: a tax £'.X'('I7'l]7Ii()f'I K/hr .'.5e?tft;I3;£_{ Lt]-f_);v'Left'.vl.tl'tf.'HSlIf1-' in the bac'kwttrd trzrett (l_\':'o:'t!V'V1"'t:*.?".'.t'i" Q'/"'.t.Fz.e_ .'.vt(]L¢.,s:tkfctl P()[i('_V, we lm\;'e. to!'14'et';v<l-h't1h.e?_zTrz:g>Ee}t':ettttttgx"t2t1létEc'c:'ttit2t1.s' in. the c:"(..')'I'?'i'c".'.'I_ Aviji/l 1".'-zcléitstrial P?)'{v;?e}{' In .s'tt(.-it (.1 ce'c't.s'e, the t?,¥£'f??,'3fidf1'5'EVf."~l_lfﬁ(.TCII'l:f>?f%$'v.!;Z'Cl'.«'('.'[() be read lt'bem.li__3-' keeping it:-.1-tzittcl the U1jfe(.:t.s= .. em%tf.s::tgt)(! by the Ittcluxtt't'tt1 P0lt'C__v C£II(!VV"}:1a()?' in ..s'tttk.*t" ,s'et:.s'e as in the ease of €'JL'GI"H[)fi()f'I.S' . --j}'()rt't tttx I_il'(lf1t~]!!l_\-' z..t':-trt'e;r' the t'c'txit1g .s't(.:tute, " V We may 211$§()"'n0te the law on the subject of prt2missr.2ry '"a=p_p_i.':ed by the apex Court in reiatitm to fiscal stt1't1__1te.S..~~ AT State of Ptmjab vs. Nestle Irtdia. Limited, _t{2T()0-4'..,";'.3:t5' STC 35, the Supreme Court has reviewed the law on ' '~§{1ie-- :;t1b_je.ct and has held as 'f0I}0ws:-

Z 35

26. This pr-'i::c':'p;.'e H.~'c"1..S' /milf upon in Urmm 0'/' India v. [!'1(17()~A'f:i{]I(.IlI A;-,n5:1c:?ic).s Lm'.{ /968) 2 SCR 366 n'hc.»1'(9 it H-'(.i.S' swirl [at ])(I_£,'(' 385).' "Umfcer our jurixp:'m1c'm:.'e {he G()1w'rznzenI is .

c?.x'ernpt _f'r0rn iz'al3I'iit'__x' to c*arr__v our the f'€p.f'€Sé'(?:l£fi@W .7 V made by if as In its ﬁtrun» c.'0ncZm'I (mcl it _g'*c;=-.'2:2:(:):'»'~ sonic' zma.'(jf'i:zc'(/ nun' I-!}'I(IrlT.S'C'/()5€03.L§$f"{)£-éfﬁfxl«(ff_f"l(4£:'jC'.$T;§:I:I"ﬁ?2 " V or cx.pm'1'e:-rc'_yﬂail In cr.z:"r_yVc)u.t I/1ae_,_r)»fr.21f;'A.2i»s'e .§E>.fﬁtnIz!}.=. nmde /9}-' it, nor c'[m'm to !2c3."-..gfl1c' Jiu.'gc» ~QfV£'.vI.\' "e9 wn~ 0bZigcIrz'm2 to ri-zc» c.-itrﬁcerz on c1r2VVt-:5;-;;.<u're appr(':z'.s'e:1-rem of fire ckirmm..s'Im1c';?.§"~ in Q-'l7:'V('.f'2 .'.'!_m, A0--b.l:Tg(1Ii(':r*z has' ar1'.s'en ".

27. H;».Ip:;«~. " .

wfriz it_.§5);}";;e-Q9221/:'::'r)}i.s=1_ .s'rr_er:--grh.\' and l.irr:iIcu.'i()n.s' /my bc?--rar1 :.>ut!ir2ce('I'J_')2V }'f14r.f_:i§:a;r,!';s'ior'1 of Mari/cal Pczdtmzpcir Suga'r--.._VM;'.//.3' (.)A.A._L'.r[..~" 1-'. State of Uttar" Prczdmlz, (19794) 2 V'.S'CHC :. 4()9.: l)'ric{}'7.\,~' .s't¢.ma(/ - the ('c':.s':2 re/(med ti'? fa" I?c:'p_r'm'ce;zration 1-male by {he State Govermnertr = 'v;):é{'.£'Il'()l'IGris' fcwrory woulcl be exempted _f}"()m ' ])(1!}~'!"I'1a':'.""§F.Z'I..bf..\'(I[(f.S' mxfar (1 pr3r£od afnﬁree _w3c.'1r.s' from .!l'-'iV(..*a ()'(i}r> of ('0!?'7.N"l('!IC'(?}'H(?lIf of pmcfuair):-1. If wax ;§'r'(;1rcec'l Ilsa: tiw pmftiorzens' had, ax a c.'()n.S'(Jqm?nc.'€ of rim reprcr.s'en1c11£0n, set up I/1(%f(1('f()r'}' in. the State. Bur I/16 Sfczie Gr)!--'(%f'nl'rI€l2T rc{fit.s'ec! In fmn.0m' :'2'S mpre.s'c1'Itczri0:z. It (.'lai:m»d »s'('1/as' m.x"j'm' tlw periocl it Z» 36 had mrici rhar ii \.vm.4i(l nor. When the pef1'IirJ11c2:".s' went to C mm, the Siam-.> Gr_wcu-mn.er:I rook Ilze p/ear {'1} In the czb5em.'c2 r;f:zaIzff}f»::uIi()n Lmder .s'ecrirm » ' A, the Stare G()vw'm:1ez-2! crmlri nm by pre1.:e;'1Ie(1--.i}*u1-ii5""

enf(m:.'in.g rhe /icriwi/ii_v 10 sales rm: i:'r1p(>.s're..r!--.o}?r.fi2e. ' petirimlers' m-m'cr the pr'r)v,..-;Ls'i(m.s* . ff'I/I€'SL3.!I('IaT Tm' , V " V (2) That {he ;)eriIi()n.c»r,s' hcm' we-:Az've{f its' T1?i-;«:;.':zI T1) claim c.>ce1'n.pri(m,' (me! (3) Thar If1eer*evc:'r)u[cI L1? mi -,'._ir(3g%1J'é.5.'_s'()r_V e).§'fk.;;éj9c)l czgczirm' Ihe Smre (Jove3fi1':r2:»:1f7;s';) c:._s7 fr) "Hz/1:'12it .ftfr0n-1 _f"or'n1.ulaIi:1§"ism! inz;3!E?;"nefzNriHg_ui.t.$' [)r;>lzT.(.'i'(%.$' in public 1' I1£ere,s'(. _

128. '7}'}éifs' c'o}.{rI !f£'jéi£_..'fE([ all the Ihree ;)lec.z.s' Q)" the G01Je!7I1r'ﬂe.I'1I.'« "~ . V {L Iféerczicaci the welf«knm~w1 ,')r'e(fm.1cii£ic212.s' ; for Mid. .(i.;)c)rczIi(2r2 (3/"1'he docrrine.

(E1_) a c?lé'c'::-<...r11~::r!' m-'1equz'v0»:rcIl pm;-ni.5'e ki-1nwin_g> cmd .:'v.1v71IC'.1"'Ié'."4vl"1'1""§_2,'.' that it would be acted upon 1)}: the Lvr'.?5'1'?/4 Isa V (2) " ' V.s'1z(,-I1 acting upon my pr0rni.s'e by the pmIm'.s'ee .S'{J¢f."'I(1f ii 1;-mule] be inequ.irc1blca I0 allow {he prmmLs'(9r I0 00 1)ac::'< on the )rr)rrzILs'e.

('I 3 38 .fm"i.s"n'ng on .vIr.f<*t legczl r'ig:'1tx, e1.»w1 where tf:e_\,' £I.l'i.S'(%, mgr: mzcfw cm)' mnmzcr, but on /zis mm title c1::.>c(!.s" or .z.m.der srczrtzrc. {;)(:;,>€ 56 Of STC) (page 424} ...... ..W/z.(zIm.'er by {I'M .F1.(If'LlI'(' of the fz.mc.'n'0n rim (}()vm"r2.:11m-2: ix cfi.srfzc1r'_:;i:zg, I/2.9 G!)V(f'IT?'?.»f?vié"i~J.{v .s'ui)_jec.'t to the rule of pr'o171i_s*.s*()2';}V ce,s'rf);;,*)ef'~anc2" .f./Effie V ' e.s'.s'entia[ in.gr'(acI1'¢%r'zr;s' Qf this mite. (ifs? Is'(zIi5ﬁ~:a§I, -.1'/'zen Gcn-'er':m'ze:r.I (.'(m' by r,'*()m.p€£{ec/ I0: ¢'a;'if\; '( J_:4AII'."-2..a:{ pmmi.s'c nz.ac.«'c by it. {page' <'5'3=. S_'TC)""{',r;tITgé? 45;?) errrp/m.s"i.s'* cz.([(l'c.'(U» V ' ' 3 ' V'

30. So rmwli for I116 .,$I:'éﬁg{i'I2.,s'gV, .T.'1};_e:2__ .%.*():ne II/ac 1i1?2iIc1t1'nm;;'«.Tims'ce £j1ro.'_, V ' V V (1.!) : 'Sinbc!':'z-.€zAc'"«:{<;ri;*rrirw of pr'(mr2is.s'(.>z'_y estoppel is an e._c,rmII(113lL%v. cf(';.rjVr;'i_1-1.r2;.. if musr _w'el(1 when rhea cicjtziiy

-- so reqzi£r(3.s'.' But if ix })r11_)=' zfthe court is .s'ari.sjfi'r3a.', on p_r(;;);e.;" a.mf '~5:--s--:'z:gLz(zIe 1-nc.1ter'i(1l p1av:'rm' by the G()v'£'1*zV2Vrii.:e:_11, I/ml r'214=erric/trig public' inIere.s't require.s' . f!'ic.r f'~!.f_re VC?ri{»ce1":1:1'z(en.i .s'h0m'd nor be helcf bomzd by {he ;2_r:'():¢1g'§iél)z1r ,s'1mulcl be _f}'ee to ac?! mgfetfereri by if, ":'/mil: the court wnulri re: Ewe. to enforce flue pm!-m'.s'e VT agaim'! the C}r)L-'er;-zrzmi-11. (page 443) { 2 ) N0 r'e,r7rc.s'¢:Jr'zration can be enf(miea' wl1ic'/I is pro/zibiled by /(IL-a.' in the .s'cn.s'c# that the per.s'0r1 or é 40

(ii) Jil Ram S/xiv Km?-mr vs. _S'Ir':Ic> of Hair)->czr1.z2, [ .1' 980]j_ SCR

689.

(iii) Unirm. Qflnciia 1.-as'. G()({fI'('_3.-' Philips Iridia SCC 369, mi Bczfail Ca.s'l1e*w Coiripan}-' ,..,5aIce.:$'."T(__.Lx'V Ii 98612 = "

SCC365, (U) Surya Nara.in_ Ycidcm ;§'t(i'r'e~:'jEI€r,rIric"ir3,= Board, and has pointpti iiziifilaait"tlie--.ViéW~~e.xpi'essed by Chandra Shekar Aiyeiz, in V.i95.2,«'V"'i~r.1 of C()U€(,.'I()l' ref Brmibay vs. ML£12i£,'i[)C'll'C¢?.'1"p('}?'(i!.i-f()AI;?.;_:[}'§.5-2] SC}? 43, still holds the field.

C('iu.r't has 1"ei;ei'1'£édv to the judgment in Kczszhka Trading VA'!:ji':?~i.()7I of India, [1995]] SC C 27, which is an aut"nQrit;: fcnfihe proposition that mere issuance of an exemption H :i()itpii'ic3ti{)n under a provision in a fiscal stattlte such as Sczctiora /,Q,V5"'u'i""' thét Cusmins Act, E.9()2, Could not create any ,z)mmi.v.s'0:*_3,= V' '";:é.s'tr2,i)pe,[ because, such an exemption by its very nature, is 3 41 susceptible to being revoked or modified or subjected to other conditions and that there as no uneqttivoczﬂ rep1'esentat_ion'.-_"Fhe seeds of 6-qUiV()L'21ll()n are inherertt in the power' _tti)i_:igj}'£ti'}-!._l ~ exen1ptiort.' The1'efo1'e, the exern-ptiora.ynotiﬁcgition be revoked without falling foul of t.he",pri-nciple"of*proni1.§s~oify._ estoppel. While it was also p()in'teiﬁii()ut th2rt.theCf:oui'1't tilso held i that the Government ot'i_l'n_(iia,_"iha_cii jtrstVii"i'eAd the Withdrawal of exemption notification _orr'.rele_v2ir1t--"'~rezt:§ons--~ in the public interest. H _ _ I;ht"'ea.._n'iQ1'el":isjecent '--de-ci's'-i--or1.~"in the case of Southern Pr?Ir'r)ciI'z.e1-ft.zZ:.'m' 1"r'i7.l:('.]£,<(4.l§'il'»",'i-c'il.'>'--.,_ i"Cr}>r'ripczm-= Limited vs. Elec'r:"ic'it}.= 1m~;r;et.~mrif itjzcrzkrml iSvC1'~.lii984, while dealing with the va.l_idity Nedtt AT'-a:<..__o__nConsumption or Sale of Electricity Act, referred to as ' the 2003 Act' for brevity_) and they 2tppl.icat_ioh thereof in respect of electricity generating cotn1§a,ni3es as also consumers of eiectiicat energy and the Tamil Electricity Duty Act, 1939 ((hereir1afte1' referred to as ' the 1939 Act' for brevity') , levying a duty on certain sales and 3 42 consumption of electricity energy by the licensees under the State of Tamil Néldll and the State of Tami} Nadu Eiec..tricit3,* (Taxation on Corasumption) Act, 1962 (i1€l'€iI]Z1f{f';t"'"i"8i&§i".liéG _._to. ' the E962 Act' for brevity). which provide fo-r tax oii consumption ofeiectricai energy in the S'tut.e' t)f7.M'adr21s";i:.::d exemption from tax p1_'(_)Vid€-(iiEiiigiel' the Hciving-. L regard to the 1939 Act and theAr.l..9i62._A'c._t haviihgbeevii repealed by the 2003 Act, whichi4ii':iite'nde.df':tt§.¢;oi1é_elViti.g.te and rationalise the ievy of t_E.1\\:-_()i'3_ ccfhst;rhptic)1fi"~.it}--i:_ of electricity, the provisions hf Vizaikigtie-stitun before the court. Whileiiap_p--Iyii:g:viVth§...__c!(:ctr'j.n§=..r>f Promissory Estoppel, the apex Court hasiiheiid asritblii "'1r"r'e~.«'Il1crc{f&)rc', are of 1115? (Jpn-1£r)11 that

--vr_Vd't.ac"f.riri'e'.__Qf' pmrni.s'.wr_r wmppel (1150 ,r.9t'e.s*w'veis' a 'i.@A"..r'z'g!7i woulcf he pre.s'e:'ve(I wiwrz ii.' is not __'v(",l','I?t"e".S'iS'.'~\' mm--1 ctr-s*(tj_.= bin in jkzcr has erg);-'e.s'.s'Iy been " _ ,r)'irc'.s'c>rv<»:c1.

145. In. View of [lie appiiccziion of doctrine of pmri'zi.s'.s'()r_t-' e'.s'r(;ppef in the c:c1.s'e of the ('1ppc)1lcmt'.s', 5 43 mm';-' righi is no! (!€.s"tm__\,=c2d and in I/MEI View aft/1e nzarrer a.lIh01zg/'-2 the Sciwrrrcﬁ zmricer {he irilpzzgrzcxi Act is ('fir/V'j"m'erzIAjm;-"I1 the 193 9 Act and the [962 A_cfI; cu-zcl_/Eu'!/2c?:'I::r.2r'e in \.=:"ew rgftlzc' pi1r'u.s'€ulog_\' 1¢.sjg€('i'1'r'2.' --. . Sz?c.'tim-1 20(1) Of If-re 2003 Acts, rz'gfzr _ c1ppc.>llcmI.s' ("cu-mm be said Io iiaiiti bcaerz --;1¢».s~_::~(;;:=a1. ' A The i€giSl(1.'z.H'(' in fact has czc'kr'1r)w>f€{tl'géci fFrc2rA".Vg:$_g:'1IVV Io be m'z',s*tir1g in the (3l[?[Je"[j(;'Ij?[_\'.

LEGITIMA TE EXPECTA TI:L:'§2'..'_ ~ I46. We may <1l.s'r>'"::'r.)I§ce"-zf1i3V¢';1'Iér<§f11g3--.ri(;>cIrine in Elm" Iacehchffj vi:j..,.V..,LegirimaLte" "Ex[}--ec*!izti()n of Subs' ra.=m' 156:; .139:-1 efir. iO'w'dz';it:rfl ' E}1_g_,$'clI'(1 principle w()uJa' _i°t:)t'ﬂ"'"':'é4g.'.z{<e"-.jc.g;1§-- c';g9j'i£.ic'c1:ir.)I1 1.4:/1c4I'(e {he lc»gi.sflciI;H°r2_[zti.s: er:4r,;t"r'«5.{§l :1 .s':'aIuIe. As', ac>cr)rc!z'ng I0 I-he £c'\gIz'l$'i{;"i:;fc>'~:fIn?;s' c_.'a..s'ce allowed the p(1m'e.s' to ttzke /.3mc{f':'t (5j:fffz'e<:'~~}7 €,\:i.§'fing right.s' having regard in the J1»-'pmi am] .s'cwing <.'[au..s'c comainced in 20(1) of the 2003 AC1', fire xmme wcmlo.' ¢, }s':-,r._2p'2'},..-=V. 1);,' rims", prirzciple of [Jl"()}'l1l..§'S()l'_}' estoppel wrm,-ikgj.' 5c'1ppl_).>, (frame may not be any reawrz as' In aw:/z___\3 the dm'Irz'm? of legitiimrte e,>cpeec'rati()n wr)uld 'n0t.

147. Le'£_;itin1c1re cax"pec:'Ia.ri0n ['5 now (:(m._s'iderec1 fr) he a par"! of ;)rin(*ip!€.s' Qf rmrzmzl j1.:.s'tzT(.'(?. If b}; 5 44 rmmn of the arrkizfrtg siuw off r§]j'k:1ir.s', U.' part}-' is giver: Iv tzz-latte:-'.x'icr:'z(1' that" the (ll/'1.L'f' pczrfr' sh.a1'l mu {cake riwcz).-* the l>mzc'{fII withorri (I'()I?I])[}'ti'?_g' MI/2 the ;.)rinrrip!t).s' of rzatuml _jr.mic*r), the wit)' c!r)c*zr"ir3z4'=; rt-'c2r.u.'d be (1,1),-)fr't't.tI.')!t*. Tire legz'.s'ittIt.u't', l.I'I(.if.\'])l.!.{§éT'b'[_'i-';'> "

hczs the ;2or~w9r to z'egj.s'laIe but where I/'J.'€'_ rcc'r)gni:e.s' c<.r£.s'Iii1g rigftt and (;v?it.ic1"mn'()2".r(1'._}<tre'z1ry(z_rV'Ih.¢f ' scurry c4.r,z)rt4is;s'l_\; or by ;1cJc't».s'.s'cii,rj}.= :ii;{":i*'IV1'A91'.ii.!.C'C!'VVf!.()f"t., ;7i"if?('i[)1(%S r';f'iegiIr':1-1ctfe* (.'5t'})'('..(_.V'1'(If'l:()"Ii('ﬂit"! .§'t4f;!.$irii}3::itzq bcmjfft ma).-' lac' heir! to be z.'zp;?.f_i('t;}2ie. '- 'V V' i

7. In the instant L'tii£E§, theirepet'it.ione'i=s. do 11ot"sofr1tIch seek to question any act on the pt-iift of the Goir/eijr1rr'i'e11t of Katnataka of w_ith':i1'z1'w£ng a11ife.xiemptioiz which is conferred. But, on the other hanti;-taiseelfi gthe,biin.te1've11tion of the State to extend ine'é3S:u1'esA, whicltiineve-d«'11()t be restricted to the proposals put- forf_Wa.r'eI"«b.y»vthe petiti()11e1', not to render the exemption granted as ».rjet21i1eeii_i'z'1fbove to be iiiusory and the reasoning afforded to reject. the request of the petitioner proceeds on the footing that "AtI1e--Apetitio11e1' had waited sales tax concession granted in "respect of its investment in Phase--I.H of its project, pursuant to Z 45 the Gov-'ernment Ord-er dated 26.4.2000 and C()i'i'€Sp0Il(;lll1g notifications considering the average tax liability of thi'ee'..ye211"s prioi' to September ?..(')0() and the base tax ~ fixed at Rs.l E .2} CTOFC P61' 211inun1.,~whi_ch ::1i1n()iutitf be it paid by the petitioner to the State Gt)VSe1*{itne-ht-- liability and tax collected exce--ed'i:.1g thiate..a11<i.o1;tvfj1tiidyiis"to be S retained by the c()mpa1n.y~..;_1s def"e'i*i'1iie'ntilot: tax utiderfthe KST, CST and KVAT Acts and while['v'i"ili<ting-.thei.i':1t¢'_.oftax under the CST Act in respeet."()i' i;i1tei_ustii1te"e at 4%. This rate continued till l;:jT_4:.e2()tl"? it 'was reduced to 3% and then toi72%:-- witliiieffeetl 1.6.2008. The reduction in the rate of tax tmdeijthe lcfslazi he; has reduced tax liability of the " '~ e()::ifi1:5a1r}yV.ur3y_dei' thétt~.A..et'21nd thereby, the amount of tax deferred the company also stood reduced. Th amount c()uil'di:--.V_be tetz-iined by the company and which could be used f°e.t.j__i'ts working capital is thei'ei'ore not available. Having " note of the plight of the petitioner in considering the 2 meqtiest of the petitioner, the State has reasoned that the S As 46 reduction in rate of is only one factor affecting the quantum of deferred tax available to the company for retention. The amount of tax so available for retention also depends-'-..up()n several other factors, such as, increase in production, v't'i}_L:iine"--ot' business, prices of products and nature. of sale, onﬁ whether it is local or interstate. These factors _a.1.s,o_'r;1epe.nd_upo'r1 ' the demand and supply of the produ'ct"in the and.'.»the efficient functioning of the compan 'froii n ztteviof which the State Government 1.evy',._the State' 'Gvo_vperr_i§meirat_:'Vr. has no other role to play. And th_e"e.irc~u_mstanee_ that the rate of tax undue-i"-- the been reduced by virtue of a statutory amentimentia1_1id«.tliie same being in aid of tax reforms il1'«w-ii6"(11.1;_'.Z_VC.L1..b}! the C-entrai Government cotnmencing during the yeai"'"'t..he"re was no reciprocal. promise by the State G0,ve1'nrn.eiits--to the effect that if there was any change i.n the rate of tan tinder' the CST Act. that there would be a corresponding "AA_rno:'1if'ication of the tax incentives offered by the Government "under its order dated. 26.4.2000 and as there can be no 8 ex, 47 pi'o1nissoi'y estoppel ztgatiitst a statute. there is no g1'otir1d__i'nade out to consider the request of the petitioner. it is also s§titt.ed_ti2at the ;tv21iirne.nt of incentives by the petitioner is ()p..il0l13.Ai,V' "l-tits. 0' no longer beneficial to the e()rnpany;' then it is at.l_ib'e.tjt*_vf not to avail the same anti pay taxes in}at-coi'danc:e"withlawir Conversely, if the rate of tax to be increased, the petiti<)ite'i';:4w::)tiici_'iiha_ve:i;erttt~i.nl<y beiiefited by the increased (ieferme_nt of tvttxantl Government would not it the base tax at a higher state Government on the basis 'which been turned down.

Adrrti*tteci1yi the'._Gt:«ve1'ninent Order dated 26.4.2000 was ;_with__ E1 vtew'v-----t--o*expand the package of incentives and "tt_)i petitioner for modernisation, diversification '¢11i"1{._iu e.><p=:.nsi'ion of the project in order to encomage industrial tteveiopihertt in the State well as with the objective of 0 vtieveiopment of backward areas and to augment the collection ~of revenue. it was with these objectives that the petitioner was 6 48 granted the facility of sales tax deferment for the period 2()02-- 2014 in respect of Phase.--i.i[ of its expansion project. For the period prior to i.-4».2()()7 the sale of paper and paper effected by the petitioner in accordance with ;m:e'r=4'stia:t;e,: V' trade against deciarations in Form--Cf,' "to"the_ e..gte,nt_iiof._ 6_2'%.» oi? its totai sales against its sale exigibie to tax under Act. The rate of tax under ii of: was fixed at 4%. It is i]()Wt-2'i{:é'tT. il that the rate of tax underthe and reduced further in This was neither on accourjt of Government nor on account of any defaiuitjioii ;o:i"«--._t:hei'iipetitioner. The reduction in the rate tax under the CS-T Act was a deliberate measure brought " < byithe Union.Le.gisiature to further tax reforms that were ' sought.to.beimplemeiited and steps in respect of which, were i ~taiken o"ve'_r..the;"§?ea1's, culminating in the circumstance with which s.ti1e-tietititiiiei' was faced after 1.4.2007. The State Gcixteiciinient was not unaware of the fact that such a prospect, S 49 where the tax imposed under the CST Act would be progressively reduced bringing it to a nil rate of tax by the year 2010. However. at the time of gmiitingz incentive, by ow-ziy of saies tax deferment by the Government Order dated this remained a prospect and it is only xvith''effe¢t*-ift'orii "

].4.20(')7, the L'OnS€L]Ll6l'}L'€ of th_e tax.a'ef'L3i'in:§iS'oii~ghI he irnpiemented were felt. The petitioiier '1LfI'I1,l'iT1,i"'i'1_'c'id~ nctifdieeseeii 1'.

the consequence that would ..__t_"oilov'v,_ TheL1'gtiA,:tvhe _T;State:° Gove1'n_rn_ent was also aware Wof the pmspw, i} it is not apparent that gwﬂéis' "awake "to the conseqvnericie vti'ili£'1'Fi:i"-itii'.?\/(.5t1.iCi"~--i'i21V6 on the incentive that was conferred ie.r_V1i t1ieipe.titii)'nei'. The State Government has, 211} A intended petitioner should have the benefit of the 'ineentiveiinordeif that the petitioner be encouraged to make the i'in'viest1ne1its that it has, in Phase-III of its expansion Api'()jeet,_ti'ie1'eby providing an avenue for iarge scnie empioyment if:?1n--dfto provide 21 source of revenue t.o the State Government.

-"The benefit that is conferred on the petitioner is by way of sales 5 50 tax defermettt, meaning thereby that the petitioner is not totally ahsoived of bearing the burden of tax. The same is only postponed. By virtue of the effect of taxation reforms brought in by the Union Legislature, if the i_ncentivereiiti'ere<i illusory, it was for the State Government to have vev_t)"it-ved T' measure to temper the hardship and lTi.'i'SfI)t"ttlI';t: thiatie it in the petitioner's venture being', retnde-:'ecItt»._tJ'nfruit'i'tj'}~.__pand unprofitable, which was prornpted largely byitthe__ince§nt.ive_T'2 offered. This is evident from fat:_t that'~th_eipetitipner who intended the expansion__p_pr.ojeCit on1'y-.._pinpi"Phase.--I Phase--II, was ei:§:()uraged7.'tzyiiinpiveirrnint Phase--IEl of the project, thereby requii'ing._stzbstatntial" a(idit'i'onal investment which is duly endorsed byithep Depai'tment of Indttstries and Comn"te.rce. The A terse of the authority of the State Government vide /itnnexiii"e;i\$.;t~t.o.}ti1e effect. that the reduction in the rate of tax is ():1_1v ()t)e"7fae:t<i1' affecting the quantum of deterred taxes avaiiabile to the company for retention and that there are "::evei'a1"ot1"iet" factors which would have effect' on the business of Z 53 the petitioner, is to say the least, an oftlhanded dismissal of the petitioner's case for amelioiative measures being i'equest'ed. if not in the manner suggested by the petitioner, by...sut:h'ti'theij alternative measures which are well within the of the S State Government to ufford to the petitioner; S' The principle as enuniciute-d "by thisiV_ciourt_i1:i Sri--_* Neel(zkante.s'hwar Oil J,]}'l.(1Lt,SIffi£..R';:'W._.S"i:E}2i'(-Z, I121-Iﬂ..e]yU§ that 3"

iiiterpi'etat.ion which makes (the ev2§:e;?11pii0ixit.i1i»u.sory and has the effect of "giv_i.:.igqb-34 one by the other"

shtiuidii i'is_:'-therefore ignored by the State Goverriment. V ; ' "'.'\/.hi1eiiit-.iAs'z'tis() to be noticed that the State Government is i not :iverfse_t'e..._step in for industrial houses when the need has ' ~arisen.i'' «lni_v.si1'n:"ijiéii' circumstances, pointed out by the learned Cciunseifor the petitioner, the Government in exercise of its ipo\,i,aers under Section 19C of the KS"? Act had issued various notifications granting exemption or£Jeferment of taxes payable 52 under the Act in respect of V£~}1'i(.)LIS indust1'ial units prior to 1.4.1965, namely.

i) :~t'ottt'it-tttttttt b€'tiI'iI1g N().FD I87 CSL

05.()6.2.()t)() in the C2156 of M/s. ACC Ltd..._ -

ii) NOtifi<."tIti()n bearing No. FDR1.88ticsig..:)c--O00(ii'--.(it1'{$d' 05.06.2000 in the case of Ji1i(i:;i1 "t' ij21y'.:1aga'1?~.u Fertilizers Ltd., tin<;E _ V' _ _

iii) Notification bear_i.:ig dated 05.06.2000 issued._in..tl1e €3'§'.'P$4ﬂS"..~Wip1'() Ltd., In the said E}0ti.ii'i(.'£1'[iC1].1'S,the !-';}o_yerfr;1ien_t pleased to extend'0'coiieeséioaisiijttj th'e.;said iin6ost1'ia1 units in the form of exempi.j0n'-- front pit)/n'iiee11tiA't:of'izixes under the Act or deferment of taxes payablet. E'veii'.t'ii:)ii'g.h4the said notiﬁcations were issued unde.1*"the prov-isio'n'is' of the KST Act, the period of exemption the period governed by the VAT regime.

i:'LE"i'Sl'l02i'13:i'[:"'Z§)ii thfetVir1ti*oduction of the provisions of the VAT Act. ttzitii et'tétt¢tt"tjt~t3;ttt 1.4.2005 in ot-tiet- to obviate the difficulties f21ce'd.b'y_thLe above said indumriai units, which were enjoying 6 53 exemptions and deferment' under the KST Act. the Government of Karnataka issued notifications in exercise of the powers conferred upon it under the VAT Act. In respect nfvthe».._tin_its eligible for tax exemption on the sale of goods 111a_1t'Ie.,rfztetelfetl ft}-33 ~ them under the KST Act, the Govemment was plvlettsletl.'t't>.'_l':~tsus: V' at t1()tifiC2lt.i()11 bearing No.FD 56 CS1l;.V2('l{llS{:1 ) with effect from 1.4.2005, ttttttet:tt;.e;' Vx.\"T..Aet..Ayyvlleiehithe net ' tax payable by the saitl._i.ndLI.:§tria'}.:t2nilt:;,_was eX'e1npted by a scheme whereunder the said anits\X}e1:e_:l'ia.b~lteto collect the tax payable L111de1:"the':;tp\:lf.AT:Actc net tax paid by the indttstriai unit.v\?z1s:"'a:et't:.t}€legltrg)lit". ln respect of those industrial units which«-ytéere el.i_gih_le'f_dr deferment of payment of taxes on thefsale.__bt'__gt)(.)tls"m.:1.nttfactL1red by them, the Government of 'Kzi1l2*I'1:1Att'=tvl<.;1'was'p*l--e.asetl to issue a notifieatiolt bearing n0.FD 56 dated l8.4.2(l05 clefe:-ring the outpttt tax payable by the industrial unit under a scheme whereby the unit " _claim--i11g deferment of tax would be eligible for input tax rebate t..,,.v:}hich was refunded to the said industrial unit subject to 5 54 fulfilling the conditions specified in the said Notification. Therefore, the Governinent in order to continue to ta-tifecr to the exemption granted earlier under the Act in. i*espeC,tol'--c ' above said industrial units to encoui'age""i'apid 'iindustrial g1'oWth~.. and achieve the twin objective of 61134;)'-l_():ylf_¥l€f1{ ge_neratiori,and'. utilisation of local resources into the scheme of the VAT lthatdthe units enjoying such €AX_€l11p[i()D..,tl_ri«(j not be in a position to.' the exemption or cieferrnelmvitiaefhtute thought it fit to issue the said not clear as to how the State Government-.thinks-_iti*._i"iit=,to put forward the reasoning now «._assti:r§iie(:l.rV:tt.:._re_iect"thereqtiest of the petitioner. The petitioner thec1'e'i'or'e,AV.ha's «eagle out a case to c1.ai in that it should be bailed out, in ,~the"§..-circumstances, in such manner as the State Cxovemment may evolve as is thought fit in respect of other "~i_ndt:strial units within the State who may be similarly piaeed as V' "the petitioner. Or it may even be said that the petitioner is g 3' E '"-decision in Kasi'nkc.2 Trading, supra, 55 better placed to deserve the benefit. As the State Government has not thought it fit to withdraw the benefit. that confeired on the petitioner. However, it is the .pil'ay' * ciiuttnstances as stated hereinabove :w'hic~hha:$ i'estilted i.njt,he~., present debacle of the petitioner'.§i".§;tate def"

management on account of thei'i'tiip:Set lot: the change in law by the Unit)n are W211-lﬁilted in the light of the Court which are referred to iliiidddown the principles 1'elati1"ig_ __tQ_ illegitimate expectation.

Thotighltheife the State Government to take any C()l'r€Clii't!t3i :ne2t:~:u1'es," with the reduction in the rate of tax C.__ST £1Ci'I'e.$.t,!i'[lng in the complete decitnation of the t__it'1eentii\:feto the petitioner. The intention of the State Gt):/44ei'n11ient to continuously provide relief from the burden of tax dui'i»ng the intended period no tonger in existence and to i 'that: extent, the principles can be pressed into service. Even the that an exemption *2'

Unlock Advanced Research with PRISMAI

Karnataka High Court