Appeal No 498 of 1975
438 From the Judgment and Order dated 3171974 of the Madhya Pradesh High Court in Misc
Petition No 3 16 of 1973
Prithvi Raj Satish K Agnihotri and Ashok Singh for the Appellants
Shankar Ghosh Vivek Gambhir and Parveen Kumar for the Respondent
The Judgment of the Court was delivered by PUNCHHI J
This is an appeal by special leave against the judgment and order of the High Court of Madhya Pradesh at Jabalpur whereby the petition under Articles 226 and 227 of the Constitution of India preferred by Orient Paper Mills Ltd the sole respondent herein was allowed and sequally the order dated 1531973 of the State Government declining to grant the respondent exemption from payment of electrici ty duty for the period from 1621965 to 1521970 and pursuant demand notices dated 2031973 and 341973 were quashed
The aggrieved State of Madhya Pradesh and its concerned Officers are the appellants challenging the same The respondent had need to go to the High Court to have an assurance dated 181961 regarding exemption from payment of electricity duty given by the State of Madhya Pradesh in its declared industrial policy observed which may well be reproduced here at the outset Where power has to be generated by industri alists themselves exemption from electricity duty shah be granted for a period of five years from the date of plant goes into produc tion
The concession shall be applicable only to new generating sets installed during the Third Plan period
 Factually it was not disputed before the High Court that the case of the respondent squarely fall within the scope of the assurance reproduced above since the industrial plant of the respondent had gone into production wef 1621965 the generating set put up was new and had been installed during the Third Plan period
To formalise the matter the respondent had corresponded with the Government for the grant of the requisite exemption
Since the same was rejected and demands for payment of electricity duty creat ed the High Court was requested to issue suitable writs directions and orders cancelling the 439 aforesaid orders and demand notices and granting exemption from payment of electricity duty in respect of electricity self generated by the respondent during the said period of five years and also commanding the State to carry out the assurance and promises made in the said industrial policy dated 181961 extracted above and then requiring the State to issue a Notification under Section 3 B of the Madhya Pradesh Electricity Duty Act 1949 granting exemption or exception to the respondent from payment of electricity duty and other allied consequential reliefs
Before the High Court voluminous documentary evidence was given by the parties in support of their respective pleadings
The High Court on consideration of the entire material placed before it spelled out a promissory estoppel in favour of the respondent and concluded as follows To conclude we are of opinion that the petitioner is entitled to invoke the doctrine of promissory estoppel in order to claim exemption from payment of electricity duty for a period of five years from 1621965 to 1521970 in terms of the assurance of the State Government dated 181961
Of course as indicated earlier it is not for us to issue any writ directing the State Government to grant the petitioner exemption in terms of section 3 A vii or Section 3 B of the MP Electric ity Duty Amendment Act 1949
But in view of the unambiguous and unequivocal assurance given by the State Government on 181961 we can certainly quash the order of the State Government dated 1531973 as also the demand notices dated 2031973 Petitioner s Annex ure 48 and dated 341973 Petitioner s Annexure 50 and leave the matter at that
It would be for the Government to work out its own course of action on that basis   Mr Prithvi Raj learned counsel for the appellant urged that on the facts and circumstances of the case there was no occasion to invoke the doctrine of promissory estoppel
It was asserted that though the industrial policy was published by the State Government on 181961 containing the assurance extracted above the respondent had not in any manner acted thereon to its own prejudice but had rather on its own been taking steps to set up a generating plant much before the industrial policy was announced and had factually set up the generating plant as per its earlier resolve
The facts highlighted were that the 440 respondent Paper Mill had been set up at Amlai in Vindhya Pradesh when a Part C State under the administration of the Central Government
It had in its application dated 35
1955 to the Government indicated that about 5000 KW elec tricity would be required by it to run its paper plant and
it would by itself make arrangements for obtaining the necessary generating equipment
It appears that the State Government had at that time its oven project in view for installing a power plant
On that basis some correspondence ensued between the respondent and the State Government with regard to its annual requirement of electricity
That exer cise was abandoned for some reasons which are not relevant here
Thereafter the respondent applied for import licence for the import of a production plant as also a power plant to run it
The respondent was granted an import licence on the strength of which it started negotiation with an Ameri can supplier
While negotiations were in process the Ameri can supplier increased the price
It became impossible for the respondent to import the production plant and the power plant within the funds allotted to it by the World Bank and in these circumstances the American suppliers advised the appellant to drop procurement of the power plant
At the same time the American supplier warned the respondent that if the power plant was not purchased along with the produc tion plant it would make the project unsound and it would not be able to fulfil its guarantees as desired by the respondent
The respondent in these circumstances became of two minds whether to have the power plant or not
When it was in that state of mind the industrial policy was an nounced by the Government on 181961
Thereafter on 2181961 the respondent applied to the Government of India for sanction of permission to import 35 million dollar worth goods more than the sanctioned amount
Finally the respondent with the consent of the Government of India and with the aid of the World Bank was able to import the pro duction plant and the power plant and after its installation was able to go on production wef 1621965
The course of the events set out earlier were not dis puted as such by the appellants before the High Court but it was maintained as now before us that the respondent would have on its own gone on to install the power plant even without the announcement of the industrial policy dated 181961
Additionally it was maintained in the like manner that the respondent had not acted to its prejudice on the basis of the aforesaid assurance dated 181961 and so that doctrine of promissory estoppel was not invokable
The defence of the State thus raised was rejected by the High Court in the following words 441 We have already dealt with that aspect earli er and we have already held that the petition er s action in setting up a power plant was postponed on account of certain circumstances and ultimately on the advise of the manufac turers who refused to continue the guarantee the petitioner decided to set up its own power plant
In the meantime the assurance of the State Government dated 181961 had already been given and the petitioner s action in making a final decision to set up its own power plant can be directly connected with the State Government s assurance dated 18 1961
No sooner the petitioner took the final deci sion in that behalf it applied to the State Government for grant of an exemption although that application was premature because the petitioner s paper mill had not started func tioning
As such the petitioner would cer tainly be entitled to claim exemption in terms of the assurance of the State Government dated 181961 with effect from the date the paper mill started functioning namely 1621965 and the exemption would last for a period of five years upto 152 1970
 Whether the respondent was of one mind right from the beginning to set up a power plant with or without the assurance of the State Government dated 181961 as assert ed by the State is neither borne out nor is the view of the High Court arrived at from the record
Rather on the con trary the view taken is that the respondent s indecision in that regard ended and it became decisive on the announcement of the assurance dated 181961
Such view of the High Court was a possible view to be taken on the material placed before it and the inference drawn therefrom could be that the respondent had acted on the basis of the assurance
The effort here to re do the exercise in this regard must inevi tably fail for this Court ordinarily does not interfere with factual findings arrived at by the High Court and this case has not been shown to us to be an exception
In this situation the view taken by the High Court was unexception al warranting it to be left uninterferred with
Some attempt was made by learned counsel for the appel lant to contend that the doctrine of promissory estoppel could not be pressed into service to command the State Government under Section 3 A vii before its amendment and Section 3 B of the Madhya Pradesh Electricity Duty Act 1949 as amended to issue a Notification exempting the respondent from payment of electricity duty
The 442 answer to this argument is available in the conclusion arrived at by the High Court extracted above
Without com manding the State Government to issue such a Notification it has granted relief to the respondent to which there was no bar
Accordingly no provision of Madhya Pradesh Elec tricity Duty Act 1949 or any other law can be said to have been transgressed
We thus reject this argument too
Thus for the foregoing reasons this appeal fails and is hereby dismissed
No costs


Summary:
The appellant is a Municipal Board governed by the provisions of the UP Municipalities Act 1916
Section 128 of the Act provides for imposition of taxes by the Board
In exercise of the powers under Sections 131 to 135 and 296 of the Act the Government of the United Provinces framed octroi rules
The said rules were included in the Municipal Account Code Chapter X rules 131 to 231
The proviso to Rule 131 provided that octroi shall not be levied on certain articles which included mineral oil
The rule was amended vide notification dated the 2nd November 1953 and for the words the mineral oil in the proviso the words mineral oils classified as motor spirit kerosene or diesel oil were substituted
Separate rules for the assessment and collection of octroi in the Bareily Municipality were framed by the Govt
of UP
The draft rules were notified vide notification dated the 16th February 1963
Final rules were notified vide notification dated the 7th May 1963 and published in UP Gazette dated the 11th May 1963
By a notification dated the 24th July 1963 published in UP Gazette dated the 3rd August 1963 the appellant Board imposed octroi duty on goods and animals brought within the octroi limits of Barei ly Municipality for consumption use and sale at the rates shown in the Schedule subject to certain exceptions men tioned therein
The said notification came into operation from November 16 1963 and thereafter the levy of octroi in Bareily Municipality was governed by 1963 rules
The amend ments were made in the octroi schedule both in the rates as well as in the exemption and as a result whereof motor spirit kerosene and diesel oil were removed from the exemp tion clause and were subjected to the octroi duty  1 paisa per liter vide notification dated August 27 1969
The respondents challenged the validity of the notification dated 377 the 27th August 1969 by means of a writ petition before the High Court on the ground that 1925 rules took away the power from all Municipal Boards to impose octroi duty on mineral oils and until such power is restored under a contrary notification issued under section 128 of the Act the Board did not have any justification to assess or collect octroi duty on mineral ohs
The appellant Board contended that Rule 131 was superseded by the 1963 rules which now governed the imposition of octroi by the appellant Board
The single Judge of the High Court who heard the petition came to the conclusion that Rule 131 restricted the power of the Board to impose the octroi and the subject matter of the rule was not covered by the 1963 rules
The appellant s appeals preferred before the Division Bench were dismissed which took the view that the bar under Rule 131 regarding the imposition of octroi duty on mineral oils continued notwith standing the 1963 Rules
Hence these appeals by the Munici pal Board
Allowing the appeals this Court HELD The rule making power under section 296 read with Section 3002 of the Act enables the State Government to except any one municipality from the operation of the gener al rule by express provision in that behalf
When the iden tical authority in exercise of its rule making power duly frames the rules in respect of the same matter expressly providing that the new rules shah apply to a particular municipality in supersession of the existing rules it must be deemed that existing rules are repealed to that extent
384C D The 1963 rules had been framed under Section 296 of the Act in supersession of the existing rules after the publica tion by the State Government in the Gazette as provided under Section 300 and therefore rule 131 in the 1925 rules ceased to have any operation in respect of the matters dealt with therein so far as the Bareilly municipality is con cerned
384D Ms Central Distillery Chemicals Works Ltd  Anr
vs State of UP  Ors 1980 All LJ 62 approved
Municipality of Anand vs State of Bombay   Municipal Board Hapur vs Raghuvendra Kripal  Ors   Mool Chand vs Municipal Board Banda AIR 1926 All 517 Zaverbhai Amaidas vs The State of Bombay 1955 1 SCR 799 and The Municipality or Anand vs State of Bombay 1962 2 Supp
SCR 366 referred to