1 pdp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE SIDE WRIT PETITION NO. 7453 OF 2007 1. Reliance Industries Limited a Company registered under the provisions of the Companies Act, 1956 having its registered office at Maker Chambers IV, 222, Nariman Point, Mumbai – 400 021 and having its Petrochemical Division at MIDC Industrial Estate Area, Patalganga - 410 220, Rasayani 410 207 District – Raigad. 2. Mr. V.K. Chandran Shareholder of the 1st Petitioner, having its office at 3rd Floor, Maker Chambers IV, Nariman Point Munbai – 400 021. .. Petitioners Vs. 1. The State of Maharashtra through Principal Secretary Industry (Industries, Energy & Labour) Mantralaya, Mumbai – 400 032. 2. Principal Secretary (Energy) Government of Maharshtra, Ministry of Industries, Energy and Labour Department, Mantralaya, Mumbai – 400 032. 3. Deputy Secretary (Energy) Government of Maharashtra, Mantralaya, Mumbai – 400 032. 4. The Electrical Inspector Electricity and Labour Department 2 Inspection Division No.1 Wagle Industrial Estate, Road No.11, Thane (W) – 400 604. .. Respondents WITH WRIT PETITION NO. 897 OF 2008 1. The Hindoostan Spinning & Weaving Mills Limited. A Company incorporated under the Companies Act, 1956, having its registered office at Sir Vithaldas Chambers, 16, Bombay Samachar Marg, Mubai – 400 001. 2. Shri Chandrahas K. Thackersey adult Indian inhabitant, the Director of Petitioner No.1 having its office at Sir Vithaldas Chambers, 16, Bombay Samachar Marg, Mumbai 400 001. .. Petitioners Vs. 1. The State of Maharashtra through its Secretary to the Department of Industry, Energy & Labour having office at Mantralaya, Mumbai. 2. The Chief Engineer (Electrical) Government of Maharashtra having office at PWD Administration Building, 3rd floor, Ramkrishna Chemburkar Marg, Chembur, Mumbai – 400 071. 3. The Electrical Inspector PMT Commercial Building No.1, 3rd Floor, Swargate, Pune – 411 042. .. Respondents WITH WRIT PETITION NO. 1960 OF 2007 1. Eurotex Industries and Exports Ltd. A Company incorporated under 3 the Companies Act, 1956, having its Regd. Office at Raheja Chambers, 12th floor, 213, Nariman Point, Mumbai – 400 021. 2. R.K. Agrawal Adult Indian inhabitant residing at B-19/20 Omlata Jain Tower, Anand Nagar, Vasai Road West, Dist. Thane 401 202. .. Petitioners Vs. State of Maharashtra having its office at Mantralaya, Mumbai – 400 032. .. Respondent WITH WRIT PETITION NO. 1962 OF 2007 1. M/s. Lupin Limited formerly known as Lupin Chemicals Ltd. Being a Company registered under the Companies Act, 1956 and having its registered office at 159, CST Road, Kalina, Santacruz (E), Mumbai – 400 098. Having one of it’s manufacturing locations at T-142, M.I.D.C. Tarapur, District – Thane, Maharashtra 400 506 2. Rajvardhan Vishnu Satam an Indian inhabitant, residing at B/1507, Shree Prabha CHS Ltd. Sejal Park, Next to Goregaon Bus Depot Link Road, Goregaon (W), Mumbai – 400 104. .. Petitioners Vs. State of Maharashtra having its office at Mantralaya Mumbai 400 032. .. Respodent 4 WITH WRIT PETITION NO. 2003 OF 2007 1. M/s. Amit Spinning Industries Ltd. A Company incorporated under the Companies Act 1956, having its registered office at Lotus House, 5th floor, 33-A New Marine Lines, Mumbai – 400 020. 2. Ranjan Mangtani, an Indian Inhabitant, Director of 1st Petitioner, his office at A-60, Okhla Industrial Area, Phase II, New Delhi – 20. Vs. State of Maharashtra having its office at Mantralaya Mumbai 400 032. .. Respondent WITH WRIT PETITION NO. 2262 OF 2007 1. M/s. Standard Industries Ltd. Being a Company registered under the Companies Act, 1956 and having its registered office at 59, Arcade, World Trade Centre, Cuffe Parade, Mumbai – 400 005. 2. Mrs. T.B. Panthaki, an Indian Inhabitant working at 59, Arcade World Trade Centre, Cuffe Parade, Mumbai – 5. .. Petitioners Vs. State of Maharashtra having its office at Mantralaya, Mumbai – 400 032. .. Respondent 5 WITH WRIT PETITION NO. 2364 OF 2007 1. M/s. Mukand Limited, being a Company registered under the Indian Companies Act, 1913 and having its registered office at Bajaj Bhavan, Jamnalal Marg, 226, Nariman Point, Mumbai – 400 021. 2. Vinod Shah, an Indian Inhabitant, Working as Director and Advisor (Special Project) at Mukand Ltd. Thane-Belapur Road, Dighe, P.O. Kalwe, Dist. Thane – 400 605 .. Petitioners Vs. State of Maharashtra having its office at Mantralaya, Mumbai 400 032. .. Respondent WITH WRIT PETITION NO. 5954 OF 2007 1. NRC Limited, a Company incorporated under the Indian Companies Act, 1913, and having its registered office at Ewart House, Homi Modi Street, Mumbai 400 001 and its plant at Post Mohone, Taluka Kalyan, Dist. Thane. 2. Jayantkumar Hirachand Killedar Deputy Manager Engineering and shareholder of Petitioner No.1 and residing at CN-2/2, NRC Colony, Mohone Kalyan – 421 102. .. Petitioners Vs. 1. The State of Maharashtra 6 through Ministry of Industries, Energy and Labour Department, Mantralaya, Mumbai – 400 032. 2. The Electrical Inspector Electricity and Labour Department Inspection Division No.1 Kalyan. .. Respondents WITH WRIT PETITION NO. 2204 OF 2007 1. Indo Count Industries Ltd. A Company incorporated under the Companies Act, 1956, having its Regd. Office at D-1, M.I.D.C. Gokul Shirgaon Kolhapur. 2. Ghanshyam Sen, aged 46 years, of Bombay, Indian Inhabitant, residing at Siddhi Apts. B-203, Shripratha Comlex Nallasopara, (W), Room No.1, Dist. Thane – 400 023. .. Petitioners Vs. 1. State of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 2. The Secretary (Energy) Government of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 3. The Deputy Secretary (Industries, Energy & Labour Dept.) Government of Maharashtra, having his office at Mantralaya, Mumbai – 400 032. .. Respondents 7 WITH WRIT PETITION NO. 2245 OF 2007 1. SI Group-India Limited A Limited Company, having registered office at Plot No. 2/1, TTC Industrial Area, Thane-Belapur Road, Navi Mumbai – 400 703. 2. Pradip S. Paradkar, aged 51 yrs. Shareholder of the Petitioner No.1 of Bombay, Indian Inhabitant residing at S/27 Jai Satyam-B, Shiv Mandir Path, Ramnagar, Dombivli (East) – 421 201. .. Petitioners Vs. 1. State of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 2. The Secretary (Energy) Government of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 3. The Deputy Secretary (Industries, Energy & Labour Dept.) Government of Maharashtra, having his office at Mantralaya, Mumbai – 400 032. .. Respondents WITH WRIT PETITION NO. 2443 OF 2007 1. Graphite India Ltd. A Limited Company, having registered office and Factory at 88, MIDC Industrial Area, Satpur, Nashik Pin – 422 007. 8 2. Shiva Balan, adult aged 48 yrs. Of Bombay, Indian Inhabitant, residing at A-3/102, Gangotri Bangur Nagar, Goregaon (W), Mumbai – 400 090. .. Petitioners Vs. 1. State of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 2. The Secretary (Energy) Government of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 3. The Deputy Secretary (Industries, Energy & Labour Dept.) Government of Maharashtra, having his office at Mantralaya, Mumbai – 400 032. .. Respondents WITH WRIT PETITION NO. 5966 OF 2007 1. Jindal Poly Films Limited previously known as Jindal Polyesters Limited a company incorporated under the Companies Act, 1956, having its Regd. Office at 19th K.M. Hapur, Bulandshahar Road, P.O. Gulauthi Dist. Bulandshahar, U.P. 2. Rangbehari Bhoot Shareholder of the Company, having his address at 602, Radha Kunj “B” Navetia Road, Malad (East), Mumbai 400 097. .. Petitioners 9 Vs. 1. State of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 2. The Secretary (Energy) Government of Maharashtra having its office at Mantralaya, Mumbai – 400 032. 3. The Deputy Secretary (Industries, Energy & Labour Dept.) Government of Maharashtra, having his office at Mantralaya, Mumbai – 400 032. 4. The Controller of Electricity Industries, Energy and Labour Division, 21, Rawal Bungalow, Tidke Colony, Nasik 422 002. .. Respondents WITH WRIT PETITION NO. 4962 OF 2007 M/s. Pudumjee Pulp and Paper Mills Limited A Company Registered under the provisions of Companies Act, 1956 [Act No.1 of 1956] having its Registered Office and Factory at Thergaon Chinchwad, Pune – 411 033. .. Petitioner Vs. 1. State of Maharashtra [Summons to be served on the learned Government Pleader appearing for State of Maharashtra under Order XXVII, Rule 4, of the Code of Civil Procedure, 1908]. 10 2. The Secretary Industries, Energy and Labour Department Government of Maharashtra Mantralaya, Mumbai – 400 032. [Summons to be served on the learned Government Pleader appearing for State of Maharashtra under Order XXVII, Rule 4, of the Code of Civil Procedure, 1908]. 3. The Electricity Inspector, PMT Commercial Building No.1, 3rd Floor, Swargate, Pune – 411 042. .. Respondents WITH WRIT PETITION NO. 8260 OF 2007 1. Soma Textiles & Industries Limited A Company incorporated under the Companies Act, 1956, having its Registered Office at D-49, MIDC Baramati, District Pune. 2. Shri Shrikant Bhat, Adult, Indian Inhabitant, resident of 702 B, Patel Terrace, Jijamata Road Pump House, Andheri (East), Mumbai – 400 093. .. Petitioners Vs. The State of Maharashtra Through Government Pleader, Appellate Side, High Court, Bombay. .. Respondent 11 WITH ORIGINAL SIDE WRIT PETITION NO. 1508 OF 2007 M/s. Nagreeka Exports Ltd., Having factor at village Yavaluj, Taluka Panhala, Dist. Kolhapur, Kolhapur – 416 008 and having office at 7, Kala Bhavan, 3, Mathew Road, Mumbai – 400 004. .. Petitioner Vs. 1. State of Maharshtra Through Govt. Pleader, High Court, Bombay. 2. The Secretary (Energy) and Labour Department, Government of Maharashtra, Mantralaya, Mumbai – 400 032. .. Respondents Mr. Milind Sathe, Senior Advocate with Mr. Apsi Chinoy, Senior Advocate with Mr. Chirag Balsara and Mr. C.D. Patel i/by M/s. Junnarkar and Associate for petitioners in Writ Petition No. 7453 of 2007. Mr. Z. T. Andhyarujina a/w Mr. Parag Patil i/by Hariani & Co. for the petitioners in W.P. No. 897/08. Mr. Haresh Jagtiani, Senior Advocate a/w Mr. Anil D’Souza & Mr. Siddesh Bhole i/by M/s. Haresh Jagtiani & Associate for petitioners in W.P. Nos. 1960, 1962, 2003, 2262 and 2364 of 2007. Mr. Satish Shah, Senior Advocate a/w Ms. Gauri Gandhi Kothari, Ms. Savita Sawalkar, Khurhnood Akhtar, Mrs.Suryawanshi i/by Mr. Vigil Juris for the petitioners in W.P. No. 5954/07. Mr. Satish Shah, Senior Advocate with Ms. Gauri Gandhi Kothari with Ms.Savita Sawalkar i/by M/s. Tamhane and Co. for petitioners in W.P. Nos.2204, 2245, 2443, 5966 of 2007. Mr. A.V. Anturkar i/by Mr. S.B. Deshmukh for petitioners in W.P. No. 4962/07. Mr. Anoshak Daver a/w Mr. Nikhil Rajani i/by M/s. V. Deshpande & Co. for petitioners in W.P. No. 8260/07. 12 None for the parties in O.S. W.P. No. 1508/07. Mr. V.A. Sonpal, “A” Panel Advocate for State all the matters. CORAM: B.H.MARLAPALLE & SMT. ROSHAN DALVI, JJ. Reserved On : September 24, 2009. Pronounced On : November 07, 2009. JUDGMENT (Per B.H. Marlapalle,J.). 1. The factual matrix, leading to the filing of these petitions in the second round, could, in briefly, be set out as follows:- The Government of Maharashtra announced its Industrial Policy sometimes in early 1993 and proposed not to charge electricity duty on the power generated by the captive power plants and its utilization. Clause 5.3.3.1 of the said policy reads as under:- “5.3.3.1 – On the power front, the State has always accorded a very high priority to this sector. Nearly one fourth of its plan outlay is earmarked for this purpose. Today, our installed capacity is 9,300 mega watts. In the next 5 years, we propose to add 5,500 mega watts to this capacity. Maharashtra was the first State in which private sector participation has been permitted in power 13 projects. We have now been able to seek participation of an international power company which is planning to set up a large power plant based on liquefied natural gas in Ratnagiri at a total investment of Rs.8,000 crore. We will also welcome captive generation of power by any unit so as to augment the overall power availablity in the State. To encourage such captive power generation, it is proposed not to charge electricity duty to the extent of such captive power generation and its utilization.” 2. In keeping with the Industrial Policy so announced, the State Government issued a notification dated 22/6/1993 in exercise of the powers conferred by Section 5A of the Bombay Electricity Duty Act, 1958 (“the Act” for short) and exempted from July 1993 the consumption of energy in respect of any industrial purpose in the whole of the State of Maharashtra from payment of the whole of the electricity duty payable under Part – F of the schedule to the said Act subject to the following conditions, namely, (i) The exemption shall be available only in respect of energy generated in generating station installed on or after 1/7/1993 by the person carrying on the Industry and consumed by himself for such industry. (ii) The exemption shall not be available in respect of any energy consumed for residential or office purpose in any industry. 3. On 1/9/1994, the Government issued a fresh notification in 14 supersession of its earlier notification dated 22/6/1993 in exercise of the powers conferred by Section 5A of the Act and exempted with effect from 1/9/1994 the consumption of energy generated in a generating station by a person carrying on the industry and consumed by himself for such industry, in the whole of the State of Maharashtra, from the payment of the whole electricity duty payable under Part – F of the schedule to the Act. On 30/10/1996 the State Government issued a fresh notification in supersession of the earlier notification dated 1/9/1994 in exercise of the powers conferred by Section 5A of the Act and exempted with effect from the billing month of October, 1996, the consumption of energy generated in a generating station by a person carrying on an industry and consumed by himself for such industry, in the whole of the State of Maharashtra from payment of the whole electricity duty payable under clause (b) of Part – G of the schedule appended to the said Act. However, on 1/4/2000, the State Government issued a notification and withdrew the exemption on the payment of electricity duty on the power generated by the captive power plants and decided to charge 30 paise per unit as electricity duty with effect from the billing month of April, 2000 in supersession of all the earlier notifications. On the very same day, the State Government issued yet another notification in exercise of the powers conferred by Section 5A of the Act and in supersession of the earlier notification dated 30/10/1996 and exempted with effect from the billing month of April, 2000, the consumption of energy generated through non-conventional sources by a person carrying on an industry in the Co-operative sector and consumed by himself for such industry, in the whole of the State of Maharashtra from payment of the whole 15 electricity duty payable under clause (b) of Part – G of the schedule appended to the said Act. On 4/4/2001, the State Government issued yet another notification in exercise of the powers conferred by Section 5A of the Act and reduced the electricity duty from 30 paise per unit to 15 paise per unit payable under clause (b) of Part – G of the schedule to the said Act, subject to the condition that the generating set is installed in pursuance of the Government of Maharashtra policy prior to the revised policy regarding captive generation declared vide GR dated 25/4/2000. Thus, the captive power plants installed after the Government Resolution dated 25/4/2000 were not entitled for the electricity duty payment at the reduced rate of 15 paise per unit, as per the notification dated 4/4/2001. 4. The notifications dated 1/4/2000 and 4/4/2001 came to be challenged in a group of Writ Petitions before this Court i.e. Writ Petition Nos. 652/01, 2604/01, 2849/01, 3005/01, 3006/01, 4847/01, 4848/01, 380/02, 558/02, 864/02, 1295/02, 1336/02, 1636/02, 2940/02, 3132/02, 3716/02 and 4711/05 and these petitions were filed by the present petitioners. The petitions were admitted and either stay to the recovery was granted or some conditional orders were passed so as not to take any coercive action against the petitioners. While these petitions were pending, the Maharashtra Electricity Regulatory Commission passed an order on 18/9/2004 and rendered an advice to the Government of Maharashtra regarding exemption in electricity duty in the following words:- 16 “ADVICE TO THE GOVERNMENT OF MAHARASHTRA Electricity Duty 1.105 State taxation is outside the domain of determination by the Commission. However, the Commission notes that the Government of Maharashtra currently levies an Electricity Duty (ED) on the consumption of the units generated from the Captive Power Plant, under the Bombay Electricity Duty Act 1958, at the rate of 30 Paise per unit on CPPs commissioned after 01.04.2000, and at the rate of 15 paise per unit on CPPs commissioned before 1st April, 2000. 1.106 An important aspect of the philosophy behind this Order on Fossil Fuel based Captive Power Plants is to gainfully utilise the excess saleable capacity of the Captive Power Plants. This is important especially in the context of the considerable demand-supply gap prevailing in the State, which could be partially bridged through surplus CPP power. 1.107 Given the above, to encourage and promote sale of available surplus captive power within the State and to avoid unduly overburdening the Captive Power Plants with further levy of Electricity Duty, the Commission, in exercise of the powers vested in it under Section 86(2), advises the Government of Maharashtra to abolish the Electricity Duty on the self- consumption by Fossil Fuel based Captive Power Plants in the State. The Commission also recommends that Tax on Sale of Electricity should not be levied in the case of CPPs.” 17 4A. The Government conceded to the said advice and issued the notification dated 16/6/2005 in exercise of the powers conferred by Section 5A of the Act and in supersession of the Government notification dated 4/4/2000 and exempted, for a period of five years with effect from 1/5/2005, the consumption of energy, generated in a captive power generating station, by a person carrying on an industry, for his industry, from payment of whole of the electricity duty payable under clause (b) of Part – G of the Schedule appended to the said Act. The said notification was placed on record in the above mentioned pending writ petitions and, therefore, on 6/6/2006 a Division Bench of this Court disposed off all the pending writ petitions and by granting liberty to the petitioners to submit a representation for exemption of electricity duty in its entirety for the period from 1/4/2000 to 30/4/2005 to the State Government and if such a representation was submitted, the State Government was directed to decide the same as early as possible and preferably in four weeks. The interim orders granted earlier were directed to be continued till the decision on the representations to be taken by the State Government. The Captive Power Producers Association, in the meanwhile, had submitted a representation dated 27/4/2006 to the Secretary, Industries, Energy and Labour Department, Government of Maharashtra. Some of the petitioners had also submitted similar representation in May, 2006 to the State Government. It appears on 5/6/2006 there was a meeting held by the Secretary (Engery) with the representatives/officials of the Captive Power Producers Association and Reliance Industries Ltd. and the minutes of the said meeting were reduced in writing. The last paragraph of the said minutes read as under:- 18 “On hearing the representations made by the representatives/officers present for the meeting, Secretary (Energy) clarified that, in 2005, when the proposal for granting concessions to CPPs was submitted to the Cabinet, it was pointed out that the Captive Power Producers Association and other industries units have already filed a petition in the High Court, to waive off all the electricity duty from the year 2000 itself. However, it was agreed by the representatives of Captive Power producers, that then the said petition shall be withdrawn, if Govt. waives off Electricity duty on Captive power generation, Govt. shall examine this and shall take a decision on the present request of the Association. It is expected that this process would take some time. It would therefore be appropriate to inform the High Court, that about 3 months time would be required to arrive at a decision on the issue. The representatives agreed to the said proposal.” On account of these intervening developments, the order dated 6/6/2006 came to be passed by this court directing the State Government to decide the representations for total exemption from the payment of electricity duty by the Captive Power Producers. On 25/1/2007, the Government of Maharashtra in the Department of Industry, Energy and Labour addressed a letter to the President of CPPA and informed that the request for exemption from payment of electricity duty could not be accepted. The CPPs were advised to immediately pay their electricity duty dues together with interest thereon to the Governemnt. The CPPs submitted yet another representation to the Minister for 19 Energy and Higher Technical Education on 6/2/2007 and 23/2/2007 some of the petitioners received notices demanding payment of electricity duty arrears for the period from April 2000 to May, 2005 and it is under these circumstances that these petitions came to be filed in the fresh round. The petitioners have prayed for quashing and setting aside the notification dated 4/4/2001 and the demand notices issued from time to time for the recovery of arrears in the payment of electricity duty for the period from 1/4/2000 to 30/4/2005 as well as the communication/order dated 25/1/2007. 4B. Writ Petition Nos. 6414/2000, 495/01 and 5207/01 came to be decided by us as per the common judgment dated 5/10/2009 and they were partly allowed. The notifications dated 1/4/2000 and 4/4/2001 were quashed and set aside and it was held that the petitioners were entitled for exemption in payment of electricity duty in terms of the notification dated 30/10/1996 for the period from 1/4/2000 to 30/4/2005. The demand notices for the recovery of arrears in electricity duty for the period from 1/4/2000 to 30/4/2005 were quashed and set aside. 5. The relief prayed for in this group of petitions is on the lines of the relief granted by us by our common judgment dated 5/10/2009. However, some additional grounds, in addition to the grounds raised in Writ Petition Nos. 6414/2000, 495/01 and 5207/01 have been set out in these petitions and, therefore, this separate judgment to deal with those additional grounds, which 20 ought to be treated as an extension of our common judgment dated 5/10/2009. 6. The petitioners have, in addition, invoked the doctrines of promissory estoppel and legitimate expectations while praying for the exemption in payment of electricity duty in its entirety for the period from 1/4/2000 to 30/4/2005. It has been submitted that the petitioners, on the basis of the industrial policy announced by the State Government in early 1993 and the said policy having been translated in terms of the notification dated 22/6/1993, they have set up their captive power plants at huge investments in crores of rupees and, therefore, the State Government ought not to be permitted to resile from the same and it must be bound by the promises made. In addition, the petitioners contend that while rejecting their representations as per the communication dated 25/1/2007, the State Government did not seek the advice from the Maharashtra Electricity Regulatory Commission which is a statutory body created under the Electricity Act, 2003 and on that ground the denial of total exemption in the payment of electricity duty is vitiated. It is further contended that the communication dated 25/1/2007 rejecting the representations submitted by the petitioners or their Association is without any reasons and that by itself is a sufficient ground to set aside the same. Pursuant to the Industrial Policy announced by the State Government, it had made an unequivocal representation/assurance/promise to exempt captive power generation from electricity duty payment in order to induce an incentive to industrial units without setting up a particular period and, in fact, it was open ended. Moreover 21 by its subsequent resolution dated