Case: Indian Oil Corporation Limited &amp; Another Vs. Kerala State Road Trading Corporation &amp; Others

the aforesaid paragraphs. Thus, it was decided by the Government of India, not to the extend subsidy to bulk consumers; same could not be said to be an arbitrary decision, discriminatory or in violation of the principles contained in Article 14 of the Constitution of India. 17. Such policy decisions are not amenable to judicial review. In State of Rajasthan v. J.K. Udaipur Udyog Ltd. (2004) 7 SCC 673 , this Court has observed that exemption is a privilege. In fiscal matters the concession granted by the State Government to the beneficiaries cannot confer upon them legally enforceable right against the Government to grant a concession, except to enjoy the benefits of the concession during the period of its grant. Enjoyment is defeasible one and can be taken away in exercise of very power under which such exemption was granted. This Court observed : "25. An exemption is by definition a freedom from an obligation which the exemptee is otherwise liable to discharge. It is a privilege granting an advantage not available to others. An exemption granted under a statutory provision in a fiscal statute has been held to be a concession granted by the State Government so that the beneficiaries of such concession are not required to pay the tax or duty they are otherwise liable to pay under such statute. The recipient of a concession has no legally enforceable right against the Government to grant of a concession except to enjoy the benefits of the concession during the period of its grant. This right to enjoy is a defeasible one in the sense that it may be taken away in exercise of the very power under which the exemption was granted. (See Shri Bakul Oil Industries v. State of Gujarat (1987) 1 SCC 31 , Kasinka Trading v. Union of India (1995) 1 SCC 274 and Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398 )." 18. Similarly, this Court in Shree Sidhbali Steels Ltd. v. State of Uttar Pradesh & Ors. 2012(1) R.C.R.(Civil) 663 : (2011) 3 SCC 193 with respect to rebate has observed that it is a privilege granted in the form of an advantage. Concession granted by the State Government under section 49 of the Electricity Act, 1948 could be enjoyed during the period of its grant. It was defeasible one and was liable to be taken away or withdrawn the way in which it was granted. The Court observed : "48. From the principle enunciated in the abovementioned decision in Udaipur Udyog case (2004) 7 SCC 673 , there is no manner of doubt that the rebate which was granted to the Petitioners, was, by definition, a freedom from an obligation which the appellants otherwise were liable to discharge. The rebate was a privilege granting an advantage which was not made available to others. The rebate granted under Section 49 of the Electricity (Supply) Act of 1948 was, therefore, a concession granted by the State Government so that the beneficiaries of such concessions were not required to pay the electricity tariff they were otherwise liable to pay under the said Act during the period of its grant. The petitioners, as recipients of a concession, accepted to enjoy the benefits of the concession during the period of its grant. This right to enjoy was a defensible one in the sense that it was liable to be taken away or withdrawn in exercise of the very power under which the exemption was granted." 19. This Court in Ayurved Shastra Seva Mandal & Anr. v. Union of India & Ors. 2013(2) S.C.T. 675 : (2013) 16 SCC 696 held that the privilege granted to candidates in the matter of education could not be transformed into a right. In Madras City Wine Merchants Association & Anr. v. State of T.N. & Anr. (1994) 5 SCC 509 , this Court observed that a privilege exists during the period it is operative or its validity and not beyond it. In Har Shankar & Ors. v. The Dy. Excise & Taxation Commissioner & Ors. (1975) 1 SCC 737 it was held that when a matter is that of privilege, it cannot be enforced as a right. 20. Thus, we find no merit in the submissions raised that subsidy should have been continued as an exception for the State Road Transport Corporations, though they may have been rendering public service. However, for the purpose of such public services corporation cannot claim as of right that Government of India or the State Government should continue or grant the subsidy. It cannot be claimed as a matter of right; no such right exists to claim the subsidy. The Court cannot interfere in such matters.21. However, with respect to the State of Kerala, we find that in the interim order, that was passed before transfer of case to this Court, the State of Kerala has undertaken to reimburse the deficit amount to respondents Nos.2 and 3 in the event of the writ petition being dismissed ultimately; the same was recorded by the High Court: - "The balance of convenience will be in favour of granting an interim order as it will be impossible to reimburse the excess collected from the traveling public in the event of the writ petition being allowed eventually. The State Government on the other hand guarantees to reimburse the deficit amount to respondents 2 and 3 in the event of the writ petition being dismissed ultimately and the same is recorded". 22. With respect to other states, suffice it to observe that it would be open to the respective parties to work out equities as may be considered appropriate by them, otherwise payment has to be made by the bulk consumers to the Oil Marketing Companies (OMCs).23. It was also stated in the matters of the State of Karnataka and State of Tamil Nadu, that there was no interim order and the concerned Transport Corporations of the States have incurred no liability. The statement is placed on record.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]16. Firstly, coming to the issue of the policy framed by the Government of India; the grant of subsidy is a matter of privilege, to be extended by the Government. It cannot be claimed as of right. No writ lies for extending or continuing the benefit of privilege in the form of concession. Subsidy is the matter of fiscal policy. Such privilege can be withdrawn at any time is the settled proposition of law. Thus, it was open to the Government of India to take a decision to withdraw the subsidy enjoyed by the bulk consumers; and, it was a decision based upon the aforestated rationale to direct funds for social welfare scheme for common man and that by grant of subsidy, the OMCs had suffered heavy losses, and had borrowed the excessive money to the extent indicated in the aforesaid paragraphs. Thus, it was decided by the Government of India, not to the extend subsidy to bulk consumers; same could not be said to be an arbitrary decision, discriminatory or in violation of the principles contained in Article 14 of the Constitution of India.Thus, we find no merit in the submissions raised that subsidy should have been continued as an exception for the State Road Transport Corporations, though they may have been rendering public service. However, for the purpose of such public services corporation cannot claim as of right that Government of India or the State Government should continue or grant the subsidy. It cannot be claimed as a matter of right; no such right exists to claim the subsidy. The Court cannot interfere in such matters.21. However, with respect to the State of Kerala, we find that in the interim order, that was passed before transfer of case to this Court, the State of Kerala has undertaken to reimburse the deficit amount to respondents Nos.2 and 3 in the event of the writ petition being dismissedWith respect to other states, suffice it to observe that it would be open to the respective parties to work out equities as may be considered appropriate by them, otherwise payment has to be made by the bulk consumers to the Oil Marketing Companies (OMCs).23. It was also stated in the matters of the State of Karnataka and State of Tamil Nadu, that there was no interim order and the concerned Transport Corporations of the States have incurred no liability. The statement is placed on record.