Case: Gitesh Pipes Private Limited &amp; Another Vs. The State of Maharashtra &amp; Others

which is produced as Annexure E to the petition, respondent no. 3 has informed that as per Government Resolution dated 23.3.2000 the last date for completing all stages was 31.12.2001 and, therefore, within 15 days from the date of the letter they should produce all necessary documents so that they will be entitled for all benefits except sales tax. It is this letter which is challenged. According to the petitioners, this was the first communication in which it is said that the petitioners would not be entitled to benefit of sales tax but only to the subsidy and again it is said that they have to complete the steps before 31.3.2002. So this letter in one sentence stated that the last date for completion as per the Government Resolution was 31.12.2001, but then it is said that the petitioners would be entitled to the benefits other than sales tax if they complete all stages before 31.3.2002.17. Along with the affidavit in reply, the respondents have produced the original package scheme of incentives 1993 as Annexure R-1 and its preamble discloses that package scheme of incentives which is a scheme introduced in order to achieve dispersal of industries outside the Bombay-Thane-Pune belt and to attract them to the underdeveloped and developing areas of the State. Para 2 shows that the implementing agency was the District Industries Centre which is respondent no. 3 in this case. Para 3.3 shows what are the effective steps which are to be taken for getting benefits. Para 5 deals with incentives and para 5.1 deals with sales tax incentives which include sales tax incentives by way of exemption, sales tax incentives by way of deferal, and sales tax incentives by way interest free unsecured loan, etc. 18. In the case of Hitech Electrothermics & Hydropower Ltd. vs. State of Kerala and others (2003) 3 SCC 716, the Kerala Government in its industrial policy offered concessional tariff rate for a five year period to new industries from the date they commenced such production between 1.1.1992 and 31.12.1996. The Electricity Board adopted that policy. The appellant industry was granted registration certificate by District Industries Centre in 1993 and the Board accorded sanction for power to it in 1995. However, the Board, despite repeated requests, provided power connection only in 1998 and such an inaction on the part of the Board prevented appellant from starting production within the prescribed time limit i.e. 31.12.1996. It was held that, under the circumstances, concessional rate cannot be denied to the appellant on literal interpretation of the Governments policy as adopted by the Board. The Supreme Court directed concessional rate to be granted to the appellant which commenced production, though not by 31.12.1996, but for a period of 3 years. 19. The doctrine of promissory estoppel was considered by the Supreme Court recently in the case of Southern Petrochemical Industries Co. Ltd. vs Electricity Inspector and E.T.I.O. & Ors. [2007 AIR SCW 3752]. The case related to tax on electricity consumed. In para 135 it is observed that the doctrine of promissory estoppel would undoubtedly be applicable where an entrepreneur alters his position pursuant to or in furtherance of the promise made by a State to grant inter alia exemption from payment of taxes or charges on the basis of the current tariff. Such a policy decision on the part of the State shall not only be expressed by reason of notifications expressed under the statutory provisions, but also under the executive instructions. 20. In this case the respondents have stated that publication was given regarding notification dated 12.5.2000 in daily "Loksatta" dated 14.3.2000. Its copy is not produced. It is not known whether it has wide circulation in Jalgaon district. Secondly it is also stated that the District Information Officer, Jalgaon was informed by letter dated 22.3.2000 regarding giving publicity. There is nothing to show whether he acted on the letter and how he had given publicity. So the respondents have not brought on record evidence to show that the petitioners knew or there is reason to believe that they knew the facts and there was no question of they being misled by the representation. 21. It is not the case of the respondents that the doctrine of promissory estoppel cannot be invoked by the petitioners because the Government has been acting in discharge of its duty in law or that acting in pursuance of the representation made in the letter of intent would be against any statute. It also does not appear that the doctrine is invoked against the legislative power of the State nor it is said that special considerations necessitated the respondents not to comply with the representation in the letter of intent in the public interest. So, the respondents have not brought their case under any of the exceptions to the doctrine of promissory estoppel.22. So, considering the facts and circumstances, it is abundantly clear that the petitioners were represented by the respondents by letter of intent Exh. A that the effective steps had to be completed by 31.3.2002. On the said representation the petitioners have acted upon. They purchased land to set up factory after obtaining loan from the Bank. They have also obtained loan of Rs. 1.90 crores, power supply and the no objection certificate from the Maharashtra Pollution Control Board. Respondent no.3 is admittedly agency of respondent nos.1 and 2 and respondent nos.1 and 2 cannot deny the representation/act made/committed by their representative/agent i.e. respondent no.3. In the circumstances, therefore, in our considered opinion, the petitioners are entitled to the benefit of the concessions which were promised by the letter of intent. In the facts and circumstances of the case, we hold that the Government Circular dated 23.3.2000 which provides 31.12.2001 as cut off date will not be applicable to the petitioners in view of the letter of intent in which 31.3.2002 is mentioned as the cut off date. Therefore, the petitioners are entitled to grant of S.T.I. incentives under the package scheme of 1993.

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

Explanation:
1[ds]16. By letter dated 20.3.2002 which is produced as Annexure E to the petition, respondent no. 3 has informed that as per Government Resolution dated 23.3.2000 the last date for completing all stages was 31.12.2001 and, therefore, within 15 days from the date of the letter they should produce all necessary documents so that they will be entitled for all benefits except sales tax. It is this letter which is challenged. According to the petitioners, this was the first communication in which it is said that the petitioners would not be entitled to benefit of sales tax but only to the subsidy and again it is said that they have to complete the steps before 31.3.2002. So this letter in one sentence stated that the last date for completion as per the Government Resolution was 31.12.2001, but then it is said that the petitioners would be entitled to the benefits other than sales tax if they complete all stages before 31.3.2002.17. Along with the affidavit in reply, the respondents have produced the original package scheme of incentives 1993 as Annexureand its preamble discloses that package scheme of incentives which is a scheme introduced in order to achieve dispersal of industries outside thebelt and to attract them to theunderdeveloped and developing areas of theState. Para 2 shows that the implementing agency was the District Industries Centre which is respondent no. 3 in this case. Para 3.3 shows what are the effective steps which are to be taken for getting benefits. Para 5 deals with incentives and para 5.1 deals with sales tax incentives which include sales tax incentives by way of exemption, sales tax incentives by way of deferal, and sales tax incentives by way interest free unsecured loan, etc. 18. In the case of Hitech ElectrothermicsHydropower Ltd. vs. State of Kerala and others (2003) 3 SCC 716, the Kerala Government in its industrial policy offered concessional tariff rate for a five year period to new industries from the date they commenced such production between 1.1.1992 and 31.12.1996. The Electricity Board adopted that policy. The appellant industry was granted registration certificate by District Industries Centre in 1993 and the Board accorded sanction for power to it in 1995. However, the Board, despite repeated requests, provided power connection only in 1998 and such an inaction on the part of the Board prevented appellant from starting production within the prescribed time limit i.e. 31.12.1996. It was held that, under the circumstances, concessional rate cannot be denied to the appellant on literal interpretation of the Governments policy as adopted by the Board. The Supreme Court directed concessional rate to be granted to the appellant which commenced production, though not by 31.12.1996, but for a period of 3 years. 19. The doctrine of promissory estoppel was considered by the Supreme Court recently in the case of Southern Petrochemical Industries Co. Ltd. vs Electricity Inspector and E.T.I.O.Ors. [2007 AIR SCW 3752]. The case related to tax on electricity consumed. In para 135 it is observed that the doctrine of promissory estoppel would undoubtedly be applicable where an entrepreneur alters his position pursuant to or in furtherance of the promise made by a State to grant inter alia exemption from payment of taxes or charges on the basis of the current tariff. Such a policy decision on the part of the State shall not only be expressed by reason of notifications expressed under the statutory provisions, but also under the executive instructions. 20. In this case the respondents have stated that publication was given regarding notification dated 12.5.2000 in daily "Loksatta" dated 14.3.2000. Its copy is not produced. It is not known whether it has wide circulation in Jalgaon district. Secondly it is also stated that the District Information Officer, Jalgaon was informed by letter dated 22.3.2000 regarding giving publicity. There is nothing to show whether he acted on the letter and how he had given publicity. So the respondents have not brought on record evidence to show that the petitioners knew or there is reason to believe that they knew the facts and there was no question of they being misled by the representation. 21. It is not the case of the respondents that the doctrine of promissory estoppel cannot be invoked by the petitioners because the Government has been acting in discharge of its duty in law or that acting in pursuance of the representation made in the letter of intent would be against any statute. It also does not appear that the doctrine is invoked against the legislative power of the State nor it is said that special considerations necessitated the respondents not to comply with the representation in the letter of intent in the public interest. So, the respondents have not brought their case under any of the exceptions to the doctrine of promissory estoppel.22. So, considering the facts and circumstances, it is abundantly clear that the petitioners were represented by the respondents by letter of intent Exh. A that the effective steps had to be completed by 31.3.2002. On the said representation the petitioners have acted upon. They purchased land to set up factory after obtaining loan from the Bank. They have also obtained loan of Rs. 1.90 crores, power supply and the no objection certificate from the Maharashtra Pollution Control Board. Respondent no.3 is admittedly agency of respondent nos.1 and 2 and respondent nos.1 and 2 cannot deny the representation/act made/committed by their representative/agent i.e. respondent no.3. In the circumstances, therefore, in our considered opinion, the petitioners are entitled to the benefit of the concessions which were promised by the letter of intent. In the facts and circumstances of the case, we hold that the Government Circular dated 23.3.2000 which provides 31.12.2001 as cut off date will not be applicable to the petitioners in view of the letter of intent in which 31.3.2002 is mentioned as the cut off date. Therefore, the petitioners are entitled to grant of S.T.I. incentives under the package scheme of 1993.