Case: State Of Gujarat  Vs. Essar Oil Ltd.

on such stand, the High Court remanded the suit for trial. Thereafter the respondent therein tried to urge the same plea of irrevocable license before the Trial Court and this Court. This Court did not accept the plea holding that the common law doctrine of approbation and reprobation is well established in our jurisprudence and applicable in our laws too. That principle has no application to the facts of this case.81. The principles decided in the case of Karnataka Rare Earth & Anr. v. Senior Geologist, Department of Mines & Geology and Anr., reported in (2004) 2 SCC 783 is equally of no assistance to Essar. In that case both the doctrines of “actus curiae” and “restitution” were discussed together. We have already held that these equitable doctrines are not applicable in the facts of the present case. In Karnataka Rare Earth (supra), the appellants, on the basis of an interim order granted by this Court, extracted minerals and disposed of the same. Ultimately the interim order was vacated by this Court and the appeal filed by Karnataka Rare Earth was dismissed. In that context this Court held that the appellants cannot enjoy the benefits earned by them under the interim order of this Court and this Court held that the demand of the State for the price of mines and minerals from the appellant is neither unreasonable nor arbitrary.82. Reliance was placed on the judgment of this Court in Bareilly Development Authority v. Methodist Church of India & Anr., reported in (1988) Supp SCC 174. In that case no principle was decided but the case was decided on its facts. In Bareilly Development Authority (supra), a commercial complex was to be constructed within a time schedule. During the said period of construction, the work had to be stopped in view of the demolition order passed by the authority. This Court held that the said period has to be excluded in computing the period of completion. It was not a case of construing any exemption scheme. What was construed was condition 6 of the construction sanction plan. Therefore principles of Bareilly Development Authority (supra) cannot be applied.83. In the case of Hitech Electrothermics & Hydro Power Ltd. v. State of Kerala & Ors., reported in (2003) 2 SCC 716 it is true that this case is one relating to grant of concessional tariff rate. However the fact shows that in that case the Electricity Board provided power to the appellant only in the year 1998 and the Court found that the delay in giving power was for sheer inaction on the part of Electricity Board. In that context this Court held that literal construction to the entitlement of concessional tariff rate should not be done and the Court also noted that the appellant enjoyed concessional tariff rates on the basis of interim order of Court.84. In the instant case, no inaction on the part of appellant was pleaded by Essar. In fact before the High Court, Essar expressly gave up its plea of delay against the appellant. In fact the High Court passed the injunction order not because of the inaction of the appellant but the said order was passed in a proceedings which was opposed by appellant right upto this Court. Therefore, the case of Hitech Electrothermics (supra) is clearly distinguishable on facts.85. The learned counsel for Essar relied on a decision of this Court in Ishwar Dutt v. Land Acquisition Collector & another reported in (2005) 7 SCC 190. But no question of issue estoppel was argued before the High Court and no such question actually has fallen for consideration in the course of argument before this Court. Therefore reliance on the principle of issue estoppel on the basis of Ishawar Dutt (supra) is not relevant at all.86. In this case we are to interpret the provisions of exemption scheme.87. In Novopan India Ltd. Hyderabad v. Collector of Central Exercise and Customs, Hyderabad [(1994) Supp 3 SCC 606] the question for consideration before this Court was that, in case of ambiguity, which rule of construction will be applicable to exemption provision. This Court relied on the case of Union of India & others v. Wood Papers Ltd & another reported in (1990) 4 SCC 256 , wherein at para 4, page 260 this Court observed as under: "...Truly speaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction." 88.This Court held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly. Further this Court also held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision and in case of doubt or ambiguity, benefit of it must go to the State.89. In this case, Essar was categorically told by letter dated 28.05.2002, which is much prior to the expiry of the period, that time for availing the exemption cannot be extended. Admittedly, Essar failed to meet the deadline. In that factual scenario, the exercise undertaken by the High Court in the impugned judgment by directing various adjustments which virtually re-wrote the States exemption scheme, is an exercise which is, with great respect, neither warranted in law nor supported by precedents. There is no question of equity here, an exemption is a stand alone process. Either an industry claiming exemption comes within it or it does not.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]78. Coming to the first question, as mentioned above, it is clear that the appellant had also challenged this restraining order before this Court. It cannot be said by this restrainingthe appellant hadgained any undue advantage. On the contrary, twin objects of development of the backward areas and employment opportunities, which were sought to be achieved by the appellant by floatinge, were adversely affected.79. Therefore the principles in South Eastern Coalfield Ltd. (supra) are not attracted here.80. In Mumbai International Airport Pvt. Ltd v. Golden Chariot Airport & another, (2010) 10 SCC 422 , after a Civil Court returned the plaint filed by respondent, the respondent came up in appeal againstorder before the High Court and expressly gave up its claim of irrevocable license in order to revive the suit and on such stand, the High Court remanded the suit for trial.nt therein tried to urge the same plea of irrevocable license before the Trial Court and this Court. This Court did not accept the plea holding that the common law doctrine of approbation and reprobation is well established in our jurisprudence and applicable in our laws too. That principle has no application to the facts of this case.81. The principles decided in the case of Karnataka Rare Earth & Anr. v. Senior Geologist, Department of Mines & Geology and Anr., reported in (2004) 2 SCC 783 is equally of no assistance to Essar. In that case both the doctrines ofwere discussed together. We have already held that these equitable doctrines are not applicable in the facts of the present case. In Karnataka Rare Earth (supra), the appellants, on the basis of an interim order granted by this Court, extracted minerals and disposed of the same. Ultimately the interim order was vacated by this Court and the appeal filed by Karnataka Rare Earth was dismissed. In that context this Court held that the appellants cannot enjoy the benefits earned by themthe interim orderof this Court and this Court held that the demand of the State for the price of mines and minerals from the appellant is neither unreasonable nor arbitrary.82. Reliance was placed on the judgment of this Court in Bareilly Development Authority v. Methodist Church of India & Anr., reported in (1988) Supp SCC 174. In that case no principle was decided but the case was decided on its facts. In Bareilly Development Authority (supra), a commercial complex was to be constructed within a time schedule. Duringperiod of construction, the work had to be stopped in view of the demolition order passed by the authority. This Court held thatperiod has to be excluded in computing the period of completion. It was not a case of construing any exemption scheme. What was construed was condition 6 of the construction sanction plan. Therefore principles of Bareilly Development Authority (supra) cannot be applied.83. In the case of Hitech Electrothermics & Hydro Power Ltd. v. State of Kerala & Ors., reported in (2003) 2 SCC 716 it is true that this case is one relating to grant of concessional tariff rate.ct shows that in that case the Electricity Board provided power to the appellant only in the year 1998 and the Court found that the delay in giving power was for sheer inaction on the part of Electricity Board. In that context this Court held that literal construction to the entitlement of concessional tariff rate should not be done and the Court also noted that the appellant enjoyed concessional tariff rates on the basis of interim order of Court.84. In the instant case, no inaction on the part of appellant was pleaded by Essar. In fact before the High Court, Essar expressly gave up its plea of delay against the appellant. In fact the High Court passed the injunction order not because of the inaction of the appellant butorder was passed in a proceedings which was opposed by appellant right upto this Court. Therefore, the case of Hitech Electrothermics (supra) is clearly distinguishable on facts.85.The learned counsel for Essar relied on a decision of this Court in Ishwar Dutt v. Land Acquisition Collector & another reported in (2005) 7 SCCBut no question of issue estoppel was argued before the High Court and no such question actually has fallen for consideration in the course of argument before this Court. Therefore reliance on the principle of issue estoppel on the basis of Ishawar Dutt (supra) is not relevant at all.86. In this case we are to interpret the provisions of exemption scheme.87. In Novopan India Ltd. Hyderabad v. Collector of Central Exercise and Customs, Hyderabad [(1994) Supp 3 SCC 606] the question for consideration before this Court was that, in case of ambiguity, which rule of construction will be applicable to exemption provision. This Court relied on the case of Union of India & others v. Wood Papers Ltd & another reported in (1990) 4 SCC 256 , wherein at para 4, page 260 this Court observed asspeaking liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberalCourt held that the principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply to the construction of an exception or an exempting provision, as the same have to be construed strictly. Further this Court also held that a person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered byprovision and in case of doubt or ambiguity, benefit of it must go to the State.89. In this case, Essar was categorically told by letter dated 28.05.2002, which is much prior to the expiry of the period, that time for availing the exemption cannot be extended. Admittedly, Essar failed to meet the deadline. In that factual scenario, the exercise undertaken by the High Court in the impugned judgment by directing various adjustments which virtually re-wrote the States exemption scheme, is an exercise which is, with great respect, neither warranted in law nor supported by precedents. There is no question of equity here, an exemption is a stand alone process. Either an industry claiming exemption comes within it or it does not.