STATE OF UTTAR PRADESH & ANR. versus M/S. BIRLA CORPORATION LIMITED on 20 November 2019

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SUPREME COURT REPORTS

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STATE OF UTTAR PRADESH & ANR.

v.

M/S. BIRLA CORPORATION LIMITED

(Civil Appeal No. 1579 of 2019)

BNOVEMBER 20, 2019

[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]

Uttar Pradesh Trade Tax Act, 1948: s. 5 – Rebate of tax oncertain purchases or sale – Notification providing for rebate on tax– Power of the State to rescind the Notification – On facts, issuanceCof notification dated 27.02.1998 by State Government wherebyexemption available to Cement Manufacturing units using fly ashin State of UP – State issuing Notification dated 14.10.2004,rescinding the earlier Notification – Challenge to, by the industrialunits who had commenced production complying with the conditionsDfor grant of rebate in terms of Notification dated 27.02.1998,entitling them to avail rebate of tax facility for ten years – Writpetition partly allowed to the extent petitioner’s entitlement for taxexemption for the period available under original notification –On appeal, held: Stand of the State Government about thesupervening public interest qua the respondents and similarly placedEpersons cannot be accepted – Notification dated 14.10.2004 canhave no application to the settled enforceable right accrued toindustrial units who fulfill all other conditions specified in thenotification dated 27.02.1998, having commenced commercialproduction of the specified goods before 14.10.2004 – NotificationFdated 14.10.2004 cannot be construed as having retrospective orretroactive effect to whittle down the accrued rights in favour ofsuch industrial units – Thus, the respondents and similarly placedpersons entitled to rebate for the relevant period prescribed in thenotification dated 27.02.1998 – Respondents to pursue their claimfor refund of the rebate amount for the relevant period.G

Dismissing the appeals, the Court

HELD : 1.1. It is well established that the Court would notact on mere ipse dixit of the Government and must insist on a H

highly rigorous standard of proof in discharge of its burden bythe Government. [Para 23] [150-F]

1.2. On a bare reading of section 5 of the Uttar PradeshTrade Tax Act, 1948, it is evident that there is no express authoritygiven to the Executive to issue notification for “withdrawing orrescinding the rebate facility” from a date prior to the date ofnotification. Section 5(2) merely constrict that power only for“allowing” rebate with effect from a date prior to the date ofnotification. That does not include, by necessary implication orotherwise, power to “withdraw” or “rescind” the rebate from adate prior to the date of the notification [Para 25] [151-C-D]

1.3. Section 21 of the 1897 Act also will be of no avail.Section 21 of the 1904 Act, is pari materia to the above provisionand will be of no avail for withdrawing the rebate from a dateprior to the date of the notification. The plain language of thenotification dated 14th October, 2004, itself expressly rescindsnotification dated 27th February, 1998 with effect from 14thOctober, 2004. There is no express or tacit intent manifestedfrom this notification, so as to construe it as bestowing power towithdraw the rebate facility with effect from a date prior to thedate of notification as such. On this finding, nothing more isrequired to be said as the concomitant of this finding wouldnecessarily be that all the industrial units set up after 27thFebruary, 1998 and before 14th October, 2004 which hadcommenced commercial production, must continue to qualify forrebate for specified term mentioned in notification dated 27thFebruary, 1998, subject to fulfilling all other conditions specifiedtherein. [Para 26, 27] [151-E, G-H; 152-A]

1.4 In the case of BCL, the rebate ought to continue up to13th December, 2008 and in the case of JPAL, up to 17thSeptember, 2014. Any other interpretation of the impugnednotification dated 14th October, 2004, would entail in givingretrospective or retroactive effect thereto. That is not predicatedby Section 5 of the 1948 Act or the impugned notification itself.Having said this, it would necessarily follow that the challenge tothe notification on the ground of being hit by doctrine of promissory AB

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[2019] 14 S.C.R.

Aestoppel need not detain this Court any further. Similarly, theargument regarding the circumstances in which the Governmentcould stave off from the dispensation under notification dated27th February, 1998 has become irrelevant. [Para 28] [152-B-C]

1.5 The dominant intent behind notification dated 27thBFebruary, 1998 was to invite the investors to set up industrialunit in the designated areas within the State of Uttar Pradeshwhich were known to be underdeveloped or backward areas andmore importantly to address the environmental issue because ofthe fly ash generated by the thermal power stations situated inUttar Pradesh and incidentally to generate job opportunities andCemployment to the locals. It is one thing to argue that becauseof the interpretation given to the notification dated 27th February,1998 by the High Court and affirmed by this Court, the industrialunits situated in the neighbouring States may not be able to fulfillthe underlying intent behind the notification dated 27th February,D1998 in its letter and spirit. That is not the plea of the State.Furthermore, it is undeniable that the thermal power stations inthe State of Uttar Pradesh are still operational and are generatingfly ash in the same manner and quantity as was happening inFebruary, 1998, if not more. It is also indisputable that theindustrial units set up in furtherance of the promise orErepresentation made in the notification dated 27th February, 1998which had commenced commercial production in respect ofspecified goods before 14th October, 2004, would continue toachieve the same objective as is specified in the notification dated27th February, 1998. In that, the concerned manufacturing unitsFcontinue to manufacture specified goods by using fly ash purchasedor produced from the thermal power stations situated within theState. As long as that activity is continued until the term specifiedunder the notification dated 27th February, 1998, namely ten yearsfrom the date of commencement of commercial production, thereis no tangible reason nor it is open to contend that the dominantGpurpose underlying notification dated 27th February, 1998 hadceased to exist or had become irrelevant in any manner, muchless there are supervening circumstances qua such units whichare so overwhelming that it would be inequitable for the State H

Government to be bound by the promise given in notificationdated 27th February, 1998. [Para 29] [152-F-H; 153-A-D]

1.6 The judgment rendered by the High Court and affirmedby this Court in interpreting the notification dated 27th February,1998, at best, may have given rise to some logistical issues forthe State including financial implications regarding future revenueloss. That ground cannot be invoked as supervening publicinterest in reference to the activities of the industrial units whoqualify the conditions specified in notification dated 27th February,1998 in all other respects and had commenced commercialproduction of the specified product before 14th October, 2004.Indubitably, an enforceable right had accrued to and crystalisedin favour of such industrial units which could not be truncated orsnapped unless the dominant purpose for which the notificationdated 27th February, 1998 came to be issued had ceased to exist,namely generation of fly ash by the thermal power stations situatedwithin the State and consumption of that fly ash by the industrialunits established within the designated areas of the State as perthe specified quantity to become entitled for rebate for theduration mentioned therein. The question of future revenue losswould not arise as the industrial units established in theneighbouring States would not be eligible to avail of the rebatebecause of rescinding the earlier notification. Suffice it to observethat the argument about future revenue loss cannot be invokedagainst the industrial units who had already established andcommenced production after 27th February, 1998 and before 14thOctober, 2004. For, it can be safely presumed that the policymakers were fully conscious about the so–called loss of futurerevenue due to rebate to those units when they had issuednotification dated 27th February, 1998. That ground cannot beset up against the industrial units who qualify in all other respectunder the notification dated 27th February, 1998 and have madesubstantial investment running into crores much less as beingsupervening public interest, as is being placated by the State inthese proceedings. This is clearly an afterthought plea, which byno standards can stand the test of judicial scrutiny. It is wellestablished that the Court is obliged to insist for a highly rigorous ABC

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Astandard of proof in the discharge of the burden and onus uponthe State to justify its action as supervening public interest.[Para 30] [153-E-H; 154-A-C]

1.7 The impugned notification dated 14th October, 2004can have no application to the settled enforceable right accruedBto industrial units who fulfill all other conditions specified in thenotification dated 27th February, 1998, having commencedcommercial production of the specified goods before 14th October,2004. The stand of the State Government about the superveningpublic interest qua the respondents and similarly placed personsis rejected. The notification dated 14th October, 2004 cannot beCconstrued as having retrospective or retroactive effect to whittledown the accrued rights in favour of such industrial units.[Para 31] [154-D-E]

1.8 The grievance of the appellant that the High Court hasnot elaborately dealt with the argument of supervening publicDinterest justifying the issuance of notification dated 14th October,2004 is disposed of because, the argument of the respondentsare convincing that no material fact has been pleaded in theresponse filed before the High Court or in the presentproceedings by the State Government in that regard. [Para 32]E[154-G]

1.9 The State Government was permitted to articulate thereasons which it did in the written submissions. The said reasonsare analysed and are of the considered opinion that the samesingularly or taken together would be of no avail to the StateFGovernment, to justify the application of the impugned notificationdated 14th October, 2004, to industrial units already set upwhich had commenced commercial production of the specifiedgoods in the designated areas before 14th October, 2004.[Para 33] [154-H; 155-A-B]

G1.10. A priori, the respondents and similarly placed personswould be entitled to rebate for the relevant period prescribed inthe notification dated 27th February, 1998 which would continueto remain in vogue until the expiry of the specified period, namely,ten years. In the case of BCL up to 13th December, 2008 and inthe case of JPAL up to 17th September, 2014 respectively. TheH

amount of rebate, however, would depend on the verification oftheir refund claim pending before the concerned authorities andwould be subject to just exceptions including the principle ofunjust enrichment. The respondents should be able tosubstantiate that the amount claimed by them has not been passedon to their consumers. Only then, they would be entitled forrefund. The competent authority may verify the claim for refundof each of the respondent(s) in accordance with law and passappropriate orders, including about the interest for the relevantperiod. [Para 34] [155-B-D]

State of Jammu & Kashmir v. Trikuta Roller Flour MillsPvt. Ltd. & Anr. (2018) 11 SCC 260 ; Sales Tax Officer& Anr. v. Shree Durga Oil Mills & Anr. (1998) 1 SCC572 – distinguished.

State of Uttar Pradesh & Ors. v. Jaiprakash AssociatesLimited (2014) 4 SCC 720 ; Shree Digvijay Cement Co.Ltd. & Anr. v. Union of India & Anr. (2003) 2 SCC614 ; Kazi Lhendup Dorji v. Central Bureau ofInvestigation & Ors. (1994) Suppl. 2 SCC 116 ;Industrial Infrastructure Development Corporation(Gwalior) Madhya Pradesh Limited v. Commissioner ofIncome Tax, Gwalior, Madhya Pradesh (2018) 4 SCC494 ; MRF Limited, Kottayam v. Assistant Commissioner(Assessment) Sales Tax & Others (2006) 8 SCC 702 ;Southern Petrochemical Industries Co. Ltd. v. ElectricityInspector & ETIO & Others (2007) 5 SCC 447 ;Pournami Oil Mills & Ors. v. State of Kerala & Anr.(1986) Suppl. SCC 728 ; Director General of ForeignTrade & Anr. v. Kanak Exports & Anr. (2016) 2 SCC226 ; M/s. Motilal Padampat Sugar Mills Co. Ltd. v.State of Uttar Pradesh & Others (1979) 2 SCC 409 ;Manuelsons Hotels Pvt. Ltd. v. State of Kerala & Others(2016) 6 SCC 766 ; State of Bihar & Others v. KalyanpurCement Limited (2010) 3 SCC 274 ; Lok PrahariThrough Its General Secretary v. State of Uttar Pradesh& Others (2018) 6 SCC 1 – referred to.

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ACase Law Reference

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1579Eof 2019.

From the Judgment and Order dated 16.04.2010 of the High Courtof Judicature at Allahabad, Lucknow Bench in Writ Petition No. 6176(MB) of 2004.

FWith

Civil Appeal No. 1580 of 2019.

Ms. Aishwarya Bhati, Sr. Adv., Chitrangada R., Nitin ChoudharyP., Damodar Solankhi, B. Dash, Ms. Tanuja Patra, Bhakti Vardhan Singh,Advs. for the Appellant.

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S.K. Bagaria, S.B. Upadhyay, Sr. Advs., Praveen Kumar,Kumar Ajit Singh, Pawan Upadhyay, Ms. Anisha Upadhyay, NishantKumar, Sarvjit Pratap Singh, Ms. Sharmila Upadhyay, Advs. for theRespondents.

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STATE OF UTTAR PRADESH & ANR. v. M/S. BIRLACORPORATION LIMITED

The Judgment of the Court was delivered by

A. M. KHANWILKAR, J.

1. The seminal question involved in both these appeals is aboutthe power of the State to rescind the notification providing for rebate inrespect of tax payable under the Uttar Pradesh Trade Tax Act, 1948(for short, “the 1948 Act”) and thus withdrawing the facility even inrespect of industrial units, which had commenced production and hadcomplied with the conditions for grant of such rebate in terms ofNotification dated 27[th] February, 1998.

2. Briefly stated, the appropriate authority, in exercise of powerunder Section 5 of the 1948 Act issued notification dated 18[th] June, 1997,to declare the goods having fly ash contents of 10% or more by weightto be notified goods for the purpose of Section 5, and to grant a rebate of25% in respect of the goods having fly ash contents between 10 to 30%by weight and a rebate of 50% in respect of the goods having fly ashcontents exceeding 30% by weight on the tax levied under the Act in thedistricts notified thereunder. In due course, the feedback received bythe Government was that neither any new industrial unit was establishedwithin the State nor the consumption of the fly ash had increased by theexisting units. Resultantly, there was no extra disposal/consumption offly ash which was being produced by the thermal power stations situatedwithin the State of Uttar Pradesh. In other words, the avowed objectivefor issuing the notification to extend rebate did not fructify. In light ofsuch feedback, the appropriate authority issued fresh notification dated27[th] February, 1998 bearing No.T.I.F-2-592/XI-9(226)94-U.P.Act-15-48-Order-98 to rescind the earlier notification and instead to grant arebate of 25% in respect of the goods having fly ash contents between10% to 30% by weight and a rebate of 50% in respect of the goodshaving fly ash contents exceeding 30% by weight on the tax levied underthe Act in the districts mentioned thereunder, subject to certain conditions.The said notification reads thus:

“[S. No. 1289]

Notification No.T.I.F – 2-592/XI-9(226)94-U.P. Act-15-48-Order-98, dated 27.02.1998

Whereas, the State Government is satisfied that it is expedientin the public interest so to do:

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Now, therefore, in exercise of the powers under Section 5 ofthe Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of1948), read with section 21 of the Uttar Pradesh General ClausesAct, 1904 (U.P. Act No.1 of 1904), the Governor, with effectfrom March 1, 1998 is pleased:

(a) to rescind the Notification No.TT-2-1885/XI-9(226)/94-UP-Act-15-48 Order-97, dated June 18, 1997; (b) to grant a rebate of twenty five percent on goods having fly-ash contents between ten to thirty percent by weight and a rebateof fifty percent on the goods having fly-ash contents exceedingthirty percent by weight on the tax levied under the Act in thedistrict mentioned in column-2 Annexure given below for the periodmentioned in column-3 of the said Annexure subject to the followingcondition:- CONDITIONS

(i) such goods shall be manufactured in a unit established in thearea mentioned in coloumn-2 of the Annexure;

(ii) such goods shall be manufactured by using fly-ash purchasedor received from the thermal power stations situated on UttarPradesh;

(iii) the dealer claiming rebate under this notification shall keeprecords in which following informations will be shown:

(a) date;

(b) name of thermal power stations from which fly-ash ispurchased or received;

(c) weight of fly-ash;

(d) name of manufactured goods;

(e) weight of manufactured goods;

(f) weight of fly-ash used in manufacturing of such goods; (g) weight of other goods used in manufacture of such goods;

(iv) the total weight of manufactured goods and percentage offly-ash used, should be mentioned on goods of packing of suchgoods as far as possible.

STATE OF UTTAR PRADESH & ANR. v. M/S. BIRLACORPORATION LIMITED [A. M. KHANWILKAR, J.]

Explanation:- The verification of percentage of fly-ash usedby fly-ash based industries shall be made of the basis ofGovernment orders issued in this behalf from time to time.”

A3. This notification came to be issued with intent to promote andencourage the industrial activities in the identified backward andunderdeveloped areas. This notification, however, was assailed in twowrit petitions filed before the High Court of Judicature at Allahabad (forshort, ‘the High Court’). The challenge was essentially on the groundthat the conditions specified in the notification resulted in causingBdiscriminatory treatment to the producers and suppliers of the sale productimported from neighbouring States as opposed to the goods manufacturedand produced in the State of Uttar Pradesh. Such dispensationcontravened the constitutional provisions of Articles 301 and 304(a) ofthe Constitution of India. The High Court vide order dated 29[th] January,C2004 upheld the said challenge. The State of Uttar Pradesh carried thematter in appeal against the said decision of the High Court, whicheventually culminated with the judgment of this Court, affirming thechallenge, in State of Uttar Pradesh & Ors. vs. Jaiprakash AssociatesLimited[1]. This Court held that rebate of tax granted by the StateGovernment only to the cement manufacturing units using fly ash asDraw material in the units established in the districts of the State of UttarPradesh, is violative of the provisions contained in Articles 301 and 304(a)of the Constitution of India. The Court further declared that notification,therefore, would also apply to the cement manufacturing units of theneighbouring States who were using fly ash as raw material.

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4. After the decision of the High Court dated 29[th ]January, 2004,the appropriate authority was advised to rescind the Notification dated27[th] February, 1998. The Principal Secretary of the Tax and RegistrationDepartment processed the proposal for rescinding the said notificationand submitted for comments of Council of Ministers which read thus:F“CONFIDENTIAL

COMMENTS FOR THE HONORABLE COUNCIL OFMINISTERS.

SUB : Repealing the exemption (rebate) available to units basedon fly ash G

Industries established in certain districts have been grantedexemption on tax levied under the Act for eight, ten, twelve yearsvide Govt. Notification No.vya.ka./592/gyarah-9(226)/94, dated27 February 1997, under Section 5 of the Trade Tax Act on thefollowing grounds:- H1 (2014) 4 SCC 720

(a) Where the content of fly ash is 10% to 30% of the totalweight of goods – 25% rebate on tax.

(b) Where the content of fly ash is more than 30% of the totalweight of goods -50% rebate on the tax.

2. Accordingly under Section 8 (5) of the Central Sales Tax Act,by the Govt. Notification No.vya.ka/-2-593/gyaraha-9 (226)94,dated 27[th] February 1998, similar rebate has been allowed. Acondition was prescribed in the above notifications that such goodsshall be manufactured within the units established in the areamentioned in column No.2 of the annexure and such goods shallbe manufactured from Fly Ash purchased from or received fromthe thermal power stations situated in Uttar Pradesh. Abovenotifications were challenged before the Hon’ble High Court bythe writ petition.

3. Commissioner, Trade Tax has informed that in the writ petitionsNo.957/99M/sBela Cement Ltd. Vs. State and writ petitionNo.958/99 M/s Jai Prakash Industries Vs State, Bench of theHon’ble High Court has by the order dated 29.1.2004 declaredthe above conditions mentioned in the notification asunconstitutional. It has also been mentioned that effect of theabove judgment shall be that henceforth facility of rebate will notonly be available to the above types of industrial units situated inUttar Pradesh only, but above rebate shall also be available to theunit situated outside the Uttar Pradesh. It is also apprised thatin regard to above, Addl. Advocate General has given thelegal opinion that considering the revenue loss being causedin future above notifications can be repealed. In case abovenotifications have to be repealed from retrospective effectthen the same can be done by way of an ordinance. Inaccordance with the legal opinion tendered by the Hon’bleAdd. Advocate General, a recommendation has made toproceed further expeditiously.

4. It appears that the main objective of providing the rebate videthe above notifications was that the Industrial units of the UttarPradesh should utilize more and more fly ash available for disposalin the state, in view of the above rebates. In the light of abovejudgment of the Hon’ble High Court, now above rebate shall also A

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Abe available to the unit situated outside the state. Therefore itdeems to be fit that above notifications should be repealed.In this regard the proposal of Commissioner Trade Taxseems to be proper.

5. Therefore it is proposed that notifications issued underBsection 5 of the Trade Tax Act and Section 8 (5) of CentralSales Tax Act, related to rebate applicable to industriesbased on the fly ash should be repealed.

6. Finance department has expressed the consent to theabove proposal.

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7. Law department has expressed the view that it had beenadvised by the Add. Advocate General that to prevent therevenue loss notification dated 22.7.1998 can be repealed.In view of the above the proceedings for repealing theimpugned notifications is legally possible.

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8. Honorable Minister has examined these comments.

9. Order of the Hon’ble Cabinet is prayed for on the Para 5 above.

Sd/-(Rita Sinha)Principal Secretary

ETax & Registration DepartmentFile No.9 (63)/2001Lucknow dated 19 August, 2004"

(emphasis supplied)

5. The appropriate authority of the State eventually took decisionFon the said proposal, as a result of which a notification dated 14[th] October,2004 came to be issued rescinding the earlier notification dated 27[th]February, 1998. The said notification reads thus :- “NOTIFICATION

No.KA.NI.-2-2996/XI-9(63)/2001-Act, 74-56 Order – (38) 2004

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Dated Lucknow : : October 14, 2004

WHEREAS, the State Government is satisfied that it is expedientso to do in public interest.

Now, therefore, in exercise of the powers sub-section (5) ofSection 8 of the Central Sales Tax Act, 1956 (Act No.74 of 1956)read with Section 21 of the General Clauses Act, 1897 (Act No.10of 1897) the Governor is pleased to rescind, with effect fromOctober 14, 2004, the government notification No.T.I.F – 2-593/X-9(226)/94-Act-74-56-Order-98, dated February 27, 1998.”

(emphasis supplied)

6. This notification is the subject matter of challenge in the presentproceedings.

7. The respondents in the respective appeals preferred separatewrit petitions asserting that because of the representation made to thestake holders vide notification dated 27[th] February, 1998, they hadcommenced production of the specified goods and complied with therequisite conditions provided under the said notification entitling them toavail rebate of the Uttar Pradesh Tax facility. They had commencedcommercial production before coming into effect of the impugnednotification on 14[th] October, 2004. However, due to coming into effectof stated notification they have been denied of the rebate which theycould have earned for ten years.

8. In the case of respondent in Civil Appeal No. 1579/2019 - M/s.Birla Corporation Limited (for short, ‘the BCL’), the factory was set upby the said respondent at Raibareli and it had commenced commercialproduction from 14[th] December, 1998. As the said respondent hadcomplied with all the conditions specified in the notification dated 27[th]February, 1998, it availed the rebate facility from 14[th] December, 1998until 13[th] October, 2004. It could have continued to avail of that facilityfor a period of ten years, i.e., upto 13[th] December, 2008, but thatarrangement has been disrupted because of the issuance of the impugnednotification dated 14[th] October, 2004. In other words, denial of rebate torespondent-BCL is for the period from 14[th] October, 2004 to 13[th]December, 2008.

9. In the case of respondent in Civil Appeal No. 1580/2019 - M/s.Jai Prakash Associates Limited (for short, ‘the JPAL’), it was operatingits factory outside the State and because of the condition specified in thenotification dated 27[th] February, 1998, had challenged the said notificationwhich, as aforesaid, was upheld by the High Court and later by thisCourt. In terms of the said decision, this respondent could have continued AB

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Awith its business and also avail of the rebate but for the impugnednotification issued on 14[th] October, 2004. However, despite the saidrespondent (JPAL) having succeeded before the High Court in WritPetition No.958 (Tax) of 1999 vide judgment dated 29[th] January, 2004,out of abundant precaution, it decided to set up a factory of its own inthe area specified in the notification dated 27[th] February, 1998, to avoidBany further controversy or dispute regarding tax rebate facility. Infurtherance of that decision, after seeking necessary approvals, the saidrespondent (JPAL) commenced commercial production in the factoryset up in the notified area in the State of Uttar Pradesh w.e.f 18[th]September, 2004 and in terms of the notification dated 27[th] February,C1998, in vogue, became entitled to avail rebate facility for a period of tenyears, i.e., up to 17[th] September, 2014. However, because of theintervening notification dated 14[th] October, 2004, the said respondent(JPAL) has been denied of that facility even though it had invested almostover Rs. 100 crores to set up a new factory within the notified area inthe State of Uttar Pradesh.D

10. In this background, both the respondents filed separate writpetitions before the High Court asserting that the State could not haveresiled from the promise or representation it had made in terms ofnotification dated 27[th] February, 1998, and the impugned notification dated14[th] October, 2004, therefore, suffered from the vice of being violativeEof promissory estoppel. It was asserted that the State, in exercise of itsexecutive power, cannot resile from the promise it had made by invitingsetting up of industry within the designated areas in the State of UttarPradesh and in the process, withdraw the rebate facility with retrospectiveeffect. That could be done only by the legislature by enacting a law inFthat behalf or by issuing ordinance as was suggested in the note submittedto the Council of Ministers referred to above. It was also asserted that,in fact, the notification, as issued on 14[th] October, 2004, specified thatthe same would come into effect from the date it is issued. There is noindication whatsoever that the intention behind issuing the said notification was to withdraw the facility of stake holders who had already set upGtheir industrial units and commenced commercial production prior to 14[th]October, 2004. The thrust of the challenge was that the decision torescind the notification dated 27[th] February, 1998 was to discontinue therebate to industry that would be set up on and from 14[th] October, 2004and to other industrial units in the neighbouring States on account of theH

Conclusion

decision of the High Court. However, that decision cannot be implementedor enforced against the industries which had already commencedcommercial production within the designated areas in the State of UttarPradesh after 27[th] February, 1998 but before 14[th] October, 2004. Takingany other view would result in giving retrospective or retroactive effectto the notification dated 14[th] October, 2004. That is impermissible inlaw.

11. The writ petitioners had also contended that in any case, theState Government had failed to make out a case of inevitable superveningcircumstances warranting cancellation and withdrawal of the rebatefacility with retrospective effect. The fact that the High Court decidedthe issue against the State and extended the benefit to other industrialunits in the neighbouring States, by itself cannot be the basis much less asupervening circumstance to justify the act of resiling from thecommitment flowing from the notification dated 27[th] February, 1998.

12. The appellant-State had resisted the writ petitions by filingaffidavit before the High Court. The stand taken by the State before theHigh Court essentially was that the State had power to rescind itsnotification dated 27[th] February, 1998 and withdraw rebate facility to allindustrial units because of the supervening circumstances. The emphasisto invoke that power was essentially because of the judgment of theAllahabad High Court dated 29[th] January, 2004 and the inability of theState to verify the claims of the industrial units in the neighbouring Stateswhich was beyond the territorial jurisdiction of the State authorities.

13. The High Court vide impugned judgment, in the first placeheld that the State had given assurance about the rebate on the specifiedgoods produced in the designated areas within the State on complyingwith other conditions specified in notification dated 27[th] February, 1998.It then proceeded to hold that the State Government in the Indian contextand the Indian jurisprudence was amenable to the doctrine of promissoryestoppel like any other private party or individual. On that finding, theHigh Court concluded that the notification issued on 14[th] October, 2004cannot stand the test of judicial scrutiny qua the claim of the industrialunits which were already established within the designated area in theState and had commenced commercial production of the stated goodsbefore 14[th] October, 2004. It also rejected the stand taken by the StateGovernment that it was justified in doing so because of supervening A

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Apublic interest and resultantly allowed the writ petitions preferred by theconcerned respondents herein. The conclusion recorded by the HighCourt reads thus:- “SUMMARY

121. Supervening public interest may not be established merelyby pleading in the counter affidavit. It shall not be sufficient tomeet out the requirement of law. The supervening public interestshould be adjudged on the basis of material placed by the StateGovernment during the course of judicial review. Nothing has beenbrought on record to establish as to what prompted the governmentto revoke earlier notification more so when the situation has notbeen changed and flyash remain an ecological hazard release bythermal power stations.

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122. Since, before issuance of the impugned notification thepetitioner had started production establishing the factory in Tanda,the principle of promissory estopple attracted in view of catena ofjudgement of Hon’ble Supreme Court particularly KalyanpurCement Ltd (supra) as well as world wide settled proposition oflaw, it shall be fitness of thing and to maintain the people’sconfidence in the administration, ordinarily government should beabide by its assurance or promise and person should not be deprivedof the benefit available from such assurance, in case it acted on.Though the government has got right to change its policy but thattoo is subject to judicial review and the courts have got amplepower to ensure that because of change of policy fundamental orstatutory rights of the citizen is not infringed. Equitable relief underthe principle of promissory estopple may be given by courts forthe ends of justice.

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123. The impugned notification should be given prospective effectwith regard to tax rebate. Thus, industries which were establishedrelying upon the assurance given in the notification dated 27.2.1998and started production are entitled for tax rebate for the periodwhich they were entitled at the time of production or before theissuance of impugned notification.

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124. In view of above, writ petition deserves to be allowed partlyand petitioner seems to be entitled for benefit of tax exemption in view of original notification dated 27.2.1998. However, keepingin view the law on the subject that government has got right tochange the policy on one hand and on the other hand, petitioner’sright may be protected by applying the impugned notificationprospectively, the right available under the principle of promissoryestoppel may be protected by applying the impugned notificationprospectively. The prayer for quashing the impugned notificationis refused and the relief is moulded accordingly.

ORDER

125. The writ petition is allowed in part to the extent petitioner’sentitlement for tax exemption for the period available under theoriginal notification dated 27.2.1998. Accordingly, a writ in thenature of mandamus is issued directing the opposite parties toprovide tax exemption to the petitioner industry from the date ofproduction for the period of entitlement under original notificationdated 27.2.1998.

Writ petition is allowed in part. Cost easy.”

14. The State of Uttar Pradesh has assailed the decision of theHigh Court. The argument canvassed on behalf of the State concedesthe legal position that even if the State Government is bestowed with theexecutive power to withdraw the rebate facility, it is obliged to justifybefore the court of law that the circumstances were so overwhelmingthat it will be inequitable to hold the Government bound by the promise.In other words, the intent behind the impugned notification dated 14[th]October, 2004 was replete with supervening public interest. To buttressthat, the State has relied upon following reasons, stated to be superveningpublic interest:

“i). The judgment dated 29.01.2004 of Allahabad High Court inthe earlier round of litigation by the same petitioners and othershad quashed condition No.1 of notification dated 27.02.1998, bywhich Units situated outside the State of U.P. were also madeentitled to the tax rebate. This judgment was subsequently affirmedby this Hon’ble Court vide its judgment dated 12.04.2004 reportedin (2014) 4 SCC 720 titled as State of U.P. & Ors. Vs Jai PrakashAssociated Ltd. etc. etc.

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Aii). The effect of the judgment nullified the public interest in grantingthe tax rebate.

iii). State had no territorial jurisdiction to ascertain fly ashconsumption and source of Units operating outside the State ofU.P.

iv). Utilization of fly ash was promoted in terms of Governmentof India Notifications dated 14.09.1999 & 27.08.2003, as alsodirections given by Hon’ble Delhi High Court in a PIL from 2003to 2005. State was taking all steps for disposal of fly ash bypromoting its use.

B

v). Future revenue loss.”

C

15. It is then urged that the High Court has not carefully analysedeach of these reasons, much less the impact of all the reasons takentogether justifying the exercise of power to rescind the notificationproviding for rebate facility. It is also contended that the decisions pressedinto service by the respondents would be applicable to ordinary situationDwhere the principle of promissory estoppel has been invoked by theState Government but the same will have no application to the notificationunder consideration which was the outcome of supervening public interest.In other words, general principle of promissory estoppel and vested/accrued rights have no application to a case of supervening publicEinterest.

16. Lastly, it is urged that even if the writ petitioners-respondentsherein were to succeed, the entitlement of rebate would depend on thefact whether the respondents have themselves paid the amount claimedand have not passed on the burden to their consumers in full or in part,Fas the case may be. The claim for refund as a consequence of applicabilityof the notification dated 27[th] February, 1998 for the specified periodwould depend on establishing the foundational fact that the respondentshad not passed on the commensurate tax burden to their consumers. Tobuttress the above submissions, reliance has been placed on the decisionsof this Court in State of Jammu & Kashmir vs. Trikuta Roller FlourGMills Pvt. Ltd. & Anr.[2]; Sales Tax Officer & Anr. vs. Shree DurgaOil Mills & Anr.[3]; and Shree Digvijay Cement Co. Ltd. & Anr. vs.Union of India & Anr.[4].

2 (2018) 11 SCC 260

3 (1998) 1 SCC 572

H4 (2003) 2 SCC 614

17. Per contra, the respondents would adopt the reasons given bythe High Court for sustaining their challenge to notification dated 14[th]October, 2004. It is urged that the notification dated 14[th] October, 2004cannot be construed as having retrospective or retroactive effect andapply to the units which had already been set up and commencedcommercial production prior to 14[th] October, 2004. Section 5 of the1948 Act does not confer any power on the executive to rescind theexisting notification with retrospective or retroactive effect. In absenceof express power invested in that behalf, it is not open to the executiveto do so either in terms of Section 5 of the 1948 Act or Section 21 of theGeneral Clauses Act, 1897 (for short, “the 1897 Act”) or Section 21 ofthe Uttar Pradesh General Clauses Act, 1904 (for short, “the 1904 Act”).Section 5(2) of the 1948 Act reinforces the submission of the respondentsthat the legislature has not invested any authority in the State or executiveto give retrospective or retroactive effect to its notification, rescindingthe existing notification unlike sub-section (2), which expressly providesfor allowing rebate with effect from a date prior to the notification. Thereis no express, much less, implicit or tacit authority in the executive toissue a notification having retrospective or retroactive effect. In supportof this plea, reliance is placed on the decisions of this Court in KaziLhendup Dorji vs. Central Bureau of Investigation & Ors.[5] andIndustrial Infrastructure Development Corporation (Gwalior)Madhya Pradesh Limited vs. Commissioner of Income Tax,Gwalior, Madhya Pradesh[6].

18. It is urged that in the present case, an enforceable right hadaccrued in favour of the respondent(s) under the notification dated 27[th]February, 1998 to avail the benefit of rebate for its full eligibility periodup to 13[th] December, 2008 and 17[th] September, 2014 respectively. Thatright could not be interdicted and disrupted by virtue of the impugnednotification dated 14[th] October, 2004. It is not a case where the legislaturehas intervened to interdict that right, but it is being done by a notificationby an authority who is not empowered to issue notification havingretrospective or retroactive effect. The respondents are relying on thedecisions of this Court which has taken the view that the notificationscannot apply to units already set up prior to their issuance. (See MRFLimited, Kottayam vs. Assistant Commissioner (Assessment) SalesTax & Others[7]; Southern Petrochemical Industries Co. Ltd. vs.

5 1994 Suppl. (2) SCC 116

6 (2018) 4 SCC 494

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ABCDE

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AElectricity Inspector & ETIO & Others[8]; and Pournami Oil Mills &Ors. vs. State of Kerala & Anr.[9]). In support of the argument that thesubordinate legislation such as the notification dated 14[th] October, 2004cannot have retrospective or retroactive effect, reliance is placed on theexposition in Director General of Foreign Trade & Anr. vs. KanakExports & Anr.[10].B

19. While dealing with the argument of the State regardingsupervening or overwhelming public interest, it is urged that the HighCourt was right in observing that the State Government had failed tomake out any case to justify the impugned notification dated 14[th] October,2004 on that principle. To buttress that submission, our attention wasCinvited to the relevant portion of the pleadings before the High Court inthe form of writ petition and affidavits of both sides. Relying on thedictum in the cases of M/s. Motilal Padampat Sugar Mills Co. Ltd.vs. State of Uttar Pradesh & Others[11] and Manuelsons Hotels Pvt.Ltd. vs. State of Kerala & Others[12], it is urged that there is heavyDburden on the State to show that the public interest is so superveningand so overwhelming that it would be inequitable to hold the Governmentbound by the promise. It is urged that facade has been created by theState Government for the first time before this Court about superveningpublic interest. In any case, the reasons stated in support thereof cannotstand the test of judicial scrutiny, inasmuch as, the notification dated 27[th]EFebruary, 1998 and the stand taken by the State Government on affidavitsfiled before the High Court in support of the said notification in the firstround of litigation, clearly, were founded on the assertion that the objectfor grant of rebate was to promote use of fly ash generated from thermalpower stations in Uttar Pradesh and utilization of the fly ash inFmanufacture of goods to be produced by the industry set up in thedesignated areas mentioned in the said notification. That was done toaddress the environmental issues confronting the State in the concernedareas and also to provide employment and job opportunities to the localsdue to setting up of industries in the designated areas within the State ofUttar Pradesh. Admittedly, the generation of fly ash in thermal powerGstations in Uttar Pradesh has continued unabated causing serious health 8 (2007) 5 SCC 4479 1986 Suppl. SCC 72810 (2016) 2 SCC 22611 (1979) 2 SCC 409H12 (2016) 6 SCC 766

hazards in the neighbourhood, turning fertile lands into barren lands.Notably, the new industry set up in the designated areas after 27[th]February, 1998 and before 14[th] October, 2004 is using the fly ashgenerated in thermal power stations in Uttar Pradesh. Thus, the newlyestablished industry would continue to achieve the object and intent behindthe said notification, which has not ceased to exist and is still relevant.In such a situation, it is incomprehensible as to how the principle ofsupervening public interest could be invoked by the State much less ofsuch magnitude that it would be impossible for the State to hold or bebound by the promise made by it in notification dated 27[th] February,1998. The only reason recorded in the proposal for issuing the impugnednotification dated 14[th] October, 2004, as can be discerned from the notesubmitted by the Principal Secretary of the concerned Department tothe Council of Ministers, mentions only about the fall out of the judgmentof the High Court dated 29[th] January, 2004. The apprehension of theState that it would not be in a position to verify the factual basis to dealwith the claims of the industries operating from the neighbouring Stateshas already been considered and negated by this Court in the previousround, which finding will continue to operate against the State.

20. The respondents have distinguished the decisions pressed intoservice by the appellant in the Trikuta Roller Flour Mills P. Ltd. (supra)and Shree Durga Oil Mills (supra) being decisions on the facts of theconcerned case. In the former case, the Court upheld the stand of theState of supervening public interest because of the unravelling offraudulent transactions and bogus refund claims by non-existent traderswho had neither filed the returns nor deposited any taxes. In the lattercase, the Court opined that the writ petitioners had not given essentialfoundational facts nor had challenged the vires of the relevant notificationfor grant of any relief as claimed by them. The Court also noted that theconcerned notification did not grant exemption but it merely promisedthat orders will be issued laying down the mode of administering theconcessions and incentives by the departments concerned and moreimportantly that, before the unit of the writ petitioner started productionon 19[th] March, 1980, the earlier notification was already abrogated on20[th] May, 1977. It is submitted that in the facts of that case, no reliefcould be granted to the writ petitioner nor it could be allowed to challengethe authority of the executive for having abrogated the earlier notification.

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A21. In addition, the respondents would rely on the exposition inState of Bihar & Others vs. Kalyanpur Cement Limited[13] to urgethat the doctrine of promissory estoppel applies to notifications such asthe impugned notification dated 14[th] October, 2004. It is further urgedthat the notification dated 14[th] October, 2004 violates not only the principleof promissory estoppel but also is arbitrary and hit by Article 14 of theBConstitution of India. Reliance has been placed on the decision in LokPrahari Through Its General Secretary vs. State of Uttar Pradesh& Others[14]. Lastly, it is contended that the argument of unjust enrichmenthas been raised for the first time before this Court and ought not to becountenanced. That would be a matter for consideration in the refundCproceedings which are still pending for decision before the concernedauthority. The respondents submit that the appeals be dismissed beingdevoid of merits.

22. We have heard Ms. Aishwarya Bhati, learned senior counselappearing for the State and Mr. S.K. Bagaria and Mr. S.B. Upadhyay,Dlearned senior counsel appearing for the respondents.

23. After cogitating over the rival submissions, it becomes evidentthat the parties have proceeded on the premise that the State Governmentor the Executive is competent to rescind the earlier notification and thedoctrine of promissory estoppel can be no impediment in that behalf.That, however, is hedged or laced with condition that the burden is uponEthe Government to show that it acted in furtherance to public interest inissuing such a notification otherwise than in accordance with the promiseand that the public interest is so overwhelming that it would be inequitableto hold the Government bound by the promise. It is well established thatthe Court would not act on mere ipse dixit of the Government and mustFinsist on a highly rigorous standard of proof in discharge of its burden bythe Government. Resultantly, it is not necessary for us to dilate on theprecedents pressed into service by the respondents on the application ofdoctrine of promissory estoppel of the State Government like any otherprivate party or individual.

24. Before we proceed further, it would be apposite to extractGSection 5 of the 1948 Act. The same reads thus :- “5. Rebate of tax on certain purchases or sale.—(1) Wherethe State Government is satisfied that it is expedient in the public 13 (2010) 3 SCC 274H14 (2018) 6 SCC 1

interest so to do, it may by notification, and subject to suchconditions and restrictions as may be specified therein, allow arebate up to the full amount of tax levied on any specified pointon—

(a) The sale or purchase of any goods, or (b) The sale or purchase of such goods, by such persons or classof persons as may be specified in the said notification.

(2) The rebate under sub-section (1) may be allowed with effectfrom a date prior to the date of the notification.”

25. On a bare reading of this provision, it is evident that there is noexpress authority given to the Executive to issue notification for“withdrawing or rescinding the rebate facility” from a date prior to thedate of notification. Section 5(2) merely constrict that power only for“allowing” rebate with effect from a date prior to the date of notification.That does not include, by necessary implication or otherwise, power to“withdraw” or “rescind” the rebate from a date prior to the date of thenotification.

26. Section 21 of the 1897 Act also will be of no avail. The samereads thus :- “21. Power to issue, to include power to add to, amend,—vary or rescind notifications, orders, rules or bye-lawsWhere, by any Central Act or Regulations a power to issuenotifications, orders, rules or bye-laws is conferred, then that powerincludes a power, exercisable in the like manner and subject tothe like sanction and conditions (if any), to add to, amend, vary orrescind any notifications, orders, rules or bye-laws so issued.”

27. Section 21 of the 1904 Act, is pari materia to the above provisionand will be of no avail for withdrawing the rebate from a date priorto the date of the notification. In the present case, it is notnecessary to dilate further on this aspect as the plain language of thenotification dated 14[th] October, 2004, reproduced above in paragraph 5,itself expressly rescinds notification dated 27[th] February, 1998 with effectfrom 14[th] October, 2004. There is no express or tacit intent manifestedfrom this notification, so as to construe it as bestowing power to withdrawthe rebate facility with effect from a date prior to the date of notificationas such. On this finding, nothing more is required to be said as the A

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Aconcomitant of this finding would necessarily be that all the industrialunits set up after 27[th] February, 1998 and before 14[th] October, 2004which had commenced commercial production, must continue to qualifyfor rebate for specified term mentioned in notification dated 27[th] February,1998, subject to fulfilling all other conditions specified therein.

B28. In the case of BCL, the rebate ought to continue up to13[th] December, 2008 and in the case of JPAL, up to 17[th] September,2014. Any other interpretation of the impugned notification dated 14[th]October, 2004, would entail in giving retrospective or retroactive effectthereto. That is not predicated by Section 5 of the 1948 Act or theimpugned notification itself. Having said this, it would necessarily followCthat the challenge to the notification on the ground of being hit by doctrineof promissory estoppel need not detain us any further. Similarly, theargument regarding the circumstances in which the Government couldstave off from the dispensation under notification dated 27[th] February,1998 has become irrelevant.

D

29. Assuming that we need to examine the reasons offered by theState Government to justify the impugned notification dated 14[th] October,2004 of supervening public interest, it is noticed from the pleadingsexchanged by the parties before the High Court or for that matter beforethis Court that the dominant reason weighed with the State GovernmentEto rescind the earlier notification was the effect of the decision of theHigh Court dated 29[th] January, 2004 and the logistical issues confrontingthe State in implementation of that decision, including the financialimplications for the future State Revenue. For proper analysis of theplea so taken by the State, we must go back to the intent behind notificationdated 27[th] February, 1998. The dominant intent was to invite the investorsFto set up industrial unit in the designated areas within the State of UttarPradesh which were known to be underdeveloped or backward areasand more importantly to address the environmental issue because of thefly ash generated by the thermal power stations situated in Uttar Pradeshand incidentally to generate job opportunities and employment to theGlocals. It is one thing to argue that because of the interpretation given tothe notification dated 27[th] February, 1998 by the High Court and affirmedby this Court, the industrial units situated in the neighbouring States maynot be able to fulfill the underlying intent behind the notification dated27[th] February, 1998 in its letter and spirit. That is not the plea of theState. Furthermore, it is undeniable that the thermal power stations in H

the State of Uttar Pradesh are still operational and are generating flyash in the same manner and quantity as was happening in February,1998, if not more. It is also indisputable that the industrial units set up infurtherance of the promise or representation made in the notificationdated 27[th] February, 1998 which had commenced commercial productionin respect of specified goods before 14[th] October, 2004, would continueto achieve the same objective as is specified in the notification dated27[th] February, 1998. In that, the concerned manufacturing units continueto manufacture specified goods by using fly ash purchased or producedfrom the thermal power stations situated within the State. As long asthat activity is continued until the term specified under the notificationdated 27[th] February, 1998, namely ten years from the date ofcommencement of commercial production, there is no tangible reasonnor it is open to contend that the dominant purpose underlying notificationdated 27[th] February, 1998 had ceased to exist or had become irrelevantin any manner, much less there are supervening circumstances qua suchunits which are so overwhelming that it would be inequitable for theState Government to be bound by the promise given in notification dated27[th] February, 1998.

30. Indeed, the judgment rendered by the High Court and affirmedby this Court in interpreting the notification dated 27[th] February, 1998, atbest, may have given rise to some logistical issues for the State includingfinancial implications regarding future revenue loss. That ground cannotbe invoked as supervening public interest in reference to the activities ofthe industrial units who qualify the conditions specified in notificationdated 27[th] February, 1998 in all other respects and had commencedcommercial production of the specified product before 14[th] October,2004. Indubitably, an enforceable right had accrued to and crystalised infavour of such industrial units which could not be truncated or snappedunless the dominant purpose for which the notification dated 27[th]February, 1998 came to be issued had ceased to exist, namely generationof fly ash by the thermal power stations situated within the State andconsumption of that fly ash by the industrial units established within thedesignated areas of the State as per the specified quantity to becomeentitled for rebate for the duration mentioned therein. The question offuture revenue loss would not arise as the industrial units established inthe neighbouring States would not be eligible to avail of the rebate becauseof rescinding the earlier notification. Suffice it to observe that the AB

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Aargument about future revenue loss cannot be invoked against theindustrial units who had already established and commenced productionafter 27[th] February, 1998 and before 14[th] October, 2004. For, it can besafely presumed that the policy makers were fully conscious about theso-called loss of future revenue due to rebate to those units when theyhad issued notification dated 27[th] February, 1998. That ground cannotBbe set up against the industrial units who qualify in all other respectunder the notification dated 27[th] February, 1998 and have made substantialinvestment running into crores much less as being supervening publicinterest, as is being placated by the State in these proceedings. This isclearly an afterthought plea, which by no standards can stand the test ofCjudicial scrutiny. It is well established that the Court is obliged to insistfor a highly rigorous standard of proof in the discharge of the burden andonus upon the State to justify its action as supervening public interest.

31. Having said this, it must necessarily follow that the impugnednotification dated 14[th] October, 2004 can have no application to the settledDenforceable right accrued to industrial units who fulfill all other conditionsspecified in the notification dated 27[th] February, 1998, having commencedcommercial production of the specified goods before 14[th] October, 2004.In other words, we reject the stand of the State Government about thesupervening public interest qua the respondents herein and similarly placedpersons. The notification dated 14[th] October, 2004 cannot be construedEas having retrospective or retroactive effect to whittle down the accruedrights in favour of such industrial units.

32. In this view of the matter, it is unnecessary to dilate on theprecedents pressed into service to buttress the argument that doctrineof promissory estoppel applies or not to the State Government or aboutFthe power of the State Government to rescind the earlier notificationwhereunder rebate under Section 5 of the 1948 Act had become dueand payable to the eligible industrial units. We also dispose of thegrievance of the appellant that the High Court has not elaborately dealtwith the argument of supervening public interest justifying the issuanceGof notification dated 14[th] October, 2004. We say so because, we areconvinced with the argument of the respondents that no material facthas been pleaded in the response filed before the High Court or in thepresent proceedings by the State Government in that regard.

33. Nevertheless, we had permitted the State Government toarticulate the reasons which it did in the written submissions as referredH

to in paragraph 14 above. We have analysed the said reasons and are ofthe considered opinion that the same singularly or taken together wouldbe of no avail to the State Government, to justify the application of theimpugned notification dated 14[th] October, 2004, to industrial units alreadyset up which had commenced commercial production of the specifiedgoods in the designated areas before 14[th] October, 2004.

34. A priori, the respondents and similarly placed persons wouldbe entitled to rebate for the relevant period prescribed in the notificationdated 27[th] February, 1998 which would continue to remain in vogue untilthe expiry of the specified period, namely, ten years. In the case of BCLup to 13[th] December, 2008 and in the case of JPAL up to 17[th] September,2014 respectively. The amount of rebate, however, would depend onthe verification of their refund claim pending before the concernedauthorities and would be subject to just exceptions including the principleof unjust enrichment. The respondents should be able to substantiatethat the amount claimed by them has not been passed on to theirconsumers. Only then, they would be entitled for refund. The competentauthority may verify the claim for refund of each of the respondent(s) inaccordance with law and pass appropriate orders, including about theinterest for the relevant period.

35. We are in agreement with the respondents that the decisionsin Trikuta Roller Flour Mills P. Ltd. (supra) and Shree Durga OilMills (supra) turn on the facts of the concerned cases. The dictum inthose cases will have no application to the fact situation of the presentcase in light of our above analysis. Similarly, the observations made bythis Court in the earlier round of proceedings cannot come in the way ofthe respondents to pursue their claim for refund of the rebate amount,for the relevant period. That be decided in accordance with law.

36. In view of the above, these appeals must fail. Hence, thesame are dismissed with observations. There shall be no order as tocosts. All pending applications are also disposed of.

Nidhi Jain

Appeals dismissed.

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