M/S. ULTRATECH CEMENT LTD. & ANR. versus STATE OF RAJASTHAN & ORS.

Citation: [2020] 7 S.C.R. 392 · Decided: 17-07-2020 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Case Partly allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
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M/S. ULTRATECH CEMENT LTD. & ANR.
v.
STATE OF RAJASTHAN & ORS.
(Civil Appeal No. 2773 of 2020)
JULY 17, 2020
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Industrial Development:
Capital Investment Subsidy – Under Rajasthan Investment
Promotion Scheme 2003 – Clauses 7(i)(a), 7(i)(b), 7(vi) and 7(vii),
10 and 13 – Request by the appellant-Company for customized
package of incentives for setting up a cement plant – Pre-BIDI (Pre
Board of Infrastructure Development and Investment Institution)
meeting, after considering the request recommended that the cement
package and the Scheme of 2003 was applicable to the Company –
BIDI also resolved that recently announced cement package and
the 2003 Scheme would be applicable to the Company – The
Company addressed letter dated 26.4.2006 to Commissioner of
Industries seeking registration in terms of sub-clause (vii) of clause
7 of the 2003 Scheme – Before any decision could be taken on the
letter, State Government deleted sub-clauses (vi) and (vii) from
Clause 7 by Notification dated 28.4.2006 – Company’s
representation seeking withdrawal of Notification dated 28.4.2006
– State replied that the Company would be eligible for concessions
as per the 2003 Scheme – Company also entered into MOU with
the State – After establishment of the cement plant and starting
production therein, Company sought Entitlement Certificate under
the 2003 Scheme – State Level Screening Committee (SLSC) allowed
Capital Investment Subsidy to the Company to the extent of 75% of
deposited VAT and Entitlement Certificate was issued – Company
availed the benefit of 75% subsidy in terms of Entitlement Certificate
– After Finance Department of the State raised doubts about the
decision in respect of grant of subsidy upto 75% to the Company,
SLSC re-examined the matter and suggested appropriate action
under Clause 13 of the 2003 Scheme – In Revision proceedings
under Clause 13, the competent Authority decided that SLSC had
erroneously issued Entitlement Certificates and the Company was
[2020] 7 S.C.R. 392
392
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not entitled to the subsidy beyond 50% of the tax payable and
deposited – Pursuant thereto revised Entitlement Certificates were
issued allowing subsidy upto 50% – The Company was directed to
refund the amount of excess availed subsidy together with interest
@ 18% – Writ petition challenging the orders was dismissed by
High Court – Appeal to Supreme Court – Held: Extending of any
incentive in the form of exemption, rebate, concession or subsidy is
the matter of policy of Government – A Government is entitled to
frame a particular policy and to alter the same – Whether the cement
industry was to be granted 75% subsidy under 2003 Scheme was a
matter of policy – The policy of extending 75% subsidy to cement
industry was withdrawn by the Government by deleting sub-clauses
(vi) and (vii) of clause 7 of the 2003 Scheme – As the policy of
extending 75% subsidy was not in existence at the time when the
application of the Company was considered, no benefit could have
been claimed under non-existent policy – Company is entitled to
subsidy only to the extent of 50% and hence liable to refund the
excess 25% – Since the disbursement of 75% subsidy to the Company
was on the basis of erroneous decision and was not relatable to
breach of any of the conditions of the Scheme on the part of the
Company, the Revenue is not entitled to demand interest on the excess
amount @ 18% p.a. – However, as the Company had obtained undue
advantage by availing 25% extra subsidy and had undertaken to
refund extra subsidy with interest @ 12% p.a. Company is liable to
refund excess amount with interest @ 12% p.a.
Doctrines/ Principles
Doctrine of Contemporanea Expotio – is a guide to the
interpretation of Statute or a document by referring the exposition
that the same had received from competent Authority at relevant
point of time – Held, not applicable in present case.
Principle of Promissory Estoppel – Applicability of – Held
not applicable in the facts of the present case.
Maxims:
‘Contemporanea exposition est optima et fortissimo in lege’ –
Meaning of.
M/S. ULTRATECH CEMENT LTD. & ANR. v. STATE OF
RAJASTHAN & ORS.
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SUPREME COURT REPORTS
[2020] 7 S.C.R.
Partly allowing the appeal, the Court
HELD: 1.1. The application earlier made by the Company
was considered in the Pre-BIDI (Board of Infrastructure
Development and Investment Institution) meeting

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