STATE OF GUJARAT & OTHERS versus ESSAR OIL LIMITED AND ANOTHER

Citation: [2012] 2 S.C.R. 1127 · Decided: 17-01-2012 · Supreme Court of India · Bench: A.K. GANGULY · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

[2012) 2 S.C.R. 1127 
STATE OF GUJARAT & OTHERS 
v. 
ESSAR OIL LIMITED AND ANOTHER 
(Civil Appeal No. 599 of 2012) 
JANUARY 17, 2012 
[ASOK KUMAR GANGULY AND 
JAGDISH SINGH KHEHAR, JJ.] 
A 
B 
Sales Tax - Tax incentive scheme - For new industrial 
units - Units seeking benefit under the scheme were required C 
to commence commercial production within a particular time 
frame - Respondent sought to set up a new Oil refinery 
project - Pipelines for the project were required to be laid 
through forest land including national park and sanctuary area 
- Respondent could not obtain requisite permission/licence 
D 
from the State Government for laying down the pipelines in 
view of injunction/restraint orders passed by the High Court. 
in certain PILs - High Court orders subsequently set aside 
by Supreme Court and requisite permission/licence thereafter 
granted to respondent -
Respondent commenced 
E 
commercial production, albeit after the time frame stipulated 
under the incentive scheme - It filed writ petition contending 
that the delay in commencement of commercial production 
was on account of the injunction granted by the High Court; 
that this situation continued till respondent was granted 
F 
permission/licence pursuant to the judgment of Supreme 
Court, and therefore it was entitled to get benefit of exclusion 
of the intervening period for calculating the time limit for 
commencement of commercial production - High Court 
excluded the intervening period and granted respondent the 
benefit of the incentive scheme on the principle of restitution G 
and on the ground that respondent could not be made to lose 
benefit under the scheme, for an act of Court - Justification 
of - Held: Not justified - Principle of restitution was not 
applicable against the appellant-State Government since it 
1127 
-
H 
1128 
SUPREME COURT REPORTS 
[2012] 2 S.C.R. 
A was nobody's case that it received any unjust benefit or any 
unjust enrichment in view of stay orders passed by the High 
Court on the P/Ls - Order passed by High Court in the P/Ls 
was overturned by Supreme Court on a different interpretation 
of s.29 of,fhe WPA - In case of a mere erroneous judgment 
8 of a Court the principle of "actus curiae" cannot be invoked -
A mere mistake or error committed by Court cannot be a 
ground for restitution - The exercise undertaken by the High 
Court in the impugned judgment by directing various 
adjustments which virtually re-wrote the State's exemption 
C scheme, was an exercise which was neither warranted in Jaw 
nor supported by precedents - There was no question of 
equity - Wildlife Protection Act - ss. 29 and 35. 
Doctrines - Doctrine of Restitution - Principles and 
applicability of - Discussed - Held: The concept of restitution 
D is basically founded on the idea that when a decree is 
reversed, Jaw imposes an obligation on the party who received 
an unjust benefit of the erroneous decree to restitute the other 
party for what the other party Jost during the period the 
erroneous decree was in operation - The Court while granting 
E restitution is required to restore the parties as far as possible 
· to their same position as they were in at the time when the 
Court by its erroneous action displaced them - A person who 
has conferred a benefit upon another in compliance with a 
judgment or whose property has been taken thereunder, is 
F entitled to restitution if the judgment is reversed or set-aside, 
unless restitution would be inequitable. 
Maxims - "actus curiae neminem gravabit" - Concept 
and applicability of. 
G 
Taxation - Sa/es tax - Exception/Exemption provision -
Interpretation of -
Held: 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 
H construed strictly - Further a person invoking an exception 
STATE OF GUJARAT & ORS. v. ESSAR.OIL LTD 1129 
AND ANR. 
or an exemption provision to relieve him of the tax liability 
A 
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 - An exemption is a stand alone process - Either an . 
industry claiming exemption comes within it or it does· not. 
B 
In 1995, the appellant-State Government introduced 
a Capital Investment Incentive Scheme which envisaged 
grant of Sales Tax incentives by way of sales tax 
exemption/ deferment for new

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