STATE OF HARYANA & OTHERS versus M/S. MAHABIR VEGETABLE OILS PVT. LTD.

Citation: [2011] 4 S.C.R. 944 · Decided: 21-02-2011 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
[2011] 4 S.C.R. 944 
STATE OF HARYANA & OTHERS 
v. 
M/S. MAHABIR VEGETABLE OILS PVT. LTD. 
(Civil Appeal No. 1977 of 2011) 
FEBRUARY 21, 2011 
[DR. MUKUNDAKAM SHARMA AND 
ANIL R. DAVE, JJ.] 
Sa/es Tax - Haryana General Sales Tax Rules, 1975 -
C r.28A - Haryana General Sales Tax Act, 1973 - Exemption 
on investment made for setting up Solvent Extraction plant -
Withdrawal of, by putting the Solvent extraction plant in the 
negative list -
Challenged -
Promissory Estoppe/ -
Applicability of - Held: The principles of promissory estoppel 
D were not applicable as the decision to put the Solvent 
Extraction Plant in the negative list was taken in public 
interest since the industry is in the category of polluting 
industry - In cases where the Government on the basis of 
material available before it, bona fide, is satisfied that public 
E interest would be served by granting, withdrawing, modifying 
or rescinding an exemption already granted, it should be 
allowed a free hand to do so - The Courts should not normally 
interfere with fiscal policy of the government more so when 
such decisions are taken in public interest and where no fraud 
F 
nor lack of bona fide is alleged much less established - The 
right to exemption or concession is a right that can be taken 
away under the very power in exercise of which the exemption 
was granted - Furthermore, in the facts of the instant case, it 
cannot be said that the Respondent had altered its position 
relying on the promise inasmuch as even before steps were 
G taken by the Respondent for laying the Solvent Extraction 
Plant, the appellant had made its intention clear through its 
notice dated 3.1.1996 that it was likely to amend the law/rules 
in respect whereof a draft was circulated for information of 
H 
944 
• 
• 
STATE OF HARYANA v. MAHABIR VEGETABLE OILS 945 
PVT. LTD. 
persons likely to be affected thereby so as to enable them to 
A · 
file objections and suggestions thereto - Amendments in the 
terms of the said draft rules were notified on 16-12-1996 
substituting Schedule Ill appended to the Rules whereby and 
where under the solvent extraction plant was included therein 
- Though investment was made by the Respondent probably 
B 
on the belief that it would 6e entitled to the exemption, 
however, the said factor alone, in the absence of any specific 
confirmation cannot stop the State to amend the policy and 
withdraw the exemption if the same is deemed necessary and 
expedient in the Public Interest - Moreover, the said policy, c 
which was for the period of 1-4-1988 to 31-3-1997, was nearing 
its end - Administrative Law. 
Doctrines/Principles - Doctrine of Promissory estoppel 
- Applicability of -Held: The doctrine of Promissory Estoppel 
D 
is an equitable remedy and has to be moulded depending 
on the facts of each case - No hard and fast rule for applying 
the doctrine of Promissory Estoppel but the doctrine has to 
do justice between the parties and ensure equity between the 
parties i.e. both the promissor and the promise. 
E 
Interpretation of Statutes - Fiscal statute - Exemption -
Nature of - Held: It is a concession granted by the State so 
that the beneficiaries of such concession are not required to 
pay the tax or the duty they are otherwise liable to pay under 
such statute - The beneficiary of a concession has no legally 
F 
enforceable right against the government to grant a 
concession except to enjoy the benefits of the concession 
during the period of its grant. 
Dispute arose as to whether the Respondent was 
G 
entitled to the benefit of Sales Jax exemption on the entire 
investment made by them in setting up the industrial unit 
i.e. Solvent Extraction Plant, or on the investments made 
up till 16.12.1996, i.e. date of amendment or in other 
H 
946 
SUPREME COURT REPORTS 
[2011] 4 S.C.R. 
A words the date on which the exemption granted under 
Rule 28A of the Haryana Sales Tax Rules ("HSTR") was 
withdrawn by the State by putting the Solvent extraction 
plant in the negative list. The High Court, by the 
impugned judgment, held that once the Respondent was 
B treated to be eligible for exemption, there was no valid 
reason to further classify the benefit of investment up to 
the date of amendment, putting the unit in the negative 
list. 
In appeal before this Court, the State vehemently 
C contended that the exemption granted to solvent 
extraction plant was legally withdrawn by the State 
Government on 16.12.1996 as the same was de

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