STATE OF UTTAR PRADESH & ANR. versus M/S. BIRLA CORPORATION LIMITED

Citation: [2019] 14 S.C.R. 128 · Decided: 20-11-2019 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Dismissed

Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 14 S.C.R.
STATE OF UTTAR PRADESH & ANR.
v.
M/S. BIRLA CORPORATION LIMITED
(Civil Appeal No. 1579 of 2019)
NOVEMBER 20, 2019
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Uttar Pradesh Trade Tax Act, 1948: s. 5 – Rebate of tax on
certain purchases or sale – Notification providing for rebate on tax
– Power of the State to rescind the Notification – On facts, issuance
of notification dated 27.02.1998 by State Government whereby
exemption available to Cement Manufacturing units using fly ash
in State of UP – State issuing Notification dated 14.10.2004,
rescinding the earlier Notification – Challenge to, by the industrial
units who had commenced production complying with the conditions
for grant of rebate in terms of Notification dated 27.02.1998,
entitling them to avail rebate of tax facility for ten years – Writ
petition partly allowed to the extent petitioner’s entitlement for tax
exemption for the period available under original notification –
On appeal, held: Stand of the State Government about the
supervening public interest qua the respondents and similarly placed
persons cannot be accepted – Notification dated 14.10.2004 can
have no application to the settled enforceable right accrued to
industrial units who fulfill all other conditions specified in the
notification dated 27.02.1998, having commenced commercial
production of the specified goods before 14.10.2004 – Notification
dated 14.10.2004 cannot be construed as having retrospective or
retroactive effect to whittle down the accrued rights in favour of
such industrial units – Thus, the respondents and similarly placed
persons entitled to rebate for the relevant period prescribed in the
notification dated 27.02.1998 – Respondents to pursue their claim
for refund of the rebate amount for the relevant period.
Dismissing the appeals, the Court
HELD : 1.1. It is well established that the Court would not
act on mere ipse dixit of the Government and must insist on a
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highly rigorous standard of proof in discharge of its burden by
the Government. [Para 23] [150-F]
1.2. On a bare reading of section 5 of the Uttar Pradesh
Trade Tax Act, 1948, it is evident that there is no express authority
given to the Executive to issue notification for “withdrawing or
rescinding the rebate facility” from a date prior to the date 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 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 provision
and will be of no avail for withdrawing the rebate from a date
prior to the date of the notification. The plain language of the
notification dated 14th October, 2004, itself expressly rescinds
notification dated 27th February, 1998 with effect from 14th
October, 2004. There is no express or tacit intent manifested
from this notification, so as to construe it as bestowing power to
withdraw the rebate facility with effect from a date prior to the
date of notification as such. On this finding, nothing more is
required to be said as the concomitant of this finding would
necessarily be that all the industrial units set up after 27th
February, 1998 and before 14th October, 2004 which had
commenced commercial production, must continue to qualify for
rebate for specified term mentioned in notification dated 27th
February, 1998, subject to fulfilling all other conditions specified
therein. [Para 26, 27] [151-E, G-H; 152-A]
1.4 In the case of BCL, the rebate ought to continue up to
13th December, 2008 and in the case of JPAL, up to 17th
September, 2014.  Any other interpretation of the impugned
notification dated 14th October, 2004, would entail in giving
retrospective or retroactive effect thereto.  That is not predicated
by Section 5 of the 1948 Act or the impugned notification itself.
Having said this, it would necessarily follow that the challenge to
the notification on the ground of being hit by doctrine of promissory
STATE OF UTTAR PRADESH & ANR. v. M/S. BIRLA
CORPORATION LIMITED
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estoppel need not detain this Court any further. Similarly, the
argument regarding the circum

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