LexUNION OF INDIA & ANOTHER ETC. ETC. versus M/S V.V.F LIMITED & ANOTHER ETC. ETC.
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A B C D E F G H 695 UNION OF INDIA & ANOTHER ETC. ETC. v. M/S V.V.F LIMITED & ANOTHER ETC. ETC. (Civil Appeal Nos. 2256-2263 of 2020) APRIL 22, 2020 [ARUN MISHRA, M. R. SHAH AND B. R. GAVAI, JJ.] Doctrines/Principles – Doctrine of promissory estoppel – Applicability of, in fiscal matters – In CA Nos. 2256-2263 of 2010, notification was issued providing exemption/incentives for setting up new industries in the earthquake affected district of Kutch – Excise duty exemption was granted by way of refund of the duty paid in cash/PLA – Respondents set up new units in Kutch – By subsequent notification, the incentive of refund of excise duty was limited to the extent of the value addition – Challenged by respondents – Quashed by High Court on the ground of breach of doctrine of promissory estoppel – In other allied matters, similar notifications/industrial policies allowing refund of excise duty on value addition basis were quashed by High Courts of Sikkim and Guwahati – On appeal, held: Doctrine of promissory estoppel cannot be invoked in the abstract – Courts are bound to consider all aspects including the objective to be achieved and the public good at large – The doctrine must yield when the equity so demands – Object of subsequent notifications/industrial policies was to prevent tax evasion by unscrupulous manufacturers – They are clarificatory in nature since they declared the refund of excise duty paid genuinely on actual manufacturing of goods and not on the goods manufactured only on paper without undertaking any manufacturing activities of such goods – Subsequent notifications/ industrial policies were issued in public interest and do not take away any vested rights conferred under the earlier notifications/ industrial policies – Thus, are not hit by the doctrine of promissory estoppel – Respective High Courts erred in quashing them – Impugned judgments set aside – Excise Duty – Central Excise Act – ss.5A, 11B – Interpretation of Statutes – Cenvat Credit Rules, 2001. Interpretation of Statutes – Parliamentary Statute/ Subordinate Legislation/ Declaratory Statutes/ Clarificatory Orders – Operation of – Discussed. [2020] 7 S.C.R. 695 695 A B C D E F G H 696 SUPREME COURT REPORTS [2020] 7 S.C.R. Interpretation of Statutes – Fiscal Statutes – Interpretation of – Discussed – Excise Duty – Tax/Taxation. Disposing of the matters, the Court Held : 1.1 The doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the objective to be achieved and the public good at large. While considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must forever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. [Para 11.1] Kasinka Trading v. Union of India (1995) 1 SCC 274: [1994] 4 Suppl. SCR 448; Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398 : [1996] 10 Suppl. SCR 888 ; STO v. Shree Durga Oil Mills (1998) 1 SCC 572 : [1997] 6 Suppl. SCR 488; State of Rajasthan v. Mahaveer Oil Industries (1999) 4 SCC 357 : [1999] 2 SCR 798 ; Shree Sidhbali Steels Ltd. v. State of U.P. (2011) 3 SCC 193 : [2011] 3 SCR 134 – relied on. 1.2 The respective notifications/industrial policies impugned before the High Courts can be said to be clarificatory in nature and it can be defined as an Act to remove doubts. It cannot be said that by the subsequent notifications/industrial policies the benefits which were accrued/granted under the earlier notifications were sought to be taken away. It also cannot be said that by the subsequent notifications/industrial policies, the rights which have been accrued under the earlier notifications had been taken away. The main objective of the earlier respective notifications/industrial policies was to encourage the entrepreneurs to put new industries in the area so as to generate employment and for that an incentive was offered to get back by way of refund the excise duty paid either in cash or PLA, namely, the amount of duty paid by the manufacturer of goods other than the amount of duty paid by utilization paid by CENVAT credit. A B C D E F G H 697 The same was subject to conditions that it will be app
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