THE HIGH COURT OF SIKKIM : GANGTOK
(Civil Extraordinary Jurisdiction)
DATED : 5th February, 2021
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DIVISION BENCH : THE HON'BLE MRS. JUSTICE MEENAKSHI MADAN RAI, JUDGE
THE HON'BLE MR. JUSTICE BHASKAR RAJ PRADHAN, JUDGE
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WP(C) No.47 of 2018
0
Petitioner : Sun Pharma Laboratories Limited
versus
Respondents : Union of India and Others
Petition under Article 226 of the
Constitution of India
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Appearance
Mr. V. Lakshmi Kumaran, Mr. Karan Sachdev and Ms. Gita Bista,
Advocates for the Petitioner.
Mr. B.K. Gupta, Advocate for Respondents No.1 and 2.
Mr. S.K. Chettri, Government Advocate for Respondent No.3.
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JUDGMENT
Meenakshi Madan Rai, J.
1. The Petitioner herein assails the restrictions imposed
by the Scheme of Budgetary Support, issued under the Goods and
Services Tax regime vide Notification F.No.10(1)/2017-DBA-
II/NER, dated 05.10.2017, by the Respondent No.1, reducing the
quantum of benefits earlier availed by the Petitioner, thereby
reneging on the promises made under the erstwhile Tax regime
and adversely affecting the Petitioner.
1.(a) The Petitioner is a Private Limited Company engaged
inter alia in the manufacture of P&P Medicaments and Consumer
Health Products for which purpose Unit I was set up on 2005 and
Unit II later in time, both situated at Ranipool, East Sikkim. WP(C) No.47 of 2018 2
Sun Pharma Laboratories Ltd. vs. Union of India and Others
1.(b) The Petitioner's case is that vide a Memorandum, dated
17.02.2003, the Respondent No.1 notified the "New Industrial
Policy and other concessions for the State of Sikkim" ("Industrial
Policy, 2003") which inter alia granted 100 per cent exemption
from Excise duty for a period of ten years from the date of
commencement of commercial production. Pursuant thereto,
various exemption Notifications were issued under the respective
Fiscal Statutes, including Central Excise original Notification
No.56/2003-C.E., dated 25.06.2003. By this Notification, 100 per
cent duty exemption was granted to the goods specified in the
Schedule thereto, manufactured and cleared from a Unit located in
Sikkim from so much of the duty of Excise leviable under the
Central Excise Act, 1944 and other allied Acts as is equivalent to
the amount of duty paid by the manufacturer of the goods other
than the amount of duty paid by utilization of CENVAT Credit under
the CENVAT Credit Rules, 2002 for a period of ten years from the
date of commencement of commercial production.
1.(c) On 01.04.2007, the Respondent No.1 notified the North
East Industrial and Investment Promotion Policy, 2007 ("Industrial
Policy, 2007") thereby discontinuing the Industrial Policy of 2003.
The Industrial Policy of 2007 also covered the State of Sikkim and
inter alia provided that the new Units and existing Units which go
in for substantial expansion and commence commercial production
within ten years of the date of Notification of the said Policy, would
be eligible for incentives for a period of ten years from the date of
commencement of commercial production. It further provided that
100 per cent Excise duty exemption would be continued on finished
products made in the North Eastern Region as available under WP(C) No.47 of 2018 3 Sun Pharma Laboratories Ltd. vs. Union of India and Others
NEIP, 1997. However, in cases where the CENVAT paid on the raw
materials and intermediate products going into the production of
finished products (other than the products which are otherwise
exempt or subject to nil rate of duty) is higher than the Excise
Duties payable on the finished products, ways and means to refund
such overflow of CENVAT Credit will be separately notified by the
Ministry of Finance.
1.(d) Based on the representations of the Respondent No.1,
the Petitioner, by making substantial investments, set up the first
Unit in 2005 and commenced commercial production on
20.04.2009. The second Unit set up later, commenced commercial
production on 14.04.2014. Thus both Units started its commercial
production within ten years from the date of issuance of Industrial
Policy, 2007 and were enjoying the full refund of the Central Excise
Duties paid by them by way of the mechanism provided in the
exemption Notification.
1.(e) It is alleged that the Respondent No.1 issued
Notifications No.21/2008-C.E. and 20/2008-C.E., both dated
27.03.2008, amending Notifications No.56/2003-C.E., dated
25.06.2003 and 20/2007-C.E., dated 25.04.2007, to curtail 100
per cent Excise duty exemption provided thereof. The benefit of
exemption was sought to be reduced to the prescribed percentage
of value addition amount i.e. 56 per cent applicable to
pharmaceutical products mentioned in the respective Notifications
and applicable Chapter. These amendments were challenged before
this Court by the Petitioner in W.P.(C) No.41/2015, W.P.(C)
No.08/2017, W.P.(C) No.27/2017 and W.P.(C) No.40/2017 and this
Court quashed the impugned Notifications No.20/2008-C.E., dated WP(C) No.47 of 2018 4 Sun Pharma Laboratories Ltd. vs. Union of India and Others
27.03.2008 and 38/2008-C.E., dated 10.06.2008, vide Judgment
dated 21.11.2017.
1.(f) From 01.07.2017, the entire indirect Tax regime in the
country underwent a major reform with the introduction of the
Goods and Services Tax ("GST") which thereby introduced the
Central Goods and Services Tax Act, 2017 (for short "CGST Act"),
the Integrated Goods and Services Tax Act, 2017 (for short "IGST
Act") and the Sikkim Goods and Service Tax Act, 2017. Section
174 of the CGST Act repealed the Central Excise Act, 1944 with
certain exceptions and vide Notification No.21/2017-C.E., dated
18.07.2017, the Respondent No.1 rescinded Notifications
No.20/2007-C.E., dated 25.04.2007 and 56/2003-C.E., dated
25.06.2003.
1.(g) In continuation of the earlier Industrial Policies as well
as Excise Notifications to exempt the levy of Central Excise duty on
the Goods manufactured and sold from the Units in the State of
Sikkim, the Central Government provided for Budgetary Support
Schemes for such Units under the GST regime. The Budgetary
Support Scheme is applicable to the Units which were eligible for
drawing benefits under the earlier Excise Duty Exemption/Refund
Schemes and was applicable for the remaining period out of the
total period not exceeding ten years, from the date of
commencement of commercial production as specified under the
erstwhile Notification. The amount of Budgetary Support under the
Scheme for specified goods manufactured by the eligible Unit is
specified as the sum total of 58 per cent of the Central Tax paid
through debit in cash ledger account maintained by the Unit after
full utilization of the input Tax Credit of the Central Tax and WP(C) No.47 of 2018 5 Sun Pharma Laboratories Ltd. vs. Union of India and Others
Integrated Tax and 29 per cent of the Integrated Tax paid through
debit in cash ledger account maintained by the Unit after full
utilization of the input Tax Credit of the Central Tax and Integrated
Tax. The Excise Duty Exemptions availed by the Petitioner by way
of refund in the pre GST regime, for both the Units were curtailed
by the Respondent No.1 through the Budgetary Support Policy
thereby reducing the benefit granted to the Petitioner. Therefore,
the reduction in benefits on the supply of goods by the Petitioner is
contrary to Article 14 of the Constitution of India (for short
"Constitution") and the Petitioner's right to avail the benefit of
exemption cannot be taken away by the limited benefit provided
under the Budgetary Support Scheme. That, the Respondent No.1
is estopped from imposition of CGST which was represented by
them to be 100 per cent exempt for the specified period. Hence,
the prayers in the Writ Petition.
2. Denying and disputing the allegations of the Petitioner,
the Respondents No.1 and 2 in their Counter-Affidavit, reagitated
that Notification No.20/2007-C.E., dated 25.04.2007, which was
subsequently amended by Notification No.20/2008-C.E., dated
27.03.2008, was issued well before the Petitioner started its
commercial production, which started after the amendment of
exemption Notification restricting the refund. That, the
confinement of 58 per cent of the Central Goods and Services Tax
(for short "CGST") and 29 per cent of the Integrated Goods and
Services Tax (for short "IGST"), has been fixed taking into
consideration that at present the Central Government devolves 42
per cent of the Taxes on Goods and Services to the States, as per
the recommendation of the 14th Finance Commission. Moreover, WP(C) No.47 of 2018 6 Sun Pharma Laboratories Ltd. vs. Union of India and Others
the power of exemption is variously described as conditional
legislation and also a piece of delegated legislation. This power of
the Central Government has to be exercised in public interest and
there is no warrant for reading any limitation into this power. That,
the new Budgetary Support Scheme is launched as a measure of
goodwill only to the Units which were eligible for drawing benefits
under the earlier Excise Duty Exemption/Refund Schemes but
otherwise has no relation to the erstwhile Schemes and it is
impossible to compare the benefits under the old Scheme and the
new Scheme, neither is it feasible or desirable. This has been
considered by the Central Government to be expedient in public
interest and for revenue. That, in fact, the Petitioner has availed
benefits extended by the Government under the Budgetary
Support Scheme for various periods from July, 2017 through
December, 2017 and after availing the benefits, they have filed the
instant Writ Petition which is arbitrary and bad in law, on which
ground alone the Petition deserves a dismissal. Moreover, the full
benefit in respect of the share of the Central Revenue is being
granted to the Petitioner and they have been availing of the said
benefit from the Department. Hence, for the aforestated reasons,
the Writ Petition is liable to be rejected.
3. The Respondent No.3 chose not to file any Counter-
Affidavit.
4. A Rejoinder was filed to the Counter-Affidavit of
Respondents No.1 and 2 which, while reiterating the facts stated in
the Petition, emphasized that the Respondents No.1 and 2 have
not cited the public interest which necessitated the curtailment of
benefits promised to the Petitioner under the erstwhile law. WP(C) No.47 of 2018 7
Sun Pharma Laboratories Ltd. vs. Union of India and Others
5.(i) Learned Counsel Mr. V. Lakshmi Kumaran for the
Petitioner, while relying and reiterating the averments made in the
Petition, contended that if the value addition norms were met, then
even under the said Scheme, the manufacturer could avail 100 per
cent exemption on the Excise duty paid through cash. That, in the
Appeals filed by the Department, the Hon'ble Supreme Court in
Union of India and Another vs. V.V.F. Limited and Another 1 set aside
the Judgments passed by the various High Courts including the
Judgment of this High Court passed on 21.11.2017 however, the
Judgment (V.V.F. Limited supra) does not conclusively decide the
issues raised in the instant Petition.
(ii) It was next contended that the Respondents have
acted against their promises and reduced the benefits promised to
the Petitioner. That, the Budgetary Support Scheme makes a
departure from the erstwhile Scheme restricting the Budgetary
Support which is de hors the value addition norms and limits the
benefits available even if value addition norms are met. It was
submitted that the principle of Promissory Estoppel is applicable in
the instant case as the Respondents have failed to demonstrate
any supervening public interest. That, the Hon'ble Supreme Court
in V.V.F. Limited (supra) has not diluted the principle of Promissory
Estoppel which would continue to apply in the present case,
consequently this Court must independently examine whether the
present amendment violates the said principle. That, the Hon'ble
Supreme Court, in fact, noted that the principle is applicable in all
cases except in cases of supervening public interest which
necessitates withdrawal of benefits so promised. In light of this
1 (2020) SCC Online SC 378 WP(C) No.47 of 2018 8 Sun Pharma Laboratories Ltd. vs. Union of India and Others
settled principle, the Hon'ble Supreme Court examined the
reduction in Excise duty exemption benefits and held that the
subsequent Notifications were merely clarificatory in nature and did
not take away any vested right and were issued in the larger public
interest to prevent misuse and to achieve the original object and
purpose of the incentive/exemption. The attention of this Court
was invited to Paragraphs 14 and 15 of the said ratio. Support in
this context was garnered from the ratio of SL Srinavasa Jute Twine
Mills (P) Ltd. Vs. Union of India2 and Southern Petrochemicals
Industries Co. Ltd. vs. Electricity Inspector and Etio and Ors. 3. That, in
the Counter-Affidavit filed by the Respondents No.1 and 2, as also
in the Budgetary Support Scheme, it is stated that the limited
benefit accorded is due to the reason that the Central Government
devolves 42 per cent of the Taxes on goods and services to the
State as per the recommendations of the 14th Finance Commission.
That, even prior to the GST regime, the Central Government was
sharing the revenue of Central Excise duty in the same proportion
with the State Governments and at the time of introduction of the
exemption Notification in 2003, the Centre was sharing 29.5 per
cent of the Central Taxes with the States. However, the Petitioner
was promised and granted 100 per cent exemption from Excise
duty and it was not restricted to 70.5 per cent of the Tax payable.
Hence, when the promises were made, the Parliament was well
aware of its obligation to share the revenue with the States. That,
the position under the GST Scheme is no different than the position
under the erstwhile Central Excise regime, whereby the Taxes were
2 (2006) 2 SCC 740 3 (2007) 5 SCC 447 WP(C) No.47 of 2018 9 Sun Pharma Laboratories Ltd. vs. Union of India and Others
shared by virtue of Article 270(1) of the Constitution. The
justification put forward by the Respondents on misuse of previous
Scheme, something that was specifically noted and was made the
basis of the Judgment in V.V.F. Limited (supra), is wholly without
merit and ex facie unsustainable. That, the Exemption granted to it
under the erstwhile Notifications were vested rights of the
Petitioner as recognized by the Hon'ble Supreme Court in V.V.F.
Limited (supra), which are saved by Section 174(2)(c) read with
Section 6 of the General Clauses Act, 1897 and do not fall under
the proviso to Sec 174(2)(c) of the said Act, which only seeks to
exclude a privilege and not a vested right. That, the Budgetary
Support Scheme being against the principles of Promissory
Estoppel is arbitrary and violative of Article 14 of the Constitution
and hence the Court may direct the Respondents to grant refund of
50 per cent IGST/100 per cent CGST, paid through cash on the
goods cleared by the Petitioner from its eligible units.
6. Per contra the arguments submitted by Respondents
No.1 and 2 was that the Petitioner had filed an Interlocutory
Application being I.A. No.02 of 2019, stating that the Respondents
No.1 and 2 had filed an Appeal against the Judgment of this Court
dated 21.11.2017. When the matter was heard and reserved for
Judgment by the Hon'ble Supreme Court, the Petitioner prayed
that as the subject matter in the Special Leave Petitions dealt with
the same issue as in the present Writ Petition, this Writ Petition be
kept in abeyance till the pronouncement of the Judgment by the
Hon'ble Supreme Court. Hence, the Judgment in V.V.F. Limited
(supra) is applicable to the facts and circumstances of the instant
case as evident from the observation at Paragraph "14.3" therein. WP(C) No.47 of 2018 10
Sun Pharma Laboratories Ltd. vs. Union of India and Others
The Hon'ble Supreme Court had rejected the original Petition of the
Petitioner wherein they sought benefit on the ground of Promissory
Estoppel. Moreover, with the roll out of the GST regime, a new
Scheme offered a measure of goodwill unrelated otherwise to the
erstwhile Schemes. That, in fact, instead of 56 per cent exemption
that was granted earlier, the amount to be refunded is fixed at 58
per cent, giving the Petitioner the benefit of additional 2 per cent.
That although any tax exemption granted as an incentive against
investment through a Notification has been discounted as a
privilege vide Section 174(2)(c) of the CGST Act read with
Notification No.21/2017-C.E., dated 18.07.2017, the Petitioner has
been compensated for the benefits they were drawing earlier. That,
as per the recommendations of the 14th Finance Commission, the
Central Government devolves 42 per cent of the taxes on goods
and services to the States, hence, it has been considered to be
expedient in public interest and in the interest of revenue by the
Central Government. In view of the above grounds, the present
Petition deserves no consideration and is liable to be dismissed.
7. Learned Government Advocate for the State-
Respondent No.3, in his arguments, contended that the distribution
of Revenue Tax in accordance with the recommendation of the
Finance Commission in the proportion of 58 per cent to the Union
and 42 per cent to the States, is a recommendation involving all
States in the Indian Union and does not pertain to the State of
Sikkim alone. Of the 42 per cent which is distributed to the State,
the share of the State of Sikkim is less than 0.5 per cent and in
this view of the matter, it would be wholly erroneous to extrapolate
the number of 42 per cent on the recommendation, if any, to be WP(C) No.47 of 2018 11 Sun Pharma Laboratories Ltd. vs. Union of India and Others
made to the Petitioner without taking into reference the share of
the State of Sikkim which is less than 0.5 per cent. That, the
"CGST" is a "Central Tax" and liability exacted by the Union. The
Union is solely responsible for the refund of the same and any
liability, if so found by this Court, would be irrational without any
fundamentals or any law.
8. The rival submissions of Learned Counsel for the
parties were heard in extenso and given due consideration. The
decisions relied on by Learned Counsel for the parties have also
been perused as also the pleadings and all documents on record.
What thereby falls for consideration before this Court is whether
the ratio in V.V.F. Limited (supra) would be applicable to the facts
and circumstances of the instant case or does this matter require
independent examination by this Court.
9.(i) It would be apposite firstly to recapitulate here that the
Petitioner had filed W.P.(C) No.41/2015, W.P.(C) No.08/2017,
W.P.(C) No.27/2017 and W.P.(C) No.40 of 2017 before this Court,
which came to be disposed of vide a common Judgment dated
21.11.2017.
(ii) In W.P.(C) No.41/2015, Notification No.21/2008-C.E.
of 27.03.2008 and Notification No.36/2008-C.E. of 10.06.2008,
were impugned with the prayer that the Petitioner Units be
permitted to avail the benefits of Excise duty exemption provided
in terms of Notification No.56/2003-C.E. of 25.06.2003.
Notification No.20/2008-C.E. of 27.03.2008 and Notification
No.38/2008-C.E. of 10.06.2008, were also impugned with the
prayer seeking to avail the benefit of Excise duty exemption, as
provided in Notification No.20/2007-C.E. of 25.04.2007. WP(C) No.47 of 2018 12
Sun Pharma Laboratories Ltd. vs. Union of India and Others
(iii) Notification No.21/2008-C.E., dated 27.03.2008;
Notification No.36/2008-C.E., dated 10.06.2008; Notification
No.20/2008-C.E., dated 27.03.2008 and Notification No.38/2008-
C.E., dated 10.06.2008 (also impugned in W.P.(C) No.41/2015)
were impugned in W.P.(C) No.27 of 2017.
(iv) W.P.(C) No.40/2017 assailed Notification No.20/2008-
C.E., dated 27.03.2008 and Notification No.38/2008-C.E., dated
10.06.2008 (also impugned in W.P.(C) No.41/2015 and W.P.(C)
No.27/2017).
(v) It is worthwhile mentioning that in the said Writ
Petitions, Learned Senior Counsel submitting on behalf of the
Petitioner inter alia canvassed the contention that based on the
Industrial Policy of 2003 and in terms of the promises made, which
also exempted from so much of the duty of Excise leviable thereon
as is equivalent to the amount of duty paid by manufacturer of the
goods other than the amount of duty paid by utilization of CENVAT
Credit under the CENVAT Credit Rules, 2002, for a period of ten
years from the date of commencement of commercial production,
the Petitioner, by investing large amounts of money, established
Units for the manufacture of P&P Medicaments falling under Serial
No.11 of the Schedule to the Notification No.56/2003-C.E., dated
25.06.2003. In the meanwhile, Office Memorandum dated
01.04.2007, was issued notifying the Industrial Policy, 2007, which
also granted 100 per cent Excise duty exemption as provided in the
Industrial Policy, 2003. That, however, the Industrial Policy, 2007,
specifically provided that the new Industrial Units which
commenced production within ten years of the said Memorandum,
would be eligible for the incentive thereunder. In line with the WP(C) No.47 of 2018 13 Sun Pharma Laboratories Ltd. vs. Union of India and Others
Industrial Policy, 2007, Notification No.20/2007-C.E., dated
25.04.2007, was issued whereby the Petitioner's goods were
exempted from so much of the duty of Excise leviable thereon as is
equivalent to the amount of duty paid by the manufacturer of
goods other than the amount of duty paid by utilization of CENVAT
Credit. In the year 2008, the earlier notified 100 per cent Excise
duty exemption was significantly curtailed by issuing two amending
impugned Notifications No.21/2008 and 20/2008 supra, by which
the benefit of exemption was limited to the certain prescribed
percentage of value addition i.e. 56 per cent applicable to
Pharmaceutical Products, as mentioned in the respective
Notifications. Further, amendment to Notifications No.56/2003 and
No.20/2007 was made vide impugned Notification No.36/2008-C.E.
(amending Notification No.56/2003) and impugned Notification
No.38/2008-C.E. (amending Notification No.20/2007) both dated
10.06.2008, whereby an option for fixation of special rates for
representing the actual value addition in respect of any goods
manufactured and cleared under the respective original Notification
was given. That, although the Petitioner was eligible to get the
benefit of exemption under the Industrial Policy, 2007,
inadvertently, after commencing commercial production from
20.04.2009, the Petitioner started claiming Excise duty benefit by
way of self-credit of Excise duty in cash for the period April, 2009
to May, 2012 at the reduced rate of 56 per cent instead of 100 per
cent of the amount paid in cash. No objection was taken to this
credit by the Petitioner. On coming to learn of the decision of this
Court in Unicorn Industries vs. Union of India4 and of the High Court
4 2013 (289) ELT 117 (Sikkim) WP(C) No.47 of 2018 14 Sun Pharma Laboratories Ltd. vs. Union of India and Others
of Jammu and Kashmir in Reckitt Benckiser vs. Union of India5,
wherein the Notifications curtailing benefits promised under
Industrial Policy, 2003, were quashed, the Petitioner informed the
authorities on 22.10.2011 that it would avail 100 per cent self-
credit of the Excise duty paid, placing reliance on the aforesaid
Judgments. For the period June, 2012 to February, 2014, the
authorities denied self-credit on monthly basis on the ground that
the Petitioner was not eligible to claim the benefit at the rate of
100 per cent of the amount paid in cash but was eligible for refund
at the rate of 56 per cent on account of the amendment vide
impugned Notification No.21/2008-C.E., dated 27.03.2008, which
reduced the benefit from 100 per cent. That, the impugned
Notifications reduced the 100 per cent Excise duty guarantee to 56
per cent, hence, on the ground of Promissory Estoppel alone, the
Writ Petitions were liable to be allowed and the offending
Notifications and Orders of the Commissionerate quashed. Further,
once an exemption Notification has been issued in public interest,
the authority cannot, by simply saying it is in public interest,
withdraw or reduce its benefit and the onus would be on the
authority to establish a superior public interest for such curtailment
or withdrawal.
(vi) The Respondents (in the Writ Petitions under
consideration then) while defending their action, claimed that a
different mechanism was devised in public good and that the
impugned Notification No.20/2008-C.E., dated 27.03.2008, does
not deviate from the 100 per cent policy. This was sought to be
explained by placing two separate calculations of Re-Credit/Refund
5 2011 (269) ELT 194 WP(C) No.47 of 2018 15 Sun Pharma Laboratories Ltd. vs. Union of India and Others
under Area Based Exemption Notification. That, the Petitioner had
started availing credit of the amount of duty paid other than by
way of utilization of CENVAT Credit under the CENVAT Credit Rules,
2004 at the rate of 56 per cent right from the beginning. That, the
Petitioner started paying Central Excise duty from the Personal
Ledger Account with effect from August, 2009, by which time, the
impugned Notifications No.21/2008, dated 27.03.2008 and
36/2008, dated 10.06.2008, were already in existence and the
Respondent No.1 was empowered under Section 5A of the Central
Excise Act, 1944, to grant exemption from duty of Excise if the
Government was satisfied that it was necessary and in public
interest so to do by a Notification in the Official Gazette. That, the
Petitioner was duly entitled to claim the option for fixation of
special rate on the basis of the impugned Notification No.36/2008,
dated 10.06.2008.
(vii) After hearing Learned Counsel for the parties and on
consideration of the averments thereto, the Court then took up the
following question for determination;
"47. The crucial question which must necessarily be answered is whether the Petitioner has been able to establish that the Respondents had vide the Industrial Policy, 2007 and Notification No. 20/2007 made a promise, which the Petitioner had acted upon putting itself in a detrimental position which would compel the Respondent No.1 to make good the promise. If the answer to the first question is in the affirmative then the second question which also needs to be answered is whether by issuing the impugned Notification No.20/2008 the Respondents has done away or curtailed the benefit granted under Notification No.20/2007. To answer the first question it is necessary to examine the pleadings in the present proceedings."
(viii) On due consideration of all the facts and circumstances
placed before it, this Court observed as follows;
"64. As the Petitioner had failed to commence commercial production within the period 23.12.2002 to 31.03.2017 as specified by Notification No. 56/2003 as WP(C) No.47 of 2018 16 Sun Pharma Laboratories Ltd. vs. Union of India and Others
amended by Notification No.27/2004 it was not entitled to claim exemption under the aforesaid notification as held above. Consequently, we shall refrain from examining the challenge to the impugned Notification Nos. 27/2004, 21/2008 and 36/2008."
(emphasis supplied)
(ix) While examining the impugned Notification
No.20/2008-C.E., dated 27.03.2008 and the point canvassed by
the Learned Additional Solicitor General that it does not actually
digress from the Industrial Policy, 2007, as put into operation by
Notification No.20/2007-C.E., dated 25.04.2007, the Court noted
inter alia as follows;
"67. Under the amended paragraph 2A of Notification No.20/2007 as amended by impugned Notification No. 20/2008 the duty payable on value addition shall be equivalent to the amount calculated as a percentage of the total duty payable on the excisable goods. For the goods i.e. P & P medicaments falling under chapter 30 of the first schedule, the rate prescribed in the table to the amended paragraph 2A was 56%. Reading of the amended paragraph 2A leaves no room for doubt that the total 100% exemption once declared by the Industrial Policy, 2007 and as put into operation by Notification No. 20/2007 was hugely reduced to only 56% that too only on the value addition undertaken in the manufacture of the said goods. Simply put value addition is the amount by which the value of any good is increased at each stage of its production, exclusive of initial cost. Whereas in the original Notification No. 20/2007, the exemption on payment of excise duty was referable to the excise duty payable on the finished goods in the impugned Notification No. 20/2008 the excise duty was restricted to the quantum of value addition only. This surely was something not promised vide the Industrial Policy, 2007 and Notification No. 20/2007."
(x) This Court further expressed its agreement with the
views of the High Court of Gujarat in Sal Steel Limited vs. Union of
India6, Reckitt Benckiser (supra), Unicorn Industries (supra), Motilal
Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh and Others 7
and Pawan Alloys and Casting Pvt. Ltd., Meerut vs. U.P. State Electricity
Board and Others8 and at Paragraph "87" concluded, as follows;
6
(2010) 260 ELT 158 (Guj) 7 (1979) 2 SCC 409 8 (1997) 7 SCC 251 WP(C) No.47 of 2018 17 Sun Pharma Laboratories Ltd. vs. Union of India and Others
"87. We find that the Respondent No.1, right from the year 2003, had declared a clear policy of 100% excise duty exemption to those new industrial units who would set up industry in Sikkim as well as to those industries who went in for substantial expansion. This policy was put into operation vide Notification No.56/2003. The Respondent No.1 had vide impugned Notification No. 24/2004 limited the period within which new industrial units were required to commence commercial production. The Petitioner started the process of investment in the year 2005 only and could not start commercial production until 20.04.2009 by which time, by the operation of a subsequent impugned Notification No.27/2004, the Petitioner did not qualify to take the benefit of the said Industrial Policy, 2003. The Petitioner therefore, is not entitled to the benefit of Notification No. 56/2003. The industrial policy however, did not change. In 2007 the Respondent No.1 declared the Industrial Policy, 2007 by which identical 100% excise duty exemption was once again promised. This Industrial Policy, 2007 was put into operation vide Notification No.20/2007. The Petitioner's subsequent investments were obviously intended to reap the benefit of the said Notification No.20/2007. The Petitioner having commenced commercial production on and from 20.04.2009 for the first unit and from 14.04.2014 for the second unit were well within the period notified therein. The policy of the Respondent No.1 was clear and cogent. It was intended to draw investors to Sikkim which was industrially backward. Having acted on the said promise made by the Respondent No.1, the Petitioner made huge investments and altered its position to its detriment. Having issued the said Notification No.20/2007 in public interest it was incumbent upon the Respondent No.1 to place before this Court all materials available to establish a superior public interest which the Respondent No.1 has failed to do. The facts and circumstances of the present writ petitions, therefore, squarely falls within the parameters of the doctrine of promissory estoppel and that it would be unconscionable on the part of the Respondent No.1 to shy away from it without fulfilling its promise. The relief that must, therefore be granted on the facts of the present case is that for the period declared vide Notification No.20/2007 the Petitioner would be entitled to the excise duty exemption as promised therein. Consequently impugned Notification Nos.20/2008 and 38/2008 are liable to be quashed to the extent they curtail and whittle down the 100% excise duty exemption benefit as promised vide Notification No.20/2007 and is hereby quashed. All impugned orders/ demand notices/show cause notices which are against the aforestated declarations of law are also quashed."
(emphasis supplied)
10.(i) As already stated, against the Judgment of this Court
dated 21.11.2017, the Union of India was in appeal before the
Hon'ble Supreme Court along with Judgments of various other High
Courts on similar issues. The Hon'ble Supreme Court, while
considering the Civil Appeals arising out of the various impugned
Judgments, observed in the case of Sikkim, that the High Court WP(C) No.47 of 2018 18 Sun Pharma Laboratories Ltd. vs. Union of India and Others
had quashed and set aside Notification No.20 of 2008-C.E., dated
27.03.2008, Notification No.36 of 2008-C.E., dated 10.06.2008 and
Notification No.38 of 2008-C.E., dated 10.06.2008, on the ground
that the same were against the principle of Promissory Estoppel
and the Union of India.
(ii) Before the Hon'ble Supreme Court, the Union of India
inter alia agitated that there was rampant misuse of Excise duty
exemption which was brought to the notice of the Government as
the Policy and intention of the Government to provide Excise duty
exemption was in respect of genuine manufacturing activities
carried out in those areas. The entire genesis of the Policy
manifesting the intention of the Government to grant Excise duty
exemption, was to provide such exemption only to actual value
addition made in these areas. In this background and with a view
to give effect to such a Policy, the Government in exercise of
powers conferred under Section 5A of the Central Excise Act, 1944
modified the refund mechanism so as to provide that Excise duty
refund would be allowed only to the extent of duty payable on
actual value addition made by the manufacturer undertaking
manufacturing activities in these areas. That, as a result of the
Notifications impugned before the High Court, the manufacturers
are required to pay duty on full value of the goods manufactured
and cleared by them in the same manner as per existing Scheme
but refund would be granted only to the extent of duty paid on the
value addition made by them in these specified areas based on all
India average of percentage of duty paid in cash and CENVAT
Credit. That, the Central Government has the power to provide for
exemption from duty on goods either wholly or partly with or WP(C) No.47 of 2018 19 Sun Pharma Laboratories Ltd. vs. Union of India and Others
without condition as may be called for in public interest which is
the guiding factor for exercise of power. That, the amendment
Notification is non-discriminatory and treats all industries at par,
and only rationalizes the quantum of exemption by proposing rate
of refund on the total duty payable and the Central Government
has only streamlined the provisions of the Notification relating to
refund of duty paid through, other than CENVAT utilization. That,
moreover, the doctrine of Promissory Estoppel cannot be invoked
against exercise of powers under the statute and the bar of
Promissory Estoppel is not applicable in fiscal matters, besides
which, the doctrine of Promissory Estoppel will not be applicable if
the change in stand of the Government is made on account of
public policy and in public interest.
(iii) The Hon'ble Supreme Court inter alia held as follows;
"10. ............Therefore, the questions which are posed for consideration of this Court are whether in the facts and circumstances of the case the subsequent notification which has been quashed and set aside by the High Court being notification No. 16 of 2008 dated 27.03.2008 can be said to be clarificatory in nature and can it be said that it takes away the vested right conferred pursuant to the earlier notification of 2001 and whether the same can be made applicable retrospectively and whether the same has been issued in the public interest and whether the same is hit by the Doctrine of Promissory Estoppel?
11. While considering the aforesaid questions and before considering the nature of the subsequent notification of 2008, few decisions of this Court on retrospectivity/clarificatory/applicability of promissory estoppel in the fiscal statute are required to be referred to, which are as under:
11.1 In the case of Kasinka Trading (supra), in paragraphs 12, 20 and 23, it is observed and held as follows:
"12. It has been settled by this Court that the doctrine of promissory estoppel is applicable against the Government also particularly where it is necessary to prevent fraud or manifest injustice. The doctrine, however, cannot be pressed into aid to compel the Government or the public authority "to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make". There is preponderance of judicial opinion that to invoke the doctrine of WP(C) No.47 of 2018 20 Sun Pharma Laboratories Ltd. vs. Union of India and Others
promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and that bald expressions, without any supporting material, to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. In our opinion, the doctrine of promissory estoppel cannot be invoked in the abstract and the courts are bound to consider all aspects including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever 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.
20. The facts of the appeals before us are not analogous to the facts in Indo-Afghan Agencies [(1968) 2 SCR 366 : AIR 1968 SC 718] or M.P. Sugar Mills [(1979) 2 SCC 409 : 1979 SCC (Tax) 144 : (1979) 2 SCR 641] . In the first case the petitioner therein had acted upon the unequivocal promises held out to it and exported goods on the specific assurance given to it and it was in that fact situation that it was held that Textile Commissioner who had enunciated the scheme was bound by the assurance thereof and obliged to carry out the promise made thereunder. As already noticed, in the present batch of cases neither the notification is of an executive character nor does it represent a scheme designed to achieve a particular purpose. It was a notification issued in public interest and again withdrawn in public interest. So far as the second case (M.P. Sugar Mills case [(1979) 2 SCC 409 : 1979 SCC (Tax) 144 : (1979) 2 SCR 641] ) is concerned the facts were totally different. In the correspondence exchanged between the State and the petitioners therein it was held out to the petitioners that the industry would be exempted from sales tax for a particular number of initial years but when the State sought to levy the sales tax it was held by this Court that it was precluded from doing so because of the categorical representation made by it to the petitioners through letters in writing, who had relied upon the same and set up the industry.
23. The appellants appear to be under the impression that even if, in the altered market conditions the continuance of the exemption may not have been justified, yet, Government was bound to continue it to give extra profit to them. That certainly was not the object with which the notification had been issued. The withdrawal of exemption "in public interest" is a matter of policy and the courts WP(C) No.47 of 2018 21 Sun Pharma Laboratories Ltd. vs. Union of India and Others
would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". The courts, do not interfere with the fiscal policy where the Government acts in "public interest" and neither any fraud or lack of bona fides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interest while issuing or modifying or withdrawing an exemption notification under Section 25(1) of the Act."
Thus, it can be seen that this Court has specifically and clearly held that 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. It has been held that 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. It is further held that 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. It is further held that an exemption notification does not make items which are subject to levy of customs duty etc. as items not leviable to such duty. It only suspends the levy and collection of customs duty, etc., wholly or partially and subject to such conditions as may be laid down in the notification by the Government in "public interest". Such an exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The supersession or revocation of an exemption notification in the "public interest" is an exercise of the statutory power of the State under the law itself. It has been further held that under the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner. It has been observed that the withdrawal of exemption "in public interest" is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". It has been held that where the Government acts in "public interest" and neither any fraud or lack of bonafides is alleged, much less established, it would not be appropriate for the court to interfere with the same.
11.2 In the case of Shrijee Sales Corporation (supra), it is observed and held that the principle of promissory estoppel may be applicable against the Government. But the determination of applicability of promissory estoppel against public authority/Government hinges upon balance of equity or "public interest". In case there is a supervening public interest, the Government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. Once public interest is accepted as the superior equity which can override individual equity, the aforesaid principle should be applicable even in cases where a period has been indicated for operation of the promise. WP(C) No.47 of 2018 22
Sun Pharma Laboratories Ltd. vs. Union of India and Others
..............................................................................................................
12. Now, so far as the decisions relied upon by the learned counsel appearing on behalf of the respective original writ petitioners-respondents herein are concerned, once it is held that the subsequent notifications/industrial policies impugned before the respective High Court are clarificatory in nature and it does not take away any vested rights conferred under the earlier notifications/industrial policies, none of the decisions relied upon shall be applicable to the facts of the case on hand."
(emphasis supplied)
(iv) Reference was also made to the ratio in Sales Tax
Officer and Another vs. Shree Durga Oil Mills and Another 9, State of
Rajasthan and Another vs. Mahaveer Oil Industries and Others 10 and
Shree Sidhbali Steels Limited and Others vs. State of Uttar Pradesh and
Others11. The Hon'ble Supreme Court also explained that any
legislation or instrument having force of law, if clarificatory,
declaratory or explanatory in nature or purport, will have
retrospective operation especially in the absence of any indication
to the contrary as to retrospectivity either in parent Act or Rules or
Notifications involved and held inter alia as follows;
"14.1 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. The same was subject to conditions that it will be applied to the new industrial units, i.e. the units which are set up on and after the publication of the said notification in the Official Gazette, i.e. not later than 31.07.2003. The notification was modified from time to time. However, during the operation of the earlier notifications, it was noticed that the provision of granting refund of cash paid portion of duty and eligibility of credit the entire amount of duty to the buyers of such excisable goods had prompted certain unscrupulous manufacturers to indulge in different types of tax evasion tactics. It was revealed on analysis of cases booked by the Excise Department and even the representations received from the Industry Association about misuse of exemptions granted by the Government, which was meant to be available only for genuine manufacturers. It was noticed as under:
i) Reporting of bogus production by mere issuance of sale invoices without actual production of goods and supply/clearance of
9 (1998) 1 SCC 572 10 (1999) 4 SCC 357 11 (2011) 3 SCC 193 WP(C) No.47 of 2018 23 Sun Pharma Laboratories Ltd. vs. Union of India and Others
excisable goods. This would result in availment of CENVAT credit by buyers of such excisable goods in other parts of the country without actual production being carried out and in absence of actual receipt of goods.
ii) Reporting of bogus production by such units in these areas where actual production takes place elsewhere in the country.
iii) Over valuation of goods resulting in
availment of excess credit by buyers.
iv) Goods are supplied by manufacturers,
importers to these units without issuance of sales invoice and these are backed by bogus sale invoices issued by traders who do not undertake actual supply of goods. The actual supplier of these goods issue bogus duty paid invoices to other manufacturers who take credit based on such invoices without receipt of goods.
Therefore, the Government came out with the impugned notifications/industrial policies that the refund of excise duty shall be provided on actual and calculated on the basis of actual value addition. On a fair reading of the earlier notifications/ industrial policies, it is clear that the object of granting the refund was to refund the excise duty paid on genuine manufacturing activities. The intention would not have been that irrespective of actual manufacturing/ manufacturing activities and even if the goods are not actually manufactured, but are manufactured on paper, there shall be refund of excise duty which are manufactured on paper. Therefore, it can be said that the object of the subsequent notifications/industrial policies was the prevention of tax evasion. It can be said that by the subsequent notifications/industrial policies, they only rationalizes the quantum of exemption and proposing rate of refund on the total duty payable on the genuine manufactured goods. At the time when the earlier notifications were issued, the Government did not visualize that such a modus operandi would be followed by the unscrupulous manufacturers who indulge in different types of tax evasion tactics. It is only by experience and on analysis of cases detected the Excise Department the Government came to know about such tax evasion tactics being followed by the unscrupulous manufacturers which prompted the Government to come out with the subsequent notifications which, as observed hereinabove, was to clarify the refund mechanism so as to provide that excise duty refund would be allowed only to the extent of duty payable on actual value addition made by the manufacturer undertaking manufacturing activities in the concerned areas. The entire genesis of the policy manifesting the intention of the Government to grant excise duty exemption/refund of excise duty paid was to provide such exemption only to actual value addition made in the respective areas. As it was found that there was misuse of excise duty exemption it was considered expedient in the public interest and with a laudable object of having genuine industrialization in backward areas or the concerned areas, the subsequent notifications/ industrial policies have been issued by the Government.
Therefore, the subsequent notifications/industrial policies impugned before the respective High Courts were in the public interest and even issued after thorough analysis of the cases of tax evasion and even after receipt of the reports. The earlier notifications were issued under Section 5A of the Central Excise Act and even the subsequent notifications which were issued in public interest and in the interest of Revenue were also issued under Section 5A of the Central Excise Act, which can not be said to be bad WP(C) No.47 of 2018 24 Sun Pharma Laboratories Ltd. vs. Union of India and Others
in law, arbitrary and/or hit by the doctrine of promissory estoppel.
14.2 The purpose of the original scheme was not to give benefit of refund of the excise duty paid on the goods manufactured only on paper or in fact not manufactured at all. As the purpose of the original notifications/incentive schemes was being frustrated by such unscrupulous manufacturers who had indulged in different types of tax evasion tactics, the subsequent notifications/industrial policies have been issued allowing refund of excise duty only to the extent of duty payable on the actual value addition made by the manufacturers undertaking manufacturing activities in these areas which is absolutely in consonance with the incentive scheme and the intention of the Government to provide the excise duty exemption only in respect of genuine manufacturing activities carried out in these areas.
14.3 As observed hereinabove, the subsequent notifications/industrial policies do not take away any vested right conferred under the earlier notifications/industrial policies. Under the subsequent notifications/industrial policies, the persons who establish the new undertakings shall be continue to get the refund of the excise duty. However, it is clarified by the subsequent notifications that the refund of the excise duty shall be on the actual excise duty paid on actual value addition made by the manufacturers undertaking manufacturing activities. Therefore, it cannot be said that subsequent notifications/industrial policies are hit by the doctrine of promissory estoppel. The respective High Courts have committed grave error in holding that the subsequent notifications/industrial policies impugned before the respective High Courts were hit by the doctrine of promissory estoppel. As observed and held hereinabove, the subsequent notifications/industrial policies which were impugned before the respective High Court can be said to be clarificatory in nature and the same have been issued in the larger public interest and in the interest of the Revenue, the same can be made applicable retrospectively, otherwise the object and purpose and the intention of the Government to provide excise duty exemption only in respect of genuine manufacturing activities carried out in the concerned areas shall be frustrated. As the subsequent notifications/industrial policies are "to explain" the earlier notifications/industrial policies, it would be without object unless construed retrospectively. The subsequent notifications impugned before the respective High Courts as such provide the manner and method of calculating the amount of refund of excise duty paid on actual manufacturing of goods. The notifications impugned before the respective High Courts can be said to be providing mode on determination of the refund of excise duty to achieve the object and purpose of providing incentive/ exemption. As observed hereinabove, they do not take away any vested right conferred under the earlier notifications. The subsequent notifications therefore are clarificatory in nature, since it declares the refund of excise duty paid genuinely and paid on actual manufacturing of goods and not on the duty paid on the goods manufactured only on paper and without undertaking any manufacturing activities of such goods.
15. In view of the above and for the reasons stated above and once it is held that the subsequent notifications/industrial policies which were impugned before the respective High Courts are clarificatory in nature and are issued in public interest and in the interest of the Revenue and they seek to achieve the original object and purpose of giving incentive/exemption while inviting the persons to make investment on establishing the new undertakings and they do not take away any vested rights conferred under the earlier notifications/industrial policies WP(C) No.47 of 2018 25 Sun Pharma Laboratories Ltd. vs. Union of India and Others
and therefore cannot be said to be hit by the doctrine of promissory estoppel, the same is to be applied retrospectively and they cannot be said to be irrational and/or arbitrary."
(emphasis supplied)
Learned Counsel for the Petitioner has admitted that the Hon'ble
Supreme Court, while examining the reduction in Excise duty
exemption benefits, held that the subsequent Notifications were
merely clarificatory in nature and did not take away any vested
right and had, in fact, been issued in the larger public interest to
prevent misuse and to achieve the original object and purpose of
the incentive/exemption.
11. On a meticulous scrutiny of the pleadings before us and
from a careful consideration of the facts canvassed by Learned
Counsel for the parties, it goes without saying that the issues
raised in the previous Writ Petitions determined by this Court vide
Judgment dated 21.11.2017, are identical to the issues raised in
the instant Writ Petition viz. W.P.(C) No.47 of 2018, the only
distinguishing factor being that the Notification challenged herein is
"Notification F.No.10(1)/2017-DBA-II/NER," dated 05.10.2017,
while the Notifications challenged in the earlier Writ Petitions have
already been enumerated hereinabove.
12.(i) The Petitioner, in the instant Writ Petition, is aggrieved
by the alleged curtailment of 100 per cent Excise duty exemption
granted vide the earlier Policies of the Government, which
underwent a sea change under the new Tax regime in 2017. That,
the 100 per cent Excise duty exemption by way of refund availed
by the Petitioner prior to the Tax Reform of 2017, was curtailed by
the Respondents under the GST regime through the Budgetary
Support Schemes reducing the benefits earlier granted inasmuch WP(C) No.47 of 2018 26 Sun Pharma Laboratories Ltd. vs. Union of India and Others
as the Budgetary Support for specified goods manufactured by the
eligible Unit is 58 per cent of CGST and 29 per cent of IGST paid
through debit in cash ledger account maintained by the Unit after
full utilization of the input Tax Credit of the Central Tax and
Integrated Tax. The Petitioner in W.P.(C) No.41/2015, W.P.(C)
No.08/2017, W.P.(C) No.27/2017 and W.P.(C) No.40 of 2017 had
in sum and substance, the same grievances. Promissory Estoppel
has been agitated previously, as also in this Writ Petition. In
W.P.(C) No.41/2015, the challenge to the impugned Notifications
therein was for the reason that the benefit of exemption was
sought to be reduced to the prescribed percentage of value
addition amount i.e. 56 per cent applicable to pharmaceutical
products mentioned in the respective Notifications and applicable
Chapter. In the instant Petition, it is contended that the amount of
Budgetary Support under the Scheme for specified goods
manufactured by the eligible Unit is specified as the sum total of 58
per cent of the Central Tax paid through debit in cash ledger
account maintained by the Unit after full utilization of the input Tax
Credit of the Central Tax and Integrated Tax and 29 per cent of the
Integrated Tax paid through debit in cash ledger account
maintained by the Unit after full utilization of the input Tax Credit
of the Central Tax and Integrated Tax. That, hence the Excise duty
Exemptions availed by the Petitioner by way of refund in the pre
GST regime, for both the Units were curtailed by the Respondent
No.1 through the Budgetary Support Policy thereby reducing the
benefit granted to the Petitioner, as the Petitioner is not allowed to
take refund of full amount of CGST paid from electronic cash ledger
and the refund of 50 per cent of the IGST paid from electronic cash WP(C) No.47 of 2018 27 Sun Pharma Laboratories Ltd. vs. Union of India and Others
ledger. In fact, it was the submission of Learned Counsel for the
Petitioner in I.A. No.02 of 2019, before this Court, that the subject
matter in the SLP(s) supra dealt with the same issue as in the
instant Writ Petition. It is relevant to notice that the Order of this
Court, dated 17.09.2019, in the said I.A., reads inter alia as
follows;
"Heard on I.A. No.02 of 2019 which is an application filed by the Petitioner, i.e., Sun Pharma Laboratories Limited, bringing on record subsequent developments relating to the subject-matter of WP(C) No.47 of 2018, which was finally heard on 03-09-2019 and Judgment reserved.
It is submitted by Learned Counsel for the Petitioner that the Respondents No.1 and 2 filed SLP(C) Nos.10257 of 2018, 10253 of 2018, 12148 of 2018 and 12496 of 2018, before the Hon'ble Supreme Court, against the Judgment of this Court dated 21-11-2017 in WP(C) Nos. 41 of 2015, 8 of 2017, 27 of 2017 and 40 of 2017. That, the said Appeals have been heard by the Hon'ble Supreme Court and Judgment is reserved in those matters. As the subject- matter in the SLP(s) supra deal with the same issue as in WP(C) No.47 of 2018, it is prayed that the Judgment in this Writ Petition be kept in abeyance till the pronouncement of the Judgment by the Hon'ble Supreme Court in the aforestated SLP(s).
The other parties have no objection.
Considered and ordered accordingly.
Let the Petitioner inform this Court after the pronouncement of the Judgment by the Hon'ble Supreme Court by filing a Petition to that effect."
(emphasis supplied)
13. The question framed in Paragraph "47" by this Court in
the impugned Judgment, dated 21.11.2017, as already extracted
supra, clearly deals with Promissory Estoppel and has been duly
examined by this Court. The Judgment of the Hon'ble Supreme
Court extracted hereinabove, therefore, elucidates and clarifies the
nature of the Notifications, while dealing with the amendments to
the impugned Notifications, as also the principle of Promissory
Estoppel and has clarified all points in controversy raised in the
Appeals, which without a shade of doubt, are similar to the issue
raised herein viz. curtailment of benefits granted vide exemptions.
Thus, these issues stand truncated and there is no question of this WP(C) No.47 of 2018 28 Sun Pharma Laboratories Ltd. vs. Union of India and Others
Court delving any further into the question of the Promissory
Estoppel.
14. That having been said, we may notably refer to the
ratio of the Hon'ble Supreme Court in Director of Settlements, A.P.
and Others vs. M.R. Apparao and Another12 which, while dealing with
the principle of binding precedent, held inter alia as follows;
"7. ...................Article 141 of the Constitution unequivocally indicates that the law declared by the Supreme Court shall be binding on all courts within the territory of India. The aforesaid Article empowers the Supreme Court to declare the law. It is, therefore, an essential function of the Court to interpret a legislation. The statements of the Court on matters other than law like facts may have no binding force as the facts of two cases may not be similar. But what is binding is the ratio of the decision and not any finding of facts. It is the principle found out upon a reading of a judgment as a whole, in the light of the questions before the Court that forms the ratio and not any particular word or sentence. To determine whether a decision has "declared law" it cannot be said to be a law when a point is disposed of on concession and what is binding is the principle underlying a decision. A judgment of the Court has to be read in the context of questions which arose for consideration in the case in which the judgment was delivered. An "obiter dictum" as distinguished from a ratio decidendi is an observation by the Court on a legal question suggested in a case before it but not arising in such manner as to require a decision. Such an obiter may not have a binding precedent as the observation was unnecessary for the decision pronounced, but even though an obiter may not have a binding effect as a precedent, but it cannot be denied that it is of considerable weight. The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court......................."
(emphasis supplied)
15. In conclusion, the grievances of the Petitioner raised in
the matter at hand is soundly quelled by the Hon'ble Supreme
Court in all aspects by the ratio in V.V.F. Limited (supra) and this
Court does not intend to venture further.
12
(2002) 4 SCC 638 WP(C) No.47 of 2018 29 Sun Pharma Laboratories Ltd. vs. Union of India and Others
16. Hence, in view of all of the foregoing discussions, we
find no merit in the Writ Petition, which deserves to be and is
accordingly dismissed.
17. No order as to costs.
( Bhaskar Raj Pradhan ) ( Meenakshi Madan Rai )
Judge Judge
05.02.2021 05.02.2021
ml Approved for reporting : Yes
