2012 Supreme(SC) 47

SUPREME COURT OF INDIA
ASOK KUMAR GANGULY & JAGDISH SINGH KHEHAR, JJ.

STATE OF GUJARAT & OTHERS - Appellant(s)
VERSUS
ESSAR OIL LIMITED AND ANOTHER - Respondent(s)
Civil Appeal No 599 of 2012 (Arising out of SLP (C) No.17130/2008)-
Decided on 17-01-2012

IMPORTANT POINTS
Restitution is a remedy against unjust enrichment or unjust benefit.
In case of a mere erroneous judgment of a Court the principle of "actus curiae" cannot be invoked.

Headnote:(a) Administration of Justice – Restitution – It is a remedy against unjust enrichment or unjust benefit – When by an erroneous decree of the court a party is prevented from retaining money or some benefit derived from another, the court is obliged to order restitution to the party so prejudiced – If one party has not been unjustly enriched, no order of recovery can be made against that party – Alternately, when a party acquires benefits lawfully, which are not conferred by the party claiming restitution, Court cannot order restitution – High Court, on the ground that respondent could not commence production due to injunction granted by it, reducing tax liability by Rs.700 crores – State not receiving any unjust benefit or unjust enrichment by stay order of High Court – Principle of restitution cannot be applied against State. (Para 62, 67, 69)

       AIR 1953 SC 136; AIR 1966 SC 948 – Relied upon

       (2003) 8 SCC 648; (2010) 10 SCC 422; (2004) 2 SCC 783; (1988) Supp SCC 174; (2003) 2 SCC 716; (2005) 7 SCC 190 – Distinguished

       (b) Administration of law – Doctrine – "Actus curiae neminem gravabit" – An act of court cannot prejudice anyone – When a court passes a judgment per incuriam some binding precedent it is duty bound to correct the same – However, in case of a mere erroneous judgment of a Court the principle of "actus curiae" cannot be invoked. (Para 74)

       (1988) 2 SCC 602; (1869-71) LR 3 PC 465 – Relied upon

       (1984) 2 SCC 183; AIR 1952 SC 75 – Referred

       (c) Interpretation of statute – Exemption provisions – To be construed strictly – The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee, does not apply in case of an exception or an exempting provision – In case of doubt or ambiguity in exempting provision, benefit must go to the State – An exemption is a stand-alone process – Either an industry claiming exemption comes within it or it does not. (Para 88)

       (1994) Supp 3 SCC 606; (1990) 4 SCC 256 – Relied upon

       Facts of the case:

       Essar was encouraged by the State Government to set up a major venture at Vadinar in Jamnagar District of Gujarat as a 100% export oriented unit for refining of petroleum products in collaboration with M/s Bechtel Inc., USA.

       The clearance for setting up the oil refinery was granted by the Government of India.

       

       `No Objection Certificate’ and a Site Clearance Certificate was also granted by the GPCB.

       Permission under Section 2 of the Forest Conservation Act ("FCA") was required for the entire 15.49 hectares. At the same time, permission of State Government was required under the Wildlife Protection Act ("WPA").

       High Court directed Essar not to carry on any construction activity in the Marine National Sanctuary and Marine National Park in violation of the statutory provisions including the provisions contained in Wild life (Protection) Act, 1972.

       Government of Gujarat discontinued the said Scheme with effect from 01.01.2000.

       The time to start commercial production was extended to 01.01.2002.

       By judgment and order dated 13.07.2000, 18.07.2000, 20.07.2000, 27.07.2000 and 03.08.2000 the High Court restrained the Government of Gujarat from granting any more authorization and permission for laying down any pipeline in any part of the sanctuary or the national park. As a result of this order, Essar was not given permission to lay down pipelines by the State Government.

       Meanwhile, on 12.04.2001 the Government of Gujarat extended the time for going into commercial production upto 15.08.2003 for various pipeline units including Essar. By that time Essar had obtained Provisional Premier Unit Registration before 15.08.2000 and had also incurred 25% of the Project Cost before 15.08.2000 and therefore, it was entitled to the benefit of this extension.

       Supreme Court directed the State Government to issue the authorization to Essar in the requisite format under Sections 29 and 35 of the Wild Life (Protection) Act.

       The Chief Wild Life Warden issued the requisite permission on 27.02.2004.

       On 26.11.2006 Essar commenced commercial production and started paying sales tax on the products sold by it, under protest.

       By impugned order-dated 22.04.2008 the High Court excluded the intervening period from 13.07.2000 to 27.02.2004 and extended the time limit for commencement of commercial production from 15.08.2003 to 02.04.2007.

       Finding of the Court:

       Impugned judgment is not sustainable.

       Result: Appeal allowed.