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1999 Supreme(Cal) 210
High Court Of Calcutta
S. B. SINHA, S. B. BHATTACHARJEE
UNION OF INDIA - Appellant
Versus
TATA IRON AND STEEL CO.LTD. - Respondent
Matter 999 Of 1995
Decided On : 04/26/1999
NIMAI CHAND SAMANTA
The IPRS did not provide for reimbursement of the portion of the reimbursement amount that represented the levies and cesses included in the JPC price.
Headnote:
INTERNATIONAL PRICE REIMBURSEMENT SCHEME (IPRS) - JPC PRICE - CESS AND LEVIES - REIMBURSEMENT CLAIM - UNJUST ENRICHMENT - DOCTRINE OF PROMISSORY ESTOPPEL - REFUND - POWER OF COURT TO GRANT RESTITUTION - JURISDICTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA: The International Price Reimbursement Scheme (IPRS) was introduced to protect exporters of engineering goods from the impact of higher domestic prices of steel. The scheme provided for reimbursement of the difference between the domestic price and the international price of steel used in the production of exported goods. The domestic price was defined as the JPC price, which included various levies and cesses. The petitioner, a steel producer, claimed reimbursement under the IPRS, but the respondents, the Union of India and the Engineering Export Promotion Council (EEPC), denied the claim on the ground that the petitioner had not paid the levies and cesses included in the JPC price. The petitioner filed a writ petition challenging the denial of its claim. The High Court allowed the writ petition, holding that the respondents were bound by the doctrine of promissory estoppel and that the petitioner was entitled to reimbursement. The respondents appealed to the Supreme Court.
Fact of the Case:
The petitioner, TISCO, was a steel producer. It claimed reimbursement under the IPRS, but the respondents, the Union of India and the EEPC, denied the claim on the ground that TISCO had not paid the levies and cesses included in the JPC price. TISCO filed a writ petition challenging the denial of its claim. The High Court allowed the writ petition, holding that the respondents were bound by the doctrine of promissory estoppel and that TISCO was entitled to reimbursement. The respondents appealed to the Supreme Court.
Finding of the Court:
The Supreme Court held that the IPRS did not provide for reimbursement of the portion of the reimbursement amount that represented the levies and cesses included in the JPC price. TISCO was not entitled to reimbursement for that portion because it had not paid the levies and cesses. The Court also held that the doctrine of promissory estoppel did not apply in the case because the respondents had not made any promise to TISCO that it would be reimbursed for the levies and cesses. The Court further held that the respondents had the power to demand a refund of the amount that had been paid to TISCO in error. The Court dismissed the appeal.
Issues: 1. Whether the IPRS provided for reimbursement of the portion of the reimbursement amount that represented the levies and cesses included in the JPC price? 2. Whether TISCO was entitled to reimbursement for that portion even though it had not paid the levies and cesses? 3. Whether the doctrine of promissory estoppel applied in the case? 4. Whether the respondents had the power to demand a refund of the amount that had been paid to TISCO in error?
Ratio Decidendi: 1. The IPRS did not provide for reimbursement of the portion of the reimbursement amount that represented the levies and cesses included in the JPC price. 2. TISCO was not entitled to reimbursement for that portion because it had not paid the levies and cesses. 3. The doctrine of promissory estoppel did not apply in the case because the respondents had not made any promise to TISCO that it would be reimbursed for the levies and cesses. 4. The respondents had the power to demand a refund of the amount that had been paid to TISCO in error.
Final Decision: The Supreme Court dismissed the appeal.
( 1 ) THIS appeal is directed against a judgment and order dated 9th August, 1996 passed by a learned single Judge of this Court whereby whereunder the writ petition filed by the 1st respondent herein was allowed.
( 2 ) IN the aforementioned writ application, the writ petitioner inter alia prayed for the following reliefs :-" (A) Issue a writ of and/or in the nature of Mandamus commanding the respondents or their servants and/or agents and/or assigns to forth with act in accordance with law and desist from making any demand on your petitioner for refund the sum Rs. 10,37,96,604/- and subsequent Adjustment Rs. 2,66,60,468/- or any other sum paid to your petitioner under IPRS or to adjust the same against further dues of your petitioner under IPRS. (b) A writ of and/or in the nature of Certiorari be issued commanding the respondents to certify and transmit to this Hon'ble Court all the records culminating in the said letter of repudiation dated 20-1-92 (and the letter dated 19-5-1994, and adjustment note date 29th November, 1994) so that the same may be quashed and conscionable justice be done. "
( 3 ) THE fact of the matter, shortly stated is as follows :-The writ petitioner and one Indian Tube Company Ltd. were separate companies. The writ petitioner-Ist respondent herein, took over the said company. Whereas the writ petitioner at all material times was and still is the producer of Steel, the Indian Tube Company produces Engineering goods. Admittedly the domestic price for Iron and Steel used to be fixed by Joint Plant Committee (JPC) of which the writ petitioner was also a member. International price of Steel, however, was less than the domestic price.
( 4 ) WITH a view to seeing that because of a higher domestic price export of manufactured good does not suffer, a policy decision was taken by the Union of India with effect from 9-2-81 to provide full protection to exporters of engineering goods from the effect thereof and for the said purpose a scheme was framed known as International Price Reimbursement Scheme (IPRS ). The purport and object of the said Scheme was that the exporters of engineering goods would be reimbursed to the extent of the difference in price for incurring addition expenditure for procuring 'steel' from domestic market vis-a-vis international market. The said scheme is contained in Annexure 'a' to the writ application.
( 5 ) CLAUSE 2. 1 of the said Scheme reads thus :-"for unexecuted engineering export contracts not covered under the price protection schemes of 1978, 1979 and 1981 and for fresh contracts the exporters will be eligible for supply of steel from and after 9-2-1981 at international prices. "
( 6 ) ). The items which were to be covered by the said scheme has been specified therein. The words 'domestic price' and 'international price' for the purpose of reimbursement under the said scheme have been defined in clauses 2. 5 and 2. 6 which read thus :-"2. 5. For reimbursement purposes, the 'domestic price' for these categories would be the JPC plant price for those categories where JPC price control exists and SAIL price for other items prevailing on the date of exports. The domestic price will be exclusive of taxes like sales tax, control, etc. 2. 6. The 'international Prices' for various categories will be determined and announced for every month. The International Price determined in respect of a particular month would apply for reimbursement relating to shipments made in the second following month e. g. prices fixed for February 81 would apply for reimbursement on exports made during April 81. The procedure for fixation of 'international Price' is being finalised separately and will be intimated. "
( 7 ) THE procedure for reimbursement has been laid down in Clause 2. 7 which is as follows :- (A) The application for reimbursement will be made to the Regional Offices of the EEPC, with whom the exporter is registered; (B) The following documents will be submitted by the exporte
