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2022 Supreme(Online)(CHH) 300
HIGH COURT OF CHHATTISGARH, BILASPUR
Arup Kumar Goswami, CJ
M/s Indra Powergen Pvt. Limited – Appellant
Versus
State of Chhattisgarh – Respondent
WPC No. 1864 of 2016
For Petitioners: Mr. Amit S. Agrawal, senior counsel, Mr. V.V.S.Moorthy, senior counsel, assisted by Mr. Shantanu Kumar, Mr. Ankit Singhal, Mr. Akhil Kumar Samantray, Mr. Abhijeet Mishra
For Respondent - State of Chhattisgarh:Mr. Satish Chandra Verma, Advocate General, assisted by Mr. Vikram Sharma and Mr. Gagan Tiwari, Deputy Government Advocates.
For Respondent – Chhattisgarh State Renewable Energy Development Agency:Mr. Devershi Thakur and Mr. Anway Tiwari, Advocates.
For Respondent - Chhattisgarh State Electricity Regulatory Commission:Mr. Anumeh Shrivastava, Advocate.
For Respondent-CSPDCL: Mr. Apurv Goyal
The court ruled that the notification restricting electricity duty exemptions was invalid as it violated principles of promissory estoppel and could not be applied retrospectively.
Headnote:(A) Chhattisgarh Electricity Duty Act, 1949 - Section 3-B - Notification dated 12.11.2014 challenged - The petitioners contended that the notification unlawfully withdrew the exemption from electricity duty previously granted under the Industrial Policy 2004-2009, violating principles of legitimate expectation and promissory estoppel. The court found that the notification restricted exemptions to self-consumption only, which was a significant change from prior notifications that allowed exemptions for sales as well. The court ruled that the notification was not a clarificatory one and could not be applied retrospectively. (Paras 9, 12, 51)
(B) Promissory Estoppel - The court emphasized that the doctrine applies when a party has relied on a promise made by the government, and it would be inequitable to allow the government to withdraw such benefits retrospectively. (Paras 28, 51)
(C) Public Interest - The court noted that the notification did not indicate it was issued in public interest, and the mere fact that the petitioners were making profits did not justify the withdrawal of benefits. (Paras 50, 51)
Facts of the case:
The petitioners, engaged in power generation from biomass, challenged the notification that limited electricity duty exemptions to self-consumption, arguing it violated their vested rights established under earlier policies. They had made significant investments based on the assurances provided by the government.
Findings of Court:
The court held that the notification dated 12.11.2014 was invalid as it unlawfully restricted previously granted exemptions and did not serve public interest. The petitioners were entitled to the exemptions as per earlier notifications.
Issues: The main issues included whether the notification could be applied retrospectively and whether it violated the principles of promissory estoppel and legitimate expectation.
Ratio Decidendi: The court concluded that the notification was not merely clarificatory and could not be applied retrospectively, as it curtailed previously granted rights without adequate justification. The principles of promissory estoppel were upheld, emphasizing the need for the government to honor its commitments.
Result: The writ petitions were disposed of, stating that no recovery of electricity duty would be made from the petitioners up to 12.11.2014.
C A V Judgment
Per Arup Kumar Goswami, Chief Justice
In this batch of petitions, essentially, the notification dated12.11.2014 issued under Section 3-B of the Chhattisgarh Electricity Duty Act, 1949 (for short, the Act) is challenged and therefore, as submitted by learned counsel for the parties, the writ petitions which have been listed together, have been heard analogously and are being disposed of by this common order.
2. Mr. Amit S. Agrawal, learned senior counsel, appearing for the petitioner in WPC No. 1621/2016 has made the lead argument. Mr. V.V.S.Moorthy, learned senior counsel, assisted by Mr. Shantanu Kumar, as well as Mr. Ankit Singhal, Mr. Akhil Kumar Samantray, Mr. Abhijeet Mishra, learned counsel, appearing for the petitioners have endorsed the submissions of Mr. Agrawal and they submit that for the purpose of disposal of the writ petition, reference may be made to the pleadings in WPC No. 1621/2016.
3. WPC No. 1621/2016 is filed by Chhattisgarh Biomass Energy Developers Association, through its Secretary, as petitioner No. 1, and Sudha Bio Power Pvt. Ltd. (formerly Sudha Agro Oil & Chemical Industries Ltd.), Neeraj Power Pvt. Ltd., Real Power Pvt. Ltd., Rukmani Power & Steel Ltd, Balaji Power Pvt. Ltd. (formerly known as Shivalik Power & Steel Pvt. Ltd) and Agrawal Vidyut, as petitioners No. 2, 3, 4, 5, 6 and 7. However, by an order dated 28.06.2016, the writ petition was treated to be filed only by Sudha Bio Power Pvt. Ltd. and the other five writ petitioners were directed to file separate and independent writ petitions.
4. Accordingly, Neeraj Power Pvt. Ltd., Real Power Pvt. Ltd., Rukmani Power & Steel Ltd., Balaji Power Pvt. Ltd. And Agrawal Vidyut had also filed independent writ petitions being WPC No. 1743/2016, 1745/2016, 1773/2016, 1775/2016 and 1776/2016, respectively.
5. Petitioner No. 1 is a registered association of which the petitioners No. 2 to 7 are its members. The petitioners No. 2 to 7 are engaged in business of generating power from bio-mass based power plants and have their plants at different places in the State of Chhattisgarh.
6. The case of the petitioners, as presented in the writ petition, is that the State Government of Chhattisgarh had formulated and notified its first industrial policy 2001-2006 by notification dated 03.12.2001, published in the State Gazette dated 25.01.2002. Under the said Industrial Policy, total exemption was granted to all new industries set up in the State, from payment of electricity duty under the provisions of the Act, for a period of 15 years from the date of commencement of commercial production. Subsequently, the State Government of Chhattisgarh framed industrial policy 2004-2009. Apart from others, the industrial policy provides for total exemption from payment of electricity duty.
7. It is stated that in view of the representation being made in Industrial Policy 2004-2009 of the State, the members of the petitioner association altered their position by acting on the said representation and promise and made huge investment to set up and establish industries in different places in the State of Chhattisgarh to generate power from non conventional sources and started their production from 2006-2008. It is also pleaded that notification dated 03.11.2005, 05.04.2006 and 09.07.2008 were issued to effectuate the commitment made in the Industrial Policy.
8. However, the Chief Electrical Inspector (respondent No. 3) started issuing demand notices to the members of the petitioner association for payment of electricity duty on the electrical units sold by the petitioners to the Chhattisgarh State Power Distribution Company Limited (for short, the CSPDCL) on the ground that the companies are entitled to exemption from payment of electricity duty only on the electricity duty which is used for self consumption and not on sale to the Electricity Board. Some members of the petitioner association had preferred writ petitions and this Court had directed the State Government and t
