Andhra Steel Corporation Ltd. Etc Vs. Andhra Pradesh State Electricityboard And Ors
them from payment of sales tax. What consequently follows is that the exemption granted by the government was only by way of concession. Once this position emerges it goes without saying that a concession can be withdrawn at any time and no time limit can be insisted upon before the concession is withdrawn. The notifications of the government clearly manifest that the State Government had earlier granted the exemption only by way of concession and subsequently by means of the revised notification issued on July 17, 1971, the concession had been withdrawn. As the State Government was under no obligation, in any manner known to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent notification. This is an additional factor militating against the contentions of the appellants." * 14. It was further held : (SCC p. 37, para 11) "The exemption granted by the government as already stated, was only by way of concession for encouraging entrepreneurs to start industries in rural and undeveloped areas and as such it was always open to the State Government to withdraw or revoke the concession. We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of promissory estoppel. In other words, the government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of promissory estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule. If the government grants exemption to a new industry and if on the basis of the representation made by the government an industry is established in order to avail the benefit of exemption, it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that promissory estoppel cannot be claimed against a statute." * 15. This being the law with regard to grant of concession we are of the opinion that neither of the two orders mentioned above can be said to be illegal on the ground that they were passed in violation of principles of natural justice. The only question in this connection which survives is that of promissory estoppel. With regard to this plea it would be seen that it is not the case of the appellants that they established their mini plants after the grant of concessional tariff by the two government orders referred to above and but for the grant of such concessional tariff they would not have established their mini plants. The necessary facts so as to sustain the plea of promissory estoppel are not, in our opinion, to be found to have been either pleaded or established by the appellants. To take it by way of an illustration reference may be made to the special leave petition gibing rise to Civil Appeal Nos. 1454-1463 of 1981 filed by M/s. Andhra Steel Corporation Ltd. The plea with regard to promissory estoppel is to be found in ground No. (i) which reads "Whether in view of the fact that the petitioner had acted upon the Government orders dated November 2, 1977 and November 26, 1977 and thus altered its position (as without the concessions being granted to the petitioner they would not have possibly run the industry, since it was bound to suffer huge losses) is the State Government estopped from revoking, or modifying the same before the full period of concession had run out of efflux of time that is, by October 31, 1980 ?" * 16. Almost identical is ground No. (i) in the special leave petition giving rise to Civil Appeal Nos. 1642-1645 of 1981. The use of the word "possibly" is obviously indicative of lack of specific averment with regard to principle of estoppel. Even such an averment has not been made qua the Electricity Board. With regard to the plea based on the doctrine of legitimate expectation suffice it to say that except invoking the said doctrine nothing substantial was brought to our notice on the basis of which the appellants could be held entitled to any relief 17. Insofar as the Government Order dated January 16, 1980 on which reliance has been placed by learned counsel for the appellants in the alternative is concerned it may be pointed out that the said order even though in substance amounts to a clarification of the earliest order of clarification dated December 5, 1978, states nothing as to why the clarification contained in the order dated December 5, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier government orders granting concessional tariff. As already indicated above, the orders granting concessional tariff, in our opinion, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated December 5, 1978 there was apparently no basis for issuing the second clarificatory order dated January 16, 1980. Further, the said order dated January 16, 1980 had been issued on some representation made on behalf of the mini steel plants as a point of time when writ petitions on their behalf had already been filed in the High Court and the matter was sub judice. In such a situation, apart from the propriety of issuing the second clarificatory order dated January 16, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in reply to the writ petitions filed on behalf of the appellants. In our opinion, in the circumstances pointed out above the order dated January 16, 1980 has no bearing in finding out the true import of the orders of the State Government granting concessional tariff
0[ds]9. Having considered the respective submissions of learned counsel for the parties on this point we are of the opinion that on the facts of the instant appeals it is not necessary to go into the rival contentions referred to above on this point. Here, the Electricity Board as is apparent from its proceedings dated January 20, 1978 proceeded to implement the directions with regard to fixation of concessional tariff issued by the State Government and resolved to realise electricity charges from the appellants only at the concessional tariff of 12.2 p. as fixed in the Government Order dated November 26, 1977. It, however, took the further view in the said proceedings that the directions issued by the government did not have any bearing on the obligation of the appellants to pay minimum charges which they were bound to pay under the agreements executed by them even though such minimum charges were to be calculated at the rate of 12.2 p. per unit subject to escalation as indicated in the government orders in question. Such minimum charges were payable even if no electricity was consumed by the appellants for any reason whatsoever. It is in this context that we are of the opinion that the question with regard to the nature of a direction issued under Section 78-A of the Act is only of academic value in these appeals. The basic question which falls for our consideration, however, is as to whether the obligation of the appellants to pay minimum charges under the agreements executed by them ceased to be operative on account of the directions issued by the State Government fixing concessional tariff as has been asserted by learned counsel for the appellants. As indicated earlier the case of the Electricity Board in this behalf has been that the directions in question did not have any bearing on the obligation of the appellants to continue to pay minimum charges, of course, to be calculated on the basis of the concessional tariff of 12.2 p. per unit. A plaint reading of the Government Orders dated November 2, 1977 and November 26, 1977 makes it clear that there is no specific direction contained therein that the appellants would not be bound to pay minimum charges or that the obligation to pay minimum charges under the agreements executed by them would remain suspended during the period when the concessional tariff would be operative. What was, however, urged by learned counsel for the appellants was that the very purpose of fixing concessional tariff by the State Government would be frustrated if the appellants are held to be bound to continue to pay minimum charges in pursuance of the agreements entered into by them. With regard to this submission it is at the outset necessary to appreciate the genesis of prescription of minimum charges. To put it succinctly the purpose of prescribing minimum charges is to ensure that no undue loss is caused to the Electricity Board because the absence of minimum charges is likely to create a tendency in a prospective consumer to have connection for an inflated requirement and having agreed to meet such requirement the Electricity Board would be under an obligation to maintain the supply up to that requirement even if on or very little energy is consumed.In our opinion, on the material placed before us it is not possible to take the view that such was the intention of the State Government in directing supply to be made to the appellants on concessional tariff. That it was not the intention of the State Government to do so was subsequently clarified by the State Government itself vide Government Order dated December 5, 1978. In this view of the matter the submission made on behalf of the appellants that with the grant of concessional tariff the agreements in so far as they required the appellants to pay minimum charges ceased to be operative or that the purpose of granting concessional tariff was likely to be frustrated if they were required to continue to pay minimum charges cannot, therefore, be accepted. In granting concessional tariff obviously it does not appear to be the purpose to compel the Electricity Board to maintain the supply of the contracted load of electricity to the appellants by incurring losses in the manner stated above. The only purpose in directing supply of energy at concessional rates was to reduce the charges of actual energy consumed by the appellants and this purpose could not be frustrated till the Electricity Board complied with the direction of supplying electricity to them at the concessional rate. In this view of the matter it is apparent that the direction of the State Government to the Electricity Board to supply electricity to the appellants at concessional rate did not either expressly or by necessary implication grant immunity to the appellants from payment of minimumThis being the law with regard to grant of concession we are of the opinion that neither of the two orders mentioned above can be said to be illegal on the ground that they were passed in violation of principles of natural justice. The only question in this connection which survives is that of promissory estoppel. With regard to this plea it would be seen that it is not the case of the appellants that they established their mini plants after the grant of concessional tariff by the two government orders referred to above and but for the grant of such concessional tariff they would not have established their mini plants. The necessary facts so as to sustain the plea of promissory estoppel are not, in our opinion, to be found to have been either pleaded or established by the appellants.Insofar as the Government Order dated January 16, 1980 on which reliance has been placed by learned counsel for the appellants in the alternative is concerned it may be pointed out that the said order even though in substance amounts to a clarification of the earliest order of clarification dated December 5, 1978, states nothing as to why the clarification contained in the order dated December 5, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier government orders granting concessional tariff. As already indicated above, the orders granting concessional tariff, in our opinion, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated December 5, 1978 there was apparently no basis for issuing the second clarificatory order dated January 16, 1980. Further, the said order dated January 16, 1980 had been issued on some representation made on behalf of the mini steel plants as a point of time when writ petitions on their behalf had already been filed in the High Court and the matter was sub judice. In such a situation, apart from the propriety of issuing the second clarificatory order dated January 16, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in reply to the writ petitions filed on behalf of the appellants. In our opinion, in the circumstances pointed out above the order dated January 16, 1980 has no bearing in finding out the true import of the orders of the State Government granting concessional tariff
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them from payment of sales tax. What consequently follows is that the exemption granted by the government was only by way of concession. Once this position emerges it goes without saying that a concession can be withdrawn at any time and no time limit can be insisted upon before the concession is withdrawn. The notifications of the government clearly manifest that the State Government had earlier granted the exemption only by way of concession and subsequently by means of the revised notification issued on July 17, 1971, the concession had been withdrawn. As the State Government was under no obligation, in any manner known to law, to grant exemption it was fully within its powers to revoke the exemption by means of a subsequent notification. This is an additional factor militating against the contentions of the appellants." * 14. It was further held : (SCC p. 37, para 11) "The exemption granted by the government as already stated, was only by way of concession for encouraging entrepreneurs to start industries in rural and undeveloped areas and as such it was always open to the State Government to withdraw or revoke the concession. We must, however, observe that the power of revocation or withdrawal would be subject to one limitation viz. the power cannot be exercised in violation of the rule of promissory estoppel. In other words, the government can withdraw an exemption granted by it earlier if such withdrawal could be done without offending the rule of promissory estoppel and depriving an industry entitled to claim exemption from payment of tax under the said rule. If the government grants exemption to a new industry and if on the basis of the representation made by the government an industry is established in order to avail the benefit of exemption, it may then follow that the new industry can legitimately raise a grievance that the exemption could not be withdrawn except by means of legislation having regard to the fact that promissory estoppel cannot be claimed against a statute." * 15. This being the law with regard to grant of concession we are of the opinion that neither of the two orders mentioned above can be said to be illegal on the ground that they were passed in violation of principles of natural justice. The only question in this connection which survives is that of promissory estoppel. With regard to this plea it would be seen that it is not the case of the appellants that they established their mini plants after the grant of concessional tariff by the two government orders referred to above and but for the grant of such concessional tariff they would not have established their mini plants. The necessary facts so as to sustain the plea of promissory estoppel are not, in our opinion, to be found to have been either pleaded or established by the appellants. To take it by way of an illustration reference may be made to the special leave petition gibing rise to Civil Appeal Nos. 1454-1463 of 1981 filed by M/s. Andhra Steel Corporation Ltd. The plea with regard to promissory estoppel is to be found in ground No. (i) which reads "Whether in view of the fact that the petitioner had acted upon the Government orders dated November 2, 1977 and November 26, 1977 and thus altered its position (as without the concessions being granted to the petitioner they would not have possibly run the industry, since it was bound to suffer huge losses) is the State Government estopped from revoking, or modifying the same before the full period of concession had run out of efflux of time that is, by October 31, 1980 ?" * 16. Almost identical is ground No. (i) in the special leave petition giving rise to Civil Appeal Nos. 1642-1645 of 1981. The use of the word "possibly" is obviously indicative of lack of specific averment with regard to principle of estoppel. Even such an averment has not been made qua the Electricity Board. With regard to the plea based on the doctrine of legitimate expectation suffice it to say that except invoking the said doctrine nothing substantial was brought to our notice on the basis of which the appellants could be held entitled to any relief 17. Insofar as the Government Order dated January 16, 1980 on which reliance has been placed by learned counsel for the appellants in the alternative is concerned it may be pointed out that the said order even though in substance amounts to a clarification of the earliest order of clarification dated December 5, 1978, states nothing as to why the clarification contained in the order dated December 5, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier government orders granting concessional tariff. As already indicated above, the orders granting concessional tariff, in our opinion, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated December 5, 1978 there was apparently no basis for issuing the second clarificatory order dated January 16, 1980. Further, the said order dated January 16, 1980 had been issued on some representation made on behalf of the mini steel plants as a point of time when writ petitions on their behalf had already been filed in the High Court and the matter was sub judice. In such a situation, apart from the propriety of issuing the second clarificatory order dated January 16, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in reply to the writ petitions filed on behalf of the appellants. In our opinion, in the circumstances pointed out above the order dated January 16, 1980 has no bearing in finding out the true import of the orders of the State Government granting concessional tariff

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is as to whether the obligation of the appellants to pay minimum charges under the agreements executed by them ceased to be operative on account of the directions issued by the State Government fixing concessional tariff as has been asserted by learned counsel for the appellants. As indicated earlier the case of the Electricity Board in this behalf has been that the directions in question did not have any bearing on the obligation of the appellants to continue to pay minimum charges, of course, to be calculated on the basis of the concessional tariff of 12.2 p. per unit. A plaint reading of the Government Orders dated November 2, 1977 and November 26, 1977 makes it clear that there is no specific direction contained therein that the appellants would not be bound to pay minimum charges or that the obligation to pay minimum charges under the agreements executed by them would remain suspended during the period when the concessional tariff would be operative. What was, however, urged by learned counsel for the appellants was that the very purpose of fixing concessional tariff by the State Government would be frustrated if the appellants are held to be bound to continue to pay minimum charges in pursuance of the agreements entered into by them. With regard to this submission it is at the outset necessary to appreciate the genesis of prescription of minimum charges. To put it succinctly the purpose of prescribing minimum charges is to ensure that no undue loss is caused to the Electricity Board because the absence of minimum charges is likely to create a tendency in a prospective consumer to have connection for an inflated requirement and having agreed to meet such requirement the Electricity Board would be under an obligation to maintain the supply up to that requirement even if on or very little energy is consumed.In our opinion, on the material placed before us it is not possible to take the view that such was the intention of the State Government in directing supply to be made to the appellants on concessional tariff. That it was not the intention of the State Government to do so was subsequently clarified by the State Government itself vide Government Order dated December 5, 1978. In this view of the matter the submission made on behalf of the appellants that with the grant of concessional tariff the agreements in so far as they required the appellants to pay minimum charges ceased to be operative or that the purpose of granting concessional tariff was likely to be frustrated if they were required to continue to pay minimum charges cannot, therefore, be accepted. In granting concessional tariff obviously it does not appear to be the purpose to compel the Electricity Board to maintain the supply of the contracted load of electricity to the appellants by incurring losses in the manner stated above. The only purpose in directing supply of energy at concessional rates was to reduce the charges of actual energy consumed by the appellants and this purpose could not be frustrated till the Electricity Board complied with the direction of supplying electricity to them at the concessional rate. In this view of the matter it is apparent that the direction of the State Government to the Electricity Board to supply electricity to the appellants at concessional rate did not either expressly or by necessary implication grant immunity to the appellants from payment of minimumThis being the law with regard to grant of concession we are of the opinion that neither of the two orders mentioned above can be said to be illegal on the ground that they were passed in violation of principles of natural justice. The only question in this connection which survives is that of promissory estoppel. With regard to this plea it would be seen that it is not the case of the appellants that they established their mini plants after the grant of concessional tariff by the two government orders referred to above and but for the grant of such concessional tariff they would not have established their mini plants. The necessary facts so as to sustain the plea of promissory estoppel are not, in our opinion, to be found to have been either pleaded or established by the appellants.Insofar as the Government Order dated January 16, 1980 on which reliance has been placed by learned counsel for the appellants in the alternative is concerned it may be pointed out that the said order even though in substance amounts to a clarification of the earliest order of clarification dated December 5, 1978, states nothing as to why the clarification contained in the order dated December 5, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier government orders granting concessional tariff. As already indicated above, the orders granting concessional tariff, in our opinion, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated December 5, 1978 there was apparently no basis for issuing the second clarificatory order dated January 16, 1980. Further, the said order dated January 16, 1980 had been issued on some representation made on behalf of the mini steel plants as a point of time when writ petitions on their behalf had already been filed in the High Court and the matter was sub judice. In such a situation, apart from the propriety of issuing the second clarificatory order dated January 16, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in reply to the writ petitions filed on behalf of the appellants. In our opinion, in the circumstances pointed out above the order dated January 16, 1980 has no bearing in finding out the true import of the orders of the State Government granting concessional tariff
