# M/S. ULTRATECH CEMENT LTD. & ANR v. STATE OF RAJASTHAN & ORS

- **Citation:** [2020] 7 S.C.R. 392
- **Court:** Supreme Court of India
- **Decided:** 2020-07-17
- **Case number:** Civil Appeal No. 2773 of 2020
- **Bench:** A. M. Khanwilkar, Dinesh Maheshwari
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-ultratech-cement-ltd-anr-v-state-of-rajasthan-ors-34658
- **Pages:** 84

## Headnote

Industrial Development:
Capital Investment Subsidy - Under Rajasthan Investment
Promotion Scheme 2003 - Clauses 7(i)(a), 7(i)(b), 7(vi) and 7(vii),
10 and 13 - Request by the appellant-Company for customized
package of incentives for setting up a cement plant - Pre-BIDI (Pre
Board of Infrastructure Development and Investment Institution)
meeting, after considering the request recommended that the cement
package and the Scheme of 2003 was applicable to the Company -
BIDI also resolved that recently announced cement package and
the 2003 Scheme would be applicable to the Company - The
Company addressed letter dated 26.4.2006 to Commissioner of
Industries seeking registration in terms of sub-clause (vii) of clause
7 of the 2003 Scheme - Before any decision could be taken on the
letter, State Government deleted sub-clauses (vi) and (vii) from
Clause 7 by Notification dated 28.4.2006 - Company's
representation seeking withdrawal of Notification dated 28.4.2006
- State replied that the Company would be eligible for concessions
as per the 2003 Scheme - Company also entered into MOU with
the State - After establishment of the cement plant and starting
production therein, Company sought Entitlement Certificate under
the 2003 Scheme - State Level Screening Committee (SLSC) allowed
Capital Investment Subsidy to the Company to the extent of 75% of
deposited VAT and Entitlement Certificate was issued - Company
availed the benefit of 75% subsidy in terms of Entitlement Certificate
- After Finance Department of the State raised doubts about the
decision in respect of grant of subsidy upto 75% to the Company,
SLSC re-examined the matter and suggested appropriate action
under Clause 13 of the 2003 Scheme - In Revision proceedings
under Clause 13, the competent Authority decided that SLSC had
erroneously issued Entitlement Certificates and the Company was
[2020] 7 S.C.R. 392
392
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not entitled to the subsidy beyond 50% of the tax payable and
deposited - Pursuant thereto revised Entitlement Certificates were
issued allowing subsidy upto 50% - The Company was directed to
refund the amount of excess availed subsidy together with interest
@ 18% - Writ petition challenging the orders was dismissed by
High Court - Appeal to Supreme Court - Held: Extending of any
incentive in the form of exemption, rebate, concession or subsidy is
the matter of policy of Government - A Government is entitled to
frame a particular policy and to alter the same - Whether the cement
industry was to be granted 75% subsidy under 2003 Scheme was a
matter of policy - The policy of extending 75% subsidy to cement
industry was withdrawn by the Government by deleting sub-clauses
(vi) and (vii) of clause 7 of the 2003 Scheme - As the policy of
extending 75% subsidy was not in existence at the time when the
application of the Company was considered, no benefit could have
been claimed under non-existent policy - Company is entitled to
subsidy only to the extent of 50% and hence liable to refund the
excess 25% - Since the disbursement of 75% subsidy to the Company
was on the basis of erroneous decision and was not relatable to
breach of any of the conditions of the Scheme on the part of the
Company, the Revenue is not entitled to demand interest on the excess
amount @ 18% p.a. - However, as the Company had obtained undue
advantage by availing 25% extra subsidy and had undertaken to
refund extra subsidy with interest @ 12% p.a. Company is liable to
refund excess amount with interest @ 12% p.a.
Doctrines/ Principles
Doctrine of Contemporanea Expotio - is a guide to the
interpretation of Statute or a document by referring the exposition
that the same had received from competent Authority at relevant
point of time - Held, not applicable in present case.
Principle of Promissory Estoppel - Applicability of - Held
not applicable in the facts of the present case.
Maxims:
'Contemporanea exposition est optima et fortissimo in lege' -
Meaning of.
M/S. ULTRATECH CEMENT LTD. &

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M/S. ULTRATECH CEMENT LTD. & ANR.
v.
STATE OF RAJASTHAN & ORS.
(Civil Appeal No. 2773 of 2020)
JULY 17, 2020
[A. M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Industrial Development:
Capital Investment Subsidy - Under Rajasthan Investment
Promotion Scheme 2003 - Clauses 7(i)(a), 7(i)(b), 7(vi) and 7(vii),
10 and 13 - Request by the appellant-Company for customized
package of incentives for setting up a cement plant - Pre-BIDI (Pre
Board of Infrastructure Development and Investment Institution)
meeting, after considering the request recommended that the cement
package and the Scheme of 2003 was applicable to the Company -
BIDI also resolved that recently announced cement package and
the 2003 Scheme would be applicable to the Company - The
Company addressed letter dated 26.4.2006 to Commissioner of
Industries seeking registration in terms of sub-clause (vii) of clause
7 of the 2003 Scheme - Before any decision could be taken on the
letter, State Government deleted sub-clauses (vi) and (vii) from
Clause 7 by Notification dated 28.4.2006 - Company's
representation seeking withdrawal of Notification dated 28.4.2006
- State replied that the Company would be eligible for concessions
as per the 2003 Scheme - Company also entered into MOU with
the State - After establishment of the cement plant and starting
production therein, Company sought Entitlement Certificate under
the 2003 Scheme - State Level Screening Committee (SLSC) allowed
Capital Investment Subsidy to the Company to the extent of 75% of
deposited VAT and Entitlement Certificate was issued - Company
availed the benefit of 75% subsidy in terms of Entitlement Certificate
- After Finance Department of the State raised doubts about the
decision in respect of grant of subsidy upto 75% to the Company,
SLSC re-examined the matter and suggested appropriate action
under Clause 13 of the 2003 Scheme - In Revision proceedings
under Clause 13, the competent Authority decided that SLSC had
erroneously issued Entitlement Certificates and the Company was
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not entitled to the subsidy beyond 50% of the tax payable and
deposited - Pursuant thereto revised Entitlement Certificates were
issued allowing subsidy upto 50% - The Company was directed to
refund the amount of excess availed subsidy together with interest
@ 18% - Writ petition challenging the orders was dismissed by
High Court - Appeal to Supreme Court - Held: Extending of any
incentive in the form of exemption, rebate, concession or subsidy is
the matter of policy of Government - A Government is entitled to
frame a particular policy and to alter the same - Whether the cement
industry was to be granted 75% subsidy under 2003 Scheme was a
matter of policy - The policy of extending 75% subsidy to cement
industry was withdrawn by the Government by deleting sub-clauses
(vi) and (vii) of clause 7 of the 2003 Scheme - As the policy of
extending 75% subsidy was not in existence at the time when the
application of the Company was considered, no benefit could have
been claimed under non-existent policy - Company is entitled to
subsidy only to the extent of 50% and hence liable to refund the
excess 25% - Since the disbursement of 75% subsidy to the Company
was on the basis of erroneous decision and was not relatable to
breach of any of the conditions of the Scheme on the part of the
Company, the Revenue is not entitled to demand interest on the excess
amount @ 18% p.a. - However, as the Company had obtained undue
advantage by availing 25% extra subsidy and had undertaken to
refund extra subsidy with interest @ 12% p.a. Company is liable to
refund excess amount with interest @ 12% p.a.
Doctrines/ Principles
Doctrine of Contemporanea Expotio - is a guide to the
interpretation of Statute or a document by referring the exposition
that the same had received from competent Authority at relevant
point of time - Held, not applicable in present case.
Principle of Promissory Estoppel - Applicability of - Held
not applicable in the facts of the present case.
Maxims:
'Contemporanea exposition est optima et fortissimo in lege' -
Meaning of.
M/S. ULTRATECH CEMENT LTD. & ANR. v. STATE OF
RAJASTHAN & ORS.
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Partly allowing the appeal, the Court
HELD: 1.1. The application earlier made by the Company
was considered in the Pre-BIDI (Board of Infrastructure
Development and Investment Institution) meeting dated
28.03.2006 and the recommendations therein had only been to
the effect that the cement package recently announced and RIPS2003 (Rajasthan Investment Promotion Scheme, 2003) should
be applicable to the Company. The decision of BIDI in its meeting
dated 01.04.2006 had also been specifically in line of the PreBIDI recommendations where it was directed that 'the recently
announced cement package and RIPS-2003 will be applicable on
the Company'. At the given stage of Pre-BIDI recommendations
dated 28.03.2006 and the decision of BIDI dated 01.04.2006, subclauses (vi) and (vii) of Clause 7 of RIPS-2003 were in existence
and, in fact, the phrase "recently announced cement package"
precisely referred to the said provisions of sub-clauses (vi) and
(vii), which had been inserted to Clause 7 of RIPS-2003 on
02.12.2005. Moreover, even when BIDI stated that 'recently
announced cement package' would be applicable to the Company,
it was coupled with the requirement of applicability of the Scheme,
i.e., RIPS-2003. After the aforesaid decision of BIDI dated
01.04.2006, the Company, in its letter dated 26.04.2006 to the
Commissioner of Industries, sought registration in terms of subclause (vii) of Clause 7 of RIPS-2003 for a new cement plant/
captive power plant. However, there had been significant
developments/revisions in relation to RIPS-2003 after the said
decision of BIDI dated 01.04.2006 and the application of the
Company dated 26.04.2006, where the said sub-clauses (vi) and
(vii) of Clause 7 were specifically deleted from the Scheme on
28.04.2006. Noticeably, no decision had been taken by SLSC (State
Level Screening Committee) to grant subsidy to the Company in
terms of the then existing sub-clauses (vi) and (vii) of Clause 7
until 28.04.2006. The application later made by the Company on
21.02.2010 and the decision thereupon taken by SLSC on
17.03.2011 do not and cannot co-relate with the decision of BIDI
dated 01.04.2006 whose initial part, i.e., 'recently announced
cement package' became redundant with the aforesaid amendment
of Clause 7 of RIPS-2003 and deletion of its sub-clauses (vi) and
(vii). [Para 19.1][458-B-G]
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1.2 It is not correct to say that BIDI had granted 75%
subsidy under proviso to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003.
It is apparent on the face of the record that neither in Pre-BIDI's
recommendation dated 28.03.2006 nor in the final decision of
BIDI dated 01.04.2006, there had at all been any proposition for
invocation and application of the said proviso to Clauses 7(i)(a)
and 7(i)(b) of RIPS-2003. The application made on behalf of the
Company had precisely been with reference to the contents of
the said sub-clauses (vi) and (vii) of Clause 7 seeking 75% subsidy,
45% being allowable upfront and remaining 30% in the form of
interest and wage/employment subsidy, with cap of interest
subsidy to the extent of 5% of the documented rate of interest.
There had never been any proposal before BIDI in the case of
the appellant Company to invoke the said proviso to Clauses
7(i)(a) and 7(i)(b) of RIPS-2003 so as to increase the maximum
limit of subsidy to 75%. Proceeding ahead of the decision of
BIDI dated 01.04.2006, the fact that the Company was consciously
seeking the benefit under sub-clause (vii) of Clause 7 of RIPS2003 is again evident on the face of the record on a bare look at
the contents of its application dated 26.04.2006. Invocation of
proviso to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003 seems to have
only been a creation of SLSC in its meeting dated 17.03.2011
while dealing with the application made by the appellant on
21.02.2010. Significantly, even in the said application, what the
appellant claimed had only been the concession in terms of subclause (vi) of Clause 7 of RIPS-2003. The claim precisely was
that the benefits may be allowed in terms of the said notification
dated 02.12.2005. The SLSC, while taking up the said application,
on its own, connected the prayer of the appellant to the decision
of BIDI and, for that matter, read as if BIDI's decision had been
to grant subsidy to the extent of 75% in terms of the said proviso
to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003. There is no rationale
or logic that SLSC, in its meeting dated 17.03.2011, imported
the said proviso to Clauses 7(i)(a) and 7(i)(b) of RIPS-2003 into
the decision of BIDI dated 01.04.2006 and then, applied such
incorrect reading of BIDI's order in its decision making process
so as to grant 75% subsidy. The SLSC, who had the power to
grant subsidy upto 50% could not have granted beyond this limit
by unwarranted application of the decision of BIDI dated
M/S. ULTRATECH CEMENT LTD. & ANR. v. STATE OF
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01.04.2006 and that too with its misconstruction; by reading into
it such powers, which had neither been invoked nor exercised
by BIDI. The decision of SLSC dated 17.03.2011 and its repeat
decision dated 24.11.2011, turn out to be wholly perverse and
could only be disapproved. [Paras 20 and 20.2][459-C-F]
[460-C-G]
1.3 The competent authority, to sanction subsidy under
RIPS-2003, had only been SLSC in terms of Clause 6 thereof.
Even if BIDI had been a high-powered body, its resolutions or
even directives could have only been read in conformity with the
provisions applicable to any particular proposition; and the fact
that one of the Secretary had been a member of both BIDI and
SLSC, the resolution of BIDI could not have been imported into
the decision making process of SLSC beyond what was
permissible under the Scheme. [Para 19.2][458-H][459-A-C]
1.4 Grant of customised incentive package for any particular
Company or establishment was governed by Clause 6-A of RIPS2003 that had an entirely different prescribed authority in the
form of a Committee, who was supposed to examine individual
cases and could have made recommendation for sanction of the
customised incentive package through BIDI. There is no such
decision by the Committee referred to in Clause 6-A and any
recommendation for customised incentive package in relation to
the appellant. The decision of BIDI dated 01.04.2006 also does
not refer to nor is relatable with any customised package meant
for the appellant Company. [Para 21][460-G-H][461-A-B]
1.5 In an overall conspectus of the record and various
amendments/revisions of RIPS-2003, it appears that though at
one stage (i.e., on 02.12.2005), the State Government thought it
proper to announce an entirely different treatment to cement units
by extending 75% subsidy to them with a different methodology
and hence, inserted sub-clauses (vi) and (vii) to Clause 7 of RIPS2003 but, it did not continue with that policy and deleted the said
sub-clauses on 28.04.2006. It remains trite that extending of any
incentive in the form of exemption, rebate, concession or subsidy
is a matter of the policy of the Government and for that matter,
fiscal policy. Ordinarily, such framing of the policy remains within
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the domain of the Government; and the Government is entitled
to frame a particular policy and to alter the same, as deemed fit
and proper. As to whether the cement industry was to be granted
75% subsidy under RIPS-2003 or not was definitely a matter of
the policy of the Government; and when such a policy was not in
existence at the time of consideration of the application of the
appellant, no benefit could have been claimed under a nonexistent policy. [Para 22][461-B-E]
1.6 Thus, it cannot be deduced, by any stretch of
imagination, that a conscious decision was ever taken by BIDI at
any stage that the appellant Company would be extended any
differential and advantageous treatment by allowing 75% subsidy
in place of the ordinarily allowable 50%. The Additional Chief
Secretary has rightly held that SLSC's decision dated 17.03.2011
and its repeat decision dated 24.11.2011 had been erroneous on
the very fundamentals where it was assumed as if BIDI had already
sanctioned 75% subsidy to the Company. The High Court has
also independently examined the entire matter in requisite details
and there is no infirmity when the High Court has held that the
appellant Company was only entitled to subsidy to the extent of
50% of the tax payable and deposited and not to the extent of
75%. [Paras 20.1 and 23][460-B][461-E-G]
J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. State
of U.P. [1961] 3 SCR 185 - referred to.
2. There is not an iota of doubt that the initial decision of
SLSC had not only been erroneous but had been highly perverse,
reaching the level of absurdity. The view of SLSC cannot be
regarded as a possible view of the matter from any standpoint or
any angle. Apart from the above, even if it be assumed for the
sake of argument that there was any ambiguity in the applicable
provisions of RIPS-2003 or the decision of BIDI, the benefit of
any such ambiguity could not have been extended to the appellant
Company. The benefit thereof would have only gone in favour of
revenue for the simple reason that under the provisions in
question, the State had agreed, by way of incentive, to part with a
portion of its revenue. Such provisions, whether in the statute or
in the non-statutory document, by their very nature, are subject
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to strict interpretation so far as their applicability is concerned.
[Paras 24.1 and 24.2][462-C-F]
Commissioner of Customs (Import), Mumbai v. Dilip
Kumar & Co. and Ors. (2018) 9 SCC 1 : [2018] 7 SCR
1191 - followed.
Ramnath & Co. v. Commissioner of Income Tax 2020
(8) SCALE 585 - relied on.
3.1 The doctrine of Contemporanea Expositio is embodied
in the maxim 'Contemporanea exposition est optima et fortissimo
in lege' which means that the best way to construe a document is
to read it as it would have read when made. In essence, the
doctrine of Contemporanea Expositio is applied as a guide to the
interpretation of a statute or even document by referring to the
exposition that the same had received from competent authority
at the relevant point of time. This doctrine is also relatable to the
doctrine of stare decisis whereunder, an exposition standing for a
long length of time, is considered to be a law settled and is applied
as such. As regards the contemporaneous construction placed
by the administrative or executive officers charged with executing
statute, the Courts lean in favour of attaching considerable weight
to the same but, it cannot be laid down that understanding of a
particular administrative or executing authority is always fait
accompli and has to be applied even if erroneous. The true
principle is just to the contrary: that is, if a construction placed
by the contemporary authority is found to be clearly wrong or
erroneous, the same deserves to be disregarded. [Paras 25, 25.1
and 25.3][464-B-C][465-F][466-A-C]
Spentex Industries Ltd v. C.C.E. (2016) 1 SCC 780 :
[2015] 11 SCR 487 - held inapplicable.
Desh Bandhu Gupta v. Delhi Stock Exchange
Association Ltd. AIR 1979 SC 1049 : [1979] 3 SCR
373 - referred to.
Principles of Statutory Interpretation by Justice G.P.
Singh 14th Edition, pp. 375-376 - referred to.
3.2 On the facts and in the circumstances of the present
case, invocation of the doctrine of Contemporanea Expositio on
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behalf the appellant remains entirely inapt. If at all this doctrine
is applied. It is not far to seek that if at all this doctrine is applied,
the consequence would be that howsoever erroneous a decision
by the executive or administrative authority may be, once it
emanates from the understanding of some of the officers or
authorities, the same would acquire immunity from scrutiny for
all time to come. Such has never been the intent of the doctrine
of Contemporanea Expositio nor could such a result be
countenanced. [Paras 25.4 and 25.5.][466-F-H]
4.1 The High Court observed that the doctrine of
promissory estoppel cannot be invoked against a statute. RIPS2003 had admittedly been a non-statutory scheme but that hardly
makes a difference looking to the nature of purport of this Scheme
whereby the State was ultimately to extend the benefit by
reducing its intake of the amount of Sales Tax/VAT; and such an
intake is indeed governed by the statute. This apart, it cannot be
deduced that a conscious decision was ever taken at any stage or
at any level that the appellant was to be extended any differential
and advantageous treatment by SLSC and was to be allowed 75%
subsidy in place of the ordinarily allowable 50%. BIDI never
issued any direction to SLSC to grant 75% subsidy to the
appellant. It merely directed that "the recently announced cement
package and RIPS-2003 shall be applicable on the Company."
Obviously, the case of the appellant was required to be dealt with
by SLSC only in accordance with the applicable provisions
contained in RIPS-2003. The provisions under which the appellant
could have availed tax subsidy upto 75% i.e., the said sub-clauses
(vi) and (vii) of Clause 7, were deleted on 28.04.2006, only two
days after the Company submitted the application dated
26.04.2006 for availing benefit thereunder. The repeat request
of the Company to withdraw such deletion and to allow benefit
under the said deleted sub-clauses, under its representation dated
26.05.2006, did not meet with any success and the only response
of the Government through BIP was to the effect that the
'Company would be eligible for concessions as contained in RIPS2003'. Even in the MoU dated 30.11.2007, what the State
undertook was only to provide incentives as permissible under
RIPS-2003 together with additional support as per the prevalent
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policy. So far availing 75% subsidy under proviso to Clauses
7(i)(a) and 7(i)(b) is concerned, the appellant was required to make
an application to SLSC for that purpose whereupon SLSC could
have referred it to BIDI but, neither any such application was
made by the appellant nor any such matter was ever placed before
BIDI until it remained in existence i.e., 07.06.2009. In an overall
view of the matter, it is difficult to find that at any stage, any such
representation was made by the State Government which led the
Company to alter its position. Besides the above, when the
decisions of SLSC dated 17.03.2011 and 24.04.2011 turn out to
be unauthorised and not in accord with the applicable provisions
of the Scheme, the principles of promissory estopple cannot be
invoked for their enforcement. [Paras 26, 26.1 and 26.2]
[467-A-H]
Dr. Ashok Kumar Maheshwari v. State of U.P. & Anr.
(1998) 2 SCC 502 : [1998] 1 SCR 147 - relied on.
4.2 Even otherwise, when the decision of SLSC, or any
decision of any authority for that matter, was subject to revision
by the Government in terms of Clause 13 of the Scheme, it cannot
be suggested that the said power of revision cannot be invoked.
In other words, the principles of promissory estoppel cannot
operate against such revisional power of the Government.
[Para 26.3][468-D-E]
5. The exercise of power of revision as per Clause 13 of
the Scheme remains unexceptionable in the present case. The
initial decision of SLSC was entirely erroneous and cannot be
said to be a possible view of the matter. Coupled with that, the
said decision was directly prejudicial to the interest of revenue
where the State exchequer was to part with extra 25% of the tax
amount received or receivable from the appellant. The Authority,
while passing the order dated 12.03.2008 in exercise of such
power of revision under Clause 13 of the Scheme, has meticulously
examined the entire material and has recorded each and every
finding with due regard to the dealings of the parties and the
provisions of Scheme as applicable. [Para 27.2][470-E-F]
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Malabar Industrial Co. Ltd. v. Commissioner of Income
Tax, Kerala State (2000) 2 SCC 718 : [2000] 1 SCR
744 - held inapplicable.
6.1 It cannot be accepted that the subsidy cannot be
revoked or withdrawn with retrospective effect and after having
been fully availed of. Sub-clause (b) of Clause 13 of the Scheme
specifically provides for a period of five years from the date by
which benefits under the Scheme are availed of. Sub-clause (b) of
Clause 13 of the Scheme specifically provides for a period of five
years from the date by which benefits under the Scheme are
availed of, to be the period within which the power of revision
could be exercised by the State Government. Admittedly, in the
present case, the appellant Company had availed the benefits
until the month of February 2017 and the order of revision was
passed on 12.03.2018, well within the period of five years
stipulated in the Scheme. [Para 28][470-G-H][471-A-B]
6.2 The fundamental questions on the correctness of the
decision of SLSC dated 17.03.2011 were indeed raised by the
Finance Department of the Government by its letter dated
17.11.2011. The Industries Department chose not to respond to
the said communication and reminders of the Finance Department
for an abnormal length of time and sent a reply only in the month
of February 2017. By that time, the appellant had practically
availed the entire advantage under the questioned decision of
the SLSC. Thereafter, the SLSC re-examined the matter only on
22.05.2017 and left it for the Finance Department to take
proceedings under Clause 13 of RIPS-2013. In the given set of
facts and circumstances, the suggestion that already availed
benefit cannot be withdrawn turn out to be hollow and baseless
because whatever was obtained by the appellant, beyond its
entitlement, had only been based on an erroneous and
unauthorised decision of SLSC. In any case, RIPS-2003 being a
matter of concession in the form of subsidy, securing an advantage
by the appellant at the cost of public exchequer could not have
been allowed and, for the Scheme itself having reserved the
powers in the State Government to revise the erroneous and
prejudicial order within a period of five years from the date of
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fully availing of the benefits, such powers have rightly been
invoked and exercised by the State Government. [Para 29]
[471-C--F]
Birla Jute & Industries Ltd. v. State of M.P. 119 STC 14
(S.C.) - distinguished.
Commissioner, Commercial Taxes, Rajasthan, Jaipur and
Anr. v. Rajasthan Taxation Tribunal and Ors. 38 Tax
Up-date 131 - referred to.
7.1 Clause 10 of RIPS-2003, providing Terms and
Conditions attached to the benefits availed under the Scheme,
envisaged that the 'breach' of any of the condition would 'make
the Capital Investment Subsidy/ exemption amount liable to be
recovered as Tax or arrears of land revenue along with interest @
18% per annum from the date from which the Capital Investment
Subsidy was provided'. It is not the case of the respondents that
the appellant had committed breach of any of the conditions
enumerated in Clause 10 of the Scheme and that the excessive
amount of subsidy (25%) was being recovered because of any
such breach. Entitlement of the appellant to 50% subsidy has
not been questioned. Disbursement of such 75% subsidy to the
appellant was only on the basis of the erroneous decisions taken
and Entitlement Certificates dated 29.04.2011 and 24.11.2011
issued by SLSC. Even when the said decisions of SLSC are found
erroneous and invalid; and the appellant Company is found
entitled to subsidy only to the extent of 50%, it cannot be said
that the excess 25% is relatable to breach of any of the conditions
of the Scheme on the part of the appellant nor the appellant could
be said to have availed the excessive amount of subsidy by way
of any misrepresentation. The basic fault had been on the part of
SLSC in taking erroneous decisions and in issuing unauthorised
Entitlement Certificates dated 29.04.2011 and 24.11.2011. The
respondent State took an abnormally long time in realising the
mistake on the part of its functionaries and took corrective
measures only after the entire benefit had already been availed
of inasmuch as the proceedings for recall were initiated only in
the month of July 2017 which led to the impugned order dated
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12.03.2018 and then, the Re-revised Entitlement Certificate was
issued only on 02.04.2018. [Paras 33 and 33.1][473-E-H]
[474-A-C]
7.2 Even when the Scheme envisaged interest at the rate
of 18% per annum, in Form 2 filed by the appellants, undertaking
was stated to repay the amount of subsidy, in case of availing
excessive benefits or non-compliance with the provisions of the
Scheme, with interest at the rate of 12% per annum. Both the
parties had proceeded with reference to the said undertaking
furnished on behalf of the appellant and the same is required to
be treated as a binding term of contract between them.
[Para 33.2][474-C-D]
7.3 Therefore, the respondent cannot be held entitled to
demand interest at the rate stipulated in Clause 10 of RIPS-2003.
However, and at the same time, when the appellant Company
had obtained undue advantage in monetary terms by availing 25%
extra subsidy; and had given undertaking to refund any excessive
benefit with interest at the rate of 12% per annum, the appellant
Company remains liable to refund the excess amount together
with interest at the rate agreed upon, i.e., 12% per annum.
[Para 33.3][474-E-F]
India Carbon Ltd. & Ors. v. State of Assam (1997) 6
SCC 479 : [1997] 3 Suppl. SCR 1; Maruti Wire
Industries Pvt. Ltd. v. Sales Tax Officer (2001) 3 SCC
735 : [2001] 2 SCR 829; J.K. Synthetics Ltd. v. C.T.O
(1994) 4 SCC 276 : [1994] 3 SCR 964 - referred to.
Case Law Reference
[2000] 1 SCR 744
held inapplicable
Para 13.11
38 Tax Up-date 131
referred to
Para 15.6
[2001] 2 SCR 829
referred to
Para 15.7
[1994] 3 SCR 964
referred to
Para 15.7
[1961] 3 SCR 185
referred to
Para 16.1
[2018] 7 SCR 1191
followed
Para 24.2
M/S. ULTRATECH CEMENT LTD. & ANR. v. STATE OF
RAJASTHAN & ORS.
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[2020] 7 S.C.R.
2020 (8) SCALE 585
relied on
Para 24.2
[1979] 3 SCR 373
referred to
Para 25.1
[2015] 11 SCR 487
held inapplicable
Para 25.4
[1998] 1 SCR 147
relied on
Para 26.2
[1997] 3 Suppl. SCR 1
referred to
Para 33.4
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2773
of 2020.
From the Judgment and Order dated 11.01.2019 of the High Court
of Judicature for Rajasthan at Jaipur Bench, Jaipur in D.B. Civil Writ
Petition No. 9090 of 2018.
S. Ganesh, Sr. Adv., U.A. Rana, M.L. Patodi, Himanshu Mehta
(for M/S. Gagrat And Co.), Advs. for the Appellants.
Dr. Manish Singhvi, Sr. Adv., Satyendra Kumar, Ms. Shailja Nanda
Mishra, Ms. Harsha Vinoy, Irshad Ahmad, Advs. for the Respondents.
The Judgment of the Court was delivered by
DINESH MAHESHWARI, J.
PRELIMINARY AND BRIEF OUTLINE
1. Leave granted.
2. This appeal is directed against the judgment and order dated
11.01.2019 passed in D.B. Civil Writ Petition No. 9090 of 2018, whereby
the High Court of Judicature for Rajasthan, Bench at Jaipur, dismissed
the writ petition filed by the appellants while upholding the order of revision
dated 12.03.2018 as passed by the Additional Chief Secretary, Finance,
Government of Rajasthan, Jaipur1 in revision proceedings under Clause
13 of the Rajasthan Investment Promotion Scheme-20032.
2.1. The appellant No.1, M/s Ultratech Cement Limited (UnitKotputli Cement Works), is a public limited company registered under
the Companies Act, 1956 and engaged in the business of manufacturing
and marketing of cement and allied products. It may be noted that
previously, the appellant was carrying on its business in the name of
M/s Grasim Industries Limited3, a company of the Aditya Birla Group,
1 'ACS' for short
2 Hereinafter also referred to as 'RIPS-2003' or simply 'the Scheme'.
3 The company's name was changed to M/s Ultratech Cement Limited w.e.f. 01.08.2010.
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which was engaged in manufacturing staple fiber, cement, textiles, sponge
iron, aluminum etc. The company originally had two cement plants, one
situated in Chittorgarh District and another in Jodhpur District in the
State of Rajasthan. The appellant No.2 is said to be the Senior General
Manager of the said Kotputli Unit of the appellant No.1. The matter in
issue in the present case essentially relates to the extent to which the
appellant No.1 company was entitled, under RIPS-2003, to avail the
Capital Investment Subsidy4 in relation to its Kotputli Unit.5
2.2. The respondent No.1 herein is the State of Rajasthan and
respondent Nos.2 to 5 are its officers related with respective departments
whereas respondent No.6 is the State Level Screening Committee, who
was the prescribed authority for determining eligibility for subsidy under
the Scheme in question.6
2.3. By the aforesaid order of revision dated 12.03.2018, the ACS
held that the Kotputli Unit of the company was entitled to Capital
Investment Subsidy only to the extent of 50% of the payable and deposited
Sales Tax/VAT and not to the extent of 75%, as availed by it pursuant to
the Entitlement Certificates dated 29.04.2011 and 24.11.2011 erroneously
issued by the State Level Screening Committee7. The SLSC was directed
to issue a new Entitlement Certificate for subsidy to the limit of 50% of
total tax to the said Kotputli Unit of the company; and the company was
directed to refund the amount of subsidy availed in excess of 50% of the
payable and deposited tax together with interest at the rate of 18% per
annum.
3. Put in a nutshell, case of the appellant is that the subsidy in
question, to the extent of 75% of tax payable and deposited, was availed
by it under the Rajasthan Investment Promotion Scheme-2003 only in
terms of and pursuant to: (a) the decision taken by the high-powered
Board of Infrastructure Development and Investment Institution8 on
01.04.2006; (b) the Memorandum of Understanding9 entered with the
4 Hereinafter also referred to as 'the subsidy'.
5 For continuity of discussion, we shall refer only to the appellant No.1 as 'the appellant'
or 'the company'.
6 For continuity of discussion, we shall refer to the respondents collectively and shall
refer to the particular respondent only when necessary in the context.
7 'SLSC' for short.
8 "BIDI" for short.
9 "MoU" for short.
M/S. ULTRATECH CEMENT LTD. & ANR. v. STATE OF
RAJASTHAN & ORS. [DINESH MAHESHWARI, J.]
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State Government on 30.11.2007; and (c) the Entitlement Certificates
issued by SLSC on 29.04.2011 and 24.11.2011. Therefore, according to
the appellant, there was no occasion for the ACS to invoke Clause 13 of
the Scheme; and the appellant can neither be forced to repay the amount
of subsidy already availed of nor could any interest be charged. Per
contra, stand of the respondents is that the decision of BIDI dated
01.04.2006 is of no good for the appellant because the package referred
therein was withdrawn and the corresponding provisions in the Scheme
were deleted on 28.04.2006; and the benefits under the deleted provisions
could have been granted only until the date of their deletion, i.e.,
28.04.2006. Thus, according to the respondents, understanding of the
State Government with the company had only been to extend the benefit
of incentive in terms of subsidy to the extent permissible under the Scheme
and not beyond. The respondents would assert that the aforesaid
Entitlement Certificates were erroneously issued by SLSC and the matter
being related to public exchequer, the appellant is not entitled to claim
any relief contrary to the applicable provisions/stipulations.
4. The factual aspects of the matter are not of much controversy
but, for what has been noticed hereinabove and for what has been
contended on behalf of the parties before us, the major questions involved
in this matter, including those relating to the effect of the decision of
BIDI as also the MoU entered into between the parties, revolve around
the terms and stipulations of the Rajasthan Investment Promotion Scheme2003. Hence, at the outset, it shall be apposite to take note of the relevant
Clauses of this Scheme having bearing on the case.
Rajasthan Investment Promotion Scheme-2003: Relevant
Clauses and their amendments/revisions up to 05.08.2010
5. Rajasthan Investment Promotion Scheme-2003, with which we
are concerned in this case, had been a non-statutory Scheme announced
by the Government of Rajasthan through its Finance Department Order
dated 28.07.200310. It is apparent from the material placed before us
that this Scheme had undergone umpteen number of amendments/
revisions from time to time. We may refer to the relevant Clauses as
also their important amendments/revisions as infra.11
10 'Finance Department' has appeared in short form 'FD' in some of the expressions.
11 A copy of this Scheme, as amended upto 05.08.2010, has been placed on record as
Annexure P-1 and another copy of this Scheme, as amended upto 25.01.2010, has been
placed for perusal in compilation by the respondents. The extractions herein are from
the copy of Scheme as amended upto 05.08.2010.
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5.1. As per the Preamble, the Scheme was introduced by the
State Government with a view to 'provide investors an attractive
opportunity to invest in the State of Rajasthan'. As per its revised
Clause 2, the Scheme was to come into operation w.e.f. 01.07.2003 and
was to remain in force up to 31.03.201112. The applicability of the Scheme,
in its amended form, had been specified as follows:-
"3. APPLICABILITY OF THE SCHEME
The Scheme shall be applicable to all new investments and
investments made by existing units and enterprises for
Modernization/Expansion/Diversification, including the units/
enterprise, covered under policy for promotion of Agro-processing
and Agri-business, 2010 subject to the condition that such units
shall commence commercial production/operations owing to such
investment during the operative period of the Scheme."
5.2. Some of the expressions and phrases used in the text of the
Scheme had been defined in Clause 4 thereof. Then, the eligibility for
availing Capital Investment Subsidy had been provided in Clause 5 of
the Scheme as follows13:-
"5. ELIGIBILITY:
The benefits Capital Investment subsidy as per Clause 7 and
exemptions as per Clause 8 under the Scheme shall be available
to all units, other than those covered in the list of ineligible units,
subject to the fulfilment of the following conditions:
(i)
the term loan sanctioned by the State/Central financial
institution(s)/International Financial Institution/Corporation
and/or Scheduled Commercial Bank(s) including cooperative Bank(s), has been sanctioned and utilized during
the operative period of the Scheme;
Provided that this condition shall not apply for the benefits
pertaining to purchase/use of land.
12 As per amendment dated 06.08.2008
13 Clause 5A, dealing with eligibility in case of Sick Industrial Units and Clause 5B,
dealing with eligibility in case of Biotechnology Units, are not relevant in the present
case.
M/S. ULTRATECH CEMENT LTD. & ANR. v. STATE OF
RAJASTHAN & ORS. [DINESH MAHESHWARI, J.]
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(ii)
the unit shall have a minimum borrowing for investment
of Rs. 10 lacs or having an investment of at least Rs. 10
lacs in land and /or building calculated on the basis of
DLC/RIICO rate for land, and Rs. 3228/- per sq. metre
(Rs. 300/- per sq. ft.) for building, during the operative
period;
provided that the above limit of Rs. 10 lacs shall be Rs. 5
lacs in case of Small Scale Industries.
(iii) to claim Capital Investment Subsidy (Wage component)
the unit shall provide:
(a) direct employment to at least ten persons in case of
a new unit; and
(b) twenty five percent additional direct employment
subject to a minimum of ten persons in case of
diversification, modernization or expansion.
(iv) the unit shall be eligible for Capital Investment Subsidy
(Interest component) and/or Capital Investment Subsidy
(Wage component) only if it commences first commercial
production/operation during the operative period of the
Scheme;
(v)
there has been no default in repayment of dues against
term loan of the concerned financial institution(s) and/or
Bank(s); and
(vi) the applications as required under this Scheme are
presented with full particulars and supporting documents,
as required, before the appropriate authority within 90
days of commencement of commercial production/
operation of the project in respect of which the Capital
Investment Subsidy (Wage component)/Capital
Investment Subsidy (Interest component) is sought. Such
commercial production/operation should however
commence during the operative period of the Scheme,
i.e., on or before March 31st 2011.
5.3. The provisions relating to the prescribed authority for granting
benefits under the Scheme and the prescribed authority to recommend
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grant of customized incentive package, as contained in Clauses 6 and
6A had been as follows14:-
"6. AUTHORITY TO GRANT BENEFITS UNDER THE
SCHEME:
The prescribed authority for determining the eligibility, except for
exemption from stamp duty and/ or conversion charges, under
this Scheme shall be the following Screening Committees, whose
decisions, subject to other provisions of the Scheme, shall be final:
S.N.
Investment
amount
Prescribed Authority
Status
1.
Investment above
Rs. 10.00 crores
State Level Screening Committee (SLSC)
consisting of the following:
a) Pr. Secretary, Industries
Chairman
b)
Secretary,
Finance
(Rev.)
or
his
representative not below the rank of Deputy
Secretary
Member
c) Commissioner, Commercial Taxes or his
representative
not
below
the
rank
of
Additional commissioner.
Member
d) CMD, RFC or his Representative, not
below the rank of ED
Member
e) MD, RIICO or his Representative, not
below the rank of ED
Member
f) Commissioner, Industries
memberSecretary
2.
Investment up to
Rs. 10.00 cores
District Level Screening Committee (DLSC)
consisting of the following:
a) District Collector
Chairman
b) Concerned Branch Manager of RFC in the
District
Member
c) Concerned Senior
Regional Manager/
Regional Manager of RIICO in the District.
Member
d) Deputy/ Asstt. Commissioner, Commercial
Taxes/ Commercial Taxes Officer (CTO)
Member
e) General Manager DIC
MemberSecretary
"6A. Authority to recommend grant of customized incentive
package:
Notwithstanding anything contained under any clause/(s) of the
scheme, the following committee shall examine individual cases
of investment and may recommend for sanction of the Customized
Incentive Package through BIP or BIDI.
14 Clause 6B, dealing with incentives for quality and standards upgradation, is also not
relevant in the present case.
M/S. ULTRATECH CEMENT LTD. & ANR. v. STATE OF
RAJASTHAN & ORS. [DINESH MAHESHWARI, J.]
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S.N.
Investment
amount
Prescribed officers
Status
1
2
3
4
1.
More than 500
crores
Principal Secretary, Finance or his
representative not below the rank of
Secretary
Member
2.
Principal Secretary, Industries/
Secretary Industries.
Member
3.
Commissioner, Commercial Taxes.
Member
4.
Commissioner (Investment & NRI)
Convenor"
5.4.