Case Note & Summary
The Supreme Court dismissed a batch of civil appeals filed by industrial units (Puja Ferro Alloys P Ltd., Karthik Alloys Ltd., Karthik Inductions Ltd., Global Ispat Ltd., and Sunrise Electromelt Ltd.) against the State of Goa and others, challenging demand notices for recovery of rebate amounts under the Goa (Prohibition of Further Payments and Recovery of Rebate Benefits) Act, 2002. The background involves a 1991 notification granting 25% rebate on electricity tariff for five years to new industrial units. This notification was rescinded on 31.03.1995, effective from 01.04.1995. Subsequently, two amending notifications (15.05.1996 and 01.08.1996) purported to extend the rebate, but these were declared void ab initio by the Bombay High Court in Manohar Parrikar v. State of Goa due to non-compliance with Rules of Business, a decision upheld by the Supreme Court in MRF Limited v. Manohar Parrikar. The 2002 Act was enacted to recover rebate benefits availed under the void notifications. The appellant-companies, who applied for power after 31.03.1995 and received connections between 1993 and 1995, were initially granted rebate from 01.01.1997 but later faced suspension and demand notices. The High Court dismissed their writ petitions, upholding the demand notices. The Supreme Court held that the appellants could not claim rebate under the rescinded 1991 notification as they applied after its rescission, and the subsequent notifications were void. The 2002 Act was valid and the demand notices were proper. The appeals were dismissed, and the demand notices were upheld.
Headnote
A) Electricity Law - Rebate on Tariff - Rescission of Notification - The notification dated 30.09.1991 granting 25% rebate was rescinded w.e.f. 01.04.1995 by notification dated 31.03.1995. Industrial units applying for power after that date are not entitled to rebate under the rescinded notification. (Paras 3-4) B) Electricity Law - Void Notifications - Non-compliance with Rules of Business - Notifications dated 15.05.1996 and 01.08.1996 were declared non-est and void ab initio by the High Court in Manohar Parrikar v. State of Goa, upheld by this Court in MRF Limited v. Manohar Parrikar. No benefits can be claimed under void notifications. (Paras 4, 9-10) C) Electricity Law - Recovery of Rebate - Validating Act - The Goa (Prohibition of Further Payments and Recovery of Rebate Benefits) Act, 2002, Section 3, provides for recovery of rebate benefits availed under the void notifications. The Act was upheld as constitutional in Goa Glass Fibre Limited v. State of Goa. Demand notices under Section 3 are valid. (Paras 4, 11-12) D) Electricity Law - Promissory Estoppel - Not Applicable - The doctrine of promissory estoppel cannot be invoked against a statutory notification that has been rescinded or declared void. The appellants cannot claim estoppel against the clear legal position. (Paras 13-14)
Issue of Consideration
Whether the appellant-companies are entitled to 25% rebate on electricity tariff under the notification dated 30.09.1991 after its rescission on 31.03.1995, and whether the demand notices under the Goa (Prohibition of Further Payments and Recovery of Rebate Benefits) Act, 2002 are valid.
Final Decision
The Supreme Court dismissed all the civil appeals, upholding the High Court's judgment and the demand notices. The Court held that the appellant-companies are not entitled to rebate under the rescinded 1991 notification, and the subsequent notifications being void, no benefits can be claimed. The 2002 Act is valid and the demand notices under Section 3 are enforceable.
Law Points
- Promissory estoppel
- Rescission of notification
- Void ab initio notifications
- Recovery of benefits under validating Act
- Binding nature of prior judgments
