Page 202 - GSTL_2nd April 2020_Vol 35_Part 1

104 GST LAW TIMES [ Vol. 35
amount of tax to the Central Government. The first Respondent has an obligation
to issue the exemption notification under the relevant provisions of the Acts.
Submissions on behalf of the Respondent
12. Mr. Amit Bansal, Learned Counsel on behalf of the Respondent has
countered these submissions and defended the withdrawal of the exemption no-
tification and introduction of the limited budgetary support. He argued that the
first contention of the petitioner that the policy will override the exemption noti-
fication is not correct, as the words of the notification are clear in providing that
the said exemption will be granted “for a period not exceeding 10 years”, and there-
fore, the exemption could be provided for a maximum period of 10 years i.e. it
could be lesser than 10 years. In view of the above, there is no bar in suspending
the exemption before a period of 10 years has expired in respect of a particular
beneficiary. He further submits that the Office Memorandum dated 7-1-2003 re-
lied on by the petitioner was meant for internal communication, and was not re-
leased in the public domain.
13. According to Mr. Bansal, the decision of the Court in the case of
K.M Refineries (supra) cannot be applied to the facts of the present case as the
said decision was qua an executive order, whereas, in the present case, Petitioner
is espousing the principle of promissory estoppel qua a legislative Act. In support
of this submission, Mr. Bansal has further drawn the attention of the Court to the
proviso to Section 174(2)(c) of the CGST Act. He contends that the Notification
No. 21/2017-C.E., dated 18-7-2017 - whereby the said exemption notification was
rescinded, has not been challenged by the Petitioner, and therefore, in view of
these circumstances, the concession grated by the exemption notification cannot
be claimed as a vested right in the light of proviso to Section 174(2)(c) of the
CGST Act.
Discussion and Decision
14. We have heard the submissions of the Learned Counsels and given
our due consideration to the matter. The Petitioner had acted upon the assurance
given by the Respondent and incurred liability by mobilizing resources and mak-
ing substantial investments which, in turn, led to economic growth and devel-
opment in the State of Uttarakhand. Now, with the change in the indirect tax
laws, Petitioner’s submission is that State could not resile from the promise or
alter its position, and withdraw the exemptions which would negatively impact
the financial position of the Petitioner. Petitioner wants this court to hold the first
Respondent to the promise it had demonstrably made by way of the exemption
notification. The central question that arises for our consideration in the present
petition is as to whether the Respondents can be compelled to grant exemption
from payment of GST and IGST to the petitioner w.e.f. 1-7-2017 for the balance
residual period of 10 years.
15. The mainstay of Petitioner’s claim is the exemption notification dat-
ed 10-6-2003 whereby the Central Government granted exemptions from the
payment of Central Excise Duty for a period of 10 years to the units in the State
of Uttarakhand. Indisputably, the said exemption notification was under the
Central Excise Act, 1944. With the coming in force of the GST regime, the Central
Excise Act, 1944 itself has been repealed. For that matter, the entire indirect tax
structure has been overhauled. Thus, the right to exemption, pitched by the Peti-
tioner as a “vested right” can be meaningfully appreciated only if we understand
the changes introduced with the advent of the GST laws. This would also help us

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