High Court Of Delhi
Kajaria Ceramics Ltd. vs. Union Of India & Ors.
Section 80HH
Markandeya Katju, C.J. & Madan B. Lokur, J.
Writ Petn. No. 2765 of 2001
21st February, 2006
Counsel Appeared :
Mrs. Rohini Nath & Ashutosh Khaitan, for the Appellant : R.D. Jolly, Ajay Jha & Deepak Shukla, for the Respondent
JUDGMENT
Markandeya Katju, C.J. :
By means of this writ petition, the petitioner has prayed for setting aside the Notification SO 165, dt. 19th Dec., 1986 insofar as it excludes Sikandrabad Block of Bulandshahar District from the list of backward areas for the purpose of getting the benefit under s. 80HH of the IT Act. The petitioner has also prayed for quashing of the circular issued by the CBDT in so far as it restricts the benefit of the deduction under s. 80HH of the IT Act to units set up in the excluded areas vide Notification No. SO 165, dt. 19th Dec., 1986. The petitioner has also prayed for setting aside the assessment orders for the asst. yrs. 1995-96, 1996-97 and 1997-98.
We have heard learned counsel for the parties and gone through the record. Sec. 80HH was inserted in the IT Act by the Direct Taxes (Amendment) Act, 1974 which provided for an incentive to entrepreneurs to set up industries in backward areas. The section, inter alia, provided for a deduction of 20 per cent from the profits and gains from the business of an industrial undertaking, which sets up its business in a backward area. Backward areas were specified in the 8th Schedule to the Act and District Bulandshahar was mentioned in its entirety as quoted in para 4 of the writ petition.
The petitioner applied for land to set up a unit at Sikandrabad, District Bulandshahar on 27th Sept., 1985. The UP State Industrial Development Corporation Ltd. allotted land to the petitioner for manufacturing of ceramic glazed tiles. A copy of this allotment letter is annexed as Annex. 1 to the writ petition. The petitioner took various steps for setting up the project. Subsequently, an amendment was made to s. 80HH in the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 by which the Explanation to s. 80HH was substituted by sub-s. (11). The newly introduced sub-s. (11) reads: (11) For the purposes of this section, backward area means such area as the Central Government may, having regard to the stage of development of that area, by notification on the Official Gazette, specify in this behalf : Provided that any notification under this sub-section may be issued so as to have retrospective effect to a date not earlier than the 1st day of April, 1983.
In pursuance of s. 80HH, a Notification SO 165, dt.19th Dec., 1986 was issued by the Central Government which redefined the backward areas with retrospective effect from 1st April, 1983. A copy of the notification is annexed as Annex. A2 to the writ petition. Sikandrabad block of Bulandshahar District was excluded from the list of backward areas.
Learned counsel for the petitioner submitted that this action was arbitrary, illegal, discriminatory and ultra vires of Arts. 14 and 19(1)(g) of the Constitution of India. However, we do not find any discrimination. It is for the Government to decide which area is to be treated as backward.
Learned counsel for the petitioner submitted that the principle of promissory estoppel applies in this case. However, we are not impressed with this submission. It is well-settled that there is no estoppel against the statute.
Learned counsel for the petitioner has relied upon a judgment of the Hon’ble Supreme Court in State of Punjab vs. Nestle India Ltd. & Anr. (2004) 6 SCC 465. In our opinion, the said decision is clearly distinguishable, and it has no relevance to the present case. In the present case, the law has been amended by Parliament, and we cannot ignore this amendment. There was no amendment to the law in the case of State of Punjab vs. Nestle India Ltd. (supra). Hence, the petitioner can derive no benefit from that decision. Admittedly by the notification dt. 19th Dec., 1986 Sikandrabad block, where the petitioner industry has been set up, is no longer regarded as a backward area. There is no force in the writ petition and it is dismissed.
[Citation : 288 ITR 393]
