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Judgment
Markandey Katju, C.J.—These writ appeals have been filed against the common judgment of the learned single Judge dated 23.4.99.
Since common questions of law are involved we are disposing of these writ appeals by a common judgment.
We have heard Mr.V.R.Reddy, learned Senior Advocate for the appellants and Mr.R.Krishnamoorthy, Mr.G.Masilamani,
Mr.T.R.Rajagopalan, Mr.K.Alagiriswami, Mr.Vijay Narayan, learned Senior Advocates for the respondent-units and Mr.V.Raghupathi, learned
Government Pleader.
The short question in this batch of appeals is whether the respondent-units are entitled to get the tariff concession in electricity supply under the
proviso to High Tension Tariff I(a) of the Notification of the Government of Tamil Nadu Energy Department dated 14.2.97.
In this batch of cases we shall not discuss the individual facts of each of the respondent''s cases as they are different in each case. We are only
laying down the principle of law as to eligibility of tariff concession, but each of the respondents will have to approach the Tamil Nadu Electiricty
Board and satisfy it that it is eligible to the tariff concession on the principle of law we are laying down, if the facts of its specific case entitle it to the
said concession.
It may be mentioned that before the Notification dated 14.02.1997 , the State Government had issued the Notification dated 31.1.95 u/s 4 of
the Tamil Nadu Revision of Tariff Rates on supply of Electrical Energy Act, 1978 (Tamil Nadu Act I of 1979) which was issued by the Governor.
The relevant part of that Notification states, ""Tariff concession for High Tension Industries coming under High Tension Tariff I:-
a) In the case of new High Tension Industries to be set up in the areas other than the Madras Metropolitan areas, the following concessional tariffs
shall be charged for the first three years from the date, the consumer is given service connection under high tension tariff I:-
For the first year - 60 percent of the High Tension rates
For the second year - 70 percent of the High Tension rates
For the third year - 80 percent of the High Tension rates
For the fourth year- Full Tariff
Subsequently, by the Notification dated 14.2.97, the above tariff concession was modified and now it states, ""a) New High Tension Industries
set up in any area on or after 15th February''97, shall not be eligible for any tariff concession. Provided that the High Tension Industries set up in
any area other than Chennai Metropolitan area before 15th February''97 shall continue to avail themselves of the said tariff concession until the
expiry of the period of three years from the date on which the consumer is given service connection.
The short question in all these cases is what is the meaning of the expression ""set up"" in the aforesaid proviso.
It is submitted by Mr. Reddy, learned Senior Counsel for the appellant that the words ""set up"" in the proviso has to be interpreted to mean that
the units in question had electricity connections prior to 15.2.97. On the other hand, the interpretation canvassed by the learned counsel for the
respondent units is that the new industries which had been actually established or erected before 15.2.97, will be entitled to the said tariff
concession, even if they did not have power connection before 15.02.1997.
Mr. Reddy has submitted that the use of the words ""shall continue to avail"" in the proviso implies that the factories did have power connections
before 15.2.97 and that are continued to be availed of. We do not agree with this interpretation.
In our opinion, the words ""shall continue to avail"" only means that the benefit of the concession under the notification dated 31.01.1995 will
continue to be given to industries which had in fact been set up prior to 15.2.97.
It may be mentioned that in several laws in the country such as Income Tax laws, Sales Tax laws etc., concessions are given to new industrial
units (particularly if set up in backward areas) such as concessional rates of tax or tax holidays for a few years, etc. This is because the policy of
the State is to encourage industrialisation of the country, since industrialisation alone is the way-out for the country to abolish poverty,
unemployment and other social evils.
The concession given by the Notification dated 31.1.95 was also towards this end viz., to promote growth of new industries. Although this
concession was modified by the Notification dated 14.2.97, it seems to us that the State Government realised that in case an industrial unit had
been set up prior to 15.2.97, it must have made a lot of investment and done financial planning under the impression that it would get the
concession in electricity tariff rates. If suddenly after the unit had been set up it is deprived of this concession, its financial planning may go haywire.
Obviously it was for this reason that the proviso was inserted in the Notification dated 14.2.97 and it was stated that the benefit will continue to be
availed of by the new units which had been set up prior to 15.2.97.
The expression ""set up"" has been explained by a Division Bench of this Court in "" Ramaraju Surgical Cotton Mills Ltd. Vs. Commissioner of
Wealth Tax, "", in which it was observed, ""The expression ''set up'' is assigned the following meaning in the Oxford Concise Dictionary start
(institution; business); establish oneself in some capacity. The Chambers Dictionary gives the following meaning; to erect, to put up, and set him up
to begin a career. The words ''set up'' are quite familiar and common place. But in the special context of the exempting provision of Section 5(1)
(xxi) of this Act, they present some complexity creating a stubborn indefiniteness. When can a business undertaking or factory, etc., be said to be
''set up''. Is it the date of the very commencement when the preliminaries are put through or is it one or other of the several intermediate stages that
have to be passed through before a factory can become a fait accompli or is it final act which puts it in gear. One thing seems to be fairly clear and
it is this unless a factory is erected and the plants and machinery installed therein, it cannot be said to have been set up. The resolutions of the
Board of Directors, the orders placed for purchasing the machinery, the licence obtained from the Government for constructing the factory, are
merely initial stages towards setting up, however necessary, and essential they may be to further the achievement of the end. It is not, however, the
actual functioning of the factory of its going into production that can alone be called setting up of the factory. The setting up is perhaps a stage
anterior to the commencement of the factory.
Against the aforesaid judgment, an appeal was filed before the Supreme Court and the Supreme Court upheld the judgment of this Court in
Commissioner of Wealth-tax Madras Vs. Ramaraju Surgical Cotton Mills Ltd., "" by observing (vide para 3):- ""The High Court held that unless a
factory is erected and the plants and machinery installed therein, it cannot be said to have been set up. The resolution of the Board of Directors, the
orders placed for purchasing machinery, licence obtained from the Government for constructing the machinery, etc., are merely initial stages
towards setting up, however necessary and essential they may be to further the achievement of the end. It is not, however, the actual functioning of
the factory or its going into production that can alone be called setting up of the factory. The setting up is perhaps a stage anterior to the
commencement of the factory. Thereafter the High Court referred to a decision of the Bombay High Court in Western India Vegetable Products
Ltd. Vs. Commissioner of Income Tax, Bombay City, and on its basis concluded that the proper meaning to be assigned to the expression ''set up''
in Section 5(1)(xxi) would be ready to commence business. We are unable to agree with the learned counsel for the Commissioner that in arriving
at this view, the High Court committed any error. A unit cannot be said to have been set up unless it is ready to discharge the function for which it
is being set up. It is only when the unit has been put into such a shape that it can start functioning as a business or a manufacturing organization that
it can be said that the unit has been set up. The expression used in the proviso, under which the period for which the exemption is available is to be
determined, is not the same as used in the principal clause. In the proviso, the period of five successive years was to commence with the
assessment year next following the date on which the company commences operations for the establishment of the unit. Operations for the
establishment of the unit, from the very nature of that expression, can only signify steps that have to be taken to establish the unit. The word ''set
up'' in the principal clause, in our opinion, is equivalent to the word ''established'', but operations for establishment cannot be equated with the
establishment of the unit itself or its setting up. The applicability of the proviso has, therefore, to be decided by finding out when the company
commenced operations for establishment of the unit, which operations must be antecedent to the actual date on which the company is held to have
been set up for purposes of the principal clause. This is also the meaning that the Bombay High Court derived in the case of Western India
Vegetable Products Ltd. Vs. Commissioner of Income Tax, Bombay City, where that Court was concerned with the interpretation of the
expression ''set up'' as used in Section 2(11) of the Income Tax Act. That Court held: It seems to us that the expression ''setting up'' means, as is
defined in the Oxford English Dictionary, ''to place on foot'' or ''to establish'' and is in contradistinction to ''commence''. The distinction is this that
when a business is established and is ready to commence business, then it can be said of that business that it is set up. But before it is ready to
commence business it is not set up. This view was expressed when that Court was considering the difference between the meaning of the
expression ''setting up of a business'' and ''commencing of a business''. In the case before us, the proviso does not even refer to commencement of
the unit. The criterion for determining the period of exemption is based on the commencement of the operations for the establishment of the unit.
These operations for establishment of the unit cannot be simultaneous with the setting up of the unit as urged on behalf of the Commissioners, but
must precede the actual setting up of the unit. In fact, it is the operations for establishment of a unit which ultimately culminate in the setting up of the
unit.
In view of the clear pronouncement of the Supreme Court in the aforesaid decision it is obvious that the words ""set up"" are different from the
word ""commence"". A factory can be said to have been ""set up"" even though it has not commenced production.
Mr. Reddy, learned Senior Counsel for the appellants has submitted that in the context in which the words ""set up"" has been used in the
proviso, it means that the unit already had an electric connection prior to 15.02.1997, otherwise it cannot be said that it is continuing to avail of it
after that date. We do not agree.
In interpreting the expression ""shall continue to avail"" in the proviso to the notification dated 14.02.1997, we have to take into account the
background and the context in which the aforesaid notification was issued. This background was that prior to 14.02.1997 new industrial units set
up in areas other than Chennai and Other Metropolitan areas were being given concessional tariff. It was decided subsequently to stop grant of this
concession, but it was obviously realized by the Government that industries which had already been set up may face difficulties if they are deprived
of this concession, since those industries were obviously set up at a time when this concession was available. Hence while doing financial planning
for the project of setting up of the new industry the businessman must have been under the impression that he would get the benefit of the tariff
concession. To deprive him of this concession after he had already set up the new unit would be unfair to the businessman as his financial planning
may get upset. After all when a businessman sets up a project he has to do considerable financial planning taking into account all aspects including
the concession in electricity tariff, etc., and hence it would be unfair to suddenly deny him this concession after he had already set up his unit.
Obviously it was for this reason that the proviso was inserted in the notification dated 14.02.1997.
We, therefore, interpret the words ""shall continue to avail"" to mean that he benefit of the concession under the notification dated 3 1.01.1995
will continue to be given to new units set up prior to 14.0 2.1997. Such, interpretation will subserve the obvious intention of the proviso, namely,
that new units which have been set up prior to 14 .2.1997 under the impression that they would get the tariff concession should not be treated
unfairly.
It is a well settled principle of interpretation that the Court should neither add nor delete words from a Statute. If the interpretation canvassed
by Mr. Reddy is accepted, we would be interpreting the words ""set up"" to mean ""set up and supplied with electricity"" in the proviso to the
notification dated 14.02.1997. This would be adding words to a Statute, which is not a legitimate method of interpretation.
In State of Jharkhand v. Govind Singh the Supreme Court (vide paragraphs 10 and 11) observed:- ""When the words of a Statute are clear,
plain or unambiguous, i.e., they are reasonably susceptible to only one meaning, the courts are bound to give effect to that meaning irrespective of
consequences. The intention of the Legislature is primarily to be gathered from the language used, which means that attention should be paid to
what has been said as also to what has not been said. (See J.P. Bansal Vs. State of Rajasthan and Another, ). As a consequence, a construction
which requires for its support addition or substitution of words or which results in rejection of words as meaningless has to be avoided. As was
noted by the Privy Council in Crawford v. Spooner, (1846) 6 Moore PC 1 : ''We cannot aid the Legislature''s defective phrasing of an Act, we
cannot add or mend and, by construction make up deficiencies which are left there''. The view was reiterated by this Court in State of Madhya
Pradesh and another Vs. G.S. Dall and Flour Mills and Others, and Commissioner of Income Tax, West Bengal III and Others Vs. Oriental
Rubber Works, . Speaking briefly the Court cannot reframe the legislation, as noted in J.P.Bansal''s Case (supra), for the very good reason that it
has no power to legislate"".
The same view was taken by the Supreme Court in Padmasundara Rao and Others Vs. State of Tamil Nadu and Others, (vide paragraphs 12
and 1 4) wherein it was observed that ""the Courts cannot read anything into a statutory provision which is plain and unambiguous"".
It is a well settled principle of interpretation that the Court can neither add nor delete words from a statute. As observed by the Supreme Court
in Aswini Kumar Ghosh and Another Vs. Arabinda Bose and Another, per Patanjali Shastry, C.J. :-
It is not a sound principle of construction to brush aside words in a statute as being inapposite surplusage, if they can have appropriate application
in circumstances conceivably within the contemplation of the statute"".
In Rao Shiv Bahadur Singh and Another Vs. The State of Vindhya Pradesh, the Supreme Court observed: ""It is incumbent on the court to
avoid a construction, if reasonably permissible on the language, which would render a part of the statute devoid of any meaning or application"".
Similarly, in The J.K. Cotton Spinning and Weaving Mills Co. Ltd. Vs. The State of Uttar Pradesh and Others, and in Shri Mohammad
Alikhan v. The Commissioner of Wealth Tax AIR 1997 SC 1165 the Supreme Court observed:- ""In the interpretation of statutes, the courts
always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should
have effect"".
The Legislature is deemed not to waste its words or to say anything in vain, vide Quebec Railway, Light, Heat & Power Co. v. Vandry AIR
1920 PC 181 . A construction which attributes redundancy to the Legislature will not be accepted except for compelling reasons, vide Ghanshyam
Das Vs. Regional Assistant Commissioner of Sales Tax, Nagpur, , State of Uttar Pradesh Ors. Vs. Radhey Shyam Nigam and Others, , etc.
The literal rule of interpretation is the normal rule of interpretation which has to be followed where the meaning of a Statute is clear. In the
present case, the meaning of the words ""set up"" is clear. These words mean ""erect or establish"", as pointed out by the Supreme Court. If the high
tension industry has been erected or established before 15.02.1997, then it is entitled to the benefit of the tariff concession, even though electricity
connection may not have been given to it prior to 15.02.1997.
We do not agree that it is the date on which the application for electricity supply is received by the electricity board that is the relevant date. An
application can be made even before setting up the industry or it can be made after setting up the industry, but that is wholly irrelevant. It is the date
when the industry has been set up that is the relevant date.
We also do not agree that where the industries have not been set up, but are in the process of being set up, yet, the benefit of the concession
will be available, on the basis of the principle of promissory estoppel. There is no question of promissory estoppel, because the language of the
Notification is very clear and there is no estoppel against a Statute.
As regards the appeals filed by the State Government, we are of the opinion that the Secretary of the Government cannot clarify an
amendment to the schedule, which has been made by the Governor. Hence, the appellant cannot get any benefit from the letter of the Secretary to
the Government of Tamil Nadu dated 01.08.1997. The appeals of the State Government are consequently dismissed and all other appeals and
writ petition are disposed off by this judgment.
We make it clear that we are not deciding individual cases whether an industry was set up before 15.2.97 or not. For this purpose, the
individual units can approach the Tamil Nadu Electricity Board and only if they satisfy the Electricity Board that the unit was in fact set up before
15.2.97, will they get the benefit of the tariff concession.
We further direct that the Electricity Board shall dispose of the claims for tariff concession by individual units within two months from the date
of receipt of copy of this order. The bank guarantees will be kept alive for the said period of two months, by which time the claim of the individual
units shall be decided by the Electricity Board. No costs. Consequently, connected pending C.M.Ps., W.A.M.Ps. & W.P.M.P. are closed.