State of Gujarat & Ors. v. Sahajanand Technologies Pvt. Ltd. & Ors.

 C/LPA/554/2014(GJHC240414542014)                   JUDGMENT DATED: 02/09/2026














     IN THE HIGH COURT OF GUJARAT AT AHMEDABAD





          R/LETTERS PATENT APPEAL NO. 554 of 2014


          In R/SPECIAL CIVIL APPLICATION/5775/2004


=============================================


                   STATE OF GUJARAT & ORS.


                            Versus


           SAHAJANAND TECHNOLOGIES PVT.LTD. & ORS.


=============================================


Appearance:


MS.HETAL PATEL, ASST.GOVERNMENT PLEADER for the


Appellant(s) No. 1,2,3


Mr.PARAM SHAH WITH MR ABHISHEK M MEHTA(3469) for the


Respondent(s) No. 2


MR. DERICK RAJAN THOMAS(15499) for the Respondent(s) No. 1


RULE SERVED for the Respondent(s) No. 3,4


=============================================


 CORAM:HONOURABLE THE CHIEF JUSTICE MRS. JUSTICE


       SUNITA AGARWAL


       and


       HONOURABLE MR.JUSTICE D.N.RAY





                                Date : 02/09/2026





                        ORAL JUDGMENT


              (PER : HONOURABLE THE CHIEF JUSTICE


                 MRS. JUSTICE SUNITA AGARWAL)





1.     Heard Ms. Hetal Patel, learned Assistant Government


Pleader for the appellant State, Mr. Abhishek M. Mehta for


the respondent No.2 and Mr. Derick Rajan Thomas for the


respondent No.1.





2.     This intra-court appeal is directed against the judgment


and order dated 15.07.2013 passed by the learned Single


Judge in allowing the writ petition directing the respondents


to refund the stamp duty and registration fee paid by the


petitioners on the lease deed dated 04.12.2003 without


interest within a period of four weeks from the date of the








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order. The writ petition has been filed with the prayers as


under :-





       “10. In the premises aforesaid, the petitioner prays as under:-


       A. You Lordship be pleased to issue a writ of mandamus or a


       writ in nature of mandamus or any other appropriate writ,


       order or direction declaring the collection of the stamp duty


       on the land-lease transaction between the petitioner and the


       respondent no. 3 being illegal, arbitrary and without any


       authority of law.


       B. You Lordship be pleased to issue a writ of mandamus or a


       writ in mature of mandamus or a by other appropriate writ,


       order or direction Commanding the respondent to refund the


       stamp duty and the registration fees paid by the petitioner on


       the land lease deed with the respondent no. 3 forthwith along


       with interest the reopen.





       c. Pending notice, admission and final herein of this petition


       You lordship be pleased to direct the respondent no. 1 to


       refund the stamp duty and the registration fees paid by the


       petitioner on the land lease deed with the respondent No.3


       on appropriate conditions/security as fit to Your lordship.





       D. Ex part ad interim relief in terms of prayer C granted.





       E. Such other relive (s) as deemed fit may be granted to the


       petitioner.”








3.     Ms. Hetal Patel, learned Assistant Government Pleader


appearing for the State appellant would submit that the


learned Single Judge has committed an error of law in


proceeding to allow the writ petition on two principles of


promissory estoppel and legitimate expectation which cannot


be invoked in a case which is governed by the statute. The


submission is that there was no exemption of stamp duty and


registration fee on a lease deed executed prior to 10.02.2004.


An    Ordinance          to    provide    the      operation,    maintenance,











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management and administration of a Special Economic Zone


(SEZ) in the State of Gujarat and to constitute an authority


and for matters connected therewith or incidental thereto was


brought into force only with the notification in the Official


Gazette on 10.02.2004. With the establishment of the Special


Economic Zone Development Authority constituted under


Section 4 of the said Ordinance, namely Gujarat Special


Economic Zone Ordinance, 2004 (Gujarat Ordinance No.1 of


2004), the fiscal benefits incorporated in Chapter VIII Clause


21 of the Ordinance would prescribe for exemption of all


taxes, cess, duties, etc. including stamp duty and registration


fee payable on transfer of land for approved units in the SEZ


(Special Economic Zone).





4.     The submission is that the lease deed in question having


been executed on 04.12.2003, prior to the promulgation of the


Ordinance on 10.02.2004, cannot be said to be covered by the


provisions of Clause 21 as contained in Chapter VIII of the


said Ordinance. There was no question, as such, of refund of


stamp duty and registration fee as paid by the petitioners at


the time of the registration of the sale deed. For this reason


alone, the judgment impugned cannot be sustained.





5.     Dealing with these contentions of the learned advocate


for the appellant, we may note the reasoning given by the


learned Single Judge in the judgment impugned as under:-


       “11. Therefore first contention which is sought to be raised


       by the respondent State that it is not a transfer since it is a


       lease agreement and therefore there is no transfer of land


       and therefore it is not leviable for the benefit of exemption is


       required to be considered. The Transfer of Property Act








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      refers to the transfer of property and manner in which the


      right, title and interest in the property could be transferred.


      Section 5 of the Transfer of Property Act provides that


      “Transfer of property” defined. “transfer of property” means


      an act by which a living person conveys property, in present


      or in future, to another. Further the mortgaged which


      referred to transfer of an interest in an immoveable property


      is also provided and, therefore, lease by which the right, title


      or interest in the land is sought to be transferred would also


      amount to a transfer but may not be a sell as provided in


      Section 54. However, Section 105 of the Transfer of Property


      Act refers to ‘a lease of immoveable property is a transfer of


      a right to enjoy such property, made for a certain time,


      express or implied, or in perpetuity, in consideration of a


      price paid or promised, or of money, a share of crops, service


      or any other thing of value, to be rendered periodically or on


      specified occasions to the transferor by the transferee, who


      accepts the transfer on such terms’. Therefore any such


      agreement between the parties with regard to the intention


      to create interest in favour of the grantee or licensee is


      entitled to an interest for enjoyment of the property. The


      Legislature has provided that the lease of immoveable


      property for a period of more than one year should be made


      by the registered sale deed suggesting that the interest in the


      property is created. It is in this background, the provisions of


      the Ordinance dated 10.02.2004 are required to be


      considered visavis the policy of the Government at


      AnnexureH dated 10.02.2004. Thus it appears that the policy


      has been made by the Government earlier which culminated


      into Ordinance subsequently and, therefore, when there is a


      specific provision to give benefit, can such benefit be denied


      on the ground that there is no transfer of land. As stated


      above, the transfer of land does not necessarily mean by


      transfer of sale only and it can have a different form or there


      could be a transfer of interest for a long term, which can be


      termed as transfer of interest in the land. Therefore, the


      submission made by learned AGP Shri Vyas that since it is a


      lease deed, it is not a transfer of land cannot be accepted.


      The interpretation of the clause in the Ordinance or the


      policy has to be made with reference to the ultimate object


      for which it is created. Therefore when the policy is made and








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      the Ordinance for the Special Economic Zone has been made


      for giving a boost to the industries and invite the people for


      setting up the industries holding out to give the benefit


      including the fiscal benefit as stated above, same cannot be


      denied by such narrow interpretation that the transfer of land


      by way of lease is not covered as there is no transfer of land.


      As discussed above, the transfer of land does not necessarily


      mean that it should be by way of sell only and such a transfer


      of sell could be by other mode including the lease of


      agreement, by which, the interest in the land is transferred


      for the purpose of enjoyment for a duration. Therefore while


      interpreting the provision of the Ordinance visavis the policy


      and underlying object, submission with regard to narrow


      interpretation that it is not a transfer and lease is not a


      transfer of land cannot be accepted. By way of lease


      agreement, there is a transfer of an interest in the land for a


      duration. It is well accepted that even institution like GIDC


      which have been set up for the purpose of permitting the


      industrialization,    encouraging      and    facilitating   an


      entrepreneur to put up and set up the industries,


      plots/shades are given by such Government Corporation by


      GIDC by way of lease. It is on the basis of such allotment of


      the plot by way of lease, the industrial units get necessary


      power connection as well as finance from the financial


      institution like banks. Further it is well accepted rule of


      interpretation that there has to be purposive interpretation


      which has consonance with the purpose and which is sought


      to be achieved by the Legislature or the Ordinance or the


      policy. Therefore once it is accepted that the submission that


      it is not a transfer of land as provided in the Ordinance and,


      therefore, the lease agreement is covered cannot be


      accepted.





      12. Therefore once it is accepted that even limited transfer of


      interest in the land by way of lease agreement would also


      amount to transfer of land for the purpose of fiscal benefits as


      provided in the Ordinance, which would make the units like


      the petitioner for the entitle for the benefit.





      13. Another facet of argument that the Ordinance was issued


      on 10.02.2004 and the policy has been made in 2007 and the








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      lease agreement is dated 04.12.2003 and, therefore, the


      agreement is prior to date of Ordinance and the benefit under


      the Ordinance could be availed from the date on which


      Ordinance is brought into force is required to be considered


      on principles of promissory estoppel. It is well accepted that


      normally when such policies are drawn which is suggestive of


      the probable road map or broad guidelines for the proposed


      development and such policy then, it can shape in the form of


      notification, Ordinance or the registration. However the moot


      question which is required to be considered is whether there


      was any such policy floated by the Government for the


      purpose of attracting the investment for the purpose of


      industrial development. If such policy has been made for


      establishment of Special Economic Zone in Gujarat with an


      object of attracting investment and development of the


      industries and pursuant thereto subsequently, it has been


      culminated into an Ordinance dated 10.02.2004, it is like


      giving the final shape to the policy. The broad preamble of


      the Ordinance referred to these aspects and, therefore, such


      argument made that lease agreement is prior to the date of


      Ordinance and, therefore, is not covered also cannot be


      accepted on the ground of promissory estoppel. It is on the


      basis of the promise as per the policy of the Government at


      AnnexureA dated 19.07.2002, person like the petitioner has


      moved in that direction seeking to establish the industrial


      unit, for which, as stated in letter dated 19.04.2004 at


      AnnexureJ by Special Economic Zone clearly suggesting that


      such a policy decision for the SEZ was taken on 19.07.2002


      and the actual Ordinance came to be issued on 10.02.2004


      which took time in processing of the papers and getting


      clearance. However the intention and promise of the


      Government which has led to such establishment of Special


      Economic Zone and the investment in such economic zone


      would certainly have a bearing. It is required to be stated


      that the Rules or the Bylaws for observations of the allottees


      and the preamble state that they were framed in the year


      2003. All these would lead to establish that the policy and the


      promise of the Government for attracting the investment for


      the purpose of industries in such Special Economic Zone to


      be set up was already there. Therefore merely because such a


      policy culminated into an Ordinance in the year 2004 by itself








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       may not be a ground to deny the benefits under the


       Ordinance to the investors like the petitioner on the ground


       of promissory estoppel. Law regarding promissory estoppel is


       well settled and useful reference can be made to the


       judgment of the Hon’ble Apex Court in case of Mahabir


       Vegetable Oils (P) Ltd. & Anr. Vs. State of Haryana &


       Ors., reported in (2006) 3 SCC 620. Therefore, when the


       promise has been held out on the ground of policy to provide


       fiscal benefit and the purposes were altered by making their


       investment, it cannot be declined on the ground of


       promissory estoppel. Further in case of Bannari Amman


       Sugars Ltd. Vs. Commercial Tax Officer & Ors., reported in


       (2005) 1 SCC 625, the Hon’ble Apex Court has made


       observation as under :


              “In order to invoke the doctrine of promissory estoppel


              clear, sound and positive foundation must be laid in the


              petition itself by the party invoking and doctrine the


              bald expressions without any supporting material to the


              effect that the doctrine is attracted because the party


              invoking the doctrine has altered its position relying on


              the assurance of the Government would not be


              sufficient to press into aid the doctrine. The Courts are


              bound to consider all aspects including the results


              sought to be achieved and the public good at large,


              because while considering the applicability of the


              doctrine, the Courts have to do equity and the


              fundamental principles of equity must for ever be


              present in the mind of the Court.”





       14. Therefore even considering these aspects that promissory


       estoppel mere assertion or claim itself would not be a ground


       but it has to be considered with reference to the


       circumstances, which are the basis for the equal and fair


       play. Therefore considering the aforesaid broad observations


       and the facts, the present petition deserves to be allowed.





6.     It may be seen that the learned Single Judge has taken


note of the fact that the policy of the State Government


framed by the Industries and Mines Department Resolution











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No.      SEZ-2001-1456-G              dated         19.07.2002         regarding


establishment of SEZ in the State of Gujarat has been


culminated into Ordinance promulgated on 10.02.2004. The


said policy has been announced by the Government of India


for setting up Special Economic Zone with a view to


augmenting infrastructure facilities for export protection. The


policy states that a concept of SEZ is expected to bring large


dividends to the State in terms of economic and industrial


development          and       the   generation      of   new      employment


opportunities. The SEZs are expected to be engines for


economic growth and the State of Gujarat remained in the


forefront of industrial development. The establishment of first


SEZ in the country, thus, has been approved in the State of


Gujarat under the SEZ policy of the Government of India.





7.     It was resolved that the existing Free Trade Zones


namely Kandla Free Trade Zone and Surat Export Processing


Zone have to be converted into Special Economic Zones as


these are/were in operation in the State besides the new


proposal to establish SEZs in the State. The State Government


has offered various incentives to both the developer as well as


industrial unit coming in the SEZ. All kinds of units namely


manufacturing, trading or service activities are permitted in


SEZ.      The State Government was called upon under the


Scheme to offer specialized facilities and concessions for


establishment of units in SEZ. The Central Government has


given guidelines for establishment of SEZ and in the matter of


formulating a policy regarding the dispensations which the


State Government will accord to promote the development of











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SEZ.





8.     It was decided that the Policy will apply to all SEZ in the


State including the existing ones, subject to framework of SEZ


determined by the Government of India from time to time.


Clause 6 of the policy dated 19.07.2002 as per the Resolution


of Industries and Mines Department of the State provides for


complete exemption of stamp duty and registration fee


including sales tax, VAT, etc.





9.     The reasoning given by the learned Single Judge that


when the policy was made and the Ordinance for Special


Economic Zone has been promulgated for giving a boost to


the industries and invite the people for setting up the


industries holding out to give the benefits including the fiscal


benefits as stated above, same cannot be denied on the


contention of the respondent no.2 that the transfer of land by


way of lease is not covered as there was no transfer of land.





10.    Dealing with the argument of the learned counsel for the


respondent that the lease agreement is prior to the date of


Ordinance and the benefit under the Ordinance could be


availed only from the date on which the Ordinance was


brought into force, it was noted that the moot question which


was required to be considered was whether there was any


such policy floated by the Government for the purpose of


attracting the investment for the purpose of industrial


development. If such policy has been made for establishment


of SEZ in Gujarat with an object of attracting investment and


development of industries and pursuant thereto, subsequently








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it has been culminated into an Ordinance dated 10.02.2004, it


is like giving the final shape to the policy.





11.    Looking to the broad preamble of the Ordinance as well


as the provisions contained therein, it was opined that it is on


the basis of the promise as per the policy of the State


Government dated 19.07.2002, persons like the petitioners


had moved in that direction seeking to establish the industrial


unit. The learned Single Judge has also taken note of the


letter dated 19.04.2004 filed as Annexure ‘J’, which clearly


suggest that such a policy decision for SEZ was taken on


19.07.2002 and the actual Ordinance came to be issued on


10.02.2004 which took time in processing of papers and


getting clearance.





12.    Looking to the intention and promise of the Government


which has led to establishment of Special Economic Zone and


the investment in the SEZ area, it was opined that merely


because a policy framed by the Government culminated into


an Ordinance in the year 2004, that by itself cannot be a


ground to deny the benefits under the Ordinance to the


investors like the petitioners. The fiscal benefits as promised


in the policy are, thus, to be accorded to the petitioners.





13.    Taking note of the content of the policy of Industries and


Mines Department vide Resolution No. SEZ-2001-1456-G


dated 19.07.2002 regarding establishment of SEZ in the State


of Gujarat and the fact that the said policy was given shape by


way of the Gujarat Ordinance No. 1 of 2004 dated 10.02.2004,


we do not find any substance in the submission of the learned








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counsel for the appellant to attach any illegality to the


judgment impugned on the premise that the lease deed was


executed prior to promulgation of the Ordinance.





14.     There is one more aspect of the matter and that is if we


accept the contentions of the learned counsel for the


appellant about the strict implementation of the date for grant


of exemption being the date of promulgation of the ordinance,


it would result in a hostile discrimination between two sets of


persons who had proceeded to establish their units in a


Special Economic Zone even a day prior to 10.02.2004 and


those who executed deeds on or after 10.02.2004. Looking to


the laudable object of growth of Indian economy for which the


SEZ policy has been promulgated by the State Government in


the year 2002, we do not find any error in the reasoning given


by the learned Single Judge.





15.     The refund as directed in the judgment impugned shall


be processed and paid within a further period of six weeks


from today.





16.     The present appeal is found devoid of merit and is


dismissed, accordingly. No order as to cost.











                                                                 (SUNITA AGARWAL, CJ )











                                                                                         (D.N.RAY,J)


SAHIL S. RANGER





Original copy of this order has been signed by the Hon'ble Judges.


Digitally signed by: SAHIL SAMIULLA RANGER(HC01898), PRIVATE SECRETARY, at High Court of Gujarat on 09/09/2026 10:35:05














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