Judgment:
Ratnam J.
1. The petitioner in these writ petitions is a company carrying on business, inter alia, in the manufacture, design and supply of titanium substrate insoluble anodes ('T. S. I. anodes', for short) since 1977. The petitioner claims the graphite anodes used extensively in the chlor-alkali industries, due to wear and tear, resulted in high power consumption and the T. S. I. anodes, as replacement for the graphite anodes, led to saving of power to a large extent. In February, 1982, according to the petitioner, the then finance Minister, while presenting the budget for the year 1982-83, stated that is was proposed to allow depreciation at 30 per cent. on devices and systems for energy saving, or for minimising environmental pollution or for conservation of natural resources and that the list of the qualifying items will be notified in due course. Based on this, the petitioner claimed that in view of the proposal made by the Finance Minister that energy saving devices would be entitled to depreciation of 30 per cent., the accounts were closed for the financial year ending with June 30, providing depreciation at 30 per cent., though by then, the list of energy saving devices had not been released. In February, 1983, when the list of machinery entitled to 30 per cent. depreciation was notified, under the heading 'Energy saving devices' contained in Appendix I, Part I, F(2A), 'T. S. I. anodes' were not included. By then, according to the petitioner, the budget for the year 1983-84 was presented and in the course of presenting the budget, a proposal was made to allow 100 per cent. depreciation on devices and systems for energy saving. The petitioner, therefore, stated that for the years 1982-83 and 1983-84 energy saving devices became entitled to 30 per cent. and 100 per cent. depreciation respectively. Since the petitioner's T. S. I. anodes were not included in the list of energy saving devices for the benefit of the higher percentage of depreciation, representation were made to the concerned authorities, but no action had been taken. Meanwhile, the Commissioner of Income-tax while taking up the appeals arising out of the assessment on the petitioner for the year 1983-84 declined to allow to the petitioner on the higher percentage of depreciation at the rate of 30 per cent. as the energy saving devices T. S. I. anodes were not included in the list. Stating that any departmental remedy individually before the appellate authorities or the Tribunal may not be effective, the petitioner filed Writ Petition No. 13224 of 1987, praying for the issue of a writ of mandamus or direction in the nature of a mandamus to the respondents to include T. S. I. anodes in the list of energy saving devices entitled to 30 per cent. depreciation in group F(2A) in Appendix I in Section 111 of the Income-tax Rules. In the affidavit filed in support of the writ petition., the petitioner took the stand that having regard to the speech of the Finance Minister to allow depreciation at a rate higher than 15 per cent. the actual list cannot be so prepared as to give a go-by to the undertaking given by the Finance Minister. Maintaining that the T. S. I. anodes used largely in the chemical industries resulted in tremendous saving of power consumption, the petitioner stated that the exclusion of T. S. I. anodes was arbitrary and illegal and that a writ of mandamus should be issued to the respondents to include T. S. I. anodes in the list of energy saving devices eligible for the higher percentage of depreciation.
2. On the same grounds the petitioner filed Writ Petition No. 13225 of 1987 for the issue of a writ of declaration declaring that rule F(2A) of Appendix I in Section 111 of the Income-tax Rules, 1962, containing the list of energy saving devices, is illegal and null and void and violative of article 14 of the Constitution of India.
3. In relation to the assessment years 1984-85 and 1985-86 in Writ Petition No. 17059 of 1991, the petitioner prayed for a relief similar to that prayed for in Writ Petition No. 13224 of 1987, on the same grounds and in that writ petition, notice of motion had been ordered and it is not in dispute that the decision arrived at in Writ Petition No 13224 of 1987 would govern that writ petition also.
4. In the common counter-affidavit filed by the respondents in Writ petitions Nos. 13224 and 13225 of 1987, while contesting the claim made by the petitioner, it was pointed out that there was no legal obligation as such to make available the benefit of depreciation at a higher percentage on the products manufactured by the petitioner as it was a matter of policy decision leading to the specification of certain items for differential treatment, owing to the circumstances that they contributed to the saving of power to a large extent. Stating that T. S. I. anodes manufactured by the petitioner would lead to a saving of power to the extent of 10 per cent. or 15 per cent. but that the articles listed in group F(2A) in Appendix I to Section 111 of the Income-tax Rules, as notified, would lead to a saving was finalised in consultation with the Ministry of Energy, the Central Electricity Board, and the Director-General of Technical Development, the respondents took the stand that if as a matter of policy, Parliament did not extend the benefits of additional depreciation to certain items, it cannot be challenged, unless the policy decision is either arbitrary or unreasonable and the list of energy saving devices cannot be stated to suffer from the vice of arbitrariness of unreasonable classification. The respondents also reiterated that the petitioner had no legal right to demand the benefit of additional depreciation had that the respondents also were under no obligation to extend the benefit of additional depreciation to the products manufactured by the petitioner. In addition the respondents also put forward the plea that the petitioner merely manufactured T. S. I. anodes, but did not use them in its business and under section 32 of the Income-tax Act, the petitioner was not entitled to claim any depreciation. Referring to the representations said to have been sent by the petitioner, the respondents took the stand that after checking the records, it was found that the representations were not available. Reliance on the speech of the Finance Minister, according to the respondents, would not in any manner, enable the petitioner to have the benefit of higher depreciation, as no assurance or promise was held out for allowing higher depreciation in respect of T. S. I. anodes of the nature manufactured by the petitioner and it was also not stated that even if there was saving of power to the extent of 10 per cent. to 15 per cent., the benefit of higher, he had stated that the list of qualifying items would be notified in due course and the petitioner, therefore, should not have taken it for granted that the items manufactured by it would be allowed depreciation at 30 per cent. according to the respondents. The respondents, therefore, prayed for the dismissal of the writ petitions.
5. Learned counsel for the petitioner contended that in February, 1982, and 1983, while presenting the budgets for the years 1982-83 and 1983-84, the Finance Minister in the course of his speech, had proposed to allow depreciation at 30 per cent. and 100 per cent., respectively, on devices and systems for energy saving and based on that, the petitioner had also made up its accounts for the relevant assessment years on the footing that it would be entitled to depreciation at the rates proposed and under those circumstances, this court should direct the inclusion of T. S. I. anodes in the list of energy saving devices, for having the benefit of higher depreciation for those years. Reliance in this connection was also placed upon the decision reported in K. P. Varghese v. ITO : [1981]131ITR597(SC) . On the other hand, learned counsel for the respondents submitted that owing to the complexity of fiscal adjustments of diverse elements, coupled with the available discretion in the matter of allowing depreciation for taxation purposes, the respondents have a very wide freedom to choose and classify goods in respect of which a higher percentage of depreciation would be allowed and the non-inclusion of T. S. I. anodes does not, in any manner, transgress the doctrine of equality and is, therefore, not vulnerable. It was also further submitted that the inclusion or otherwise of any particular item in the list depended upon a wide variety of diverse economic criteria forming part of the fiscal policy formulation in which Parliament enjoys a wide latitude in the matter of selection of subject-matter for purposes of allowing higher depreciation and that classifications had been recognised, based on the differences in the economic superiority of the article, particularly for purpose of allowing the higher rate of depreciation. Learned counsel also further submitted that speeches made at the time of the presentation of the budget could at best be regarded as proposals and cannot be taken as any definite assurance, for after deep discussion and deliberation, such proposals may be modified, altered or even dropped wholesale and that could not give rise to any right in the petitioner to claim that a higher percentage of depreciation should be allowed in respect of T. S. I. anodes. Yet another submission put for the by learned counsel for the respondents was that being a matter of fiscal policy, it is not within the province of courts exercising jurisdiction under article 226 of the Constitution to sit in judgment as an appellate authority over the inclusion or non-inclusion of certain items for claiming the benefit of higher depreciation. Reference in support of the aforesaid contentions was made to the decisions in ITO v. N. Takin Roy Rymbai : [1976]103ITR82(SC) ; Federation of Hotel and Restaurant Association of India v. Union of India : [1989]178ITR97(SC) ; Hoechst Pharmaceuticals Ltd. v. State of Bihar : [1985]154ITR64(SC) and Chandigarh Administration v. Manpreet Singh, : AIR1992SC435 .
6. In order to appreciate and consider the submission made as aforesaid, it would be necessary to refer to the speech of the Finance Minister while presenting the budget for 1982-83 which is as follows (see [1982] 134 ITR 27) :
'Energy saving and protection of environment are high priority areas. I, therefore, propose to allow depreciation at 30% on devices and systems for energy saving, or for minimising environmental pollution or for conservation of natural resources. The list of the qualifying items will be notified in due course.
While presenting the budget for the year 1983-84, the Finance Minister stated as follows (see [1983] 140 ITR 28) : 'Hon'ble Members would recall that last year I had proposed to allow depreciation at 30% the cost of devices and systems for energy saving and for minimising environmental pollution and for conservation of natural resources. I propose to go further and allow 100 per cent. depreciation on devices and systems for energy saving.'
7. From the extracts of the speeches of the Finance Minister while presenting the budgets for 1982-83 and 1983-84 as above, it is seen that a proposal had been put forward to allow depreciation of 30 per cent. and 100 per cent. generally for energy saving devices and systems. It is common knowledge that proposals made at the time of presenting the budget and introducing the Finance Bill are discussed and deliberate upon by Parliament and ultimately what emerges as the Fiance Act may contain the proposals as originally made or such proposals as have been made might find a place in a altered manner or the proposal made may not be found at all. In other words, the Finance Minister proposes, but Parliament disposes. Therefore, even if proposals as found in the budget speeches for the year 1982-83 and 1983-84 had been made, ultimately, these proposals have not been implemented by incorporating the proposals in the Finance Acts of the relevant years. The proposals had thus remained as such and merely on the basis of the proposals. The petitioner cannot, in our view, be heard to claim that the benefit of higher depreciation on T. S. I. anodes should be made available to it. In any event, at least for the year 1982-83 as could be gathered from the text of the speech referred to earlier, it had been stated that the list of the qualifying items would be notified in due course. Thus, even in the speech there was no assurance that T. S. I. anodes will be included in the list and no such assurance can also be read into the speech for the year 1983-84 earlier extracted. Thus based on the speech containing the proposal of the Finance Minister, without more, the petitioner cannot claim that its energy saving devices should be accorded the benefit of higher percentage of depreciation. It may also be pointed out that fiscal adjustment of diverse elements dictated by economic wisdom and diverse economic criteria is a difficult and a complex problem and while so adjusting, it is open to Parliament to treat certain items or goods differently from others, for purposes of depreciation and in that process, a selection may also be made to include some items and omit others. It is significant that it is not the case of the petitioner that Parliament has no choice or discretion in the matter of including certain items for higher depreciation and others for a lower depreciation. In this case, it is not a dispute that the petitioner had the benefit of the normal depreciation of 15 per cent, and the benefit of the higher depreciation had been claimed only on the basis of the alleged promise or assurance held out by the Finance Minister. It would be appropriate at this stage to refer to the decision in K. P. Varghese v. ITO : [1981]131ITR597(SC) , relied on by learned counsel for the petitioner, in support of the plea of the petitioner. The question that arose in that case was whether an understatement of consideration in a transfer of property was a necessary condition for attracting section 52(2) of the Income-tax Act, 1961, or whether it would suffice, if the Revenue established that the fair market value of the property, as on the date of the transfer, exceeded the full value of the consideration disclosed by the assessee in respect of the transfer by an amount of not less than 15 per cent. of the value so declared In the context of considering this question, a reference was made to the speech of the Finance Minister explaining the reason for the introduction of section 52(2) of the Income-tax Act. Considering how far such speeches could be looked into for the purpose of interpreting the statutory provisions, the Supreme Court pointed out that such speeches made on the floor of the House, when the Bill for enacting the statutory provision is being debated are inadmissible for the purpose of interpreting statutory provision, but the speech made by the mover of the Bill explaining the reason for its introduction can certainly be referred to for the purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation was enacted and that would also accord with the modern trends in justice thought. In that case, with reference to the amendment introduced under section 52(2) of the Income-tax Act, 1961, the court was attempting to ascertain the mischief sought to be remedied by the amendment and the object as well as the purpose for which the amendment was introduced. In so doing, the court ruled that the underlying assumption of section 52(2) was the question of consideration and that applied only when actual consideration received by the assessee was undisclosed and the declared consideration for the transfer was shown at a figure less than that actually received. We are unable to find any support from this decision for the stand taken by the petitioner.
8. We may now make a brief reference to the decisions relied on by learned counsel for the respondents. In N. Takin Roy Rymbai's case : [1976]103ITR82(SC) , the constitutional validity as well as classification for purpose of exemption from tax between the income of a member of a Scheduled Tribe accruing or arising from any source in a specified area and income of such a person from a source outside such area, came to be considered. In that connection, the Supreme Court pointed out that there is a wide discretion in the matter of classification for taxation purposes and there is freedom to select and classify goods, properties, which should be subjected to tax and which should not be and so long as that classification is made within that wide and flexible range and does not transgress the principles of the doctrine of equality, such classification is not vulnerable on the ground of discrimination merely because it taxes or exempts from tax some incomes or objects and not others. The Supreme Court further laid down that a mere fact that a tax falls more heavily on some in the same category, by itself, is no ground to render the law invalid. What is found in this case is that Parliament has the freedom to select and classify goods for purposes of different rates of depreciation based on certain criteria. In other words, when the classification is made within the range of articles eligible for depreciation, the availability of a lower percentage of depreciation in respect of T. S. I. anodes manufactured by the petitioner cannot be taken exception to, on the ground that a higher percentage of depreciation is allowed in cases of other energy saving devices.
9. In Federation of Hotel and Restaurant Associations of India's case : [1989]178ITR97(SC) , it had been laid down that having regard to the wide variety of diverse economic criteria that go into the formulation of a fiscal policy, the Legislature enjoys a wide latitude in the matter of selection of persons, subject-matter, etc., and within that latitude a classification could be made, not transgressing the fundamental principles underlying the doctrine of equality and if so made within the range of the selection, it is not vulnerable. It may also be pointed out that in the complex and ever-expanding exigencies of the Government, when the power to tax and grant exemptions and benefits of depreciation exists, the extent of the benefit is a matter for the discretion of the law-makers and it is not the function of the court to enter upon the realm of legislative policy.
10. Again, the Supreme Court in Hoechst Pharmaceuticals Ltd.'s case : [1985]154ITR64(SC) , pointed out that the economic wisdom of a tax is within the exclusive province of the Legislature. We may add that such wisdom extends also to the allowing of depreciation on specific items on a higher percentage. There is no substance, in our view, in the plea put forward by the petitioner, that there is arbitrariness in declining to give the benefit of higher percentage of depreciation to the T. S. I. anodes manufactured by the petitioner, especially in the absence of the relevant data as to whether the T. S. I. anodes manufactured by the petitioner bring about reduction in power consumption to such an extent as to be considered eligible for the higher percentage of depreciation.
11. That leads to the consideration of the question whether this court should exercise its jurisdiction under article 226 of the Constitution. Whether the T. S. I. anodes manufactured by the petitioner are such as to be accorded the benefit of a higher percentage of depreciation as an energy saving device as claimed or not, is not a matter for the court to decide, as that would depend upon a variety of technical details and data regarding the result of the use of such anodes and merely on the basis of the claim made by the petitioner, a writ of mandamus or even a direction to include anodes as an item eligible for the higher percentage of depreciation cannot be issued. We have also been informed that the representation said to have been made by the petitioner has been carefully considered and rejected and, under these circumstances, it would be a matter for the petitioner and other similar manufacturers to persuade the Government with the relevant data and other materials to consider the granting of a higher percentage of depreciation on the T. S. I. anodes. Without doing so, the petitioner cannot be permitted to approach this court praying for issue of a writ trenching upon what essentially is a matter of fiscal policy of the Government. It is worthwhile in this connection to refer to Chandigarh Administration v. Manpreet Singh, : AIR1992SC435 , it is observed that the High Court acting under article 226 of the Constitution does not sit or act as an appellate authority and the main objective of its supervisory jurisdiction is to keep the Government and several authorities within the bounds of their respective jurisdiction, taking care at the same time that the High Court while performing its functions, does not overstep the well-recognised bounds of its own jurisdiction. The petitioner in these writ petitions virtually has approached this court for directing the respondents to take a policy decision with reference to the inclusion of T. S. I. anodes for purposes of higher depreciation eligibility and that, in our view, cannot be done.
12. For the foregoing reasons, the rule nisi in Writ Petitions Nos. 13224 and 13225 of 1987 is discharged and those writ petitions will stand dismissed with costs. Counsel fee Rs. 3,000 (Rupees three thousand) (one set). Writ Petition No. 17059 of 1991 is also dismissed, but without costs.