State of Andhra Pradesh and Others vs Sri Ambuja Petro Chemicals Ltd.

A. Raghuvir, J.—The subject in the writ appeal relates to what in brief termed as interest-free sales tax loans (I.F.S.T.). The I.F.S.T. loans were offered by the State as incentive to new industries in the order on March 9, 1976 (which will be referred as "G.O. 224"). The offer was made to industries which commence production on or after January 1, 1976 and to other industries who effect "substantial expansion" and increase production. The incentive particulars include exemption of payment of sales tax on construction materials, plant, machinery equipment during pre-production stage and include exemption of purchase tax and sales tax under the Central Sales Tax Act of 1956 and the Andhra Pradesh General Sales Tax Act of 1957. The incentives were current for five years till December 31, 1980. The Government extended the term of five years till a revised scheme is promulgated and that is recited in G.O. 736 on December 28, 1981. The later events show registration of claims under G.O. 224 was stopped on August 29, 1983. A revised policy was promulgated on August 23, 1985 in G.O. 375 in that G.O. 224 was superseded (para 10). In the revised policy areas are classified like "intensive industrial development areas" and "growth centers" for incentives.

The issues in the appeal also are relevant to the order in G.O. 224 in that a committee was constituted to advise the Government from time to time in the implementation of incentives. Such a committee in December 5, 1978 advised to limit the loan to rupees ten lakhs and amend the G.O. 224. Curiously the recommendation was accepted, but the amendment was not effected. That inaction brought about numerous problems including the issues in law - whether G.O. 224 was operative till August 23, 1985; whether the terms of G.O. 224 came to an end on December 31, 1980 or on August 29, 1983. The two issues are further accentuated because of orders in G.O. 482 dated September 9, 1980 in which a loan to Bhadrachalam Paper Boards Limited and in G.O. 483 dated September 9, 1986 another loan was accorded to A.P. Rayons Company. Whether the two orders were passed under G.O. 224 or under G.O. 375. To those whom loan is denied whether they are discriminated within the meaning of article 14 of the Constitution.

M/s. Ambuja Petro Chemicals Limited is one of the companies to whom loan was denied. A learned single Judge in a writ petition by the company [see Sri Ambuja Petro Chemicals Ltd. Vs. State of Andhra Pradesh, directed in the order under appeal the State Government to examine the claim of the company in terms of G.O. 224 and pass orders. Aggrieved thereby, the appeal is by the State.

The learned Advocate-General very fairly offered the records of the Government Orders of scrutiny including the file in which the decision was taken on March 10, 1979 to accept the recommendations of the committee made on December 5, 1978. The amendment was not effected though the suggestion was accepted, was recounted earlier. The inaction of the Government brought forth ripples in understanding the business of the State administration.

The learned Advocate-General in the circumstances represented the entire subject is under consideration of the present Government to adopt one of the two courses of action - to pass appropriate executive order limiting the G.O. 224 or appropriate legislative measure to arrest the mischief that resulted from the inaction of the authorities or of the State Government.

The counsel for the company, however, argued that the Government does not intend to withdraw G.O. 224 and stressed that the company is discriminated from the perspective of promissory estoppel. The company in law is entitled to I.F.S.T. loan as claimed by them.

In view of the representation by the learned Advocate-General, we consider the State Government may be enabled in eight weeks from today either to pass an executive order or issue an Ordinance. If none of the courses is adopted in the period prescribed, the company to submit claims indicating the amount of I.F.S.T. loan under what conditions of G.O. 224 or in virtue of any other scheme. The Government is obliged after receipt of such a claim within three months to pass appropriate orders. If the schemes in G.O. 224, G.O. 375 are abrogated or modified, the affected can choose to seek remedies provided in law. The writ appeal, therefore, is closed with above direction. No costs.

W.P. No. 4461 of 1981 :

What is stated in the writ appeal applies to the writ petition. The petitioner in eight weeks from today to submit their claim as indicated above. The Government to consider the same and pass appropriate orders in three months as indicated in the earlier case.

The writ petition with that direction is closed. No costs. Advocate''s fee Rs. 150.

Ordered accordingly.