OLYMPIC OIL INDUSTRIES LTD Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) As all these writ petitions involve common question of law and facts, they were heard together and are being disposed of by this common judgment.

(2.) By these writ petitions the petitioners, who are engaged in the production and manufacture of edible oil, seek to challenge the constitutional validity of the Bombay Sales Tax (Amendment) Act, 1985, hereinafter referred to as the said Amendment Act, as being ultra vires of articles 14, 19(1)(g) and 300A of the Constitution of India.

(3.) Initially the Government of Maharashtra announced a package scheme of incentives in the year 1964 vide Government Resolution dated 25th September, 1964, to encourage and induce entrepreneurs to establish industrial units in undeveloped and underdeveloped areas-outside Bombay-Thane and Pune-Pimpri-Chinchwad regions. By this resolution the State Government agreed to give to new industries, during the initial stages of its production, a cash refund of sales tax paid by the industry on the raw materials purchased by it and on the finished goods for the the first 13 years from the date of the registration and/or licence, provided the refund on account of the sales tax did not exceed in a year 8 per cent of the capital investment. This incentive scheme was framed for dispersal of the industries outside Bombay-Thane and Pune-Pimpri-Chinchwad. By another resolution dated 2nd April, 1969, the State Government, in partial modification of its earlier resolution of 1964, introduced a modified incentives scheme, under which eligible units were granted interest-free loan equivalent to the sales tax paid by them on raw materials and finished products for the first 6 years of production, repayable in 18 years of the disbursement of loan in 3 easy annual instalments, provided the quantum of loan in any one year will not exceed 8 per cent of the gross fixed assets. Thereafter with a view to give graded incentive so as to ensure that the new industries going into interior and more backward regions get more incentives progressively at a reduced rate, the State Government by its resolution dated 23rd October, 1973, decided to divide various areas of the State into 4 groups and modified the package scheme of incentives with effect from 15th August, 1973, under which the interest-free loan was given by SICOM on the basis of sales tax paid by the new unit for 6 to 10 years upto the maximum of 8 per cent of the fixed assets each year. The package scheme of graded incentives was further modified by the Government vide Government Resolution dated 18th January, 1977, with effect from 1st August, 1976, for a period of 3 years. Under the said scheme eligible unit was entitled every year to the sales tax incentive at 4 per cent of the cost of the fixed assets plus employment incentive based on the average employment worked out at Rs. 1,200 per job per year, limited to 4 per cent of the cost of the fixed assets, provided the total amount so calculated was limited to the total sales tax liability during the year or 8 per cent of the gross value of the fixed assets whichever is lower. By Government resolution dated 17th September, 1977, the Government introduced a special capital incentive scheme with effect from 1st August, 1977 for a period of 3 years under which the special capital incentives admissible to the eligible units in specified industrial areas was in the form of interest-free loan to the extent of 15 per cent of the fixed assets subject to the maximum of Rs. 15 lakhs repayable after 12 years in 6 equal annual instalments. By Government resolution dated 18th October, 1979, the special capital incentives scheme introduced under the Government resolution dated 17th September, 1977, was extended for a further period of one year, i.e., upto 31st July, 1980, to enable more units to get the advantage of the scheme.