JAGANNATH ROLLER FLOUR MILL Vs. STATE

JUDGEMENT

(1.) The core question for consideration in all these writ applications is whether, in the facts and circumstances of these cases, the petitioners are entitled to the concession enumerated in the industrial policy Resolution dated 18th July, 1979 operative during the period 1979 to 1983, despite its revision on 31-7-1980.

(2.) The petitioners are entrepreneurs who lave set up rolling mills at different places in he State. They have filed these writ applications being aggrieved by the acts/omissions of the opposite parties in not granting them the concession relating to the octroi and sales tax for a period of five years commencing from the dates their unit went into commercial production. From the pleadings of the parties, it is clear that there is no controversy regarding the material facts in these cases. The grievance of all the petitioners is of similar nature and they raise similar questions of law. In these circumstances, with the consent of the parties, the writ applications were heard together and are disposed of by this common judgment. The Secretaries of the Department of Industries, the Department of Housing and Urban Development and the State Government have been impleaded as opposite parties in the writ applications. In addition, the Regional Manager, Food Corporation of India, the District Manager, Food Corporation of India, the Director of Industries, the Executive Officer of the concerned Municipality, the Managing Director of the State Civil Supplies Corporation and in some cases the Octroi Superintendent and the Chairman of the Municipality concerned have also been impleaded as opposite parties.

(3.) The gist of the case of the petitioners is that the State Government in the Industries Department announced its Industrial Policy effective from the first April 1977 up to March, 1979 by resolution dt.1st April, 1977. In the said resolution the State Government, in order to attract entrepreneurs to set up new industrial units in the State offered several concessions. To state a few of them, it was declared that in view of the fact that the entire State was industrially backward, the State Government would provide a cash subsidy of 10% of the capital cost of the project or Rs. 10 lakhs whichever was less, for all new as well as for expansion of the existing units all over the State, but this subsidy would not be available for the units set up in the districts already declared by the Government of India as specially backward as these units would be eligible for 15% cash subsidy from the Central Government. Item No. 6 of the concessions referred to sales tax loan, it was stated therein that the new industrial units including expansion of the existing units would be eligible for an interest-free sales tax loan every year for 5 years of production, i.e., from the 2nd year of production to the 6th year of production and the loan amount would be equal to the sales tax paid by them on their finished products to the State Government during the previous year subject to the condition that the loan amount in any one year should not exceed 8% of the gross fixed assets of the units. In respect of large industries, however, the applicability of this scheme would be declared by the State Government on the merits of each case. Item No. 7, relating to octroi duty stated that machinery brought for the purpose of setting up new industries or expansion and renovation of the existing industries shall be exempted from payment of octroi tax. Raw materials would also be exempted from payment of octroi duty in respect of the new industries for a period of five years. The above resolution was followed by another Policy Resolution issued by the same department on 1st April, 1979 which was to remain operative for the period 1979-1983. The concessions mentioned in the earlier resolution particularly those relating to exemptions from octroi duty and sales tax were repeated in the subsequent resolution. According to the petitioners, being lured by the concessions including those relating to sales tax and octroi duty, they took steps to set up new rolling flour mills in small scale industries sector. On obtaining necessary permission from the State Government in the Food and Civil Supplies Department in 1979 to set up the said mill, they registered their units with the District Industries Centre, arranged funds from banks and other financial institutions on payment of heavy interest, constructed the mill premises, installed machineries and went into production within the period the aforesaid policy was in vogue. The dates of commencement of production of their units were duly intimated to the authorities. The petitioners submit that they hopefully expected that the State Government would abide by its promise granting exemption from payment of octroi duty on the machineries and raw materials brought by them and also the concession relating to sales tax as indicated in its Policy Resolution referred to above. But the authorities of the concerned Municipalities paid no heed to the decision of the State Government enumerated in the aforesaid Policy Resolution and demanded octroi duty from the petitioners. Similar was the conduct of the some of the assessing authorities under the Sales Tax Act. In the result, the petitioners have been put to heavy financial loss and their hopes, that the nascent industrial units would be able to make good progress in view of the concessions granted by the State Government, have been shattered, The petitioners further contend that in view of the declared policy of the State Government holding out the promise that the entrepreneurs would enjoy the concessions mentioned therein, and the petitioners, relying on the said promise, having set up new industrial units and having acted to their detriment and having changed their position thereby the former is estopped from going back upon its promise. The fact in O.J.C. No. 2026 of 1983 is slightly different. Therein the petitioner, M/s, Lingaraj Flour Mills (P) Ltd. was granted letter of intent on 2-8-1972 when the Industrial Policy Resolution for 1971-76 was in force. But the mill was completed in June, 1980, within the period extended (up to 30-9-1980) by the State Government. Thus when the unit was completed and went into production the Industrial Policy Resolution for 1979-83 was in vogue. On the above averments the petitioners have prayed for the following reliefs :-