HERO SOAP & CHEMICALS Vs. STATE OF ORISSA

JUDGEMENT

(1.) THIS petition has been filed challenging the order of the General Manager, District Industries Centre, Ganjam, dated September 20, 2000 with regard to non -grant of sales tax concession as per Finance Department Notification Nos. SRO 140 and 141 dated February 17, 2000. The petitioner has submitted that in view of the policy decision taken by the State, tax exemption had to be granted to it, but its application for such exemption has been rejected without assigning any reason whatsoever. In fact, the petitioner sought exemption under the aforesaid notification dated February 17, 2000 which could be granted to a person fulfilling the following criteria as on January 1, 2000.

(2.) THE learned counsel for the petitioner submits that the petitioner has fulfilled all the aforesaid conditions. It started its commercial production on May 22, 2000. However, its application for exemption was rejected without assigning any reason. Therefore, the order dated September 20, 2000 is liable to be quashed and the petitioner is entitled to the benefit of the said exemption. Undoubtedly the order impugned dated September 20, 2000 is not a speaking order. It simply refers to certain notification but no specific reason has been assigned.

(3.) IN Life Insurance Corporation of India v. Consumer Education and Research Centre [1995] 84 Comp Cas 168 (SC); [1995] 5 SCC 482, the apex court observed that the State or its instrumentality must not take any irrelevant or irrational factors into consideration or appears arbitrary in its decision. "Duty to act fairly" is part of fair procedure envisaged under articles 14 and 21. Every activity of the public authority or those under public duty must be received and guided by the public interest. Same view has been reiterated by the Supreme Court in Mahesh Chandra v. Regional Manager, U.P. Financial Corporation [1993] 78 Comp Cas 1 (SC); [1993] AIR 1993 SC 935 and Union of India v. M. L. Capoor AIR 1974 SC 87. In State of West Bengal v. Atul Krishna Shaw [1991] Suppl 1 SCC 414, the Supreme Court observed that