2001 (12) TMI 846 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to government order extending sales tax deferment, Public interest litigation regarding the legality of concessions granted by the State of Andhra Pradesh.

Analysis:
The petitioner challenged Government Order (G.O.) extending sales tax deferment to a company, arguing it was arbitrary, unreasonable, ultra vires, and against public welfare. The petitioner, a public-spirited individual, highlighted the concession exceeding Rs. 200 crores granted to the company. The Court examined annexures, the impugned G.O., and heard arguments. The company bought a sick unit from a government undertaking, benefiting from sales tax incentives under the industrial policy 'Target 2000.' The petitioner contended the company was not eligible for further incentives under Target 2000 as it was an existing unit predating the policy. Despite initial denials by industry and revenue departments, the government issued G.O. granting sales tax deferment of Rs. 200 crores to the company, citing substantial investment and job protection for 900 workers. The Court upheld the government's decision, viewing it as promoting socio-economic development and industry growth, dismissing the petition for lack of locus standi.

The Court found the government's decision to extend sales tax incentives to the company justifiable, emphasizing the protection of 900 workers' jobs and socio-economic development. It noted the absence of malafide intentions in the government's actions, highlighting the decision's alignment with public interest and revenue generation goals. The Court opined that the petitioner, a chartered accountant-cum-advocate, lacked standing to maintain the writ petition due to the absence of a direct interest in the matter. It affirmed the government's authority to provide tax-based incentives for public welfare and industrial development, cautioning against judicial interference in policy decisions. Ultimately, the Court dismissed the petition, endorsing the government's prerogative to grant tax deferment incentives in backward areas for public and industrial advancement.