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Issues Involved:
1. Interpretation of Section 21(3) of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961. 2. Whether the Government's policy to grant tax exemptions only to cooperative sugar factories is valid. 3. The applicability of the principle of promissory estoppel. 4. Whether the Government's discretion under Section 21(3) should be considered as mandatory or discretionary. 5. Whether the Government's policy constitutes a fetter on its discretion. Detailed Analysis: 1. Interpretation of Section 21(3) of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1961: The primary issue revolves around the interpretation of Section 21(3) of the Act, which allows the Government to exempt new or substantially expanded sugar factories from tax. The appellants argued that the Government should consider each application on its merits and not adopt a blanket policy that only benefits cooperative sugar factories. The Court held that Section 21(3) does not obligate the Government to grant exemptions but provides it with discretion. 2. Validity of the Government's Policy to Grant Tax Exemptions Only to Cooperative Sugar Factories: The appellants contended that the Government's policy to grant exemptions only to cooperative sugar factories is discriminatory and lacks a nexus to the object of the Act, which is to encourage new and expanded sugar factories. The Court found that the Government's policy is justified as cooperative sugar factories consisting of cane growers form a distinct category deserving special treatment. The Court emphasized that the Government's discretion must be exercised considering the state of the industry and financial conditions. 3. Applicability of the Principle of Promissory Estoppel: Though initially raised, the issue of promissory estoppel was not pressed before the Court. Therefore, it was not considered in the judgment. 4. Discretionary vs. Mandatory Nature of Government's Power under Section 21(3): The appellants argued that the word "may" in Section 21(3) should be interpreted as "shall," making it mandatory for the Government to grant exemptions if the conditions are met. The Court rejected this argument, stating that the section clearly provides the Government with discretion and is not obligatory. The Court noted that the Government is not bound to grant exemptions even if the conditions specified in the section are satisfied. 5. Whether the Government's Policy Constitutes a Fetter on Its Discretion: The appellants argued that by adopting a policy to grant exemptions only to cooperative sugar factories, the Government fettered its discretion and failed to consider individual applications on their merits. The Court held that the Government's policy does not constitute an unlawful fetter on its discretion. The policy was found to be a legitimate exercise of discretion, considering the state of the industry and financial conditions. The Court emphasized that the Government must keep its mind ajar and be willing to listen to applications, even if it has a general policy. Dissenting Opinion: The dissenting opinion argued that the Government's policy to limit exemptions to cooperative sugar factories is unjustified and unrelated to the object of the Act. It held that the Government's policy precluded it from considering the merits of individual applications, thereby shutting its ears to the merits of each case. The dissenting judges would have quashed the Government's policy and issued a mandamus to consider each application on its merits without regard to the policy. Conclusion: The majority judgment upheld the Government's policy and dismissed the appeal and writ petitions, affirming that the Government's discretion under Section 21(3) is valid and properly exercised. The dissenting opinion, however, would have quashed the policy and required the Government to consider each application on its merits.
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