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TMI Blog1991 (11) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... idy and interest-free sales tax loan are the two incentives that were announced therein. We are not concerned in these writ petitions with investment subsidy which is granted to the industries set up in backward areas and the Scheduled (tribal) areas. As far as interest-free sales tax loan is concerned, the relevant portion of the Government order is extracted hereunder: "State Government will give an interest-free sales tax loan to all new industrial units and/or those going in for substantial expansion in all the areas excepting the municipal limits of Hyderabad and Secunderabad, Vijayawada and Visakhapatnam. Entrepreneurs setting up industries will be eligible for interestfree sales tax loan equal to the tax paid by them under the Andhra Pradesh General Sales Tax Act if any on construction materials, plant and machinery and equipment during the pre-production stage and purchase tax/sales tax amount paid by them under the Andhra Pradesh General Sales Tax Act, 1957 and sales tax paid by them under the Central Sales Tax Act, 1956, during the period of 5 years from the date of going into regular production, on raw materials, components and finished goods. This can be claimed annua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid concessions as sought for by them. The above representations of the company have been examined in detail by the Government keeping in view the financial position of the State Government as well as the company's need for those concessions from the point of view of its economic viability in the context of the appraisal of the financial institutions. Discussions have also been held between the representatives of the company and the Government in the interest of reaching a comprehensive negotiated settlement on the above issues in order to end the uncertainty over these issues in the interest of smooth running of industry since delays and litigation on such matters would be detrimental to the interest of the smooth running of industry. The company has stated that they have not filed cases against the Government on these issues. The issues have been examined by the Government in the light of the above, and the following agreement has been reached between the Government and the company as enumerated below: (1) Interest-free sales tax loan: The total quantum of interest-free sales tax loan eligible under G.O. Ms. No. 224, Industries and Commerce Department dated March 9, 1976 woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, 1976, as extended from time to time till the 31st March, 1984, shall not exceed a sum of rupees ten lakhs in respect of each industry with a fixed capital cost of rupees one crore and above." The preamble of the Act sets out the background in which the Act was passed. Inter alia, it is stated that the financial commitment will be up to Rs. 46 crores if the claim for the loans is limited to 10 per centum of the fixed capital cost instead of limiting it to Rs. 10 lakhs as suggested by the State Level Committee. It is then stated that the total outlay provided cannot meet the demands if the claim is not limited to a maximum of Rs. 10 lakhs and that the State is not in a position to meet such huge commitment in view of the financial constraints. After the A.P. Act 20 of 1987 came into force the Commercial Tax Officer, Company Circle, Secunderabad Division, issued a notice dated February 8, 1988 calling upon the petitioner to pay the sales tax dues to the tune of Rs. 75,68,217 in respect of the assessment years 1986-87 and 1987-88 (up to December, 1987). The Commercial Tax Officer took the stand that in view of the enactment of A.P. Act 20 of 1987, the benefit given in G.O. Ms. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The observations made by the Supreme Court in a recent case reported in Vasantkumar Radhakisan Vora v. Board of Trustees of the Port of Bombay AIR 1991 SC 14, are quite apposite in this connection. K. Ramaswamy, J., speaking for the Bench observed: "It is equally settled law that the promissory estoppel cannot be used compelling the Government or a public authority to carry out a representation or promise which is prohibited by law or which was devoid of the authority or power of the officer of the Government or the public authority to make. We may also point out that the doctrine of promissory estoppel being an equitable doctrine, it must yield place to the equity, if larger public interest so requires, and if it can be shown by the Government or public authority, for having regard to the facts as they have transpired that it would be inequitable to hold the Government or public authority to the promise or representation made by it..... Though executive necessity is not always a good defence, this doctrine cannot be extended to legislative acts or to acts prohibited by the statute." In Union of India v. Godfrey Philips India Ltd. [1986] 59 Comp Cas 526 (SC); AIR 1986 SC 806, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to the other. However, we are unable to view the G.O. dated September 9, 1986, in that light. It is true that section 3 of the A.P. Act 20 of 1987 has been enacted with a view to limit the benefit conferred by G.O. Ms. No. 224, dated March 9, 1976, visa-vis, interest-free sales tax loan. The phraseology-"in terms of G.O. Ms. No. 224" makes this position clear. Still, the question is whether any benefit has been conferred under G.O. Ms. No. 483, de hors the earlier G.O., namely, G.O. Ms. No. 224. We are of the view that by issuing G.O. Ms. No. 483 dated September 9, 1986, the Government did not confer any independent or additional benefit outside the purview and framework of G.O. Ms. No. 224, dated March 9, 1976. Although G.O. Ms. No. 224 lapsed by March 31, 1984, the claims preferred and registered under G.O. Ms. No. 224 were liable to be dealt with in terms of that G.O., notwithstanding its discontinuance with effect from March 31, 1984. It is fallacious to contend that after March 31, 1984 the pending claims stood abated or became infructuous. Let us take a case where the claim had not been disposed of for reasons beyond the control of the applicant. Even in such a case, if w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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