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TMI Blog2001 (11) TMI 981X X X X Extracts X X X X X X X X Extracts X X X X ..... 88, brought about the change in the pre-existing scheme. Under the scheme as it existed prior to 1988, the Government had been granting waiver of purchase tax for a period of five years from the date of commencement of commercial production of the sugar mills. It had granted such waiver to sugar mills in the co-operative sector as also in the private sector; the first of such orders having been made in G.O. Ms. No. 1294 Industries Department, dated October 24, 1975 the benefit of that order being confined to sugar factories in co-operative and public sectors. 3.. In that order of the year 1975, a reference had been made to recommendations of the committee that had been constituted by the Government of India to go into the question of viabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g up both in co-operative and in the private sectors in the next two years. It went on to state that for general industrial development, the Government have sanctioned a scheme of interest-free sales tax loan for an initial period with certain ceilings on loans, both annual and for the entire period of assistance. It then referred to the fact that the scheme was being modified to one of tax deferral and that in order to bring about unity in the type of assistance given to the industrial units, the purchase tax subsidy scheme for the sugar industries be modified to one of deferral of purchase tax. Para 2 of the order of September 1, 1988 sets out the new scheme thus: "In partial modification of the orders issued in G.Os. read above, the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for mills with a TCD capacity of 1,250 to 1,500, and with a further ceiling of Rs. 300 lakhs for four years. For mills with TCD capacity of 2,500 and above, the ceiling per year was Rs. 125 lakhs with a ceiling of Rs. 550 lakhs for four years. 7.. As noticed earlier, the petitioner commenced commercial production in January, 1989, after the Government Order dated September 1, 1988, had brought about a change in the scheme of assistance to the sugar mills, and which had taken effect. The petitioner has admittedly received all the benefits provided for in the revised scheme under the Government Order of September 1, 1988. 8.. The petitioner's grievance is that the assistance should not have been restricted to what is provided in the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... municating the existing policy also does not, on that score alone, give rise to a legitimate expectation that that policy will not change. 10.. In matters of economic policy, the Government enjoys the greatest possible latitude subject only to the overall requirements, to which it is required to conform under the provisions of the Constitution. Economic policies are necessarily subject to change, as the policy appropriate to a given environment will not be suitable in a changed scenario. Ideology also plays a part in the formulation of the policy. The Government, therefore, cannot be held to be powerless to change policy once a policy has been formulated. 11.. The Government order of September 1, 1988 refers to the fact that a number of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount involved, by itself, constituted sufficient public interest justifying the change in the scheme. 14. The change in the policy even with reference to the financial position of the petitioner cannot be said to be so adverse that the petitioner's very existence was dependant upon continuance of a policy of subsidy. The figure furnished by the petitioner shows that the total income of the petitioner in the first year of production in 1989-90 was Rs. 2,075 lakhs, its gross profit is Rs. 527 lakhs, and after meeting interest and finance charges of Rs. 250 lakhs and depreciation of Rs. 214 lakhs; the company still had a profit. It was only after the credit of Rs. 237 lakhs to the investment allowance reserve that the bottom line became o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the policy is not the same as giving a promise that there will be no change to that policy till petitioner set up a mill and commenced commercial production. It cannot also be said that there could be any legitimate expectation on the part of the petitioner by reason of the policy being what it was at the time the project was conceived. In order to cast a burden on the State to give a hearing before changing the policy or before the State could be compelled to follow the policy that prevailed earlier, much more than what the petitioner has been able to show, is required to be established. 17.. It was then submitted by counsel that the petitioner has been dealt with in a hostile manner and has been discriminated against, when compared to tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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