Government of Tamil Nadu Vs Tvl.Ponni Sugars (Erode) Limited (Madras High Court)
Madras High Court held that retrospective withdrawal of purchase tax subsidy granted to sugar mill has no sanction of law. Accordingly, the assessee is entitled to the full benefit of subsidy as set out in the Government Orders issued in 1984.
Facts- The assessee is a sugar mill. It had been granted an annual subsidy equivalent to the quantum of purchase tax on sugarcane for a period of two years commencing from the date of going into production. This benefit was vide G.O.Ms.No.1414, Industries Department dated 30.11.1984. The Government Order had been issued by the Industries Department. The period under the aforesaid G.O. was extended from 2 to 5 years vide G.O.Ms.No.1497, Industries (MID.I) Department dated 26.12.1984.
On the heels of the aforesaid G.O.s, the State undertook the exercise of reviewing the Scheme for grant of subsidy to sugar mills, undertaking a comparison with existing sugar mills and sugar mills that had been set up and for which licence had been issued subsequently, both in the cooperative and private sector. Having regard to the functional modifications involved, the Scheme for grant of subsidy was modified to one of Interest Free Sales Tax Deferral (IFST) with a monetary ceiling limit.
