Judgment:
Raghuvir, J.
1. Someswara Cement and Chemicals Limited was registered on July 4, 1980. The company obtained the licence on June 10, 1980 to manufacture cement. The management of the company placed orders in May, 1981, for plant and machinery. The factory was ready in November, 1981. The company's production commenced on March 17, 1983. The total investment of the company is Rs. 5.9 crores. The factory is at Ippalnegaon in a tribal village in the scheduled area of Asifabad taluk, Adilabad district. The issue raised by the company in the writ petition relates to payment of sales tax for five years from March 17, 1983. The case of the company is they are not liable to pay sales tax for five years from the date of the commencement of production, that is from March 17, 1983.
2. The company now is served a show cause notice on August 28, 1984 to state exemption ordered by the relevant notifications issued under section 9 of the Andhra Pradesh General Sales Tax Act, 1957, is inapplicable to the company. Thereupon the company has approached this Court to interdict the respondent-authorities including the State Government not to levy sales tax under the Andhra Pradesh General Sales Tax Act, 1957, for five years. The State Government in their counter maintains the exemption granted in their favour was withdrawn, therefore, they are liable to pay sales tax for the relevant period of five years.
3. The State Government in the orders G.O. Ms. No. 455 on May 3, 1971 and G.O. Ms. No. 201 on December 17, 1976, speaks of advice from an Expert Committee in the month of January 1975 and a report in February 1976 recommending the State to implement industrial schemes in the areas specified in the Fifth Schedule of the Constitution. The recommendation covered 50 per cent concession on raw materials, machinery, equipment for factory and further exemption of the products of the industry from sales tax for five years. Pursuant to the recommendation, the State Government in G.O. Ms. No. 606 dated April 9, 1981, promulgated notifications under section 9 of 1957 Act, which inter alia, as to sales tax, states, units set up on or after December 17, 1976, in the scheduled areas are exempted for five years. The notification was enforced from January 1, 1977. The State Government later modified their order on March 2, 1982, in G.O. Ms. No. 302. In that the following amendment was incorporated : 'In the said notifications (G.O. Ms. No. 606) for the words 'industrial unit set up' the words 'industrial unit whose total capital investment does not exceed rupees one crore and set up' shall be substituted'. When the company assailed the show cause notice, earlier this Court directed the company to submit explanation, but that order is set aside by the Supreme Court in Civil Appeal No. 401 of 1986 dated January 24, 1986. The writ petition is now heard on the merits of the case.
4. The company asserts the State Government in exercise of power under section 9 of the Act promulgated G.O. Ms. No. 606 and exempted goods for five years from payment of sales tax from the date of commencement of production (in the instant case from March 17, 1983). The State has put the defence in two aspects. The exemption, it is argued, granted in G.O. Ms. No. 606, was repealed. This stand of the Government cannot be countenanced for G.O. Ms. No. 302 does not recite to that effect. Though for some time it was argued the amendment order of G.O. 302 has retrospective operation from April 9, 1981, later the argument to such an effect was also not pressed.
5. The State alternatively argued the instant company is liable to pay sales tax under the Andhra Pradesh General Sales Tax Act, 1957. The exemption granted earlier in G.O. 606 is no more available from March 2, 1982. In support of this contention, the learned Government Pleader cited two cases : State of Kerala v. Velayudhan [1963] 14 STC 382 (Ker) and the other Parthasarathy Mudaliar v. State of Madras [1957] 8 STC 632 (Mad.), and stressed from the case cited first that the ratio in that case applies on all fours for this case. We are unable to agree with this contention.
6. We read the circumstances as follows : There was an offer by the State Government in the scheduled areas if the industries are set up, sales tax for five years is exempted. The writ petitioner-company is one such company who have had established a cement factory at Ippalnegaon village in Asifabad taluk, Adilabad district. They have invested about Rs. 5.9 crores of capital for the factory. They commenced production on March 17, 1983. It is on that premise the company claims exemption for five years from sales tax under the Andhra Pradesh General Sales Tax Act. In our view, the company is enforcing an accrued right under the relevant notification. Since we understood this is accrued right, it is in no way affected by the amendment brought about on March 2, 1982, in G.O. Ms. No. 302. The company commenced production from March 17, 1983, therefore, is entitled to the exemption from the Andhra Pradesh General Sales Tax Act, 1957, under G.O. 606 dated April 9, 1981.
7. No other point has been argued in this writ petition by the learned Government Pleader.
8. The writ petition is allowed as indicated above. No costs. Advocate's fee Rs. 500.
9. Writ petition allowed.