Alagiriswami, J. - (1.) The appeal and the writ petitions raise the question of interpretation of Section 21 (3) of the Andhra Pradesh Sugarcane (Regulation of Supply and Purchase). Act, 1961. The appellant and the petitioners are sugar factories in the State of Andhra Pradesh. They applied under the provisions of Section 21 (3) for exemption from the tax payable under sub-section (1) of that section on the ground that they, having substantially expanded, were entitled, to the extent of such expansion, to exemption from the payment of tax. The Government of Andhra Pradesh having refused that request these writ petitions have been filed before this Court contending that the decision denying them exemption is contrary to Section 21 (3) which does not countenance any classification and that the classification adopted is based on no nexus to the object of the Act. The appeal is against the decision of the Andhra Pradesh High Court dismissing a writ petition filed for similar relief.
(2.) Two contentions, one regarding promissory estoppel and another regarding the exemption given to Sarvaraya Sugars Ltd. were not pressed before this Court. Though in the beginning it was urged that the grant of exemption under the section was obligatory, later the only contention raised was that the application of each of the factories should have considered on its merits and the State should not have fettered its discretion by laying down a policy of granting exemption only to co-operative sugar factories and that the policy had no nexus to the object of the Act.
(3.) Section 21 reads as follows: "21 (1) The Government may, by notification levy a tax at such rate not exceeding five rupees per metric tonne as may be prescribed on the purchase of cane required for use, consumption or sale in a factory. (2) The Government may, by notification, remit in whole or in part such tax in respect of cane used or intended to be used in a factory for any purpose specified in such notification. (3) The Government may, by notification exempt from the payment of tax under this section - (a) any new factory for a period not exceeding three years from the date on which it commences crushing of cane; (b) any factory which, in the opinion of the Government, has substantially expanded, to the extent of such expansion, for a period not exceeding two years from the date of completion of the expansion. (4) The tax payable under sub-section (1) shall be levied and collected from the occupier of the factory in such manner and by such authority as may be prescribed. (5) Arrears of tax shall carry interest at the rate of nine per cent per annum. (6) If the tax under this section together with the interest, if any, due thereon, is not paid by the occupier of a factory within the prescribed time, it shall be recoverable from him as an arrear of land revenue.";