RAM GANGA FERTILIZER Vs. UNION OF INDIA

JUDGEMENT

(1.) In this writ petition the petitioners have challenged the orders dated 1st November, 1991 and 9th January, 1992 issued by the Government of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers & Chemicals fixing a ceiling on subsidy payable on single super phosphate, hereinafter referred to as 'SSP'.

(2.) The facts of the case briefly stated are that the petitioners are manufacturers of SSP which is one of the key fertilizers used for agriculture. Prior to 1982 SSP was under informal price control which was made efffective from 16th March, 1976. A flat subsidy of Rs.200.00 per tonne was granted by the Government of India while the consumer price for individual unit was fixed by the Fertilizers Association of India in accordance with the formula agreed to with the Government of India after deducting the said subsidy. However, different retail price was fixed for different manufacturers and for different marketing zones of the same manufacturers. The result was that there was no uniformity in the price of SSP.

(3.) The working group of review of subsidy inrespect of SSP examined all the aspects and gave a report in the year 1980. The group suggested a formula for determining the variable costs. While accepting the aforesaid recommendations, the Government of India made some changes in it. The new method of payment of subsidy and formula of working out the ex-factory price as suggested by the. group and modified by the Government came into effect on 23rd May, 1982. . Pursuant to the introduction of the new method of payment of subsidy, the Government sent a circular letter dated 19th June, 1982 to all manufacturers of SSP informing them about the decision of the Government to work out differential subsidy payable to different fertilizers units. The said circular is reproduced hereinbelow,-