2004 (11) TMI 320 - SUPREME COURT

Legality of the G.O. Ms. No. 989 dated September 1, 1988, directing discontinuance of purchase tax exemption in case of mills which exceeded the ceiling of Rs. 300 lakhs during the period of five years, and Government letter dated December 28, 1988, which made the aforesaid G.O. Ms. No. 989 of September 1, 1988, operative retrospectively from April 1, 1988

Held that:- Decision of the High Court by placing reliance on the files to hold that the withdrawal was justified, is not tenable in law and in the fitness of things, the High Court should hear the matter afresh and take a decision on those two is- sues. It is made clear that we have not expressed any opinion on those issues on the facts of the present case.

It is to be noted that no privilege was claimed from production of the file as the files were produced before the High Court and in fact the High Court referred to the materials on the files to affirm State's action.

We direct that the State Government, if it so chooses, shall file its further counter-affidavits before the High Court within six weeks from today indicating the reasons which warranted the withdrawal of the benefits extended. The plea of the appellants regarding legitimate expectation shall be considered by the High Court in the light of the materials to be placed by the respondents by affidavits as directed above. Another point which was specifically raised before the High Court but has not been dealt by it is the legality of the action in directing retrospective withdrawal of the benefit by a letter of the Government. Whether the same is permissible in law has to be decided by the High Court.