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2014 (5) TMI 176 - HC - VAT and Sales TaxExemption from Tax - Govt. Circular - Sale of diesel to Fishermen on par with the Government outlets – Colorable exercise of power – Jurisdiction under Article 226 – Reasonable Classification – Discriminatory & Arbitrary Actions – Article 14 - Held that:- By G.O.Ms.No.170 and G.O.M.s.No.130, the Government granted exemption from tax on sale of diesel to fishermen though outlets run by TNFDC, TAFCOFED and Authorised Private Dealers - There is no differentiation in the Government Order - The beneficiary under the Government Orders is the fishermen - If no exemption is granted, they have to purchase diesel at a higher rate - In both the Government Orders referred above, the exemption was also made applicable to Authorised Private Dealers - Therefore, any restriction at the point of supply can only be termed as arbitrary. Again in 2005, G.O.(D)No.110, Animal Husbandry and Fisheries Department was issued, wherein the Government had considered the need to grant exemption from sales tax to sale of diesel to fishermen by opening new outlets and even there no such restriction was contemplated - When the Government has not imposed any restriction in the Government Orders, the Committee has no right to give such findings that too without any reasoning - The Committee was only authorised to identify the private outlets which can be permitted to sell diesel to fishermen with tax exemption - However, it has gone beyond the scope of reference and imposed the conditions which according to us is arbitrary, as the Committee restricted supply in favour of TNFDC and TAFCOFED outlets - No doubt the scope of judicial review in the matters of policy decision is limited - However, when there is colourable exercise of power under the guise of reasonable restriction, this Court under Article 226 of the Constitution of India can very well interfere - For a classification to be reasonable, the conditions under which the classification is made must be different - When the conditions that apply to different parties are one and the same, any restriction on one party can only be termed as arbitrary and erroneous. Similarly, as rightly observed by the learned single Judge, when such restrictions were not imposed by GO, under the guise of memo / recommendations, the respondent cannot impose such restrictions - From the facts it is also seen that there is more demand in the areas where Authorised Private Dealers operate and the Government outlets are unable to sell their indented quota - Therefore, the argument that when sale is made, the revenue goes directly to the Government Agency cannot be applicable to the present facts - Because of the restriction imposed, the objects of the Government Orders are defeated - Not even a single case where there is misuse of the exemption in the sale made by Authorised Private Outlets is reported before this Court - Therefore, mere apprehension cannot be the ground for imposing restrictions, not contemplated under the Government Orders - The indent itself contains check and balance measures - Thus, concurring with the view of the learned single Judge and keeping in mind the public interest, it is hold that the actions of the appellants are discriminatory and arbitrary and affirm the Common order dated 15.06.2010 - In the result, these Writ Appeals are dismissed - Consequently, connected miscellaneous petitions are closed – Decided against Revenue.
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