Power sops only for co-op sugar units arbitrary: HC

The court was hearing a petition moved by Ravalgaon Sugar Farm and two other private-sector sugar factories challenging a notification issued by the state government in April 2000. As per the notification,the government withdrew the exemption of electricity duty granted to private-sector sugar factories,but decided to continue with the same granted to co-operative factories.

Private sugar factories contended that the withdrawal of exemption was discriminatory as it favoured co-operative sector,and thus violated the constitutional right to equality. However,in 2005,while this petition was pending,the state decided to revert to an earlier policy of granting exemption to all captive power plants.

But petitioners demanded that they must not be made to pay the duty during the period of 2001-2005.

A division bench led by Justice B H Marlapalle upheld the private sugar factories’ case last month. The court said,“if the state had withdrawn the exemption for all the industries,it could have been a different matter. But it is evident that the state government continued the exemption of electricity duty selectively and only to the co-operative sector.”

Further,the court obeserved that units in the co-operative sector “are commonly known to be the political power centres in rural Maharashtra “.

However,the state government argued that exemption to other sectors has been withdrawn because of “financial crunch”. But the court noted that no reasons have been set out by the state government as to why it thought it fit to deny such exemption only during the intervening period,” the court said.