P.R. BORKAR, J.

Heard Mr. P. M. Shah, learned Senior Counsel holding for Mr. R. R. Mantri, advocate for the petitioner and Mr. K. G. Patil, learned A.G.P. for the respondents.

The petitioner challenges the Government Circular dated 23.3.2000 which provides 31.12.2000 as cut off date and seeks its quashing and setting aside with further direction that the respondents should grant the Sales Tax Incentive under package scheme of 1993 to the petitioner Company and to further restrain the respondents from recovering any sales tax from the petitioners.

Petitioner no. 1 is a Company duly incorporated under the provisions of the Companies Act, 1956 as a Private Limited Company. Petitioner no. 2 is its Director having authority to sign and act on it's behalf. It is case of the petitioners that in order to achieve dispersal of industries out of Mumbai, Thane, Pune belt and to attract them in the under-developed and developing areas of the State, respondent no. 1 offered packages of incentives to new units and for expansion of existing units in the specified region of the State. The original package of 1964 came to be amended from time to time and ultimately in the year 1993 a new package of incentives scheme was introduced by respondent no. 1. Under the said scheme, various regions were identified for grant of various types of incentives. Jalgaon city and district has also been included in it.

Petitioner no. 1 is a small scale industry engaged in manufacture of PVC pipes and fittings situated at M.I.D.C. area Jalgaon. The above said package scheme was implemented in Jalgaon district through respondent no. 3. Besides other benefits under the scheme, sales tax exemption and other benefits including special capital incentives are conferred upon the specified industries in which the petitioner Company is included. The term S.C.I. benefits or incentives means special capital incentives including exemption and refund of octroi, etc. The term S.T.I. incentives means exemption from sales tax, etc. upto 120 per cent of fixed investment of the unit. In this case, there is no dispute regarding eligibility of the petitioner for S.C.I. benefits or incentives. The dispute is only in respect of S.T.I. incentives and eligibility of the petitioner Company for them.

It is case of the petitioners that earlier the petitioner Company was styled as, "M/s. Shri Pulp and Paper" and had obtained Plot No. V-12 from the M.I.D.C., Jalgaon. At that time, petitioner Company was not registered. The matter was being processed. The petitioners desired to have the benefit of the scheme. On 28.3.2000, an application for letter of intent for eligibility for incentives was forwarded to respondent no. 3. After processing the same, a letter of intent is issued by respondent no. 3 - District Industries Centre. The date by which the particular unit has to start functioning and actual production is also fixed by respondent no. 3 in advance. The unit is expected to take effective steps by such date to get benefits of package scheme. After testing the eligibility of the petitioner on 30.12.2000 respondent no. 3 issued the letter of intent directing that if effective steps are not taken by 31.3.2002 to install and start production, the benefit of package scheme of 1993 shall not be given to the petitioners and the letter of intent shall be rendered invalid. Petitioner no. 1 - Private Limited Company was registered by present name on 8.2.2002 and due permission of respondent no. 1 was obtained regarding the same. Thereafter the petitioners took various steps for acquisition, installation of machinery, and creating other infrastructure for starting production. In due course it obtained permission from the Electrical Inspector to install 140 KV Generator. By 28.3.2002, the petitioners obtained necessary consent from the Maharashtra Pollution Control Board. By 26.2.2002 the petitioners started purchasing raw material. It had obtained loan from Jalgaon Janata Bank. The producti