GOKAL CHAND MITAL, CJ.

( 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 and Fertilizers, Department of Fertilizers and 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,-

"consequent upon issue of Government of India, Ministry of Agriculture, Deptt. of Agriculture and Co-operation, telegram No. 1- 9/82-FA. (GP) dated 22nd May, 1982 fixing a uniform retail price of Single Super Phosphate with effect from 23rd May, 1982, it has become necessary to replace the scheme for payment of uniform flat subsidy of Rs. 1,250. 00 per MT of P205 by a scheme for payment of differential rate of subsidy based on the ex-factory price worked out separately for each manufacturing unit. To enable this office to work out the ex-factory price in respect of SSP manufactured in your unit, information in the enclosed proforma may please be furnished to this office urgently, latest by fifteenth July, 1982. The information should be furnished separately for the period 1. 10. 81-31. 12. 81 and 1. 1. 82-31. 3. 82 duly certified by a Chartered Accountant or your Statutory Auditors. "

( 4 ) IT would be seen from the above mentioned circular letter that each of the manufacturing unit was informed that a scheme for payment of differential rate of subsidy in place of the earlier uniform flat subsidy was being introduced. The differential rate of subsidy was to depend upon the ex-factory price worked out by Fertilizers Industries Co-operative Committee of the Government (for short called ficc ) separately for each manufacturing unit. The method by which the ex- factory price was to be worked out for each of the manufacturing unit was not indicated in the circular letter.

( 5 ) THE Supreme Court in a recent judgment in Union of India vs. Surya Phosphate Limited JT 1992 (4) SC 481, while interpretting the abovementioned circular letter dated 19th June, 1992, has held that the ex-factory price is not to be worked out on the basis of the actual cost shown by the manufaturers but on. the basis of the method adopted by FICC which was on a normative basis as recommended by the working group and accepted by the Government of India. It has further been held that manufacturing units cannot be paid the differential rate of subsidy on the basis of the unwarranted costs.

( 6 ) PRIOR to the issue of the impugn

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