Expansion of industry to Pondicherry to be construed as new unit.

The prayer is for a mandamus to the respondents to sanction all the benefits conferred on new industries in backward areas brought into effect by the Government of Pondicherry, vide letter No.16(2)/82-SSI(II)/SSI(P), dated 9.12.1985 to the petitioner's new unit with an installed capacity of 1,40,000 tonnes per annum on the following allegations:

The petitioner, a company incorporated under the Companies Act, 1956, has been carrying on the business of producing steel in its premises PIPDIC Industrial Estate at Mettupalayam in Pondicherry from September, 1987, its first unit having a capacity of 10,000 tonnes per annum and its second unit a capacity of 1,40,000 tonnes per annum of steel ingots and billets. There was a scheme brought into effect by the Government of Pondicherry following letter No.16(23)//SSI(II)/SSI(P), dated 9.12.1985 of the Government of India, Ministry of Industry, Department of Industrial Development, as per the terms of which industries set up in backward areas were eligible for various benefits such as power subsidy, sales tax exemption and cash subsidy to the tune of 15% of capital investment. The power subsidy to industries, both HT and LT was for a period of five years from the date of commencement of production on a tapering basis, i.e., 33-/3% for the first three years, 20% for the fourth year and 10% for the fifth year. The petitioner with a view to avail the benefits of the said scheme, set up a new industrial unit at the Industrial Estate, Pondicherry. It was sanctioned 5 MVA power in September, 1985, commenced commercial production from September, 1987 and it enjoyed the benefits under the subsidy scheme. On 30th June, 1987 the petitioner with a view to instal fresh capacity on a large scale, obtained feasibility from the Electricity Department, Pondicherry Government (ED) for supply of additional power of 20.05 MVA. The Electricity Department stated that supply would be made available only in or about 1988 and in any event, only after 18 to 24 months from the date of submission of a firm application. The Government of India issued an Industrial Licence recognising the setting up of its plant by the petitioner to produce 10,000 tonnes per annum of steel ingots. On 17.1.1990 the Government of India gave approval to the petitioner installing fresh capacity of 1,40,00 tonnes per annum raising the total capacity of the petitioner's unit to 1,50,000 tonnes per annum, which was in pursuance of the scheme of minimum economic scale of operation contained in Press Note No.18(//88-LP), dated 13.7.1989 issued by the Government of India. The petitioner obtained the necessary Panchayat Permit for increase of power load to 25 MVA placed firm orders for a substantial part of the plant and machinery for the new unit and also constructed a new factory building of 50,000 sq.ft. in the additional area of 3 acres acquired for the new and larger unit. The petitioner purchased a new 2 x 12 metric tonnes furnace, continuous casting machine, heavy cranes, etc. and installed them. A new 110 KVA Sub Station has been commissioned. The product manufactured in the new unit is a new product called billet, which is different from ingots produced in the old unit. Billet has a separate classification under Excise Classifications. On 11.2.1991 the Government of Pondicherry, Development Department (Industries) reviewed the existing power subsidy scheme dated 9.12.1985 and issued a fresh Notification G.O.Ms.No.9/91-IND, dated 11.2.1991 whereby all industries were excluded from the power subsidy scheme except Small Scale Industries consuming low tension power. However, large and medium industries having power feasibility certificate issued prior to 1st March, 1991 and having taken effective steps as stipulated in the said notification would continue to be governed by the power subsidy scheme dated 9.12.1985 as hitherto.

“The effective steps” stipulated are as follows:

(a) 60% or more of the issued capital of the industrial unit ha