N.K.sodhi, J.

1. Whether the items manufactured by the respondent-company, namely, "Monocrotophos (technical) and Dichlorvos (technical)" are covered by entry 43 of the negative list as contained in Schedule III to the Haryana General Sales Tax Rules, 1975 (for short "the Rules") so as to disentitle the company from claiming sales tax exemption under Rule 28A of the Rules is the primary question which arises for our consideration in this petition filed under Article 226 of the Constitution.

2. M/s. Anil Pesticides Limited (hereinafter referred to as "the company") is a company incorporated under the provisions of the Companies Act, 1956 arid during the year 1994-1995 it set up an industrial unit at Village Badgodam Tehsil Kalka District Panchkula. The company is manufacturing amongst others "Monocrotophos and Dichlorvos (technical)". Since the company was a newly set up industrial unit, it claimed sales tax exemption in terms of the industrial policy of the Sate of Haryana and applied for the grant of an "eligibility certificate" under Rule 28A of the Rules. This application was considered by the Higher Level Screening Committee (for short, "the Committee") in its 59th meeting held on August 25, 1999. The Committee observed that the items of manufacture, viz., i.e., Monocrotophos (technical) and Dichlorvos (technical)" were covered under the category of "pesticides" which fall in entry 43 of the negative list dated December 16, 1996 and, therefore, the application of the company for the grant of benefit of sales tax exemption was rejected. Feeling aggrieved by this decision, the company filed an appeal before the Commissioner and Secretary to Government of Haryana, Industries Department who by his order dated May 21, 2001 allowed the same and held that the items manufactured by the company do not fall in the category of "pesticides and formulations" as referred to in entry 43 of the negative list and that they are chemicals entitling the company to claim sales tax benefit. He ordered that the "eligibility certificate" as applied for by the company be issued. It is against this order that the present petition has been filed by the State of Haryana which is the petitioner before us.

3. An eligible industrial unit, short of other details with which we are not concerned, means a new industrial unit which is not included in Schedule III appended to the Rules. It is not in dispute that the company is a new industrial unit which was set up in the year 1994-1995 and went into commercial production with effect from February 18, 1997. It would be entitled to an "eligibility certificate" under the Rules to enable it to claim sales tax exemption provided the items manufactured by it do not fall in Schedule III to the Rules. Entry 43 of Schedule III with which we are concerned reads as under:

"43. Pesticides manufacturing and formulations."

This entry in the negative list was brought in Schedule III for the first time with effect from December 16, 1996 by the Haryana General Sales Tax (Fifth Amendment) Rules, 1996. While adding this entry to the Schedule the State Government also added Note 2 in the Schedule which reads as under:

"Note 2.--The industrial units in which investment has been made up to 25 per cent of the anticipated cost of the project and which have been included in the above list for the first time shall be entitled to the sales tax benefit related to the extent of investment made up to the 3rd of January, 1996. Only those assets will be included in the fixed capital investment which have been installed or erected at site and have been paid for. The anticipated cost of the project will be taken on the basis of documents furnished to a financial institution or bank for drawing a loan and which have been accepted by the financial institution or bank concerned for sanction of loan."

4. The Rules were again amended on May 28, 1997 and Note 2 which was added in the year 1996 was omitted with retrospective effect by the H