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Issues: (i) Whether the State Government had authority to issue the comprehensive Government Order dated 26/27 November 1993 withdrawing tax exemptions in view of acute power shortage, and whether that order applied across the board to units that became power intensive units; (ii) whether the Government Order dated 24 November 1998 modifying the negative list was clarificatory and therefore not confined to prospective operation.
Issue (i): Whether the State Government had authority to issue the comprehensive Government Order dated 26/27 November 1993 withdrawing tax exemptions in view of acute power shortage, and whether that order applied across the board to units that became power intensive units.
Analysis: The State could act under its constitutional executive power to issue a comprehensive order in aid of its policy response to acute power shortage. The Court proceeded on the basis that the order withdrawing concessions and tax exemption was applicable to the facts and found no infirmity in the issuance of the comprehensive Government Order. It further held that the order operated across the board against units which came within the description of power intensive units.
Conclusion: The challenge to the State's authority and to the general applicability of the comprehensive Government Order failed, and the issue was decided in favour of Revenue.
Issue (ii): Whether the Government Order dated 24 November 1998 modifying the negative list was clarificatory and therefore not confined to prospective operation.
Analysis: The later order was read as a modification of the earlier policy governing the negative list. On that basis, the Court held that the order did not merely operate prospectively but clarified the earlier regime. The contention that the order was purely prospective was rejected.
Conclusion: The Government Order dated 24 November 1998 was held to be clarificatory, and the objection to its retrospective effect failed, in favour of Revenue.
Final Conclusion: The appeals succeeded to the extent that the State's policy withdrawal of tax concessions was upheld in principle, but the matters were remitted for consideration of unresolved issues, leaving the controversy finally undecided on the remitted questions.
Ratio Decidendi: A State may, in exercise of its executive power, issue a comprehensive policy order withdrawing tax concessions, and a later order that merely clarifies or modifies the earlier regime can operate as part of that scheme rather than as a purely prospective enactment.
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