Locus standi and judicial restraint in fiscal policy: challenge to sales tax deferment failed for lack of standing and no arbitrariness.

A petitioner with no direct or legally cognisable interest lacked locus standi to maintain a public interest challenge to sales tax deferment granted to an industrial unit. The High Court also held that the Government's extension of deferment, made to support revival of a sick unit, protect employment, and further industrial development, was a bona fide fiscal and policy decision. In the absence of mala fides, illegality, or arbitrariness, the court would not interfere in judicial review. The writ petition was therefore rejected and the deferment order sustained.

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Issues: (i) Whether the petitioner had locus standi to maintain the public interest litigation challenging the grant of sales tax deferment; (ii) whether the Government's order extending sales tax deferment in favour of the industrial unit was arbitrary, ultra vires, or liable to interference in judicial review.

Issue (i): Whether the petitioner had locus standi to maintain the public interest litigation challenging the grant of sales tax deferment.

Analysis: The challenge was brought as a public interest petition, but the record showed that the petitioner had no personal stake in the subject matter. The Court found that the petitioner, though a chartered accountant-cum-advocate, was not shown to have a sufficient direct or legally cognisable interest in the grant of incentive to the industrial unit.

Conclusion: The petitioner lacked locus standi to maintain the writ petition.

Issue (ii): Whether the Government's order extending sales tax deferment in favour of the industrial unit was arbitrary, ultra vires, or liable to interference in judicial review.

Analysis: The Government had extended the deferment after considering the substantial investment made for revival of the sick unit, protection of employment of about 900 workmen, payment of statutory dues, and the broader public interest in industrial development. The Court held that tax-based incentives and deferment measures are within governmental policy powers, and that courts should be slow to interfere with such socio-economic policy decisions in the absence of mala fides or illegality. No mala fides were found in the impugned order.

Conclusion: The Government's decision was upheld and no interference was warranted.

Final Conclusion: The writ petition failed, and the challenge to the sales tax deferment order was rejected on grounds of lack of standing and absence of any legal basis for judicial interference.

Ratio Decidendi: Courts will not interfere with a bona fide fiscal or industrial policy decision granting tax incentives unless illegality, arbitrariness, or mala fides are established, and a petitioner without sufficient interest cannot maintain such a challenge.

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