IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) FRIDAY, THE FOURTEENTH DAY OF NOVEMBER TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION NO:13776 of 2002 Between: Raghu Milk Products Pvt.Ltd., Rep.by its Managing Director, M.B.V.Raghavaiah, Nidamanuuru, Vijayawada Rural, Krishna District. ..... PETITIONER AND 1 General Manager, District Industries Centre, Krishna, Vijayawada-7. 2 Commissioner of Industries, Govt. of A.P., Chirag Ali Lane, Abids, Hyderabad. 3 Secretary, Industries, Govt. of A.P., Hyderabad. .....RESPONDENTS Counsel for the Petitioner:MR.V.S.RAJU Counsel for the Respondents:AGP FOR INDUSTRIES & COMMERCE The Court made the following : ORDER: This writ petition is filed for a writ of mandamus to set aside orders, dated 04.06.2002 and 18.05.2002 passed by respondent Nos.1 and 2 respectively. Heard Sri V.S.Raju, learned counsel for the petitioner and the learned Assistant Government Pleader for Industries. The dispute pertains to the petitioner’s claim for the incentives pertaining to investment subsidy as envisaged in G.O.Ms.No.117, dated 17.03.1993. The petitioner established a milk processing plant at Nidamanuru, Vijayawada Rural, Krishna District. Under the said G.O., the State Government provided for various incentives including investment subsidy in respect of the new industrial units. Clause 4.4 of the said G.O. defined “New Industrial Unit” as, a unit, which commenced commercial production from 03.10.1992 to 31.03.1997. Clause 22.2 of the said G.O. provides that if the industrial unit goes out of production within five years from the date of commencement of commercial production, except in case where the unit remains out of production for short period up to six months due to the reasons beyond it’s control, such as, shortage of raw material, power and change of management etc., investment subsidy granted to an industrial unit shall be liable to be recovered. Respondent No.1 - the General Manager, District Industries Centre, Vijayawada, issued the eligibility certificate in favour of the petitioner on 27.03.1997. Based on the said certificate, the Additional Director of Industries (V) issued proceedings, dated 25.01.2002, sanctioning Capital Investment Subsidy to the petitioner to the extent of Rs.9,40,950/-. When the petitioner claimed payment of the said amount, respondent No.2 informed the petitioner vide his letter, dated 18.05.2002 that respondent No.1 inspected the petitioner unit and furnished a report stating that the unit has been found closed and no responsible person was available at the premises of the unit to give information on the status of working of the unit. On that ground, the petitioner’s request for release of the investment subsidy, which was already sanctioned, was rejected. A few days later, on 04.06.2002, permanent registration of the petitioner unit was cancelled by respondent No.1. The learned counsel for the petitioner submitted that respondent Nos.1 and 2 have not considered the material, which clearly shows that the petitioner unit had been working and that it was never closed. He also invited my attention to the Advocate Commissioner’s report, called for by this Court pending the writ petition, wherein it was stated that the petitioner unit was functioning and supplying milk in milk cans by engaging four workers and one Supervisor. The Advocate Commissioner also found the existence of 15 items of machinery in the unit. On being satisfied that the petitioner unit satisfied the requirement under G.O.Ms.No.117, the investment subsidy was sanctioned. By the time respondent No.2 rejected the petitioner’s request for release of the subsidy amount, the Registration Certificate of the petitioner unit was not cancelled by respondent No.1. Respondent No.2 ought not to have merely relied upon the report of respondent No.1 in declining to release the subsidy amount, when the order sanctioning subsidy amount was in force and not rendered invalid or cancelled. Even while cancelling the registration certificate, respondent No.1 has not given any reasons except saying that the contents of the explanation are not correct. Undoubtedly, the action of respondent Nos.1 and 2 in cancelling the registration certificate and declining to release the investment subsidy results in serious adverse civil consequences to the petitioner. Both of them have not applied their mind and given detailed reasons in support of the orders passed by them. The material filed by the petitioner, such as, sales tax returns for a continuous period of five years after commercial production prima facie shows that the petitioner unit was not completely closed. The respondents ought to have considered this material along with other material filed by the petitioner before passing the impugned orders. For the above-mentioned reasons, the writ petition is allowed and the impugned orders are quashed with the direction to respondent Nos.1 and 2 to pass fresh orders after giving the petitioner an opportunity of personal hearing and filing appropriate material to support it’s plea that it is entitled to release of investment subsidy and continue it’s registration. C.V.NAGARJUNA REDDY, J 14th NOVEMBER, 2008. kvni