Gujarat High Court puts stay on government's recover orders to GSFC

Gujarat State Fertilizers & Chemicals Ltd has approached Gujarat High Court against Department of Fertilizers, Union Ministry of Chemicals and Fertilizers, for issuing an order on dated January 6, 2014 to recover of ‘undue benefit’ earned by GSFC in production of P&K fertilisers using cheap domestic gas as feedstock.
 
GSFC has informed BSE that the company has challenged the Office Memorandum (OM) bearing No. :23011/5/2012-MRP dated January 06, 2014 issued by Department of Fertilizers, Ministry of Chemicals and Fertilizers before the Gujarat High Court for recovery of so called undue benefits to the P&K fertiliser producing companies for use of cheap domestic gas in the production of P&K fertilisers from the date of issue of the said OM.
 
GSFC added that the implementation of the said memorandum has been stayed by the Gujarat High Court.
 
According to GSFC, the decision of the Department of Fertilizers is in complete contrast/contradiction with the extant Nutrient Based Subsidy (NBS) Policy under which fertiliser companies get the subsidy at a fixed amount irrespective of the cost of fertilisers they produce. The company has contested the matter from the standpoint of adherence to the rule of law.
 
On January 6, 2014, the complex fertiliser manufacturers producing ammonia using domestic gas had received an OM from Department of Fertilizers (DoF) which states that, pending finalisation of the guidelines on recovery, it has been decided to recover undue benefit to the company on account of usage of cheap domestic gas in the production of P&K fertilisers from the date of the OM (Jan 6, 2014), subject to reconciliation after final decision by EGoM.