ISSUE:
Whether the Govt. of Andhra Pradesh was justified in refusing exemption from tax to sugar factories by adopting a policy to grant exemption only to cooperative sector sugar factories?
RULE:
A public authority with statutory discretion can adopt general rules or policies to guide its discretion, provided such rules are legally relevant to its powers and consistent with the enabling legislation's purpose.
While exercising statutory discretion, authorities must not shut their ears to applications or completely disable themselves from considering individual cases on merit.
The policy or classification adopted by an authority must have a rational nexus to the object of the law and cannot be arbitrary.