Jai Ambe Concrete Industries vs. The State Of Bihar
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The petitioner, Jai Ambe Concrete Industries, filed a writ petition challenging the rejection of its claim for reimbursement of VAT/ET/SGST under the Bihar Industrial Incentive Policy, 2011. The rejection was based on the ground that the petitioner commenced commercial production before obtaining approval from the State Investment Promotion Board (SIPB). The petitioner sought a writ of certiorari to set aside the impugned orders and a writ of mandamus directing the respondents to pay the entitled incentives. The petitioner argued that the policy did not stipulate that SIPB approval was a prerequisite for commencing production. The respondents contended that starting production prior to SIPB approval violated the policy terms and conditions, citing a similar rejection for M/s Jagaran Prakash Limited.
Held
The Court held that the rejection of the petitioner's claim was arbitrary and without legal basis. The Court found that the Bihar Industrial Incentive Policy, 2011, did not explicitly prohibit commencing production before SIPB approval, nor did it state that such an act would disentitle an applicant from receiving incentives. The Court noted that the petitioner's proposal was eventually approved by the SIPB on 31.08.2015, and commercial production had commenced on 01.04.2015. The Court reasoned that at most, incentives could be granted from the date of SIPB approval, but denying them entirely was not justified. The impugned order was set aside. The authorities were directed to grant the incentives as envisaged under the policy from the date of SIPB approval and make the necessary payments to the petitioner within three months of receiving the order. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the commencement of commercial production by the petitioner prior to the approval of its proposal by the State Investment Promotion Board (SIPB) disentitles it from claiming incentives under the Bihar Industrial Incentive Policy, 2011, as argued by the petitioner and the respondents? 2. Whether the rejection of the petitioner's claim for reimbursement of VAT/ET/SGST by the authorities is arbitrary and contrary to the spirit and provisions of the Bihar Industrial Incentive Policy, 2011, as contended by the petitioner? Petitioner's Arguments: The petitioner argued that the Bihar Industrial Incentive Policy, 2011, did not contain any provision mandating that SIPB approval must be obtained before commencing commercial production. They asserted that the authorities' stand was arbitrary, illegal, and contrary to the policy's objectives. The petitioner relied on the fact that their proposal was eventually approved by the SIPB on 31.08.2015. Respondents' Arguments: The respondents argued that the petitioner violated the terms and conditions of the policy by starting production before obtaining prior approval from the SIPB. They contended that this act disentitled the petitioner from receiving any incentives under the policy and cited the rejection of M/s Jagaran Prakash Limited's case as precedent.
Sections Cited
Bihar Industrial Incentive Policy, 2011
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Cause title — parties, addresses and appearances
ORAL JUDGMENT Date : 16-08-2023 The present writ petition is filed for the following relief(s):- i. For issuing a writ of certiorari or any other appropriate writ setting aside the email dated 14.10.2011 and the attachment therein whereby and whereunder the claim of the petitioner under the Bihar Industrial Incentive Policy 2011 has been rejected on the 2/7 ground that the proposal of the petitioner was accepted by the State Investment Promotion Board after the date of commercial production of the unit. ii. For issuing writ of certiorari or any other appropriate writ setting aside the letter dated 23.11.2017 bearing memo No.3473 (to the extent it relates to the petitioner) whereby and whereunder the claim of the petitioner under the Bihar Industrial Incentive Policy 2011 had been rejected on the ground of proposal of the petitioner not having approval of the competent authority. iii. For issuing writ of mandamus directing the respondents to pay the petitioner its entitlement under the head of reimbursement of VAT/ET/SGST paid under the Bihar Industrial Incentive Policy, 2011 in cases of VAT/ET/SGST reimbursement. iv. For issuing appropriate writ declaring that the payments to the Petitioner as per entitlement for post- production
incentives
such as Reimbursement for VAT/ET/GST paid cannot be kept pending or denied and has to be timely paid to Petitioner. v. For holding that once the proposal of the investment has been accepted and petitioner is declared 3/7 entitled under the Policy then the Respondents cannot interfere with the disbursal of the reimbursement/subsidy amount to the Petitioner. vi. For holding that the Respondents erred by not releasing full Reimbursements and subsides amount given the fact that they hold no authoirty to refuse/stop/interfere, once proposal of investment has been accepted by the State Investment Promotion Board (SIPB). Vii. For holding that it is the duty of the Respondents to timely release the payments for reimbursement under the head of VAT/GST every time the petitioner submits an application for the same and the petitioner need not go through the unnecessary technicalities and procedures again. Vii. For holding that the Respondents cannot make the Petitioner run from pillar to post for reimbursement/subsidy once it is found entitled. ix. For any relies/ direction/directions for which the petitioner is entitled may be given.
Learned counsel for the petitioner has stated that the impugned order is passed by the authority concerned solely 4/7 on the ground that the petitioner has started production even before the approval has been granted by the State Investment Promotion Board (SIPB).
Learned counsel has stated that under the Bihar Industrial Incentive Policy, 2011, the petitioner’s entitlement for re-imbursement of VAT/ET/SGST was denied on the ground that the petitioner has started commercial production even before the approval by SIPB and the authorities have rejected the case of the petitioner.
Learned counsel has stated that there is nothing under the regulation which states that the approval of the SIPB is a condition precedent for starting the commercial production. That the stand taken by the authorities is not only arbitrary, bad and illegal but also contrary to the scheme floated by the State of Bihar under the Bihar Industrial Incentive Policy, 2011, and therefore, prayed this Hon’ble Court to allow the present writ petition and give a direction to the authorities concerned for granting the incentives under the Bihar Industrial Incentives policy, 2011. 5. Per contra, the learned counsel appearing on behalf of the respondents has vehemently opposed the prayer of this writ petition and has stated that the petitioner has violated 5/7 the terms and conditions of the policy.
Learned counsel has stated that the petitioner has not taken prior approval of the SIPB before starting the production. The act of the petitioner in starting the production even before the approval was granted is in violation of the incentive policy, and therefore, the petitioner is not entitled to any incentive as envisaged under the Incentive Policy, 2011. Further, it is stated under similar circumstances the authorities have rejected the case of M/s Jagaran Prakash Limited, Gaya after taking opinion of the Law Department, and therefore, the petitioner’s case which is also similar has also been rejected. Learned counsel for the respondents has prayed to dismiss the present writ petition.
Admittedly, in the present case, the State of Bihar has floated Bihar Industrial Incentive Policy, 2011 to attract investments in the State. The petitioner, admittedly, has applied to the Competent Authority i.e. SIPB and was granted approval on 31.08.2015 and as per the said policy, the petitioner is entitled for re-imbursement of VAT/ET/SGST. But, the case of the petitioner has been rejected on the sole ground that the petitioner has started commercial production even before the grant of approval by SIPB. The said stand taken by the official 6/7 respondents appears to be an arbitrary and frivolous one. Admittedly the authorities have invited investors/ industrialists to invest in the State of Bihar by floating the Bihar Industrial Incentive Policy, 2011 and under the scheme some incentives have being offered to the Businessmen who have established their industries. The stand taken by the respondent that the petitioner has started production even before the grant of approval is without any legal basis. The policy does not lay any guidelines or restrictions on the industrialists that the production cannot be started before the approval by SIPB is granted and does not state that any person who starts production without getting the necessary approvals from SIPB is disentitled to the incentives. Admittedly in the present case, the approval was granted on 31.08.2015 and it is the case of the respondents that the commercial production has started on 01.04.2015 merely because the production is started the incentive under the scheme cannot be disallowed. At the most, the incentives can be granted from the date of the approval of SIPB but the authorities cannot deny the incentives under the scheme as a whole.
Having regard to the above made submissions, the court does not find any valid reasons for upholding the impugned order passed by the authorities and the same is set 7/7 aside. The authorities are directed to grant the incentives as envisaged under the Bihar Industrial Incentive Policy, 2011 from the date of approval of the SIPB and make necessary payments to the petitioner as per the entitlement within a period of three months from the date of receipt of the copy of this order.
gauravkr/- (A. Abhishek Reddy , J) AFR/NAFR NAFR CAV DATE N/A Uploading Date 24.08.2023 Transmission Date N/A
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.