M/S Prakash Udyog vs. The State Of Bihar

Facts

The petitioner, M/s Prakash Udyog, a proprietorship firm, sought a writ of mandamus from the Patna High Court to compel the respondents, various departments of the Bihar Government, to disburse VAT/GST reimbursement subsidy. The petitioner claimed entitlement based on the Bihar Industrial Incentive Policy, 2006 and 2011. The respondents, through learned G.P. 7, stated that due to a policy change, the petitioner was required to apply online for reimbursement, which they had not done. The petitioner's counsel indicated they would take the necessary steps but requested an expedited decision for claims pertaining to 2017 onwards. The court noted no objection to this course of action.

Held

The Court disposed of the writ petition on mutually agreeable terms. It directed the petitioner to file an appropriate application in terms of the Bihar Industrial Incentive Policy, 2006/11. The Court further ordered that this application be processed and an appropriate order passed in accordance with law within three months from the date of its filing, provided it is complete in all respects. Liberty was reserved for the petitioner to take recourse to other available steps if the need arose concerning the same or subsequent cause of action. The Court did not explicitly rule on the entitlement to the subsidy, the dilution of policy, or the principles of promissory estoppel and legitimate expectation, as the matter was resolved by directing the petitioner to follow the prescribed application procedure.

Key Issues

1. Whether the petitioner is entitled to receive VAT/GST subsidy in accordance with the Bihar Industrial Incentive Policy, 2006 and Bihar Industrial Incentive Policy, 2011? (Question of law) 2. Can the Bihar Industrial Incentive Policy, 2006 and Bihar Industrial Incentive Policy, 2011, having been approved by the Cabinet, be diluted by any department to deny promised incentives? (Question of law) 3. Is the non-issuance of VAT/GST subsidy hit by the principle of promissory estoppel and legitimate expectation? (Question of law) Petitioner's arguments: The petitioner contended they are entitled to the subsidy under the stated policies and that these policies, once approved by the Cabinet, cannot be diluted by individual departments. They also argued that the non-disbursement of the subsidy violates the principles of promissory estoppel and legitimate expectation. Revenue/State's arguments: The State submitted that a policy change necessitates an online application for reimbursement, which the petitioner had failed to complete. The judgment records no further arguments from the State.