M/S Rspl Limited vs. The State Of Bihar

Facts

The petitioner, M/s RSPL Limited, filed a writ application seeking payment of incentives totaling Rs. 64,66,65,434/- under the Bihar Industrial Incentive Policy, 2011. These incentives were claimed under various heads including exemption in Stamp Duty and Registration Fees, subsidy on investment in Plants and Machinery, reimbursement for VAT/Entry Tax paid, and reimbursement for GST paid. The petitioner's claim was rejected by a committee headed by the Additional Chief Secretary, Department of Industry, Government of Bihar, on December 18, 2020. The stated reason for rejection was that the investment in question was not duly approved by the Competent Authority. The petitioner relied on a previous Division Bench decision of the High Court in M/s Sunny Stars Hotels Private Limited Vs. The State of Bihar, which dealt with similar issues concerning the interpretation of 'Competent Authority' and the approval process under the 2011 policy.

Held

The Court acknowledged the petitioner's reliance on the Division Bench decision in M/s Sunny Stars Hotels Private Limited, which held that rejection of claims solely on the ground of lack of approval by a 'Competent Authority' was whimsical and lacked application of mind, especially when the term was not defined in the policy. The Court noted that the State's counsel admitted that the reason for refusal, as per the cited precedent, no longer survived. Consequently, the Court directed the Additional Chief Secretary, Department of Industry, Government of Bihar, to take a final decision on the petitioner's claim within three weeks from the date of the order. Furthermore, the Court ordered that the admissible benefits should be paid to the petitioner within two weeks thereafter. The Court did not expressly leave any issue undecided, but the final decision on the quantum and admissibility of benefits was to be taken by the authority.

Key Issues

1. Whether the rejection of the petitioner's claim for incentives under the Bihar Industrial Incentive Policy, 2011, on the ground that the investment was not duly approved by the Competent Authority, is valid, considering the definition and interpretation of 'Competent Authority' under the policy and related precedents? (Question of law turning on the interpretation of the Bihar Industrial Incentive Policy, 2011 and the Act of 2006). Petitioner's Arguments: The petitioner argued that the rejection was whimsical and lacked application of mind, citing the Division Bench decision in M/s Sunny Stars Hotels Private Limited. They contended that in the absence of a defined 'Competent Authority' in the 2011 policy, approval by the State Investment Promotion Board, accepted by the concerned department, should suffice. They also argued that there was no provision requiring placement before the Chief Minister or Cabinet, and that the approval granted by the State Investment Board, acted upon by the department, was valid. They invoked the principle of promissory estoppel, stating that the State cannot deny promised incentives after the petitioner invested based on that promise. Revenue's Arguments: The State, through its counsel, admitted that in view of the Division Bench decision in M/s Sunny Stars Hotels Private Limited, the reason recorded for refusing the petitioner's claim no longer survived. They submitted that a decision on the petitioner's claim would be taken within three weeks.