M/S Vj Jindal Cocoa PVT LTD Sidco Industrial Complex Bari Brahmana Jammu. vs. Union Of INDIA Th Secretary Deptt Of Revenue And Others.

Facts

The petitioner, M/s VJ Jindal Cocoa Pvt. Ltd., previously M/s Jindal Drugs Private Ltd. (Cocoa Division), was registered with the Central Excise Department. Following the implementation of GST and rescission of area-based exemption notifications, the petitioner registered under GST. To mitigate financial hardship caused by the withdrawal of exemptions, the Government introduced a Budgetary Support Scheme via a DIPP Notification dated 05.10.2017. The petitioner filed a claim under this Scheme, which was sanctioned but not disbursed promptly due to a non-availability of funds from DIPP. The petitioner filed a writ petition seeking disbursement of the sanctioned amount with interest and a direction for timely decision on future applications. During the pendency of the petition, the sanctioned amount was released, but the petitioner pursued the claim for interest on the delayed payment. The respondents contended that the delay was due to insufficient funds allocated by DIPP, which were significantly less than the petitioner's claim and other pending claims.

Held

The Court held that the petitioner is not entitled to interest on the delayed disbursement of the sanctioned Budgetary Support. The reasoning was threefold: (i) the benefit under the Scheme is in the nature of a concession/incentive granted by the Government to help industrial units tide over financial hardship, not a right claimable by eligible units; (ii) the respondents had a valid reason for the delay in disbursement due to an acute shortage of funds at the Commissionerate level, with allocated funds from DIPP being insufficient to meet even the petitioner's claim, and the amount was disbursed as soon as funds became available; and (iii) there is no provision within the Scheme that provides for the payment of interest in case of any delay in the actual release of the benefit. The Court found no merit in the petition and dismissed it, while clarifying that the dismissal would not impede the respondents from processing and disposing of any pending claims of the petitioner without undue delay. The Court did not expressly leave any issue undecided.

Key Issues

1. Whether the petitioner is entitled to interest on the delayed disbursement of the sanctioned Budgetary Support under the Scheme, considering the nature of the Scheme and the reasons for delay? (Question of law) Petitioner's arguments: The petitioner sought a direction for the disbursement of the sanctioned amount with interest in a time-bound manner. Although the primary amount was released during the pendency of the petition, the petitioner continued to pursue the claim for interest on the delayed payment. Respondents' arguments: The respondents argued that the delay in disbursement was solely due to the non-availability of requisite funds from DIPP, which had allocated significantly less funds than the total claims. They further contended that the Scheme does not envisage the provision of any interest on delayed payments, as the benefit is in the nature of a concession/incentive and not a matter of right. They relied on a Circular dated 10.01.2019 stating that claims should be disposed of within two weeks, but explained the fund shortage as the reason for non-compliance.