M/S Lupin LTD Epip Kartholi Sidco Industrial Complex Bari Barahmana Th Vinod Raina. vs. Union Of INDIA Th Secretary Deptt Of Industrial Policy And Promotion Ministry Of Commerce And Ors.

Held

The Court held that the impugned order dated 26.08.2020 was unsustainable in law. The Court found that the respondents erred in declining part of the petitioner's claim for budgetary support for January to March 2020. The reasoning for the rejection was not provided in the order itself. Furthermore, the respondents attempted to supplement the reasoning by referring to an office memorandum dated 26.07.2021, which was issued after the impugned order was passed. The Court relied on the Supreme Court's decision in Mohinder Singh Gill & anr. Vs. The Chief Election Commissioner, New Delhi & ors. (AIR 1978 SC 851), which established that the validity of an order must be judged based on the reasoning contained within it and cannot be supplemented by subsequent affidavits. The Court explicitly stated that it had not adjudicated on the petitioner's overall eligibility for budgetary support or the period for which such benefits are available.

Facts

The petitioner, M/s Lupin Ltd., challenged an order dated 26.08.2020 by which the respondents partially rejected its claim for budgetary support for the period January to March 2020. The petitioner was entitled to tax exemption under an earlier scheme and sought budgetary support under the GST regime until 2023. The petitioner claimed Rs. 93,29,509/-, of which Rs. 68,67,539/- was accepted, but Rs. 24,61,920/- was rejected. The petitioner argued that no reasons were provided for the rejection and no opportunity of hearing was given. The respondents, in their counter-affidavit, relied on a subsequent investigation and an office memorandum dated 26.07.2021, which purportedly found the petitioner eligible only until 06.11.2017, leading to the rejection of the claim for January to March 2020.

Key Issues

1. Whether the impugned order dated 26.08.2020, rejecting part of the petitioner's claim for budgetary support for January to March 2020, is sustainable in law, considering the lack of reasons and opportunity of hearing provided to the petitioner? 2. Whether the respondents can supplement the reasoning for the impugned order by relying on an office memorandum dated 26.07.2021, which was issued after the impugned order was passed? Petitioner's Contentions: The petitioner argued that the impugned order was passed without assigning any reasons for the rejection of part of its claim and without providing any notice or opportunity of hearing. They contended that the respondents are liable to extend budgetary support until 2023, as per their understanding of the entitlement under the GST regime. Respondents' Contentions: The respondents relied on their counter-affidavit, specifically paragraph 4, and submitted that subsequent investigation and an office memorandum dated 26.07.2021 determined the petitioner's eligibility for budgetary support only until 06.11.2017, thus justifying the rejection of the claim for January to March 2020.