Karan Distilleries Pvt. Ltd., ... vs The State Of Maharashtra, Through ...
2017 Latest Caselaw 668 Bom

 pps                                                1          901 civ wp 5535-12.doc

             IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                       CIVIL APPELLATE JURISDICTION

                           WRIT PETITION NO. 5535  OF 2012


  Karan Distilleries Pvt. Ltd.                              ..Petitioner               

                                v/s.

The State of Maharashtra & Ors.                             ..Respondents


 Mr.   S.M.Gorwadkar,  Sr.  Advocate  i/b.  Mr.  Kamlesh  Mali   for   the 
 Petitioner
 Mr. Manish Pabale, APP for the Respondent/State.

                               CORAM  :  A.S. OKA & 
                                          SMT.ANUJA PRABHUDESSAI, JJ.

DATED : 10TH MARCH 2017

ORAL JUDGMENT ( PER A.S. OKA, J )

1. The submissions of the learned Counsel appearing for the

parties were heard earlier in this petition which was on final

hearing cause list. The controversy involved in this petition is

very limited.

2. With a view to appreciate the controversy, a brief reference

to the facts of the case will be necessary. According to the case of

the Petitioner, it has set up a distillery having a license for

manufacturing of alcohol from grain. It is the case made out in

the petition that for manufacturing alcohol, the Petitioner is using

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jowar. It is stated that from the year 2006-2007, the

manufacturing is approximately 50% of its annual capacity.

3. Reliance is placed by the Petitioner on the State Government

Resolution dated 8th June, 2007. A copy of the resolution is

annexed as Exhibit A. The resolution records that the

manufacture of alcohol by the use of jowar is a viable option. The

said Government Resolution records that demand for alcohol is

ever increasing. Therefore, the Government Resolution (GR) was

issued to encourage manufacturing of liquor without using

sugarcane. The GR records that an incentive will be payable to

those projects which will be set up and commissioned before the

end of the year 2009. Under the GR, to the eligible industries,

incentive is made payable at the rate of Rs.10/- per litre.

4. The Petitioner applied for subsidy under the said GR.

Thereafter, representations were made from time to time. The

prayer in this petition under Article 226 of the Constitution of

India is for directing the State Government to reconsider the

application of the Petitioner dated 28th December, 2009. There is

a reply filed by Shri Yeshwant Manga Pawar, Deputy Commissioner

of State Excise. In paragraphs (4) and (5) of the said reply, Shri

Pawar has stated thus:-

pps 3 901 civ wp 5535-12.doc

"(4). With reference to para 3(f) of the Petition, I say that the Government Resolution (Exhibit A to the Petition) clearly stats that the Distillery and Integrated Unit Financial Assistance Scheme 2007 is entitled to new units becoming operational in industrially backward areas as declared by the Indian Industries Department, who are in D or D+ zone. I say that as per this Government Resolution, none other than those units coming up in other parts of the State except D or D+ zone would be entitled to financial assistance. (5) With reference to Para 3(g to I) of the Petition, I say that the Petitioner has made representations from time to time but the Government vide its letter dated 10.08.2011 (Exhibit-P to the Petition) has conveyed to the Petitioner that the scheme for financial assistance is applicable only to those units who have commenced production after the announcement of the scheme and not to those who had been operational prior to the announcement of the scheme."

(underline supplied)

5. Thus, the stand taken by the State Government is the same

as the stand reflected from the communication dated 10 th August,

2011 (Exhibit P to the petition) addressed by the State

Government to the Petitioner. The stand taken is that the benefits

under the GR dated 8th June, 2007 will be admissible only to those

industries which are set up after the date of the said GR. It is

pps 4 901 civ wp 5535-12.doc

further stated that the scheme has been closed and the scheme has

ceased to apply with effect from 20 th August, 2009. In paragraph

16 of the reply, it is stated that the scheme under the GR is

applicable only to those units which became operational between

8th June 2007 and 20th August, 2009.

6. The learned Senior Counsel appearing for the Petitioner

submitted that on plain reading of the said GR it is apparent that it

does not provide that the benefits thereunder will not be available

to those industries which are in existence prior to the date of the

said GR. He submitted that the GR states that the benefits

thereunder will be available only to those industries which come

into existence by the end of the year 2009. He also relied upon

the decision of the Apex Court in the case of K.J.S. Buttar vs.

Union of India1. He submitted that arbitrary cut off date for

applicability of a GR cannot be fixed by the State Government as

the same will be violative of Article 14 of the Constitution of India.

The learned AGP supported the stand taken in the reply filed by

Shri Pawar.

7. We have given careful consideration to the submissions. We

have carefully perused the GR dated 8 th June, 2007. The perusal

of the same shows that the benefits available under the scheme

1 (2011) 11 SCC 429

pps 5 901 civ wp 5535-12.doc

floated under the said GR have been set out in clause (10) thereof.

Clause (9) imposes a condition that the scheme will apply only to

those projects which are set up in D and D+ zones and if the

industry is set up in any other zone, the same will not be entitled

for the benefit under the scheme. The clause (5) of the scheme

records that the scheme has been brought with a view to

encourage the industries to manufacture alcohol by using jowar,

bajra etc.

8. Clause (2) of the GR provides that only those industries

which are set up and commissioned by the end of the year 2009

will be entitled to benefits of the scheme. There is no clause in

the said GR which provides that the scheme will not apply to the

existing industries as of 8th June, 2007 which are otherwise

covered by the scheme. Thus, the stand taken in the affidavit of

Shri Pawar and in particular in paragraph 16 that the financial

assistance under the said GR is available only to those units which

became operational between 8th June, 2007 and 20 th August, 2009

appears to be completely contrary to the contents of the said GR.

There is no indication in the GR that the industries which are

already in existence and which are otherwise covered by the GR

are excluded only on the ground that the same were in existence

pps 6 901 civ wp 5535-12.doc

on the date of the GR.

8. Therefore, in our view, the case of the Petitioner could not

have been rejected only on the ground that the Petitioner's

industry was in existence as of 8 th June, 2007. Therefore, the

case of the Petitioner will have to be reconsidered by the State

Government. Needless to add that even if the State Government

finds that the Petitioner is eligible to the benefits under the said

scheme covered by the said GR, the Petitioner will be entitled to

receive the benefits under the scheme from the date of the said GR

and not from the date on which the Petitioner started its

manufacturing activity. Needless to add that in such a case, the

Petitioner will be entitled to benefit only till the date of the

closure of the scheme as set out in the affidavit of Shri Pawar.

9. Accordingly, we dispose of the petition by passing following

order:-

i) We direct the State Government to re-consider the case of

the Petitioner for grant of benefits under the Government

Resolution dated 8th June, 2007 in the light of what is held in this

judgment. The prayer of the Petitioner shall not be rejected only

on the ground that the production unit of the Petitioner was

already functional on the date of the said Government Resolution;

  pps                                               7          901 civ wp 5535-12.doc




  ii)     We make it clear that we have not examined whether the 

Petitioner is otherwise eligible for the benefits under the

Government Resolution dated 8th June, 2007. Suffice it to say

that the case of the Petitioner shall not be rejected only on the

ground that the industry was operational on the date of the

Government Resolution;

iii) Appropriate decision shall be taken by the State Government

within a period of three months from the date on which an

authenticated copy of this judgment and order is produced with

the concerned department of the State;

iv) Rule is made partly absolute in above terms.

v) All concerned to act upon an authenticated copy of this

Order.

  (SMT.ANUJA PRABHUDESSAI, J)                                  ( A.S. OKA, J )