Electrosteel Castings Ltd. & Anr vs The State Of West Bengal & Ors
2022 Latest Caselaw 821 Cal/2

                                       1


                   IN THE HIGH COURT AT CALCUTTA

                    (Constitutional Writ Jurisdiction)

                              ORIGINAL SIDE

Present:

The Hon'ble Justice Krishna Rao

                              WPO 406 of 2021

                    Electrosteel Castings Ltd. & Anr.

                                  Versus

                    The State of West Bengal & Ors.



           Mr. Kishore Dutta, Sr. Adv.
           Mr. A. Ali, Adv.
           Mr. Prabhat Kumar Srivastawa Adv.
                                                   .....For the Petitioner


Heard on                : 24.02.2022

Judgment on             : 10.03.2022

Krishna Rao, J.: This writ petition is directed against the order passed by

the Director of Industries, West Bengal dt. 13th November, 2020 wherein

the application of the petitioner company for amendment of registration

certificate was rejected on the ground of non-compliance with Para 13.1 of

the West Bengal Insentive Scheme 2004 and the direction of Industries,

Commerce and Enterprises Department, West Bengal.


     The   petitioner   company   had      made   an application     before   the

respondent no. 2 for registration under the said Scheme. In the said

application the petitioner company indicated that the petitioner company

was an existing establishment and the proposed item for which registration

was sought, was indicated to be conversion of Furnace Oil to Coal Gas. The

Director of Industries issued a Registration Cerificate to the petitioner

company under the said Scheme and in the Registration Certificate, the

proposed item of manufacture was mentioned as "Piped Coal Gas" and the

registration is valid uptill 3rd March, 2008.

On 14th December, 2005 the petitioner company submitted an

application for amendment of manufacture item in the the Registration

Certificate for use of Coal Gas in place of Furnace Oil and as per the

request of the petitioner, the respondent no. 2 allowed the item of

amendment as use of Coal Gas in place of Furnace Oil.

The Executive Director of West Bengal Industrial Development

Corporation Ltd. vide its letter dt. 8th February, 2006 informed the

petitioner that the unit of the petitioner company is eligible for the

incentives declared under the Scheme of 2004. On 9th October, 2007 the

General Manager of Greater Calcutta Supply Corporation Ltd. had forwarded

the bills and vouchers of paid gas bills for Coal Gas consumption for the

period from 06.01.2004 to 02.01.2007 received from the petitioner company

for grant of subsidy of consumption of coal gas and accordingly the West

Bengal Industrial Development Corporation time to time sanctioned Coal

Gas Subsidy to the petitioner company.

The petitioner company had applied for issuance of certificate for

obtaining incentive under the said scheme for subsidy of sale tax before the

sale tax authorities and in reply to the request made by the petitioner, the

Commissioner, Commercial Tax West Bengal informed the petitioner that

there is no item for sale and they cannot issue a certificate certifying the tax

paid by the petitioner company. On receipt of reply , the petitioner realized

that the item of sale being Ductile Iron Pipe is not mentioned in the

application and accordingly the petitioner submitted an application to the

Director of Industries, Government of West Bengal for amendment of item of

manufacture in the Registration Certificate by incorporating as use of coal

gas for manufacture of 2,00,000 MTs of Ductile Iron Pipe.

The Director of Industries vide communication dt. 4th February 2015

informed the petitioner that further amendment of Registration Certificate

after nine years from the date of issuance by including the product of

Ductile Iron Pipe was not feasible as the Scheme expired long back. On 10th

February, 2015 the petitioner had again submitted a representation to the

Director of Industries by drawing the attention with respect of Clause 13.1

of the Scheme. Thereafter, the petitioner had made several representations

to the concern authorities for consideration of amendment of the

Registration Certificate. The respondent authorities have issued notice to the

petitioner for appearance of the petitioner in person and accordingly the

petitoner had appeared and also filed his written submissions. Inspite of

personal hearing the respondents failed to take decision, and the petitioner

had preferred a Writ Application before this Court being WP. 110 of 2019

and the said writ petition was disposed of by the coordinate bench of this

Court by directing the concern authority to decide the application of the

petitioner within a period of eight weeks by giving an reasonable opportunity

of hearing to the petitioner. After the order passed by the coordinate bench

of this Court, the respondents have issued notices to the petitioner and

accordingly the petitioner had appeared before the concern authority but

inspite of conclusion of hearing the authorities failed to pass final order and

finding no other alternative, the petitioner had again filed a writ application

being WP No. 345 of 2020 and the Coordinate Bench of this Court had

disposed of the writ application by directing the concern authority to pass a

reasoned order within a period of four weeks from date.

After the order passed by the Coordinate Bench of this Court, the

Respondent no. 2 had passed the following order on 13th November, 2020:

"On scrutiny of the submitted certificate of Expenditure issued by GM, Greater Calcutta Gas Supply Corporation Ltd. (GCGSCL), it is seen that the company has been consuming coal gas from 01.11.2003. It may be mentioned that in terms of West Bengal Incentive Scheme, 2004 an unit is eligible to get subsidy for conversion for use of piped coal gas on or after 01.01.2004. The matter was referred to the Department of Industries, Commerce & Enterprises for necessary instruction.

The Department of Industries, Commerce & Enterprises vide letter No. 260-ICE-15014(11)/2/2021-ADMIN SECTION-Dept. OF ICE, dated 24.06.2020 has confirmed that the actual commencement of supply of coal gas by, M/s. GCGSCL to M/s. Electrosteel Casting Ltd is 01.11.2003 on the basis of communication by GCGSCL and "hence, the question of amendment of RC does not arise as it fails to meet the demand of the WBIS-2004".

Therefore, after careful consideration of the representation dated 30.08.2019 of the company and upon hearing the representatives of the company, the application for further amendment of Registration Certificate is rejected on the ground of non-compliance with Para 13.1 of WBIS, 2004 and direction of Industries, Commerce and Enterprises Department, West Bengal."

Mr. Kishore Dutta, Ld. Senior Advocate representing the petitoner

submitted that the impugned order dt. 13th November, 2020 has been

issued by the person other than the earlier Director of Industries Ms.

Debjani Bhattacharjee who had heard the petitioner in person. It is further

submitted that the officer who had passed the impugned order never heard

the representative of the petitioner and had passed the order without giving

any opportunity of hearing to the petitioner.

Ld. Senior Counsel for the petitioner company further submitted that

the impugned order is passed on the basis of the certificate of expenditure

issued by the General Manager, Calcutta Gas Supply Corporation Limited

wherein it is mentioned that the company has been consuming Coal Gas

from 01.11.2003. It is further argued that the respondent no. 2 had referred

the matter to the Department of Industries, Commerce and Enterprises,

West Bengal for instructions and department vide letter dt. 24th June, 2020

has informed that the actual commencement of supply of Coal Gas by

respondent no. 6 to the petitioner company is 1st November, 2003. It is

further urged that the petitioner company is consuming coal gas for its

commercial production from 2nd January, 2004. On 1st Novemeber, 2003

the meter regulating station was installed at the premises of the petitioner

company to enable the company to complete the fabrication work at their

end.

Ld. Senior Counsel further argued that the respondent no. 6 had

issued letter on 6th November, 2019 stating the fact that the petitioner

company had started consuming piped gas on and from 2nd January, 2004.

It is further submitted that after the impugned order, the petitioner had

applied for certain documents under Right to Information Act, 2005 and on

receipt of the information the petitioner came to know that vide letter dt.

13th Januray, 2020 the respondent no. 1 had asked for clarification from

the respondent no. 6 wherein it was mentioned that any wrong input may

cost an unpleasant burden of Rs. 4,11,87,0004/- to the State Exchequer

and referring the same it is argued that such statement was made in order

to put pressure upon the respondent no. 6 and due to which the respondent

no. 6 had issued the letter dt. 19th June, 2020.

Ld. Senior Counsel further submitted that though the respondent had

relied the said documents while passing the impugned order but neither the

said document was served upon the petitioner nor any opportunity was

given to the petitioner to deal with the said documents.

Heard the Ld. Counsel for the petitioner and considered the

documents available on record. The Director of Industries, West Bengal had

issued Certificate of Resgistration under the West Benagal Incentive

Scheme, 2004 in the name of the petitioner on 04.03.2005 and the item of

Manufacture is described as Piped Coal Gas. After issuance of the

certificate, the petitioner had applied for amendment in the said certificate

and accordingly the concern authority had amended the Certificate of

Registration as "use of Coal Gas in place of Furnace Oil". In terms of the

certificate of Registration, the petitioner had availed the subsidy under the

Scheme. As the petitioner did not apply under Form IV of the said Scheme

for issuance of Certificate from the Sale Tax Authorities and accordingly,

they had applied for issuance of certificate for obtaining incentive under the

scheme for subsidy of sale tax before the sale tax authorities. The sale tax

authorities refused to issue such certificate with the reason that there is no

item involved in the scheme on sale of which the Commissioner can issue a

certificate, certifying the tax paid by the petitioner.

On being refused by the sale tax authorities, the petitioner has made

an application before the Director of Industries for amendment in the

registration certificate "to read as Coal Gas for manufacture of 2,00,000 MTs

of Ductile Iron Pipe". The authority concern had rejected the request of the

petitioner with the reason that further amendment of Registration Certificate

after 9 years from the date of issuance thereof by including the product of

Ductile Pipe is not feasible as the scheme expired long back. The petitioner

again made representation to the authority by drawing the attention Clause

13.1 of the Scheme and submitted that the scheme came into force from

01.04.2004 and the same was remain valid till 31.03.2009. The petitioner

time and again made representation to the authority and accordingly on

13th November, 2020 the authorities have again rejected the request of the

petitioner which is impugned in the instant application.

The petitioner to avail the benefit of incentive under the said scheme

for subsidy of sale tax had applied for amendment in the Registration

Certificate but the same was rejected on 13.11.2020 by holding that the

company has been consuming coal gas from 01.11.2003 and in terms of

West Bengal Incentive Scheme, 2004 an unit is eligible to get subsidy for

conversion for used of pipe coal gas on or after 01.01.2004 and the matter

was referred to Department of Industries, Commerce and Enterprises and it

was confirmed that the actual commencement of supply of coal gas by the

petitioner company is 01.11.2003. The respondents have rejected the

request of the petitioner on the ground of non compliance with Para 13.1 of

the WBIS Scheme, 2004.

Clause 13 of the West Bengal Incentive Scheme, 2004 reads as

follows:

"13. Subsidy for conversion for use of piped gas:

13.1 An existing unit irrespective of its location, undertaking conversion for use of piped gas for manufacture/operation on or after the 1st January, 2004 will be eligible to subsidy equal to 75 % of the investment for necessary conversion of furnace etc., subject to limit of Rs. 10.00 lakhs.

13.2 A new unit for its approved project set up on or after the 1st January, 2004 envisaging use of piped gas for manufacture/operation will be entitled to the benefit prescribed at sub-para 13.1 above for installation of necessary equipments in the units for use of piped gas.

13.3 An existing unit or a new unit mentioned at sub-para 13.1 & 13.2 above will be entitled to subsidy of 20 % of gas charges on gas used for manufacture/operation for a period of 5 years from the date of commencement of supply gas for commercial manufacture/ operation of the unit."

The specific case of the petitioner is that the petitioner has been

consuming coal gas for it commercial production from 2nd January, 2004

and on 1st November, 2003 the Meter Regulating Station was installed at

the premises of the petitioner to enable the petitioner to complete the

fabrication work. The petitioner relied upon the Certificate of Expenditure

Annexure P-7 (Page 78) wherein it was shown that the bill amount for the

period from 01.11.2003 to 06.1.2004 is only Rs. 93,533/-, whereas from

06.01.2004 onwards the amount is much higher. The petitioner also relied

upon the certificate issued by the Greater Calcutta Gas Supply Corporation

dt. 29.04.2008 and the letter issued by the General Manager, Greater

Calcutta Gas Supply Corporation Ltd. letter dt. 06.11.2019 wherein the said

authority had certified that the petitioner company had commercially started

consuming supply of piped gas from 02.01.2004 and the meter was installed

at the premises on 01.11.2003 with a view to complete the fabrication work.

The respondent authorities while deciding the request of the petitioner

have called for further clarification from the Greater Calcutta Gas Supply

Coproration Ltd. vide their letter dt. 13.01.2020 and in reply to the same the

GCGSC Ltd. sent reply to the Industries Department clarifying that "the gas

meter was installed at the premises of the petitioner on 01.11.2003 which

according to them had been treated as date of commencement of supply and

all earlier communication in this regard may be ignored."

The specific case of the petitioner is that the respondent authorities

have called for the said clarification behind the back of the petitioner and

the copy of the said clarification was not served to the petitioner and the

petitioner could not get an opportunity to take exception to the said

clarification. The petitioner came to know about the said clarification after

getting information through Right to Information Act. The case of the

petitioner was heard by one officer and the order was passed by another

officer without giving an opportunity of hearing to the petitioner.

Clause 13 of the scheme stipulates that undertaking conversion for

use of piped gas for manufacture/operation on or after 01.01.2004 will be

eligible for subsidy, the respondents failed to consider the contentions raised

by the petitioner company that on 01.11.2003 the Meter Regulating System

installed at the premises of the petitioner to complete the fabrication work

and the petitioner actual started consuming coal gas for production of

commercial use from 02.01.2004.

This Court is of the view that the respondents ought to have been

proceeded by an opportunity of hearing to the petitioner. Non-grant of

opportunity of hearing in confirmity with the principles of natural justice.

On the facts and circumstances, also renders the impugned order passed by

the Director of Industries, West Bengal dt. 13.11.2020 vulnerable.

In the result, the impugned order dt. 13.11.2020 stands set aside.

The respondent no. 2, the Director of Industries, West Bengal is directed to

consider the representations submitted by the petitioner for amendment in

the Registration Certificate by passing a reasoned and speeking order after

giving an opportunity of hearing to the petitioner within a period of four

weeks from the date of communication of the copy of this order.

WPO 406 of 2021 is thus disposed of.

Parties shall be entitled to act on the basis of a server copy of the

Judgment and Order placed on the official website of the Court.

Urgent Xerox certified photocopies of this judgment, if applied for, be

given to the parties upon compliance of the requisite formalities.

(Krishna Rao, J.)

Though when the matter was taken up for hearing on 24th February,

2022, none appeared on behalf of the respondent authority. Today, when

the matter was listed for delivery of judgment; learned Advocates Mr. A.

Banerjee, Mr. N. Chatterjee (For the State), Md. T.M. Siddiqui (For the

WBIDC) have appeared on behalf of the authorities and judgment is

delivered in open Court in presence of both the parties.

(Krishna Rao, J.)