Page No.# 1/9 vs The Union Of India And 4 Ors
2025 Latest Caselaw 9244 Gua

Gauhati High Court

Page No.# 1/9 vs The Union Of India And 4 Ors on 2 December, 2025

                                                              Page No.# 1/9

GAHC010100102021




                                                        2025:GAU-AS:16590

                      THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                          Case No. : WP(C)/3877/2021

         M/S VISION ISPAT PVT. LTD.
         REPRESENTED BY ITS DIRECTOR, SRI NARENDRA KR. SAHARIA,
         AGED ABOUT 57 YEARS, S/O SRI SATYA NARAYAN SAHARIAH,RESIDENT
         OF CHOTA GOLA, AT ROAD, PO DIBRUGARH, ASSAM,



         VERSUS

         THE UNION OF INDIA AND 4 ORS.
         REPRESENTED BY THE SECRETARY, MINISTRY OF COMMERCE AND
         INDUSTRY, GOVT. OF INDIA, NEW DELHI

         2:THE COMMISSIONER AND SECRETARY
          GOVT. OF ASSAM
          INDUSTRIES AND COMMERCE DEPT. AND CHAIRMAN OF STATE LEVEL
         COMMITTEE
          DISPUR GUWAHATI

         3:THE DIRECTOR

          INDUSTRIES AND COMMERCE DEPARTMENT
          GOVT. OF ASSAM
          BAMUNIMAIDAM
          GUWAHATI
          ASSAM

         4:NORTH EASTERN DEVELOPMENT FINANCE CORPORATION LIMITED
          REPRESENTED BY THE CHAIRMAN AND MANAGING DIRECTOR
          NEDFI
          NEDFI BHAWAN
          DISPUR
          GUWAHATI 6
                                                                              Page No.# 2/9

            5:THE GENERAL MANAGER
             DISTRICT INDUSTRIES AND COMMERCE DEPT. TINSUKI

Advocate for the Petitioner   : MS N SAIKIA, MRS. P GOSWAMI,MR A SAIKIA

Advocate for the Respondent : ASSTT.S.G.I., MR A KALITA(SC, INDUSTRIES AND
COMMERCE DEPT.),MR H GUPTA (r-1),SC, NEDFI




                                    BEFORE
                    HONOURABLE MR. JUSTICE RAJESH MAZUMDAR

                               JUDGMENT & ORDER (ORAL)

Date : 02-12-2025

Heard Ms. N. Saikia, learned counsel for the petitioner. Also heard Mr. B. Gogoi, learned Addl. Advocate General for the respondent no. 2, 3 & 5, Mr. G. Das, learned counsel for the respondent No. 4 and Mr. B. Sharma, learned counsel appearing for the respondent No.1.

2. This writ petition has been preferred by the petitioner under Article 226 of the Constitution of India, being aggrieved by the action of the respondent No. 2, 3 & 4 rejecting the claim of the petitioner for subsidy under the Central Capital Investment Subsidy Scheme, 2007. The respondents have deducted a sum of Rs. 34,48,453/- from the total subsidy which the petitioner alleged to be entitled to.

3. The petitioner company is engaged in manufacturing of TMT Bars and Rods. With the introduction of Central Capital Investment Subsidy Scheme, 2007 under the NEIIPP 2007 through a notification dated 27.07.2007, the Government of India announced that all eligible industrial units located anywhere in the North Eastern Region shall be given a capital investment subsidy at the rate of 30% of their investment in Plant and Machinery or additional investment in Plant and Machinery. Such subsidy will be applicable to units in the private sector, joint sector, cooperative sector as well as the units set up by the State Governments concerned in the North

Eastern Region. The duration of the scheme was from the 1 st April, 2007 and it would Page No.# 3/9

remain in force up to and inclusive of 31.03.2017. The petitioner company, having made substantial investment in the plant and machinery of its production units, applied for grant of the subsidy in accordance with the scheme. By a communication issued by the General Manager, District Industries & Commerce Centre, Tinsukia on 24.12.2006, the Director of Industries & Commerce, Assam was informed that the admissible amount of investment in plant and machinery for the particular unit of the petitioner came to Rs. 4,96,33,335/- only and the 30% CCISS recommended to the unit stood at Rs. 1,48,90,000/- only. In a Meeting held by the SLC, an amount of Rs. 3,81,38,493/- was taken by the SLC to be the amount which would be considered for granting the subsidy under the scheme and accordingly, the petitioner company was held to be entitled to Rs. 1,14,41,547/- as subsidy.

4. When even the aforesaid subsidy amount was not paid to the petitioner, the petitioner had approached this Court. The stand taken by the respondents in the writ petitions and the writ appeals filed subsequently were that the petitioner and the other similar companies would not be entitled to the subsidy since allowing such a subsidy would be allowing them double benefits under the NEIIPP, 2007 and CCIS scheme simultaneously. This Court had decided that the petitioner herein, along with other business establishments who were similarly circumstanced, would be entitled for the grant of subsidy under the CCISS, 2007 also. The details of the previous litigation, which do not have bearing in the present lis, are not discussed in detail herein for the sake of brevity, save and except observe that the petitioner was held to be entitled to grant the benefits under the CCISS, 2007.

5. The petitioner claims, and the respondents do not dispute, that they have been paid the amount of subsidy based on the decision of the respondents that the total expenditure eligible for consideration for grant of subsidy was Rs. 3,81,38,493/-.

6. The grievance raised in the present writ petition is that although the recommendation in favour of the petitioner was for a subsidy of Rs. 1,48,90,000/-, on the basis of a total investment of Rs. 4,96,33,335/-, the respondents have calculated Page No.# 4/9

the amount of subsidy to be Rs. 1,14,41,547/- as approved CCISS on the basis of an investment to be taken Rs. 3,81,38,493/- only.

7. Ms. N. Saikia, learned counsel for the petitioner has referred to the provisions of the subsidy scheme and the earlier order of this Court to impress that there is no doubt that the investment made by the petitioner company in its plant and machinery are entitled to be considered for grant of the subsidy under the scheme. Ms. N. Saikia, learned counsel has submitted that the only ground on which the investment has been taken at a lower figure than what was approved by the District authorities is that the investment on electrical installation was considered by the State respondents to be not eligible for consideration for payment of the subsidy.

8. The learned counsel has drawn the attention of this Court to the affidavit-in- opposition filed by the respondent No. 2, 3 & 5 on 25.04.2024 where at paragraph-5, the following has been stated;

"That with regard to the statements made in paragraphs 7 & 8 of the writ petition, the answering Deponent begs to state that the SLC unanimously approved an amount of Rs. 1,14,41,548/- only as eligible of 30% Central Capital Investment Subsidy against admissible investment of Rs. 3,81,38,493/only on 31.12.2019 and released the sanctioned amount of Rs. 1,14,41,548/on 31.03.2021 by NEDFI. It is to be mentioned herein that the SLC disallowed Rs. 34,48,453/towards electrical installation due to cash transactions and not mentioned in the financial certificates, It is denied that the aforesaid amount was wrongly deducted by the Respondent Authorities and it is stated that the cash components in expenses are not accounted In the cost factor of capital investment subsidy as per the guidelines/notifications Issued by the DIPP, the Ministry of Commerce & Industry, Government of India. In this connection, the answering Deponent craves leave of this Hon'ble Court to place on record the relevant records of the case at the time of hearing if Page No.# 5/9

so directed by this Hon'ble Court."

9. The learned counsel has submitted that in the affidavit-in-reply, the petitioner had given substantial evidence of the fact that there were no cash transaction involved in the electrical installation and therefore, the stand of the respondents that the subsidy could be refused on the allegation of cash transaction being involved was baseless. She has also drawn the attention of this Court to the additional affidavit filed on 28.08.2024 by the respondent No. 2, 3 & 5 where at paragraph-3, the following is stated;

"3. That the Deponent states that in some of the paragraphs of the aforesaid Affidavit-in-opposition, it has been mentioned that the SLC has disallowed Rs. 34,48,453/-towards electrical installation due to cash transactions. However, after proper verification of the documents, it is seen that rather than the aforesaid, it should have been "the SLC has disallowed Rs. 34, 48,451/ towards electrical installation." It is submitted that a Sub-committee was formed to examine the claims of 30% CCIS valued more than Rs. 1 Crore and the Sub-committee has accordingly recommended the omission of the expenditure made by the claimant against Electrical Installation and Cash Expenditure which is approved by the SLC in their meeting held on 31.12.2019. Further, an amount of Rs 18,267/-was deducted by Commissioner of Industries & Commerce, Assam from the amount of Plant & Machinery recommended by GM, DICC, Tinsukia due to non availability of payment details."

10. The learned counsel for the petitioner has submitted that with the correction sought to be brought into the earlier affidavit, the allegation of the respondent authorities that it was due to the cash transaction stands belied and it is apparent that Page No.# 6/9

the SLC has disallowed the subsidy of Rs. 34,48,453/- to which the petiioenr claims to be entitled only because the same had arisen from investments made towards electrical installations in the manufacturing units.

11. The learned counsel for the petitioner has thereafter drawn the attention of this Court to the communication dated 25.02.2013, issued by the Government of India, Ministry of Commerce & Industry, whereby the following has been clarified;

3. (a) While assessing the cost of erection, only the cost of foundation for placing & fixing the productive machinery in its working place is considered as eligible component for the purpose of subsidy under CCIS structures, other than the above are not considered as eligible component of P&M for the purpose of CCISS.

(b) While miscellaneous fixed assets are not eligible component of P&M for purpose of CCISS, however, electrical components essential for plant operation, which are connected on the Plant side from the point where electric meter is put up, to the point where finished goods are produced/dispatched and are associated with the manufacturing process, are considered as eligible component of P&M for purpose of CCIS.

(c) The components of P&M for which payment has been made in cash by the industrial unit are not considered while assessing the value of P&M for the purpose of subsidy under CCISS."

12. The learned counsel for the petitioner thus submitted that it is now settled and clarified that the electrical components essential for plant operation, which are connected on the Plant side from the point where electric meter is set up, to the point where finished goods are produced/dispatched and are associated with the manufacturing process, are required to be considered as eligible component of P&M for the purposes of CCISS. She thus prays for a direction to the respondent authorities to pay the balance recommended CCISS amount of Rs. 34,48,453/- only. She has also prays that the petitioner company would be entitled to @ 12% p.a for illegally Page No.# 7/9

detaining the subsidy amount.

13. Ms. N. Saikia, learned counsel for the petitioner has relied upon the several cases to buttress her submission. She has in particular stressed on the judgment delivered in the case of Under Secretary Ministry of Industries & Others

-versus- Marchon Textiles Industries Pvt. Ltd. & Another, reported in (2005) 10 SCC 554 wherein it has held as follows;

"8. The schemes have to be construed with practical and pragmatic approach so as to achieve and not frustrate the purpose sought to be achieved. The applications should not be dealt with a hyper technical approach or in the pedantic manner."

14. Mr. G. Das, learned counsel appearing for the respondent No. 4 has submitted that it is only a disbursing agency. The subsidy amount is approved by respondent No. 2, 3 & 5 and released by the respondent No. 1.

15. Mr. B. Gogoi, learned Addl. Advocate General appearing for the respondent No. 2, 3 & 5 has made reference to the affidavit-in-opposition filed on behalf of the State respondents to submit that the subsidy for the electrical installations by existing or new units was not specifically a part of the scheme of 2007 and it is only by the later clarification of 2013 that it has been clarified that electrical installations as described in the clarification would be eligible for grant of subsidy. Therefore, at the initial stage when the said subsidy was rejected, there was no infirmity in the decision of the SLC. He submits that even subsequently when the matter was re-considered, even at that point of time the clarification was not available with the respondent authorities and therefore, no fault can be found in the decision taken to deduct that particular amount. When confronted with the contents of the affidavit filed on 28.07.2024, Mr. B. Gogoi has however, submitted that from the said clarification, it appears that the rejection was not due to the cash transaction but only because the investments in electrical installation were not perceived to be entitled for the grant of subsidy.

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16. The respondents have not projected any grounds for rejection to the claim of the subsidy in issue while contesting the writ petition.

17. The records available with the writ petition have been perused and the submissions made by the learned counsel for the contesting parties has been duly considered.

18. It is an admitted position by the respondents that the petitioner was denied the consideration of the investments made in electrical installation in the industrial unit for eligibility of the subsidy since the respondents were under an impression at that point of time that investments in electrical installations were not eligible for being considered for the purposes of the subsidy. The clarification dated 25.02.2013 is not in dispute, and therefore, the position is now clear that expenses on installation of electrical components essential for plant operation and which are associated in the manufacturing process are also considered as eligible components of the "plant and machinery" for the purposes of the subsidy. Since the only ground taken by the respondents to disentitle the petitioner from a particular part of the subsidy has now been put at rest by the clarification issued by the Central Government, this Court deems it fit to remand the matter to the respondent No. 2, who shall call for the records of the claim raised by the petitioner and place the entire records before the State Level Committee for re-consideration of the rejection which was based only on the ground that the expense on the electrical component would not be entitled for subsidy and which ground has now turned out to be misconceived in view of the clarification issued by the Central Government.

The State Level Committee shall take into account the clarification issued by the Central Government and re-asses the subsidy to which the petitioner will be eligible. The recommendation on such reassessment shall be forwarded to the concerned authorities in the Central Government and the respondent No. 1, 2 & 4 shall thereafter ensure the payment of the subsidy to the petitioner. The entire exercise including the payment to the petitioner shall be completed within an outer limit of 4(four) months Page No.# 9/9

from the date of receipt of a certified copy of this order.

19. Writ petition stands disposed.

JUDGE

Comparing Assistant