Patna High Court
M/S Parul Packaging Private Ltd vs The State Of Bihar on 1 August, 2024
Author: A. Abhishek Reddy
Bench: A. Abhishek Reddy
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.13554 of 2023
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M/s Parul Packaging Private Ltd., A company registered under Companies
Act having its office at B-16 (P) Industrial Area, Phase-II MIC, Bela,
Muzaffarpur - 842005 through its authorized representative -Ravi Kumar,
(Male) Aged about 49 years, Son of Ramesh Chandra Ray, Resident of
Pandepur, Tilhari, P.S Maner. District-Patna, Bihar.
... ... Petitioner/s
Versus
1. The State of Bihar Through Chief Secretary, Government of Bihar, Patna.
2. The Principal Secretary, Department of Industry, Government of Bihar,
Patna.
3. The State Investment Promotion Board, Vikash Bhawan, Patna through its
Secretary.
4. Director, Industries, Department of Industry, Government of Bihar, Patna.
5. The Director (Technical Development) Department of Industry, Government
of Bihar.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.Abhishek Kumar
For the Respondent/s : Mr.Vikash Kumar ( Sc 11 )
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CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY
ORAL JUDGMENT
Date : 01-08-2024
Heard the learned counsel for the parties.
The present writ petition has been filed for the following
reliefs:-
"i. For issuing a writ of
certiorari or any other appropriate writ
setting aside the order dated
24.06.2023
and the attachment therein
whereby and whereunder the claim of
the petitioner under the Bihar
Industrial Incentive Policy 2011 has
been rejected on the ground that the
proposal of the petitioner was accepted
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
by the State Investment Promotion
Board after the date of commercial
production of the unit.
ii. For issuing writ of
certiorari or any other appropriate writ
setting aside the letter dated
13.10.2017 (to the extent it relates to
the petitioner) whereby and whereunder
the claim of the petitioner under the
Bihar Industrial Incentive Police 2011
had been rejected on the ground of
proposal of the petitioner not having
approval of the competent authority.
iii. For issuing writ of
mandamus directing the respondents to
pay the petitioner its entitlement under
the Bihar Industrial Incentive Policy,
2011.
iv. For issuing a writ of
mandamus directing the respondent to
allow the petitioner to apply for its
claim under the head of VAT and
AMG/MMG under the Bihar Industrial
Incentive Policy, 2011 which could be
applied as the Respondents have closed
the online portal for the petitioner.
v. For holding that once the
proposal of the investment has been
accepted and petitioner is declared
entitled under the Policy then the
Respondents cannot interfere with the
disbursal of the subsidy amount to the
Petitioner.
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
vi. For holding that the
Respondents erred by not releasing
subsidy amount given the fact that they
hold no authority to
refuse/stop/interfere, once proposal of
investment has been accepted by the
State Investment Promotion Board
(SIPB).
vii. For holding that the
Respondents cannot make the
Petitioner run from pillar to post for
subsidy once it is found entitled.
viii. For any reliefs,
direction/directions for which the
petitioner is entitled may be given."
3. Learned counsel for the petitioner has stated that the
impugned order is passed by the authority concerned solely on the
ground that the petitioner has started production even before the
approval has been granted by the State Investment Promotion
Board (SIPB).
4. Learned counsel has stated that under the Bihar
Industrial Incentive Policy, 2011, the petitioner's entitlement for
re-imbursement of capital subsidy was denied on the ground that
the petitioner has started commercial production even before the
approval by SIPB and the authorities have rejected the case of the
petitioner.
5. Learned counsel has stated that there is nothing under
the regulation which states that the approval of the SIPB is a
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
condition precedent for starting the commercial production. That
the stand taken by the authorities is not only arbitrary, bad and
illegal but also contrary to the scheme floated by the State of Bihar
under the Bihar Industrial Incentive Policy, 2011, and therefore,
prayed this Hon'ble Court to allow the present writ petition and
give a direction to the authorities concerned for granting the
incentives under the Bihar Industrial Incentives policy, 2011.
6. Per contra, the learned counsel appearing on behalf of
the respondents has vehemently opposed the prayer of this writ
petition and has stated that the petitioner has violated the terms
and conditions of the policy.
7. Learned counsel has stated that the petitioner has not
taken prior approval of the SIPB before starting the production.
The act of the petitioner in starting the production even before the
approval was granted is in violation of the incentive policy, and
therefore, the petitioner is not entitled to any incentive as
envisaged under the Incentive Policy, 2011. Further, it is stated
under similar circumstances the authorities have rejected the case
of M/s Jagaran Prakash Limited, Gaya after taking the opinion of
the Law Department and, therefore, the petitioner's case which is
also similar has also been rejected. Learned counsel for the
respondents has prayed to dismiss the present writ petition.
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
8. Admittedly, in the present case, the State of Bihar has
floated Bihar Industrial Incentive Policy, 2011 to attract
investments in the State. The petitioner, admittedly, has applied to
the Competent Authority i.e., SIPB and was granted approval on
18.05.2015 and as per the said policy, the petitioner is entitled for
re-reimbursement of capital subsidy. But, the case of the petitioner
has been rejected on the sole ground that the petitioner has started
commercial production even before the grant of approval by SIPB.
The said stand taken by the official respondents appears to be
arbitrary and frivolous one. Admittedly, the authorities have
invited investors/industrialists to invest in the State of Bihar by
floating the Bihar Industrial Incentive Policy, 2011 and under the
scheme some incentives have being offered to the Businessmen
who have established their industries. The stand taken by the
respondents that the petitioner has started production even before
the grant of approval is without any legal basis. The policy does
not lay any guidelines or restrictions on the industrialists that the
production cannot be started before the approval by SIPB is
granted and does not state that any person who starts production
without getting the necessary approvals from SIPB is disentitled to
the incentives under the scheme. As per the policy floated by the
Government under the heading.
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
"Incentives to be provided to industrial units of the
state to speed up industrial growth and investment in Bihar.
1. Pre-Production Incentives
Stamp duty and Registration Fees
(a) 100% exemption from the Stamp Duty /
Registration Fees being levied on Lease/ Sale / Transfer of
Industrial Land/Shed as also there outside the jurisdiction of
Industrial Area Development Authority for new Micro, Small,
Medium (MSME) and Large sector industries.
This exemption from Stamp Duty and Registration
Fees facility will be granted only for the first time and will not
be applicable in subsequent stages of Lease/ Sale / Transfer.
This incentive will be available to new units only.
(b) Such existing Industrial Units which have
undertaken expansion or diversification thereby leading to an
increase of 50% in their production capacity, will also be
entitled for the above incentive, only on to the extent of
additional land required for Expansion.
(c) If, for any reason, the above incentive is not
availed by the unit and the land is purchased, the above Stamp
Duty and Registration Fees will be reimbursement by the
department to such units at the post production stage.
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
2. The following incentives would be given to
Industrial Units after commencement of Commercial Production
under the New Industrial Incentive Policy.
(i) Post-Production Incentives
under the present policy, incentives like Project
Report Incentive, Incentives on land/shed, financial assistance
for acquiring Technical Know-How, Capital Subsidy etc. will be
available. The upper limit for such reimbursement will be Rs.
600 lacs (Six hundred lacs). This will be excluding the subsidy
on Captive Power General/Diesel Generating set. The
incentives specified under Para 2 are as under:-
(ii).......
(iii)......
(iv)......
(v).......
(vi)......
(vii) Capital Subsidy
a. New MSME industrial units will be granted 20%
capital subsidy on the amount spent on plant and machinery
subject to a maximum of Rs. 75 lacs (seventy five lacs).
b. New large industrial units will be granted 20%
capital subsidy on the amount spent on plant and machinery
subject to a maximum of Rs. 500 lacs (five hundred lacs).
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
c. Above Capital Subsidy will be available to such
industries which will come into commercial production after the
effective date of this policy and the capital subsidy will be
available only on the capital investment made on Plant &
Machinery by such industries. This facility will be available
only after the commercial production of the industrial unit.
d. Since food processing sector units are already
entitled for capital subsidy under food processing policy,
therefore such units will not be entitled for above capital
subsidy under this policy."
9. As seen from the scheme there is no embargo for
starting the production prior to the approval by SIPB. Admittedly
in the present case, the approval was granted on 18.05.2015 and it
is the case of the respondents that the commercial production has
started on 18.08.2014, merely because the production has started
before the approval by SIPB the incentive under the scheme
cannot be disallowed. Moreover, the resolution dated 15.07.2011
(Annexure P-3) Clause 2 reveals that the inspection of the unit will
be done by the authorities for extending the benefits of the scheme,
which makes it abundantly clear that the unit has to be in
production at the time of inspection.
10. Having regard to the above made submissions, this
Court does not find any valid reasons for upholding the impugned
Patna High Court CWJC No.13554 of 2023 dt.01-08-2024
order dated 24.06.2023 (Annexure-P/1) passed by the authorities
and the same is set aside. The authorities are directed to grant the
capital subsidy as envisaged under the Bihar Industrial Incentive
Policy, 2011 and make necessary payments to the petitioner as per
the entitlement within a period of three months from the date of
receipt of the copy of this order.
(A. Abhishek Reddy, J)
Ayush/-
AFR/NAFR NAFR
CAV DATE NA
Uploading Date 02.08.2024.
Transmission Date NA
