Patna High Court
Shree Saibaba Plasto Products Private ... vs The State Of Bihar on 19 September, 2024
Author: A. Abhishek Reddy
Bench: A. Abhishek Reddy
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.8907 of 2023
======================================================
Shree Saibaba Plasto Products Private Limited, Having its Office at Flat D-3
(P) EPIP Industrial Area, Hajipur, Vaishali, Bihar 844101, through its
authorized representative-Ajit Kumar Sharma (male), aged about 54 Years S/o
C.D. Sharma, R/o 164/C/48 Prince Anwar Shah Road, Lake-Gardens Kolkata,
West Bengal P.S.-Lake Police Station, District-Kolkata.
... ... 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. Commissioner-Secretary, Commercial Tax Department Government of
Bihar, Patna.
4. Director, Industries, Department of Industry, Government of Bihar, Patna.
5. The Director (Technical Development) Department of Industry, Government
of Bihar, Patna.
6. Managing Director, Bihar Industrial Area Development Authority, Patna.
7. The General Manager, District Industries Centre, Hajipur.
... ... Respondent/s
======================================================
Appearance:
For the Petitioner/s : Mr. Abhishek Kumar
For the Respondent/s : Mr. Vikash Kumar (Sc11)
======================================================
CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY
ORAL JUDGMENT
Date : 19-09-2024
Heard the learned counsel for the parties.
The present writ petition has been filed for the following
reliefs:-
"vi. For issuing a writ of
mandamus or any other appropriate
writ directing the Respondent
Authorities to bring on record order(s)
or letter(s) by which the claim of the
petitioner under the head of
reimbursement of VAT/SGST paid has
been denied for the period April 2021
to September 2021 and the ground that
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
2/9
the production of the petitioner unit was
below 25% of Installed capacity.
vii. For issuing a writ of
certiorari or any other appropriate writ
setting aside the order(s) or letter(s) so
brought on record by the Respondent
Authorities by which the claim of the
petitioner under the head of
reimbursement of VAT/SGST paid has
been denied for the period April 2021
to September 2021 and the ground that
the production of the petitioner unit was
below 25% of installed capacity.
viii. For issuing a writ of
mandamus directing the respondents to
pay the petitioner its entitlement under
the head of reimbursement of SGST
paid for the period April 2021 to
September 2021 which has been denied
on the ground that the petitioner has
not done production of more than 25%
during the said period.
ix. For issuing the writ of
mandamus directing the respondents
nor to with hold payment of
reimbursement of SGST paid on the
ground that the petitioner has not done
production of more than 25%.
x. For any reliefs,
direction/directions for which the
petitioner is entitled may be given."
3. Learned counsel for the petitioner has stated that the
petitioner pursuant to the Incentive Policy, 2011 floated by the
Government of Bihar has set up a plastic furniture unit. That due
permission was accorded to the unit of the petitioner by the State
Investment Promotion Board (SIPB) in its meeting held on
21.07.2010
and, thereafter, letter dated 13.08.2010 (Annexure-P/2)
was issued to the petitioner. That the unit of the petitioner started
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
production on 08.11.2011, the petitioner was given the eligibility
certificate for reimbursement of the VAT/SGST on 31.08.2012
(Annexure-P/3). That when the petitioner was denied the
incentives i.e., reimbursement of VAT/SGST by the State
Government, the petitioner has approached this Court by way of
CWJC No. 10492 of 2021 (Annexure-P/4). This Court vide order
dated 24.03.2022 has directed the authorities to consider the case
of the petitioner for reimbursement of the VAT/SGST duly taking
into consideration the orders passed by this Court in the case of
M/s Sunny Stars Hotel Pvt. Ltd. Vs. The State of Bihar & Ors
reported in 2020(2) PLJR 321. Thereafter, the petitioner was
directed to file necessary documents and also certificate issued by
the Chartered Accountant to show that the unit of the petitioner is
in production. The petitioner accordingly submitted the required
documents however, the authorities while granting the
reimbursement for the period July 2017 to March 2021 have
rejected the claim of the petitioner for the period April 2021 to
September 2021. Learned counsel has stated that the rejection of
the claim of the petitioner for the period April 2021 to September
2021 is ostensibly on the ground that the production of the unit of
the petitioner was less than 25%. Learned counsel has stated that
once the petitioner is found eligible for reimbursement of the
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
VAT/SGST as per the Bihar Industrial Incentive Policy 2011, the
rejection of the claim for the months of April 2021 to September
2021 on the ground that the production in the unit of the petitioner
is less than 25% is contrary to the policy. Learned counsel has
stated that the subsequent amendments, if any, made will not be
applicable to the petitioner as the petitioner has established the unit
based on the promises given by the Government of Bihar under the
Bihar Industrial Incentive Policy, 2011. Learned counsel has
therefore, prayed this Hon'ble Court to allow the present writ
petition and direct the respondents to reimburse the VAT/SGST for
the months of April 2021 to September 2021.
4. Per contra, the learned counsel appearing on behalf of
the respondents has vehemently opposed the very maintainability
of the present writ petition and stated that as per the Resolution
No. 108 dated 20.01.2020 (Annexure-A), there was a modification
to the Bihar Industrial Incentive Policy, 2011. As per the said
modification those units which are having less than 25%
production cannot be granted the reimbursement of VAT/SGST.
Further, it is stated that the law as applicable as on the date of
considering the application will govern and, therefore, the
Resolution No. 108 dated 20.01.2020 will be applicable to the
facts of the present case and the petitioner's case was rightly
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
rejected the incentive of reimbursement for the months of April
2021 to September 2021. Further, it is stated that the petitioner
himself has admitted that the production of the unit was less than
25% for the months of April 2021 and the same is evidenced from
the certificate issued by the Chartered Accountant. Learned
counsel has therefore, prayed this Hon'ble Court to dismiss the
present writ petition.
5. Admittedly, in the present case, the petitioner has
established the unit and started commercial production after
obtaining necessary permission from the SIPB in the year 2010. As
per the Industrial Incentive Policy, 2011, the petitioner is entitled
to some incentives for setting up the industry which includes,
reimbursement of VAT/SGST for a period of ten years from the
date of production. That the unit of the petitioner has started
commercial production on 08.11.2011 has not been denied by the
authorities. The only question in the present writ petition is as to
whether the amendment made to Bihar Industrial Incentive Policy,
2011 vide Resolution No. 108 dated 20.01.2020 is applicable
retrospectively or not. It is apt to cite the judgments of the Hon'ble
Supreme Court on this issue. The Hon'ble Supreme Court in the
case of Pournami Oil Mills And Others V. State of Kerala And
Another reported in 1986 SUPP SCC 728 has held as under;
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
"8. It is not disputed that the first order
namely, the one dated April 11, 1979 gave more of tax
exemption than the second one. The second
notification withdrew the exemption relating to
purchase tax and confined the exemption from sales
tax to the limit specified in the proviso of the
notification. All parties before us who in response to
the order of April 11, 1979 set up their industries prior
to October 21, 1980 within the State of Kerala would
thus be entitled to the exemption extended and/ or
promised under that order. Such exemption would
continue for the full period of five years from the date
they started production. New industries set up after
October 21, 1980 obviously would not be entitled to
that benefit as they had notice of the curtailment in the
exemption before they came to set up their industries."
6. This Hon'ble Court vide judgment dated 22.03.2024
passed in CWJC No. 10038 of 2020 has held as under;
"11. In Pournami Oil Mills and Others
vs. State of Kerala and Another reported in 1986
SUPP SCC 728, the Hon'ble Supreme Court has held
that concession to new industries, setup pursuant to
concession granted by the State Government, is
entitled to invoke rule of promissory estoppel to
obligate the State not to take a different stand and to
grant concession to them. Under the notification dated
11th April, 1979, of the Kerala Government, new small
scale units were invited to set up their industries in the
State of Kerala and with a view to boosting of
industrialization, exemption from sales tax and
purchase tax for a period of five years, which was to
run from the date of commencement of production, was
extended as a concession. By a subsequent notification
dated 29th September, 1980, published on 21.10.1980,
the government withdrew the exemption relating to the
purchase tax and confined the exemption from sales
tax to the limit specified in the proviso of the said
notification. The Hon'ble Supreme Court held that if in
response to such an order and in consideration of the
concession made available, promoters of any small
scale concerned have set up their industries within the
State of Kerala, they would certainly be entitled to
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
plead the rule of estoppel in their favour when the
State of Kerala purports to act differently.
12. In Motilal Padampat Sugar Mills Co.
Ltd. vs. The State of UP and Others reported in
(1979) 2 SCC 409, the Supreme Court has said that
the law may, therefore, now be taken to be settled as a
result that where the Government makes a promise,
knowing or intending that it would be acted on by the
promisee and, in fact, the promisee acting in reliance
on it, alters his position, the Government would be
held bound by the promise and the promise would be
enforceable against the Government at the instance of
the promisee, notwithstanding that there is no
consideration for the promise and the promise is not
recorded in the form of a formal contract as required
by the Article 299 of the Constitution.
M/s Gangotri Iron & Steel Co. Ltd. vs.
The State of Bihar & Others reported in 2021(3)
PLJR 73, while considering 2006 Policy, has held that
once the State Government has made a clear and
unequivocal promise regarding grant of
subsidy/incentive, knowing and intending that it would
be acted upon by the promisee and the promisee acting
in reliance on it, alters his position, the Government
would be held bound by the promise and the promise
would be enforceable against the Government at the
instance of the promisee.
Kasinka Trading's Case (Supra) and Rom
Industries vs. The State of Jammu & Kashmir,
reported in (2005) 7 SCC 348,
34. In Kasinka Trading's case (supra) and
Rom Industries vs. State of Jammu & Kashmir,
(2005)7 SCC 348, on which reliance has been placed
by the learned counsel for the respondent do not
disturb the settled position in law that where a right
has already accrued, for instance, the right to
exemption of tax for a fixed period and the conditions
for that exemption have been fulfilled, then the
withdrawal of the exemption during that fixed period
cannot effect the already accrued right. Of course,
overriding public interest would prevail over a plea
based on promissory estoppel, but in the present case
there is not even a whisper of any overriding public
interest or equity. Notification SRO 38/98 was an
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
amendment and not a clarification of SRO 1729/93
and was expressly made prospective w.e.f. 15.1.1998.
16. Considering the aforesaid submissions
of the parties and the law laid down by the Apex
Court, in my opinion, the State, having made a
promise under the Industrial Policy, 2006, to extend
the incentive benefits to the industrial unit for a period
of ten years and the petitioner/company having acted
on the promise made investment, fulfilled the criteria
for grant of incentive, the respondent/State cannot
deny the benefits arising out of 2006 Policy on the
principles of promissory estoppel/legitimate
expectation, accordingly"
7. A reading of the above judgments clearly postulates
that once an incentive has been promised under a particular
scheme, the same shall have to be continued till the end of the
period for which the incentive was granted. The authorities by
relying on subsequent amendments cannot deny the claim of the
petitioner. In this particular case, the petitioner was given the
incentive of reimbursement of VAT/SGST after he has started
commercial production on 08.11.2011, even if there is any
subsequent amendment made in the year 2020, the same would not
be applicable to the petitioner's case.
8. Further, a perusal of the Resolution No. 108 dated
21.01.2020 reveals that the said amendment has been made to the
Industrial Incentive Policy of 2016 and not to Policy of 2011.
Therefore, the contention of the respondents that the Resolution
No. 108 dated 21.01.2020 will be applicable to the facts of the
Patna High Court CWJC No.8907 of 2023 dt.19-09-2024
case and as on the date of taking decision, the same shall be
applicable to the petitioner is misconstrued and legally not tenable.
9. Having regard to the above mentioned facts and
circumstances, the impugned order dated 05.04.2023 (Annexure-
R/1) is set aside, the authorities are directed to calculate the
reimbursement of VAT/SGST for the months of April 2021 to
September 2021 and pay the same to the petitioner as
expeditiously as possible preferably within a period of four weeks
from the date of receipt of a copy of this order.
10. With the above direction, the present writ petition
stands allowed to the extent indicated.
(A. Abhishek Reddy, J)
Ayush/-
AFR/NAFR NAFR
CAV DATE NA
Uploading Date 21.09.2024.
Transmission Date NA
