Industrial incentive scheme interpretation: resumed and reallotted property may qualify as a new asset for subsidy eligibility.

An industrial incentive scheme intended to promote new industries in backward areas was held not to bar subsidy or sales tax waiver merely because the shed had earlier been partly constructed by another entrepreneur and later resumed by SIPCOT and reallotted. The petitioner was treated as having acquired a new asset for establishing a new industry, and the prior partial construction was not a disqualifying condition under the scheme. The Court further noted that the only specific exclusion was second-hand machinery, and the rejection could not rest on any ground not supported by the scheme. The matter was therefore required to be reconsidered under G.O. Ms. No. 500.

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Issues: Whether the petitioner was entitled to capital subsidy and sales tax waiver under G.O. Ms. No. 500 dated 14 May 1990 when the industrial shed had been partly completed by a previous entrepreneur, resumed by SIPCOT, and thereafter completed by the petitioner, and whether the rejection based on that ground was legally sustainable.

Analysis: The scheme under G.O. Ms. No. 500 was intended to encourage new industries in backward areas. The Court noted that the petitioner had not purchased a partly completed structure from the earlier allottee, but had received the land and shed after SIPCOT resumed and reallotted the property. From the petitioner's standpoint, the asset was therefore a new asset acquired for setting up a new industry, and the reason that the asset had been partly created by another entrepreneur did not fit the scheme as a disqualifying condition. The Court also noticed that clause 12 excluded only second-hand machinery from eligible investment, and the rejection order was not founded on any sustainable statutory or scheme-based bar.

Conclusion: The rejection of subsidy and sales tax waiver on the stated ground was unsustainable, and the matter required reconsideration by the authorities in accordance with G.O. Ms. No. 500.

Ratio Decidendi: In applying an industrial incentive scheme, a property resumed by SIPCOT and reallotted for a new project may be treated as a new asset for the allottee, and rejection cannot rest on an extraneous ground not found in the scheme, while second-hand machinery remains outside eligible investment only to the extent specifically excluded by the scheme.

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