Court rejects tax recovery demand under Wind Power Generation Scheme 1993 due to cyclone-induced stoppage

The court ruled in favor of the petitioner, rejecting the tax recovery demand based on certificates issued under the Incentive Scheme for Wind Power Generation, 1993. The court held that recovery only applies if the unit deliberately ceases production, which was not the case due to the cyclone-induced stoppage. Units recommissioned within 24 months were not liable for interest, and the petitioner, having complied within this period, was not subject to recovery based on the breach of condition No. 7(b). The petitioner was directed to discharge its liability as per the court's instructions, with no costs imposed.

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Issues:
Challenge to tax recovery based on cancelled certificates under Incentive Scheme for Wind Power Generation, 1993; Breach of condition No. 7(b) of the Scheme; Interpretation of subsequent resolution relaxing conditions for wind farm operation; Recommissioning period for windmills post-cyclone; Liability of units based on recommissioning status.

Analysis:
The petition challenged the tax recovery demand based on certificates issued under the Incentive Scheme for Wind Power Generation, 1993. The petitioner installed windmills in compliance with the scheme, but a cyclone caused damage leading to a stoppage in production. The respondent sought recovery due to the petitioner's inability to remain in continuous production as per condition No. 7(b) of the Scheme. The court referred to a previous judgment stating that recovery applies only if the unit deliberately ceases production, which was not the case here. Thus, the plea of the respondent was not accepted.

Another issue involved the interpretation of a subsequent resolution relaxing conditions for wind farm operation post-cyclone. The court noted that units recommissioned within 24 months from the cyclone date were entitled to benefits for the balance period. The court considered factors like shock, finance arrangements, and installation time for a new windmill in setting the recommissioning period. Units not recommissioned were liable for the period pre-cyclone under the original Scheme terms.

The judgment clarified that units recommissioned within 24 months were not liable for interest, but units recommissioned beyond that period were subject to interest payment while discharging their liability. In this case, as the petitioner recommissioned within 24 months, no recovery was allowed based on the breach of condition No. 7(b), and the petitioner was required to discharge its liability as per the court's directives. The petition was allowed accordingly with no costs imposed.

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