Court rules in favor of petitioner, finding withdrawal of approval based on misappreciation of facts.

The court found in favor of the petitioner, ruling that the withdrawal of approval by the DIPP was based on a misappreciation of facts. The court highlighted that the petitioner had consistently communicated the actual built-up area, which was part of the record when the approval was initially granted. The court also noted that the delay in project completion was within a permissible grace period, as established in a previous case. Consequently, the court quashed the withdrawal of approval, directing a reconsideration of the matter with proper hearing and a focus on relevant factors without specifying a minimum constructed area requirement for benefits under the scheme and Income Tax Act.

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Issues Involved:
1. Withdrawal of approval under the Industrial Park Scheme 2002 and Section 80IA of the Income Tax Act.
2. Alleged non-compliance with the conditions of the approval and notification.
3. Discrepancy in the built-up area of the Industrial Park.
4. Delay in the commencement and completion of the Industrial Park project.

Issue-wise Detailed Analysis:

1. Withdrawal of Approval:
The petitioner challenged the withdrawal of approval granted by the DIPP under the Industrial Park Scheme 2002 and Section 80IA of the Income Tax Act. The approval had been initially granted on 09.02.2007, but was withdrawn by notification No. 21/2014 dated 27.03.2014. The petitioner argued that the withdrawal was unilateral and without granting any opportunity for a hearing.

2. Non-compliance with Conditions:
The DIPP's withdrawal was based on the alleged non-compliance with the conditions mentioned in the approval letter dated 05.12.2006 and the notification dated 09.02.2007. Specifically, it was argued that the petitioner failed to commence the Industrial Park by 31.03.2006 and that the occupation certificate issued only covered 8094.02 sq. meters, whereas the initial application declared an area of 24299.75 sq. meters.

3. Discrepancy in Built-up Area:
The petitioner consistently maintained that the DIPP was aware that the built-up area was 14715.55 sq. meters, as evidenced by various reports and correspondence with the Haryana Director of Industries. The DIPP, however, noted the discrepancy between the initially declared area (24299.75 sq. meters) and the actual constructed area (14715.55 sq. meters), and further claimed that the actual area constructed was only 8094.02 sq. meters.

4. Delay in Commencement and Completion:
The DIPP cited that the project was not completed within the stipulated period. The petitioner argued that the scheme and the statute allowed a grace period of one year, within which the construction was completed. The court referred to the precedent set in M/s. Silverland Developers Pvt. Ltd. v. Empowered Committee & Ors., where a similar delay was deemed permissible.

Judgment Analysis:
The court found that the DIPP's decision to withdraw the approval was based on a misappreciation of the facts and circumstances. The petitioner had consistently communicated the actual built-up area (14715.55 sq. meters), and this was part of the record when the approval was initially granted. The court noted that the DIPP failed to consider the petitioner's explanation and the material facts, such as the approval given by the town planning authorities and the inter se correspondence between the Haryana Director of Industries.

The court also addressed the issue of delay, citing the Silverland Developers case, which allowed for a grace period beyond the initially stipulated date. The court held that the DIPP's withdrawal of approval, based on the alleged non-compliance with the construction timeline, was unsustainable.

Conclusion:
The court quashed the impugned order and notification withdrawing the earlier approval. It directed the second respondent to reconsider the materials on record, grant a proper hearing to the petitioner, and issue a reasoned order addressing all contentions. The fresh order should focus on the constructed area and whether there was any material suppression, considering the scheme and the Income Tax Act, which do not stipulate a minimum constructed area for qualifying benefits. The writ petition was allowed without any order on costs.

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