Renewal of existing SEZ unit approval cannot be refused on an unstated phase-out policy or discriminatory treatment.

The Board of Approval could not refuse renewal of an existing plastic recycling unit's Letter of Approval on the basis of an assumed policy to phase out such units, because section 9 of the Special Economic Zones Act, 2005 makes the Board an implementing body bound by written Central Government policy directions and not a policy-maker. Rule 18(4)(a) of the Special Economic Zones Rules, 2006 bars only new units, while the proviso leaves extension of existing units to the Board. In the absence of any written phase-out policy, and given the comparable treatment of similarly situated units, the refusal was arbitrary and discriminatory and the renewal was to be granted.

---

---

Issues: Whether the Board of Approval could refuse renewal of the Letter of Approval for an existing plastic recycling unit by treating rule 18(4) of the Special Economic Zones Rules, 2006 as embodying a policy to phase out such units, and whether the impugned refusal was arbitrary and discriminatory in the face of the earlier judicial direction and the treatment accorded to similarly situated units.

Analysis: Section 9 of the Special Economic Zones Act, 2005 shows that the Board is an implementing body bound by written policy directions of the Central Government and does not itself possess policy-making power. The record did not disclose any written Central Government policy to phase out existing plastic recycling units. Rule 18(4)(a) of the Special Economic Zones Rules, 2006 only bars new units and, by its proviso, leaves extension of existing units to the Board. The Board had earlier been required to compare the petitioner's case with similarly situated units, and the Development Commissioner's report indicated comparable treatment. The refusal was nevertheless based on a newly invented phase-out rationale, while extension had been granted to other dormant units.

Conclusion: The refusal was unsustainable. The petitioner was entitled to renewal and extension of the Letter of Approval, and the impugned decision was liable to be quashed.

---