2023 (7) TMI 354 - HC - GST

Industrial Unit Wins Appeal: Policy Incentives Restored, Authorities Directed to Reconsider Expansion and Subsidy Grants

HC Patna ruled in favor of the industrial unit, setting aside an order rejecting industrial incentives under Bihar's 2011 Policy. The court directed ... Rejection of claim of disbursement of incentives promised under Bihar Industrial Incentive Policy, 2011 on 1 & 2nd expansion of the Petitioner's unit - rejection on the ground that the proposal for said expansions were not approved by the SIPB ignoring the Resolution. HELD THAT:- Perusal of the impugned order reveals that the authority concerned has not taken into consideration the letter dated 15.07.2011 (Annexure-5), which clearly states that for the purpose of expansion and diversification of an existing industry no separate approval of State Investment Promotion Board is necessary. Having regard to the same, this Court deems it appropriate the impugned order needs to be set aside and the matter remanded back to the authority concerned for reconsidering the matter afresh duly taking into consideration the letter dated 15.07.2011 (Annexure-5). Therefore, the impugned order is set aside, the matter is remanded back to the authority concerned to pass an appropriate order duly taking consideration the letter dated 15.07.2011 (Annexure-5) as expeditiously as possible preferably within a period of eight weeks from the date of receipt of a copy of this order. Petition allowed by way of remand. Issues Involved:The issues involved in the judgment are related to the rejection of incentives promised under the Bihar Industrial Incentive Policy, 2011 for the expansion of the petitioner's unit, the authority responsible for approval of expansion proposals, reimbursement of State Goods and Service Tax (SGST), grant of Capital Subsidy, and other subsidies as per the Policy, 2011.Issue 1: Rejection of Incentives for Expansion:The writ petition was filed to challenge the order rejecting the claim of incentives for the expansion of the petitioner's unit, citing lack of approval from the State Investment Promotion Board (SIPB). The petitioner argued that the procedure for eligibility and grant of incentives under the Policy did not require SIPB approval for expansions of existing units. The court found that the authority failed to consider a letter dated 15.07.2011, which clarified that no separate approval of SIPB was necessary for expansion and diversification of an existing industry. Consequently, the court set aside the impugned order and remanded the matter for reconsideration, emphasizing the importance of following the guidelines outlined in the aforementioned letter.Issue 2: Entitlement to Incentives and Subsidies:The petitioner sought a declaration that they were entitled to incentives promised under the Bihar Industrial Incentive Policy, 2011 for their unit expansions. The court noted that the then Principal Secretary, Department of Industries, had confirmed that SIPB approval was not required for expansion and diversification programs of existing industries. The court directed the authority to reconsider the petitioner's case in light of the 2011 letter and instructed that the petitioner be given a hearing before any decision is made, emphasizing the need for a prompt resolution within eight weeks.Issue 3: Reimbursement of SGST and Other Subsidies:The petitioner also requested reimbursement of 80% of the State Goods and Service Tax (SGST) deposited, as promised under the Policy, 2011. The court ordered the Commissioner of State Taxes and other relevant authorities to ensure the reimbursement of SGST and directed the Department of Industry, Government of Bihar, to grant Capital Subsidy and other subsidies promptly to support the petitioner's unit, which was suffering due to the lack of VAT reimbursement and subsidy disbursement.In conclusion, the High Court of Patna, in the judgment, addressed the issues raised by the petitioner regarding the rejection of incentives, entitlement to subsidies, and reimbursement of taxes under the Bihar Industrial Incentive Policy, 2011. The court emphasized the importance of following the established procedures and guidelines, setting aside the impugned order and remanding the matter for reconsideration in accordance with the relevant provisions and clarifications provided.