TaxTMI 
TaxTMI 
2010 (8) TMI 838
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....ing and manufacturing hand tools and machine tools. As industrial units set up in Punjab and which undertake export, were at disadvantageous position, because of their geographical placement, they have to incur additional freight due to distance from the ports. With a purpose to offset this additional cost and to enhance competitiveness of industries, the Government of Punjab under the "Industrial Policy Statement-2003", formulated a scheme called the Freight Neutralization Scheme on March 26, 2003 (hereinafter referred to as, "the Scheme"). Under the said Scheme, industrial manufacturing undertaking export units were given freight assistance to the extent of one per cent of the free on board (FOB) value of exports, subject to maximum of 50 lakhs per unit per annum. Light engineering including machine tools and auto parts were also held eligible for the said benefit. The Scheme was notified on September 11, 2003, according to which, the budgetary allocation up to Rs. 50 crores per annum was to be made to the Industries Department by the State Government, which was to be released on quarterly basis. The Scheme was to come into force from April 1, 2003. Clause 6.4 of the provided tha....
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....dy, the budgetary allocation stands made and non-release of amount by the respondents is unjustified and without any basis. Unless the Scheme is withdrawn or modified, the rights accrued thereunder would continue and the petitioner would be entitled to all the benefits under the said Scheme. He further submits that the doctrine of estoppel would come into play and the State cannot shirk its responsibility under the said Scheme. Merely, because no fund has been released by the State Government for disbursement under the said Scheme, would not be a justifiable ground for nonrelease of amount of freight subsidy to the petitioner. In support of these contentions, counsel has relied upon the judgment of the honourable Supreme Court in the case of Southern Petrochemical Industries Co. Ltd. v. Electricity Inspector and ETIO [2007] 5 SCC 447. On the other hand, counsel for the respondents has not disputed the Freight Neutralization Scheme, which came into force from April 1, 2003 and was framed under the "Industrial Policy-2003". However, it has been stated that as per clause 2 of the Scheme, the claims are to be entertained up to the amount provided for this purpose and in case, no amoun....
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....ht assistance under the Scheme. She contends that the agreement with regard to the interest-free loan is an independent contract, which is neither dependent nor connected with the Scheme and, therefore, both the two cannot be co-related with each other. She accordingly prays for dismissal of the present writ petition as the same is devoid of merit. I have heard counsel for the parties and have gone through the records of the case. The Punjab Government notified "Industrial Policy Statement2003" on March 26, 2003, under which a provision for freight neutralization to the extent of one per cent of free on board (FOB) value of exports, subject to maximum of Rs. 50 lakhs of freight incurred on transporting goods from place of manufacture to the place from where these were to be shipped, was made. For implementation of the provision of the Scheme, the State of Punjab notified Inland Freight Neutralization Scheme on September 11, 2003. This Scheme was formulated in order to enhance competitiveness of industrial units undertaking export, which were situated in the State of Punjab as it was felt by the State of Punjab that the industrial units in Punjab were at disadvantageous position d....
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....e of Industries was to make disbursement on quarterly basis out of the total sanctioned amount. Since, no amount was sanctioned or provided by the State Government to the Department of Industries during the financial years 2003-04, 2004-05, and 2005-06, due to the financial constraints and stringency, no disbursement of freight subsidy was made to any of the claimants under the Scheme. Further as per clause 2 of the Scheme, the claims were to be entertained up to the amount provided. For the purpose of granting incentives under the Scheme, the claims would not be carried forward to the subsequent year and the same would lapse. No industrial unit in the State of Punjab has been disbursed the incentive under the Scheme during the period in ques tion. In the present case, as no amount was provided for, therefore, no incen tives could be provided to the claimants under the Scheme. The result thereof was that the claims lapsed. In view of the above, the petitioner is not entitled to any freight subsidy, as has been claimed by it under the Scheme. In any case, the prayer made by the petitioner for adjustment of the interest-free loan instalments against the freight subsidy due to the....
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....led to its claim under the Freight Neutralization Scheme, it cannot legally press for adjust ment of interest-free instalments for the interest-free loan it has availed of. The doctrine of promissory estoppel, which has been sought to be invoked in the present case, would apply only where in pursuance of and in furtherance of a promise made by a State to grant incentives under the Scheme, the claimant of such benefit had taken steps based on such assur ance. In the present case, interest-free loan of Rs. 16,90,300 was disbursed to the petitioner in four yearly instalments under the Industrial Policy Statement-1978 during the periods 1990-91, 1991-92, 1992-93 and 1993-94. The petitioner executed agreement deeds with the Government on receipt of each instalment (annexures R2 to R5), which provide for return of loan on 11th, 12th, and 13th anniversary of first instalment of the loan. The last agreement deed is dated June 15, 1995 (annexure R5). The Freight Neutral ization Scheme came into effect from April 1, 2003. When the petitioner is claiming adjustment of interest-free loan received by it against the claim of reimbursement, which has been made now under the Freight Neutraliza t....