TaxTMI 
TaxTMI 
2020 (4) TMI 135
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....ons filed under Article 226 of the Constitution of India have a common grievance and that is the rejection of their respective claims for the benefits/incentives admissible under the Bihar Industrial Incentive Policy, 2011 (hereinafter referred to as the 'Industrial Policy, 2011') by the Director, Industries, Bihar, Patna through separate orders as impugned in the respective writ petitions, inter alia, on grounds 'that their proposal does not have the approval of the Competent Authority'. Since the grievance of the petitioners in this batch is common, that the writ petitions have been heard analogous and are being disposed of at the stage of admission with the consent of the parties. To demonstrate the commonness in the relief prayed by the respective writ petitioners I am persuaded to reproduce the same hereunder: Re: CWJC No.12104 of 2018: (i) For direction to the Respondent Commissioner of Commercial Taxes as also the Deputy Commissioner of Commercial Taxes to restore the VAT Reimbursement of amount of VAT deposited by the petitioner in terms of the Industrial Policy Resolution, 2011 as the same has been abruptly discontinued in most arbitrary and illegal ma....
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....Minimum Bases Energy Charges etc.; (v) For a direction to the respondents for grant of subsidies at the earliest to save the petitioner's unit as it is suffering due to discontinuance of reimbursement of the amount of VAT deposited by the petitioner and also for non-grant of the amount of capital subsidy and other subsidies; and/or for any other relief(s) for which the petitioner may be found entitled to in the facts & circumstances of the present cases. Re: CWJC No.2981 of 2019: (a) For issuance of order/orders, direction/directions or writ/writs in the nature of mandamus directing the respondent authorities to reimburse the petitioner company subsidy under the heading of Value Added Tax (for brevity 'VAT')/Central Sales Tax (for brevity 'CST')/ Bihar Tax on Entry of Goods into Local Areas for Consumption (for brevity 'Bihar Entry Tax Act') in terms of Clause (i) of the Industrial Incentive Policy, 2011 (hereinafter referred to as 'the IIP 2011') for the period of 01.01.2016 to 30.06.2017 to the tune of Rs. 1,05,92,000/- (One Crore Five Lakh and Ninety Two Thousand only). (b) For issuance of writ in nature of Mandamus directing the respondents a....
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....cting domestic and foreign investment as well as for revival and expansion of business operations of the existing industrial units. The policy was approved by the Cabinet before being notified in the official gazette vide Resolution No.691 dated 09.06.2011 of the Industries department which was published in the gazette on 10.06.2011. A copy of the gazette notification is enclosed at Annexure 2 with its English text at Annexure 3 to the writ petition. The petitioner in order to take advantage of the promise made by the State under the 'Industrial Policy, 2011, applied with all relevant documents seeking permission to set up a Four Star Hotel which was covered under the 'Tourism' category vide item c(7) of Annexure 1 appended to the 'Industrial Policy, 2011' enclosed at Annexures 2 and 3 to the writ petition. The State Investment Promotion Board gave its consent on the proposal for establishment of the Four Star Hotel and which was communicated through letter dated 17.04.2013 of the Director, Technical Development, Department of Industries enclosed at Annexure 8 to the writ petition. The letter sufficiently indicates that the proposal was approved on the parameters of the 'Industr....
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....s before this Court. Re: CWJC No.15496 of 2018 : The petitioner in this case is a partnership firm incorporated on 21.07.2015 under the provisions of the Limited Liability Partnership Act, 2008 having its registered office at Debi Chowk, Patna City, Patna 800008. The petitioner is engaged in the business of manufacture of basic metal which manufactures ERW pipe, steel sheet cutting, shutter profile etc. A similar sequence of events as existing in the case of M/s Sunny Stars Hotels Private Limited accompanies the present writ petition as well and even when the claim of the petitioner for grant of incentive under the 'Industrial Policy, 2011' has been approved by the State Investment Board and an Eligibility Certificate was issued for reimbursement of the 'VAT' amount as well as the Capital Subsidy etc. but through letter dated 26.06.2018 impugned at Annexure 15 series, that assigning absence of approval by the Competent Authority, the claim for reimbursement made by the petitioners was rejected in continuation of earlier rejection communicated through letter dated 13.10.2017, of the Director, Industries, Bihar, Patna. It is feeling aggrieved that the said petitioner is before ....
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....ed in the writ petitions and in reference to the one enclosed at Annexure 3 to CWJC No.12104 of 2018 which is the English text of the 'Industrial Policy, 2011' he submits that a complete scheme is spelt out in the Industrial Policy, 2011 which was announced with the avowed object of accelerating industrial development but the action of the respondent-Director, Industries in rejecting the claim advanced by the petitioners on the technicality that 'the proposal does not bear the approval of the Competent Authority' defeats the very object for which the policy was announced. It is the argument of Mr. Sanjay that the claim of the petitioners is not negated on eligibility rather the only reason which is assigned by the Director, Industries in the respective letters which communicate the rejection of the claim is, the absence of approval by the Competent Authority. It is submitted that these communications fail to assign any reason and also do not indicate whether the claims in fact, have been rejected by the Competent Authority or they are awaiting approval. According to Mr. Sanjay, the Scheme at Annexure 3 and the subsequent notifications issued thereunder clearly explains the oblig....
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.... to the recommendations at Annexure 8 that the Director, Technical Development in consideration of the proposal submitted by the petitioner informed about the approval given by the State Investment Promotion Board in its meeting held on 08.02.2013 and also communicated that the incentives shall be considered separately by the concerned department as per the policy. In reference to the proposal at Annexures 9 and 10 he submits that it is in consideration of the eligibility of the petitioner to draw benefits under the 'Industrial Policy, 2011' that the Eligibility Certificate for reimbursement of VAT under 'VAT Act, 2005' was issued on 21.03.2014 by the General Manager, District Industries Centre, Patna who also issued a certificate regarding 100% exemption from luxury tax. Learned senior counsel in reference to the pass-book, the extract of which is enclosed at Annexure 14 submits that while the deposits made by the petitioner towards 'VAT' is entered therein, the petitioner could get reimbursement only up to the 3rd quarter of the financial year 2015-16. In reference to the paragraph 29 of the writ petition he submits that as until 1st quarter of the financial year 2017-18 wh....
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....e non-grant of approval by the Competent Authority. Mr. Mrigank Mauli has appeared for the petitioner in CWJC No.2981 of 2019 and while going along with the arguments advanced by Mr. Sanjay, has invited the attention of the Court to the Bihar Single Window Clearance Act, 2006 (hereinafter referred to as the 'Act of 2006') at Annexure P/3 to the writ petition to submit that the confusion whatsoever on the issue of 'Competent Authority' is answered by the definition present at section 2(2) of the said Act which defines the 'Competent Authority' to mean any department or the Agency of the Government, a Gram Panchayat, or a Municipality or any other local body, which is entrusted with the powers and responsibilities to grant or issue clearance. He submits that the said Act was enacted in 2006 for providing speedy clearances and certificates required for setting up of Industrial undertakings for all round development of the State and for providing investor friendly environment. He thus argues that even though the term 'Competent Authority' as relied upon by the State to deny the benefits to the petitioner, is not defined in the 'Industrial Policy, 2011' but considering the import of ....
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....ing Counsel No.11 and Mr. Kinkar Kumar, learned Standing Counsel No.9 and their entire arguments revolve around the stand taken by the respondents in their respective counter affidavit and which is that, since the Competent Authority has not approved the case of the petitioners for grant of incentives, that their cases have been rejected. There is nothing further in the arguments of the respective counsel which requires to be recorded because no objection is raised on the merits of the claim or on the eligibility of the petitioners to draw the incentives. Each of the counter affidavits filed in the three writ petitions has identical stand taken by the respondent-State in its Industries department and since identical stand has been taken by the State in each of the cases, I am persuaded to reproduce the statement made in paragraphs 17 to 20 of the counter affidavit filed in CWJC No.12104 of 2018 which reads as under: "17. That it is stated that although in the case of the present petitioner there is recommendation and consent of the State Investment Promotion Board (SIPB for short) as stated above, however, there is no approval of the 'competent authority' and therefore,....
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....ed before the 'competent authority' as defined in notification no.128 dated 16.01.2006 for approval whose approval is mandatory depending upon the financial aspect involved in the project as per Clause 2.2 of the Notification No.128 dated 16.01.2006. 11. That it is stated that it is only after the approval of the Competent Authority, the admissible benefits are supposed to be given to any eligible Unit. 12. That it is stated that there is a rationale for keeping the requirement of approval by the 'competent authority', as by that process when the SIPB recommendation/advice is received by the 'competent authority' as per the mandate of Clause 2.2 of the Notification dated 16.01.2006 (Letter No.126), the Head of the Government gets an opportunity to see the nature of the project, the sector which the project is going to cover, the employment which the project is going to generate, the future prospect of the project, the tax revenue which in future, the project may generate, the project's viability and the need to provide financial assistance to such project, and they all are relevant factors for approval and therefore, it is only after approval by the 'competent aut....
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....ot lawful. The Commercial Tax department on the other hand attributes stoppage of reimbursement to the change in procedure under the Bihar Industrial Investment Promotion Policy, 2016 read alongside the provisions of the 'Act of 2016'. Having noted the arguments advanced by learned counsel appearing on behalf of the petitioners as contested by learned counsel appearing for the State in reference to the stand taken in the counter affidavits in my opinion, the petitioners herein have been subjected to unwarranted litigation by the respondents by raising a bogie of 'lack of approval by the 'Competent Authority' i.e. the Head of the Government', when the documents on record confirm to the approval given by the Competent Authority under the 'Industrial Policy, 2011'. I have noted the arguments advanced by learned counsel for the petitioners as contested by learned counsel for the State, in reference to the stand taken by the Industries department and Commercial Taxes department in their respective counter affidavits filed in the writ petitions. In my considered opinion the objections raised by the Industries department which has led to the filing of the writ petitions lacks founda....
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...., 2011 was announced with an objective to attract domestic and foreign investment as well as the revival and expansion of business operations of the existing industrial units by providing the right industrial ambience. For the sake of convenience I am persuaded to reproduce paragraphs 1 and 2 of the English text of the 'Industrial Policy, 2011' which runs under: "In view of the rapid changes in the Global Industrial Scenario, Bihar Industrial Incentive Policy-2006 has been reviewed with an objective to attract domestic and foreign investment as well as revival and expansion of business operations of the existing industrial units by providing the right industrial ambience. After reviewing the same, it was felt that in view of the present scenario, it is imperative that a new industrial incentive policy be prepared so as to promote balanced industrial development and enable industries to contribute towards the social and economic development of the State. In the above background, a new Industrial Incentive Policy-2011 has been prepared based on the suggestions and consultations with the main Industry Associations such as- Bihar Industries Association, Bihar Chamber ....
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....concerned vide order bearing Memo No 2443 dated 15.07.2011 the Principal Secretary, Industries department has constituted a committee to be chaired by himself with the Director, Industries, the Principal Secretary, Commercial Taxes department, the Member representative of the Bihar Industries Association, the Bihar Chamber of Commerce, the Director, Technical Development etc. as its Members. The said order is enclosed as a part of Annexure 6. Annexure 7 is a resolution of the State Government in its Industries department in laying down the procedure for grant of subsidy on establishment of Captive Power Plant/Diesel Generating Set/Non-Conventional form of energy under the 'Industrial Policy, 2011' bearing Memo no.2438 dated 15.07.2011. A committee to examine the grant of subsidy for establishment of such Captive Power Plant, Diesel Generating Set and nonconventional source of energy is also constituted vide resolution bearing Memo No.2444 dated 15.07.2011 of the State Government in its Industries department at Annexure 7/A. I have consciously referred to these orders and resolutions of the State Government in its Industries department issued under the signature of the Head....
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....Policy, 2011'. Considering that it is not the stand of the State in its Industries department that any of these petitioners had opted to remain under the 'Industrial Policy, 2006' rather their proposal was submitted for grant of benefits/incentive under the 'Industrial Policy, 2011', the orders of rejection issued in reference of a resolution dated 16.01.2006 under the old policy impugned in the writ petitions, is illegal. In fact the reliance by the Industries department to the notification issued under the 'Industrial Policy, 2006' to deny the benefits admissible to these petitioners under the 'Industrial Policy, 2011' is a malafide act and de-hors the object for which the Industrial Policy was framed. Mr. Mauli, has made reference to the 'Act of 2006' to explain the term 'Competent Authority' to mean any department or agency of the Government, a Gram Panchayat or a Municipality or any other local body and which definition has a overriding effect as per section 23 thereof but even going by the stipulation present in the 'Industrial Policy, 2011' itself which is a self contained policy more particularly Clause 14 thereof there is absolutely no confusion that the concerned de....
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....hat extent. ... ... ... ... ..." In view of the legal position so settled by the Supreme Court, the orders passed by the Director, Industries impugned in the respective writ petitions are rendered whimsical, lacking application of mind and bereft of reasons. It is rather unfortunate that even when the respondents do not adversely comment on the eligibility of the petitioners to draw incentive under the 'Industrial Policy, 2011', it is simply by raising a bogie of lack of approval by the Competent Authority that they seek to deprive the benefits to these petitioners even when there is no contest on the approval granted by the State Investment Promotion Board in terms of Clause 14 of the 'Industrial Policy, 2011' to these petitioners. It is not the case of the State Government that the proposals of these petitioners have been rejected by an authority competent to do so under the 'Industrial Policy, 2011' rather it is admitting to the eligibility that 2 of the 3 petitioners have drawn the advantage under the 'Industrial Policy, 2011' and there is again a difference in opinion for stoppage of these incentives in between the department of Industries and the Commercial Tax departme....
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....he approval of the Competent Authority in terms of the resolution dated 16.01.2006, is a whimsical decision, lacking application of mind and bereft of reasons. (b) In absence of the term 'Competent Authority' defined under the 'Industrial Policy, 2011', the approval granted by the State Investment Promotion Board, accepted by the concerned department in terms of Clause 14 of the 'Industrial Policy, 2011' and acted thereupon, there is no requirement of further approval by any other authority. (c) In absence of any provision present in the 'Industrial Policy, 2011', to require the eligibility proposal of any unit to be placed before the Chief Minister or the Cabinet, the explanation given by the Industries department at paragraphs 10 to 13 of the counter affidavit filed in CWJC No.12104 of 2018, to justify his illegal act, is de-hors the 'Industrial Policy, 2011'. (d) In view of the definition of 'Competent Authority' present in the 'Act of 2006 at Annexure P/3 to CWJC No.2981 of 2019 the approval granted by the State Investment Board and acted upon by the concerned department in terms of Clause 14 for extending incentives to 2 of the 3 petitioners under th....