TaxTMI 
TaxTMI 
2024 (8) TMI 828
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....ibility conditions, more particularly set out in the said Office Memorandum. It is in this context that the Petitioner, although seeking various reliefs in the above Petition, has restricted itself to prayer clauses (iii-a) and (iii-b) which read thus:- "(iii-a) A writ of Certiorari and/or a Writ in the nature of Certiorari and/or any other appropriate Writ, Order and/or direction under Article 226, calling for the records leading to the issuance of the decisions communicated vide emails dated 12th March 2024 (at Exhibit "S") and 13th March 2024 (at Exhibit "T") and after examining the legality and propriety thereof, be pleased to quash and set aside the same. (iii-b) A Writ of Mandamus and/or a Writ in the nature of Mandamus and/or any other appropriate Writ, Order and/or direction under Article 226 directing the Respondent to accept the Petitioner's application for relief under the Vivad Se Vishwas I Scheme as per Office Memorandum dated 10.04.2023 and subsequent Office Memorandums and to process the same in accordance with law." 3. The Petitioner is a Company engaged in rendering services of electronic automation, information, communication, and technica....
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.... references from Micro, Small and Medium Enterprises (MSMEs) regarding difficulties faced by them due to the COVID - 19 pandemic, by an Office Memorandum dated 6th February 2023, the Finance Ministry framed the VSV Scheme under which it proposed to refund 95% of the liquidated damages deducted under contracts with Government / PSUs inter alia on the conditions that the contractor/supplier should be registered as a Medium, Small or Micro Enterprise with the Ministry of MSME, as on 31st March 2022, and the original delivery period/completion period [under the concerned contract] was between 19th February 2020 and 31st March 2022. The Government e-Marketplace (the "GeM") was also directed to provide an online portal for the purpose of implementing the VSV Scheme. 8. Thereafter, the Finance Ministry issued an Office Memorandum dated 10th April 2023 whereby the eligibility conditions for applying under the VSV Scheme were modified. It was provided that the supplier/contractor would be eligible for the VSV Scheme if it is registered as a Medium, Small or Micro Enterprise as per the prevalent scheme of the Ministry of MSME on the date of the claim made by the supplier/contractor. It wa....
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.... has been constrained to file the present Petition seeking the reliefs set out above. 13. In this factual backdrop, and which is undisputed, Mr. Kadam, the learned counsel appearing on behalf of the Petitioner, submitted that by the impugned emails dated 12th March 2024 and 13th March 2024, the Respondents have wrongfully held that the Petitioner is not entitled to make a claim under the VSV Scheme on the ground that the Petitioner was not a MSME. Mr. Kadam submitted that for the Petitioner to be entitled to avail of the VSV Scheme, it had to be registered as a Medium, Small or Micro Enterprise as per the prevalent scheme of the Ministry of MSME on the date of making the claim. He submitted that the Petitioner made the claim in February 2024. He further submitted that the Petitioner was registered as a Medium Enterprise with the MSME Ministry on 10th May 2021. He submitted that the Petitioner was upgraded/re-classified as "not an MSME" w.e.f. 9th May 2023. However, the Udyam Registration Certificate, by which the Petitioner was re-classified as "not an MSME", itself provided that in case of graduation of status of an Enterprise, the benefit of Government Schemes can be availed a....
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.... of the VSV Scheme, an Enterprise had to be a Micro or Small or a Medium Enterprise on the date of the claim made by it. When the Petitioner submitted its claim in February 2024, it was admittedly not a Micro or Small or a Medium Enterprise because w.e.f. 9th May 2023 it had been classified as 'not an MSME'. 19. The said Affidavit further stated that Clause 8 (5) of the Notification dated 26th June 2020, as substituted by Notification dated 18th October 2022, was not applicable to the VSV Scheme, because the said Scheme inter alia stipulated that on the date of making the claim, the said Enterprise would have to be registered as a MSME. Admittedly, in February 2024 the Petitioner was not a MSME, and hence, could not avail of the VSV Scheme. The said Affidavit then stated that an upward re-classification/change as contemplated under Clause 8 (5) of the Notification dated 26th June 2020, as substituted by Notification dated 18th October 2022, could never apply where, by virtue of the upward change, the MSME ceases to be a MSME. The upward change contemplated is only a change from a Micro Enterprise to a Small Enterprise, and from a Small Enterprise to a Medium Enterprise. The said....
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..... iv .................." 23. As per the said eligibility criteria, for the supplier/contractor to be eligible for the VSV Scheme, it should be registered as a Medium, Small or Micro Enterprise as per the prevalent scheme of the Ministry of MSME on the date of the claim by the supplier / contractor. 24. As mentioned earlier, the Ministry of MSME has issued a Notification dated 26th June 2020 notifying certain criteria for classifying Enterprises as Micro, Small and Medium Enterprises, and for specifying the form and procedure for filing the Memorandum known as Udyam Registration w.e.f. 1st July 2020. Clause 1 thereof provides for classification of Enterprises and reads as under: "1. Classification of enterprises.-An enterprise shall be classified as a micro, small or medium enterprise on the basis of the following criteria, namely:-- (i) a micro enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees; (ii) a small enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed ....
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....r any word otiose or superfluous. Therefore, it is not possible to accept the said submission of the Ministry of Finance. 28. In our view, Mr. Kadam is right in submitting that Clause 8 (5), as substituted by Notification dated 18th October 2022, creates a legal fiction of treating a Micro or Small or a Medium Enterprise as such, for a period of three years, from an upward change/reclassification in its status, notwithstanding the fact that its status may have changed due to its upward change/re-classification. This, of course, is for the limited purpose of availing of all non-tax benefits. In other words, for example, if a Small Enterprise becomes a Medium Enterprise [by virtue of its upward re-classification], for availing of all non-tax benefits, it will continue to be treated as a Small Enterprise for a period of three years from such upward change/re-classification. Similarly, if a Medium Enterprise is classified as "not an MSME" by virtue of its upward re-classification, for availing of all non-tax benefits, it will continue to be treated as a Medium Enterprise for a period of three years from such upward change/re-classification. In this context, the Judgement of the Hon'....
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....ction (1) of Section 33 as agreements relating to restrictive trade practices. It can be said that Parliament after having examined different trade practices, has identified such trade practices which have to be held as restrictive trade practices for the purposes of the Act. To keep such trade practices beyond controversy in any proceeding, a deeming clause has been introduced in sub-section (1) of Section 33 saying that they shall be deemed to be restrictive trade practices. In this background, according to us, there is not much scope for argument that although a particular agreement is covered by one or the other clauses of sub-section (1) of Section 33, still it shall not amount to an agreement containing conditions which can be held to be restrictive trade practices within the meaning of the Act." (emphasis supplied) 29. In these circumstances, in our view, even though the Petitioner was re-classified as "not an MSME" [by virtue of upward reclassification] w.e.f. 9th May 2023, for a period of three years from 9th May 2023, it was entitled to avail of all non-tax benefits available to a Medium Enterprise. Since the VSV Scheme is a non-tax benefit applicable even to ....