2017 (11) TMI 2052 - HC - Income Tax

Release of sanctioned capital subsidy/Investment Incentive - Petitioner(s) has submitted that the petitioner(s) in all writ petitions are closed units but they are eligible for grant of subsidy - HELD THAT - The capital subsidy/Investment Incentive of Rs.50 lacs was sanctioned to the petitioner as far as back on 31.3.1997 on 18.3.1999. Since then the petitioner is waiting for the release of the capital subsidy/Investment Incentive. During this interregnum due to financial sickness, the petitioner Company was closed in the year 2006 but the subsidy is still not released and the only reason assigned is that since there are so many similar closed units, which are claiming subsidy, therefore the Guidelines are in pipelines on the basis of which the seniority will be determined and amount would be released. This argument is not at all impressive because earlier the petitioner, who was at Seniority No.640 has now reduced to Sr.No.230 and therefore the petitioner(s) are entitled and eligible to get the subsidy. Thus, keeping in view the aforesaid facts and circumstances the present petitions are allowed and a direction is issued to the respondents to release/grant the capital subsidy/Investment Incentive, as claimed by the petitioner(s), within a period of two months from the date of receipt of certified copy of this order.

Summary

Issues:
Release of sanctioned capital subsidy/Investment Incentive.

Analysis:

The judgment delivered by HON'BLE MR. JUSTICE RAKESH KUMAR JAIN pertains to the release of sanctioned capital subsidy/Investment Incentive in four writ petitions with a common issue. The petitioner's counsel argued that despite being closed units, they are eligible for subsidy based on a previous court decision. The respondents, in their reply, acknowledged the eligibility of petitioners for subsidy but cited the formulation of guidelines for disbursement due to numerous closed units in the state. The court noted the delay in releasing the subsidy to the petitioner since 1997, despite financial difficulties leading to the closure of the petitioner's company in 2006. The court found the respondent's argument unconvincing as the petitioner's seniority had decreased over time, making them eligible for the subsidy. Consequently, the court allowed the petitions and directed the respondents to release the capital subsidy/Investment Incentive claimed by the petitioners within two months from the date of the order.

This judgment highlights the importance of timely disbursement of sanctioned subsidies and investment incentives to eligible entities. It underscores the obligation of the government to honor commitments made to businesses, even in cases of financial distress or closure. The court's decision emphasizes the need for transparency and efficiency in the administration of subsidy schemes, ensuring that deserving beneficiaries receive their entitlements promptly. Furthermore, the judgment serves as a reminder to authorities to prioritize the resolution of subsidy claims to prevent undue delays and uphold the principles of fairness and justice in such matters.