2024 (7) TMI 157 - HC - GST

Reimbursement of VAT/ET/SGST paid under the Bihar Industrial Incentive Policy, 2011 - Attachment order - claims under Bihar Industrial Incentive Policy 2011 rejected - rejection on the ground that petitioner has started production even before the approval has been granted by the State Investment Promotion Board (SIPB) - HELD THAT - Admittedly, in the present case, the State of Bihar has floated Bihar Industrial Incentive Policy, 2011 to attract investments in the State. The petitioner, admittedly, has applied to the Competent Authority i.e. SIPB and was granted approval on 30.06.2015 and as per the said policy, the petitioner is entitled for re-imbursement of VAT/ET/SGST. But, the case of the petitioner has been rejected on the sole ground that the petitioner has started commercial production even before the grant of approval by SIPB - Admittedly in the present case, the approval was granted on 30.06.2015 and it is the case of the respondents that the commercial production has started on 08.08.2014 merely because the production is started the incentive under the scheme cannot be disallowed. At the most, the incentives can be granted from the date of the approval of SIPB but the authorities cannot deny the incentives under the scheme as a whole. The court does not find any valid reasons for upholding the impugned order passed by the authorities and the same is set aside. The authorities are directed to grant the incentives as envisaged under the Bihar Industrial Incentive Policy, 2011 from the date of approval of the SIPB and make necessary payments to the petitioner as per the entitlement within a period of three months from the date of receipt of the copy of this order. Petition allowed.

Issues:
1. Rejection of claims under Bihar Industrial Incentive Policy 2011.
2. Denial of VAT/GST reimbursement to the petitioner.
3. Disbursement of post-production incentives.
4. Authority to release subsidy amount.
5. Timely release of payments for reimbursement.
6. Compliance with regulations for entitlement.

Issue 1: Rejection of claims under Bihar Industrial Incentive Policy 2011
The petitioner filed a writ petition seeking to set aside the rejection of their claims under the Bihar Industrial Incentive Policy 2011. The rejection was based on the grounds that the proposal was accepted after the date of commercial production. The petitioner argued that the approval by the State Investment Promotion Board (SIPB) was not a condition precedent for starting commercial production, and the rejection was arbitrary and contrary to the policy. The court found the rejection to be frivolous and arbitrary, setting it aside and directing the authorities to grant the incentives from the date of SIPB approval.

Issue 2: Denial of VAT/GST reimbursement to the petitioner
The petitioner's entitlement for VAT/GST reimbursement under the policy was denied due to starting commercial production before SIPB approval. The authorities contended that this violated the policy's terms and conditions. However, the court held that the policy did not restrict production before SIPB approval and found the denial baseless. The court directed the authorities to make necessary payments to the petitioner within three months from the date of the order.

Issue 3: Disbursement of post-production incentives
The petitioner sought a writ to declare that post-production incentives, such as reimbursement for VAT/ET/GST paid, cannot be delayed or denied and must be timely paid. The court agreed, emphasizing that once the investment proposal is accepted, the authorities cannot interfere with subsidy disbursement to the petitioner. The court directed the authorities to release payments for reimbursement promptly without unnecessary delays or technicalities.

Issue 4: Authority to release subsidy amount
The petitioner argued that the authorities erred in not releasing the subsidy amount after SIPB's acceptance of the investment proposal. The court held that once the proposal is accepted, the authorities have no authority to refuse, stop, or interfere with the subsidy disbursement. The court directed the authorities to release the subsidy amount to the petitioner in a timely manner.

Issue 5: Timely release of payments for reimbursement
The petitioner contended that the authorities should release payments for reimbursement under VAT/GST promptly upon application without unnecessary procedures. The court agreed, stating that the petitioner should not be made to run around for entitled reimbursements once approved. The court directed the authorities to release payments timely and without unnecessary delays.

In conclusion, the court set aside the rejection of the petitioner's claims under the Bihar Industrial Incentive Policy 2011, emphasizing that production before SIPB approval did not disentitle the petitioner from incentives. The court directed the authorities to grant the incentives from the date of SIPB approval and release payments promptly to the petitioner.

← Previous Next →