2024 (11) TMI 194 - HC - Indian Laws

Direction to empanel it as an Agency for production of audio visual contents - benefits of exemption/relaxation from deposit of EMD in terms of the letter dated 27th December, 2023 (Annexure-8) issued by the MSME Department - HELD THAT - This Court finds that the Petitioner being a MSME Unit is entitled for certain exemptions/relaxations as per the letter under Annexure-8 and notification as well as Memorandum under Annexure-10 and 11 respectively. The plea taken by the State of Odisha-Opposite Party Nos.1 2 that the case of the Petitioner could not have been considered, as the notification was issued on the date of sitting of the Scrutiny Committee is not sustainable. From the counter affidavit, it appears that the Scrutiny Committee was convened on 27th December, 2023 and subsequently on 28th December, 2023. Admittedly, notification of MSME Department (Annexure-8) was issued on 27th December, 2023. Thus, it could have been considered by the Scrutiny Committee on 28th December, 2023. Further the Petitioner claims that in view of Section 44AD of the Act, it is not required to submit the audit report of the Chattered Accountant. These aspects need fresh consideration by the Scrutiny Committee. Further the Scrutiny Committee failed to take into consideration the instruction and policy decision of the Government under Annexures-10 and 11. The writ petition is disposed of with a direction that the Scrutiny Committee shall review the case of the Petitioner giving its representative an opportunity of being heard and to produce documents in support of its case. The Petitioner shall be intimated about the date of consideration of its case by the Scrutiny Committee and entire exercise shall be completed as expeditiously as possible preferably within a period of three months from the date of production of certified copy of this order before the Director, Department of Information and Public Relations, Government of Odisha, Bhubaneswar-Opposite Party No. 2. Petition disposed off.

Summary

Issues:
1. Direction sought to empanel as an agency for production of audio-visual contents.
2. Consideration of MSME status for exemption/relaxation benefits.
3. Rejection of Request for Proposal (RFP) based on turnover and experience criteria.
4. Discrepancies in experience certificate and rejection reasons.
5. Applicability of Income Tax Act Section 44AD and audit report submission.
6. Alleged errors in rejecting RFP and ignorance of State Government policies.

Analysis:
1. The petitioner sought a direction to be empaneled as an agency for audio-visual content production. The petitioner, an MSME unit, submitted a proposal in response to an RFP but was not included in the list of empaneled agencies. The petitioner claimed entitlement to exemption/relaxation benefits under the MSME Department's letter, citing relaxation in turnover and experience criteria. The petitioner argued that its experience in live streaming and audio-visual content creation was not adequately considered during the empanelment process.

2. The respondent, represented by the Additional Government Advocate, contended that the petitioner's experience certificate was questionable as it lacked essential details. The Scrutiny Committee rejected the petitioner's RFP due to insufficient turnover and experience criteria. The respondent emphasized that live streaming did not equate to audio-visual content production, justifying the exclusion of the petitioner from the empaneled list.

3. The petitioner invoked Section 44AD of the Income Tax Act to claim exemption from submitting a Chartered Accountant's audit report, which was a requirement in the RFP eligibility criteria. The petitioner argued that its turnover exceeded the specified threshold for the past three years, highlighting an error in the rejection decision. Moreover, the petitioner asserted that State Government policies regarding MSME units were disregarded during the empanelment process.

4. The court acknowledged the petitioner's entitlement to exemptions and relaxations as an MSME unit under relevant notifications and memorandums. It found the State's argument, regarding the timing of notification issuance vis-a-vis the Scrutiny Committee's meetings, unsustainable. The court directed the Scrutiny Committee to reevaluate the petitioner's case, allowing the petitioner to present supporting documents and be heard. The Committee was instructed to consider the petitioner's claims under Section 44AD and adhere to State Government policies during the review process, aiming for completion within three months.

5. The judgment concluded by ordering the provision of a certified copy to the concerned parties for communication and compliance, emphasizing the urgency of the matter for prompt action.