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2023 (3) TMI 1003 - HC - Indian LawsPromotion of investments by providing structured packages for eligible projects - Tamil Nadu Industrial Policy 2007 - G.O.Ms.No.180 Industries (MIB.1) Department dated 30.09.2008 - HELD THAT - There is really no effective defence from the State as far as this aspect of the matter is concerned and I concur with the petitioner on the position of law qua this issue. If the Court were to ultimately accept the stand of the petitioner then the mere fact that the State has hurriedly issued a clarification pending Writ Petition is certainly going to have no effect on such a decision - the amendment to G.O.Ms.No.150 by virtue of G.O.No.235 dated 02.12.2022 is irrelevant and in bad taste. If at all the State were confident in its stand it ought to have rested content with the documentation as available. Thus and being of the view that the clarification is irrelevant. SIPCOT being an arm of the State has conferred with and consulted the appropriate departments of the Government and this inter- departmental discretion has resulted in the issuance of the Eligibility Certificate imposing a cap on the period of benefit. The respondents have also established clearly that there has been application of mind to the request of the petitioner as well as to various other aspects of the project including the exemptions - there is nothing perverse in the procedure that has been followed or on the restriction imposed. The petitioner cannot dictate any aspect of the benefit that it seeks and it is a matter of negotiation between the petitioner and the respondents as to the kind of aid that it receives. No doubt it is always within its discretion to seek a particular benefit and in this case the petitioner has sought the benefit of 10 years which has been rejected. The policy and consequential the Government Orders issued reveal that there are several considerations to be taken into account by the State in curating an incentive/aid package to an applicant. In the present case the fact that the petitioner has failed to achieve the requisite production for 13 years after commencement of production stands as testimony to its ineligibility to the incentive. Incidentally the cement industry the respondents point out are not beneficiaries under the later industrial policies floated by the State - Incentives are extended by the State based on a periodic assessment of industries that are deserving of the same. The mere fact that a period or a tenure has not been set out under an order of exemption would thus in my considered view not lead to the conclusion that such a benefit was extended to be permanent. In the present case there is no modification as such to the terms and conditions barring the cap in post on the tenure of benefit under the Notification. This would not constitute an amendment of the original terms as the petitioner has revealed its hand by way of its own letter that a proper period for the currency of the investment benefit would be a minimum of ten years. Even on this score the petitioner has failed since even today after the expiry of 13 years the petitioner accedes to the position that it has been unable to achieve the requisite production. The challenge to Eligibility Certificate dated 31.12.2015 is repelled - petition dismissed.
Issues Involved:
1. Eligibility for incentives under the Tamil Nadu Industrial Policy 2007. 2. Determination of the period for which incentives are granted. 3. Compliance with performance stipulations for availing incentives. Summary: Issue 1: Eligibility for incentives under the Tamil Nadu Industrial Policy 2007 The petitioner, a cement manufacturing company, challenged the incentives provided under the Tamil Nadu Industrial Policy 2007, which aims to promote investments through structured packages for eligible projects. The policy includes various incentives such as back-ended state capital subsidy, electricity tax exemption, and special subsidies for Effluent Treatment Plants (ETP) or Hazardous Waste Treatment Storage and Disposal Facilities (HWTSDF). The petitioner sought structured assistance for an investment of Rs.572 Crores in eligible fixed assets for setting up additional cement manufacturing and captive thermal power plants. Issue 2: Determination of the period for which incentives are granted The petitioner argued that the policy did not specify a time limit for the incentives. However, the Eligibility Certificate issued by SIPCOT limited the benefit period to five years. The petitioner contended that this ceiling was not stipulated in the original policy or G.O.Ms.No.150 dated 28.10.2010. The court noted that the policy allows the State to customize packages and that the eligibility certificate, which includes the time limit, is the final document detailing the terms and conditions specific to an application. The petitioner's request for a ten-year benefit period was also considered and rejected by the State. Issue 3: Compliance with performance stipulations for availing incentives The petitioner failed to achieve production above the base production volume of 65 lakhs MT, a condition necessary to avail the incentives. The court emphasized that incentives and subsidies are premised on performance, and the petitioner's inability to meet the production targets for 13 years rendered it ineligible for the incentives. The court concluded that the State's decision to impose a time limit on the benefit period was not perverse and fell outside the realm of judicial review unless proven otherwise. Conclusion: The court dismissed the petitioner's challenge to the Eligibility Certificate dated 31.12.2015, upholding the State's discretion in customizing incentive packages and imposing a time limit on the benefit period. The petitioner's failure to meet the stipulated production targets further justified the denial of the incentives.
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