2023 (5) TMI 1184 - HC - GST

Interest on the delayed disbursal of amount of Budgetary Support already sanctioned - Budgetary Support Scheme - HELD THAT - Circular dated 10.1.2019 stated that the claims under the Scheme are required to be disposed of within two weeks. True it is, that, in terms of Circular dated 10.01.2019, the claims under the Scheme are required to be disposed of within two weeks. It is not the case of the petitioner that the claims for release of payment under the Scheme were not considered or disposed of by the respondents within the stipulated time frame. The amount payable to the petitioner under the Scheme was duly sanctioned in favour of the petitioner. However, the said amount could not be disbursed due to non availability of requisite funds from DIPP. It is also not in dispute that that the benefit envisaged under the Scheme is in the nature of concession/incentive granted by the Government in favour of eligible industries, so as to provide them necessary cushion to face the financial hardship that may have visited such units/industries due to withdrawal of area based exemption notifications issued under the Central Excise Act. Such being the nature of concession given, no unit could lay a claim to the payment of amount under the Scheme as a matter of right - True it is, that the claims submitted under the Scheme are required to be disposed of within a period of two weeks, but, there is no complaint by the petitioner that his claim was not considered or disposed of by the respondents within the stipulated period. Sanction for release of amount was granted in time, but, disbursement of the amount took sometime. It is also not the case of the petitioner that there was deliberate delay on the part of the respondents to release the benefit. Admittedly, the funds at the disposal of Commissionerate were far less than the claims received and, therefore, the amount though sanctioned in favour of the petitioner could not be released till the requisite funds were made available to the Commissionerate by the DIPP. In these circumstances, it is difficult for us to say that the amount payable to the petitioner under the Scheme was illegally, arbitrarily or without any reason withheld by the respondents. The petitioner are no entitled to interest on the amount disabused to it under the Scheme for the following reasons (i) That having regard to the nature of Scheme, the benefit under the Scheme is not claimable by the eligible industrial units as a matter of right. The benefit envisaged is in the nature of concession/incentive extended by the Government of India to enable the industrial units to tide over the financial hardship to which they may have been exposed with the withdrawal of area-based exemptions under the Central Excise Act; (ii) That the respondents had a valid reason not to disburse the amount sanctioned immediately. The Commissionerate was facing acute shortage of funds and the funds placed at its disposal by DIPP were not sufficient enough to meet even the claim of the petitioner. The amount was disbursed immediately when the funds became available; and, (iii) That there is no provision in the Scheme which provides for payment of interest in case of any delay in actual release of the benefit envisaged under the Scheme. Unless, it is pleaded and demonstrated that the amount payable under the Scheme was unauthorisedly and, without any reason, withheld by the respondents, it would be difficult for this Court to penalize the respondents by directing them to pay interest. Petition dismissed.

Summary

Issues Involved:
The petition involves the delay in disbursement of Budgetary Support under a government Scheme to an industrial unit due to non-availability of funds, leading to a claim for interest on the delayed payment.

Summary:

Issue 1: Delay in Disbursement of Budgetary Support
The petitioner, a registered industrial unit, filed a petition seeking direction for the disbursement of Budgetary Support under a government Scheme, which was delayed due to non-availability of funds from the Department of Industrial Policy and Promotion (DIPP). The petitioner claimed interest on the delayed payment.

Details:
The petitioner, previously known as M/S Jindal Drugs Private Ltd., registered under Central Excise and later under GST, filed a claim for Budgetary Support under the Scheme after area-based exemptions were rescinded. Despite the claim being sanctioned, funds were not immediately released due to insufficient funds from DIPP. The petitioner pursued the petition for interest on the delayed payment.

Issue 2: Contestation by Respondents
The respondents contested the petition, stating that funds from DIPP were inadequate to meet all claims, including the petitioner's, and emphasized that the Scheme did not provide for interest on delayed payments. They argued that the Scheme offered concessions to eligible industries, not guaranteed payments.

Details:
Respondents explained that the delay in disbursement was due to the limited funds allocated by DIPP, which were insufficient to cover all claims. They highlighted that the Scheme aimed to support eligible industries facing financial challenges post-exemption withdrawal, emphasizing that interest on delayed payments was not part of the Scheme's provisions.

Judgment:
The Court noted that the entire amount under the Scheme was eventually disbursed to the petitioner during the petition's pendency. It emphasized that the Scheme's benefits were concessions, not enforceable rights, and that the delay in disbursement was due to fund shortages. The Court dismissed the petition, stating that interest on delayed payments was not warranted unless funds were unlawfully withheld, and directed timely processing of pending claims without undue delay.

This summary highlights the legal judgment's key aspects, including the delay in Budgetary Support disbursement, contestation by respondents, and the Court's decision dismissing the petition while clarifying the nature of the Scheme's benefits and the absence of provisions for interest on delayed payments.