2025 (4) TMI 553 - HC - GST

Recovery of refund along with interest in terms of Budgetary Support Scheme read with affidavit-cum-indemnity bond dated 23.01.2018 - change in ownership of a business unit - disqualifies from receiving benefits under the Budgetary Support Scheme or not - HELD THAT - The facts of the case in Zydus Wellness Products Limited Versus Union of India and Others And Alkem Laboratories Limited Versus Union of India and Others 2024 (12) TMI 873 - SIKKIM HIGH COURT is similar to the present case where it was held that the appellants were indeed eligible for the BSS benefits. The writ petition is accordingly disposed along with the interim application.

ISSUES PRESENTED and CONSIDERED

The core legal issue considered in this judgment was whether the petitioner, M/s Torrent Pharmaceuticals Limited (Unit III), was eligible for the Budgetary Support Scheme benefits despite a change in ownership. The question arose from the recovery order issued by the Assistant Commissioner of CGST, which demanded the reversal of the budgetary support previously granted to the petitioner. The Court also considered the applicability of previous judgments and their impact on the current case.

ISSUE-WISE DETAILED ANALYSIS

1. Eligibility under the Budgetary Support Scheme:

Relevant legal framework and precedents: The Budgetary Support Scheme provides financial support to units based on specific eligibility criteria. The primary legal framework involved the interpretation of paragraph 9.1 of the Scheme and the affidavit-cum-indemnity bond dated 23.01.2018. The clarification issued by the Department for Promotion of Industry and Internal Trade (DPIIT) via Office Memorandum was also pertinent, which stated that units undergoing a change in ownership were not eligible for the Scheme.

Court's interpretation and reasoning: The Court noted that the recovery notice was based on the premise that a change in ownership rendered the unit ineligible for the Scheme. However, the Court emphasized the binding nature of the Division Bench's judgment in Writ Appeal No. 09 of 2023 and Writ Appeal No. 10 of 2023, which had set aside previous judgments that denied benefits under similar circumstances.

Key evidence and findings: The petitioner had communicated the change in ownership to the relevant authorities and had been granted a Unique ID under the Scheme after addressing queries from the respondent. The recovery notice's reliance on the DPIIT's clarification was challenged by the petitioner, citing the Division Bench's recent judgment.

Application of law to facts: The Court applied the Division Bench's judgment, which had overturned the previous denial of benefits due to ownership changes, to the current case. The Court found that the precedent set by the Division Bench was directly applicable, thereby supporting the petitioner's eligibility for the Scheme.

Treatment of competing arguments: The Deputy Solicitor General's argument that the matter should await the Supreme Court's decision on a proposed Special Leave Petition (SLP) was rejected. The Court held that the Division Bench's judgment was binding and applicable to the present case.

Conclusions: The Court concluded that the petitioner was eligible for the Budgetary Support Scheme benefits, as the Division Bench's judgment was binding and directly applicable to the facts of the case. The writ petition was allowed, and the recovery order was set aside.

SIGNIFICANT HOLDINGS

The Court held that the Division Bench's judgment in Writ Appeal No. 09 of 2023 and Writ Appeal No. 10 of 2023 was binding and directly applicable to the present case, thereby entitling the petitioner to the benefits under the Budgetary Support Scheme despite the change in ownership. The Court emphasized that the Division Bench's decision set a precedent that must be followed unless overturned by a higher court.

"If the judgment dated 13.12.2024 passed by the Division Bench of this Court in Writ Appeal Nos. 09 of 2023 and 10 of 2023 squarely covers the present case it is binding on this Court."

The core principle established was that a change in ownership does not automatically disqualify a unit from receiving benefits under the Budgetary Support Scheme if a binding precedent supports eligibility. The Court's final determination was to allow the writ petition, setting aside the recovery order and leaving other questions open for future consideration.

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