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2020 (5) TMI 391 - CHHATTISGARH HIGH COURTBenefits of Investment subsidy - Chhattisgarh State Infrastructure Cost Fixed Capital Investment Subsidy Rules, 2004 framed and published with retrospective effect from 01.11.2004 - entitlement for a subsidy adjustment / reimbursement of 25% of the infrastructure cost for establishing industry outside industrial area, upto a maximum amount equivalent to the amount of commercial tax / central sales tax paid in the State for 5 years - subsequently issued Annexure-P/9 Notification dated 10.08.2011, virtually curtailing the benefit of concession payable under the Investment Subsidy Scheme, whereby the maximum limit (which was originally fixed as 25% of the investment subject to a maximum of 5 years' sales tax paid) was restricted as '₹ 3 crores'. HELD THAT:- There is no dispute with regard to the sequence of events. It was based on the specific need felt of the newly formed State that the 'Industrial Policy (2001-2006', later substituted by 2004-2009) was formulated and notified inviting entrepreneurs to set up industries in the State to achieve rapid economic growth offering to make use of the advantages available in the State and the concessions assured. This offer was acted upon by the Petitioners to set up the industries, making huge investments under the firm belief that they were entitled to have the benefit of investment subsidy to an extent of 25% of the infrastructure cost, subject to maximum of the Sales Tax / CST paid in the State during the first 'five' years. Obviously, there is a cap / ceiling fixed already with regard to the extent of benefit payable as per the Industrial Policy notified at the first instance, as incorporated in the Rules notified subsequently, to the effect that it would be 25% of the infrastructure cost made by the entrepreneurs subject to maximum of the Sales Tax / CST paid in the State for the first 'five' years. The commodity thus manufactured fixing the 'sale price' (based on the above factors, also reckoning the element of 'investment subsidy' surely to get as offered / assured as per the notified Industrial Policy / Rules) has already been marketed and as such, if the amount payable towards the Investment Subsidy as per the original terms of the Policy / Rules is sought to be denied after expiry of the Policy period, it will simply result in rupturing the financial base of the Petitioners, as the unconscionable financial burden cannot be recovered by them 'by resetting the sale price' of the commodity which they had already sold out - The Petitioners have made out a case that they were having 'Legitimate Expectation' to have had the benefits flowing from the Industrial Policy for year 2004-2009 and incorporated as part of the Rules notified and existed throughout the Policy period. This is more so since, similar terms of benefit were offered in the Industrial Policy originally notified for the period 2001-2006, in respect of which, no plea is raised from the part of the State as to any mistake having occurred therein. Admittedly, the said Policy was prematurely terminated and a new Policy was introduced for the period 2004-2009; when also the need to fix any "additional capping of benefit" was never felt by the Government. As such, the explanation now offered from the part of the Government, that it was only a mistake, which required to be rectified in 'public interest' does not hold any water at all. The course of action pursued by the Respondent-State in the case of the Petitioners herein, curtailing the benefit of Investment Subsidy, which ought to have been extended to them on the strength of the original Industrial Policy 2004-2009 and declared in the Investment Subsidy Rules, 2005 (as originally notified in the Gazette) is not correct or proper - It is declared that the Petitioners are entitled to have the benefit of Investment Subsidy to an extent of 25% of the infrastructure cost , subject to a ceiling of the Sales Tax / VAT / CST paid in the State for the first ' five ' years . In the said circumstances, all the orders / proceedings passed in the case of the Petitioners, insofar as they stand against said declaration are set aside. The State might be permitted to set off the subsidy amount to be disbursed to the Petitioners against subsequent / remaining the tax liability to be cleared by the Petitioners, considering the totality of the facts and circumstances involved, the Respondents-State are permitted to set off / adjust the investment subsidy payable to the Petitioners, against the tax liability to be cleared by the Petitioners in respect of any past, present or future transactions - Petition allowed.
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