2023 (9) TMI 631 - SIKKIM HIGH COURT

Entitlement of budgetary support under the Budgetary Support Scheme - whether the grant of fresh UID and registration number disentitle the units from availing the budgetary support as the Budgetary Support Scheme seeks to provide budgetary support to “eligible units” and not to the owners thereof or not? - HELD THAT:- A composite reading of the Budgetary Support Scheme along with the exemption notification no.20/2007-CE makes it clear that Government of India had decided to provide budgetary support to the existing manufacturing unit operating in Sikkim under different Industrial Promotional Schemes of the Government of India, for the “residual period for which each of the unit is eligible”. Quite evidently, it was a support given to the existing manufacturing units operating in Sikkim since the said units had not been able to enjoy the full benefit of exemption notification no.20/2007-CE for the entire period.

Reading the definition of “person” under section 2(84) and the requirement of registration under section 22 of such “persons” makes it clear that Zydus Nutritions Limited (later Zydus Wellness Products Limited) and Alkem Laboratories Limited were required to be registered under section 22 after the change in ownership. Accordingly and admittedly, Zydus Nutritions Limited was registered under Rule 10(1) on 26.03.2019 and Alkem Laboratories Limited on 3.10.2019. Consequently, both the petitioners who were separate and distinct legal entities from the previous “persons”, i.e., Zydus Wellness-Sikkim and Cachet Pharmaceuticals Private Limited, who were eligible under exemption notification 20/2007-CE could not have filed the application for budgetary support under paragraph 7 of the Budgetary Support Scheme. The petitioners, as rightly contended by the respondents, were not “eligible units” as defined under paragraph 4.1 of the budgetary scheme.

The exemption under exemption notification no. 20/2007-CE was to those manufacturers who have made investments in the State of Sikkim. The untimely withdrawal of exemption notifications before the manufacturers could enjoy its benefits for its full term as the new GST regime came in, persuaded the Government of India to provide budgetary support to those “eligible units” and not to those who have not made any investment to be able to enjoy the benefit of the exemption notification no. 20/2007-CE for the “residual period”. Neither Zydus Wellness Products Limited nor Alkem Laboratories Limited could legally claim that they were entitled to the exemption under the exemption Notification No. 20/2007-CE as they did not exists then.

Both the writ petitions preferred by Zydus Wellness Products Limited and Alkem Laboratories Limited are accordingly dismissed.