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2017 DIGILAW 819 (GAU)

Barak Valley Cement Ltd. v. Union of India

2017-06-21

NELSON SAILO

body2017
JUDGMENT AND ORDER (CAV) : The 3 (three) writ petitions involved similar questions to be addressed and therefore, they are taken up together for disposal. 2. Heard Mr. B.P. Todi, the learned Senior Counsel for the petitioners and Mr. S.C. Keyal, the learned ASGI for the respondent No.1. The respondent Nos. 2, 3 and 4 are represented by Dr. B. Ahmed, the learned Standing Counsel, Commerce and Industries Department. The respondent No.5, the North Eastern Development Finance Corporation Limited (NEDFI) is represented by Mr. G. Das, the learned counsel. 3. The petitioners’ company are limited companies carrying on their business by getting the benefit of transport subsidy under the Transport Subsidy Scheme, 1971. The writ petitioner in WP(C) No.6291 of 2014 has claimed the disbursement of transport amounting to Rs.1,60,92,486/- (Rupees One Crore Sixty Lakhs Ninety Two Thousand Four Hundren Eight Six) only, sanctioned by the State Level Committee (SLC) for the period from 01.01.2006 to 31.03.2006. The petitioner in WP(C) No.5620 of 2014 similarly has claimed the release of transport subsidy amounting to Rs.38,42,909/- (Rupees Thirty Eight Lakhs Forty Two Thousand Nine Hundred) only, for the period from 01.01.2007 to 10.03.2007, whereas the petitioner in WP(C) No.5622 of 2014 has claimed the transport subsidy amounting to Rs.36,74,805/- ( Rupees Thirty Six Lakhs Seventy Four Thousand Eight Hundred Five) only for the period from 01.10.2006 to 31.12.2006. 4. The Government of India in the Ministry of Commerce and Industry, Department of Industrial Policy and Promotion (DIPP), introduced a scheme as the Transport Subsidy Scheme, 1971 (Annexure-1) which came into effect from 15.07.1971 for selected areas and to remain in force till 31.03.2007. The selected areas amongst others included the North-Eastern Region. Clause-6 (iv) of the Scheme amongst others proves that in the case of North-Eastern Region comprise of the State of Assam, Meghalaya, Nagaland, Tripura and Union Territories of Arunachal Pradesh and Mizoram the transport subsidy will be given on the transport costs between Siliguri and the location of the industrial units in these States/ Union Territories. While calculating the transport costs of raw materials, the cost of movement by rail from Siliguri to railway station to the nearest location of the industrial unit and thereafter, the cost of movement of road to the location of the industrial unit will be taken into account. While calculating the transport costs of raw materials, the cost of movement by rail from Siliguri to railway station to the nearest location of the industrial unit and thereafter, the cost of movement of road to the location of the industrial unit will be taken into account. Similarly, while calculating the transport costs of finished goods the costs of movement by road from the location of industrial unit to the nearest railway station and thereafter, the cost of movement by rail to Siliguri will be taken into account. In the case of North-Eastern region, the raw materials moving by road or other mode of transport the transport costs will be limited to the amount might have paid had the raw materials moved from Siliguri by rail upto the railway station nearest to the location of the industrial unit and thereafter, by road. Similarly, in the case of movement of finished goods moving entirely by road or other mode of transport in the North-Eastern region the transport costs will be limited to the amount which the Industrial Unit might have paid at the finished goods moved from the location of the industrial units to the nearest Railway station by road and thereafter by rail to Siliguri. 5. In terms of the provision of the Scheme, the industrial units are entitled to transport subsidy to the extent indicated in the scheme vide notification dated 29.01.1998 (Anenxure-2). The respondent No.5 was declared the nodal agency for realization of transport subsidy on the basis of the recommendation of the State Level Committee for the North-East Region, as per the existing terms and conditions of the scheme. It may be mentioned at this stage that vide notification dated 22.11.2016, the Ministry of Commerce and Industry, Department of Industrial Policy and Promotion refused the Promotion Policy for the North-East Region and decided that henceforth the subsidy payable to the Industrial Unit will be disbursed through the Direct Benefit Transfer mechanism by the Chief Controller of Accounts (Industry) for which the units would need to get themselves registered as per the process provided. 6. The petitioners along with all other similarly situated companies have been enjoying all the benefits of the scheme since the establishment of their respective companies. 6. The petitioners along with all other similarly situated companies have been enjoying all the benefits of the scheme since the establishment of their respective companies. On 09.06.2006 (Annexure-5) the respondent No.4 had written a letter to the Director of the Commerce and Industries to the Government of Assam recommending an amount of Rs.1,60,92,486/- (Rupees One Crore Sixty Lakhs Ninety Two Thousand Four Hundren Eight Six) only as the transport subsidy entitled to the petitioner in W(C) No.6291 of 2014 for the period from 01.01.2006 to 12.03.2006 while forwarding the scheme application. However, since the transport subsidy was not released to the petitioner, the petitioner on 12.05.2009 (Annexure-6) wrote to the Directorate of Commerce and Industries, Government of Assam, seeking clarification in view of the resent Performance Audit carried out by the Comptroller and Auditor General (C&AG) in the North-Eastern Region. The C&AG had examined the Transport Subsidy Scheme, 1971, more particularly Clause- 6 (ii) and observed that there was lack of proper scrutiny in the Department prior to recommending payment of subsidy. 7. In consequence thereof, the petitioner was required to produce certain details and documents in support of the subsidy claimed from 01.01.2006 to 12.03.2006. According the petitioner, on 10.02.2009 (Annexure-7) they furnished the required information to the respondent No.5. Consequently, the cheque amounting to Rs.1,60,92,486/-(Rupees One Crore Sixty Lakhs Ninety Two Thousand Four Hundred Eight Six) only issued by the respondent No.5 to the petitioner on 14.12.2009. However, in view of the objection raised by the Principal Director of Audit, Economic and Service Ministries, New Delhi, in their performance audit report the cheque that was issued was directed to be returned to the respondent No.5, which was accordingly returned. Following the return of the cheque towards the transport subsidy claimed by the petitioner, the series of correspondence is placed between the petitioner and the State Government in the Commerce and Industries Department as well as the State Level committee for the transport subsidy. 8. Following the return of the cheque towards the transport subsidy claimed by the petitioner, the series of correspondence is placed between the petitioner and the State Government in the Commerce and Industries Department as well as the State Level committee for the transport subsidy. 8. On account of the C & AG having prepared the Performance Audit with a finding that there was lack of proper scrutiny in the department concerned prior to recommending payment of subsidy in terms of the Transport Subsidy Scheme, 1971, the clarification was made by the Ministry of Commerce and Industries, Government of India, Department of Industrial Policy and Promotion (DIPP) vide communication dated 04.07.2014 (Annexure-14) to the effect that subsidy was not admissible for the transportation cost incurred for inter-state movement of finished goods within North East states railway station nearest to the final destination. Several representations were made to the department concerned in the Ministry of Commerce and Industries by the beneficiaries with a request to review the decision relating to admissibility of finished goods for transport subsidy under the scheme on its inter-state movement within the North-Eastern region. Consequently, vide communication dated 04.07.2014 it was clarified that by the Head Comptroller Accounts (DIPP) after careful examination and in consultation with the Integrated Finance Wing that in case of inter-state movement of finished goods within the North-East Region, the cost of transport beyond the railway head nearest to the delivery point where the finished goods is being delivered is also to be taken in to account for subsidy under Transport Subsidy Scheme, 1971. In other words the actual cost of transportation or movement from the location of the industrial unit to the nearest railway station by road and thereafter, by rail to the railway station nearest to the location where the finished goods is to be received and subsequently, by road from that railway station to the location where finished goods has been received, whichever is less, will be taken into account. Accordingly, the Department’s earlier letter dated 04.10.2013 was withdrawn. The Transports subsidy amount pending in favor of the petitioner having not been released despite the clarification issued by the Ministry of Commerce and Industries, the petitioner being aggrieved is before this Court by the instant writ petition along with two others. 9. Appearing for the writ petitioners, Dr. Accordingly, the Department’s earlier letter dated 04.10.2013 was withdrawn. The Transports subsidy amount pending in favor of the petitioner having not been released despite the clarification issued by the Ministry of Commerce and Industries, the petitioner being aggrieved is before this Court by the instant writ petition along with two others. 9. Appearing for the writ petitioners, Dr. B.P. Todi, the learned Senior Counsel submits that the petitioners along with all other similarly situated units in the North Eastern region have been enjoying the benefit of the transport subsidy introduced by the Ministry of Commerce and Industries, Government of Assam, since the very inception. He submits that the scheme had been introduced keeping in mind the remoteness of the region comparing to other parts of the country. The industrial units in the North-East region cannot compete with the industrial units of other parts of the country due to lack of proper communication facilities. The very object of the scheme is to encourage the industrial units of the region to compete with other industrial units of the well communicated regions of the country. He further submits that if such subsidy is denied to the industrial units in the North-East region, the very scope and intend of the scheme would fail. 10. Dr. B.P. Todi also submits that the transport subsidies have been availed by the petitioners’ company over the years and the same cannot be denied on account of the observation made by the C & AG that there was no proper scrutiny prior to recommending the payment of subsidy. Moreover, now, that the Ministry of Commerce and Industries has clarified the applicability of the scheme to the North-East region. There is no reason for the respondent authorities concerned not to release the transport subsidy due to the petitioners. He also submits that the affidavit-in-opposition field by the respondent No.5 clearly indicates that the subsidy amount has not been released to the petitioners only for lack of proper scrutiny in the Department prior to recommending the payment of subsidy. Dr. B.P. Todi submits that the petitioners in fact have no role in this scrutiny besides providing the necessary documents and materials while making the claim for subsidy. The ground for denial of the subsidy is only vague and does not reveal the process which has prevented the release of subsidy amount. Dr. B.P. Todi submits that the petitioners in fact have no role in this scrutiny besides providing the necessary documents and materials while making the claim for subsidy. The ground for denial of the subsidy is only vague and does not reveal the process which has prevented the release of subsidy amount. Under such circumstances and also considering the fact that the clarification has already been made, the respondent authorities cannot keep on hold the amount due to the petitioner. For the delay in release of the subsidy amount, Dr. B.P. Todi submits that the respondent authorities are liable to be directed to pay interest as has been ordered in other similar cases. He relies upon the decision of this Court passed in the case of Union of India vs. J Tariang reported in (2013) 2 NEJ 224, wherein, the Division Bench of this Court taking note of the fact that there was due delay in release of the subsidy amount and keeping in view the purpose of the Scheme, upheld the direction of the learned Single Judge to pay simple interest @ 12% per annum. Similarly, he refers to directions passed by this Court in WP(C) No.1743 of 2012 i.e. M/S Ri Balaji Cement Pvt. Ltd vs. Union of India and 4 others, whereby, a direction was given for releasing of the transport subsidy amount to the petitioner therein within a specified time frame and failing which interest @ 12% per annum was imposed. He, therefore, prays for a similar direction in the instant cases as well. 11. Appearing for the respondent No.1, Mr. S.C. Keyal, the learned ASGI, submits that the C & AG had conducted the performance audit in the North-East Region states, wherefrom, it came to a finding that the transport subsidy released to the industrial units lacked proper scrutiny in the Department prior to the same being recommended for payment. The C & AG also took into account the relevant provision of the Transport Subsidy Scheme, 1971, while making such observation. He submits that the various States in the North East including Assam were under the consideration of the C & AG where amongst others those who were found to be the beneficiaries which otherwise were not entitled to. In order to substantiate his submission, Mr. He submits that the various States in the North East including Assam were under the consideration of the C & AG where amongst others those who were found to be the beneficiaries which otherwise were not entitled to. In order to substantiate his submission, Mr. S.C. Keyal , the learned ASGI refers to the affidavit-in-opposition filed by the respondent No.5 wherein the Performance Audit of transport subsidy by the C & AG have been annexed as Annexure-B. Mr. S.C. Keyal also by referring to the affidavit-in-opposition field by the respondent No.1 submits that the C & AG pointed out other instances of irregularities in the beneficiary states which included claim for the period from 01.01.2004 to 31.03.2004 amongst others. The C & AG had recommended that such cases be investigated in depth, preferably supported by field visits and therefore, pending such instruction and field verification, the transport subsidy claimed by the petitioners should not be released. However, Mr. S.C. Keyal submits that although the C & AG are yet to take a final call in the matter, he has received instructions that the process for enabling the payment of the pending transport subsidy in favour of the writ petitioners is directed to be processed. 12. Since the learned ASGI has received the instructions for processing of subsidy payable to the petitioners, there would be no difficulty in directing the respondent authorities concerned to make the payment thereof. However, what is required to be considered as to whether the petitioners should be paid any interest towards delay payment of the transport subsidy under the Subsidy Scheme of 1971. As can be noticed, the Ministry of Commerce and Industries, Department of Industrial Policy and Promotion vide communication dated 04.07.2014 had clarified that in case of inter-state movement of finished goods within the North-East region, the cost of transportation beyond the railway head nearest to the delivery point where finished goods is being delivered is also to be taken into account for the subsidy benefit. The actual cost of transportation or cost of movement from the location of the industrial unit to the nearest railway station by road and thereafter, by rail to the railway station nearest to the location where finished goods is to be received and subsequently, by road from that railway station to the location where finished goods has been received, whichever is less is to be accounted. Despite such clarification, the petitioners have not been released the transport subsidy amount due to them. Although the Performance Audit of the C & AG detected that there was lack of proper scrutiny on the part of the department concerned prior to recommending the concerned units for availing subsidy, no formal proceeding have followed thereafter. In that view of the matter while taking into account the Court decisions relied upon by the learned Senior Counsel for the petitioners, I am of the considered opinion that the petitioners are also entitled to be paid interest on account of the delay in release of the transport subsidy. 13. Considering the case in its entirety and upon perusal of the materials available on record and after hearing the rival parties, the petitioners are found to be entitled to release their respective transport subsidy along with interest @ 12% per annum with effect from 04.07.2014 (the date on which clarification was made) till final payment of the principal amount. Since the respondent No.5 is no longer the Nodal agency in terms of the notification dated 22.11.2016, the respondent Nos. 1 to 4 are directed to take necessary steps for releasing the pending dues in favour of the writ petitioners towards transport subsidy along with simple interest @ 12% per annum with effect from 04.07.2014 till final payment as expeditious as possible and not latter then the outer limit of 3 (three) months from the date of receipt of a certified copy of this order. 14. With the above observations and direction this writ petitions stand disposed of. No cost.