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2024 DIGILAW 1459 (CAL)

Banik Concrete Udyog v. State of West Bengal

2024-08-19

PARTHA SARATHI SEN

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JUDGMENT : PARTHA SARATHI SEN, J. 1. In this writ petition the writ petitioner has prayed for issuance of appropriate writ for cancellation of the reasoned order dated 03.10.2016 as passed by the respondent No. 2/authority whereby and whereunder the writ petitioner’s application for incentive under West Bengal Incentive Scheme, 2007 for Micro And Small Scale Enterprises (hereinafter referred to as the ‘said Scheme’ in short) has been rejected by the respondent No. 2/authority. 2. It is the case of the writ petitioner that the writ petitioner is a micro and small scale enterprises under the said Scheme and in order to get the benefit of the said scheme it had applied for the entrepreneur memorandum which was issued by the respondent No. 2/authority on 17.02.2011. It is the further case of the writ petitioner that considering the eligibility criteria of the writ petitioner the respondent No. 2 authority had issued a certificate of eligibility dated 29.03.2013. It is the further case of the writ petitioner that thereafter on 30.03.2012 the writ petitioner made an application with respondent authorities for grant of subsidy, viz., State capital investment subsidy, interest subsidy and electric charges subsidy from the respondent No. 2/authority. The writ petitioner had also applied for bank loan for setting up its unit and the bank that is the United Bank of India sanctioned such loan and after availing such loan the manufacturing unit was established without even receiving a single incentive under the said Scheme. 3. It is the further case of the writ petitioner that for the reason best known to the respondents the writ petitioner was not given subsidy as prayed for though similar such subsidy was given to the other entrepreneurs which according to the writ petitioner is a violation of Article 14 of the Constitution of India. 4. It is the further case of the writ petitioner that in an earlier round of litigation the aforementioned grievance of the writ petitioner was agitated wherein a co-ordinate Bench while disposing WP 16899(W) of 2016 by its order dated 05.09.2016 directed the respondent No. 2/authority to dispose of the pending application of grant of subsidy as filed by the writ petitioner within a specified time. 5. It is submitted that pursuant to such direction of the Hon’ble Court the respondent No. 2/authority most unilaterally passed an unreasoned order dated 03.10.2016 which requires interference by this Court. 6. 5. It is submitted that pursuant to such direction of the Hon’ble Court the respondent No. 2/authority most unilaterally passed an unreasoned order dated 03.10.2016 which requires interference by this Court. 6. In course of submission Mr. Sanyal, learned Advocate for the writ petitioner at the very outset draws attention of this Court to the Scheme which is annexed with the writ petition at page No. 40 onwards. Attention of this Court is also drawn to Clause 3(ix) and Claue 3(x) of the said Scheme. Further attention of this Court is also drawn to Clause 3(xvi) of the said Scheme. It is submitted that on perusal of the aforesaid three Sub-clauses it would reveal that the said scheme defines the ‘new unit’, ‘existing industrial unit’ and ‘expanded portion’. 7. It is submitted that from the documents which have been placed before the respondent No. 2/authority there cannot be any justification on the part of the respondents to hold that the writ petitioner’s unit is an existing industrial unit and not a new unit. It is further submitted that it is not disputed that the writ petitioner has commenced its commercial production on and from 24.08.2010 at its unit but from page Nos. 224 and 225 of the writ petition it would reveal that such commercial production was started only after availing bank loan as sanctioned and disbursed by the United Bank of India. It is thus submitted that since the writ petitioner has fulfilled the eligibility criteria for obtaining the subsidy/incentive under Clause 6 of the said Scheme there cannot be any justification on the part of the respondent No. 2/authority to discard the prayer of the writ petitioner solely on the ground that the writ petitioner’s unit is an existing industrial unit though in the said reasoned order there is no whisper about any alleged expanded portion within the meaning of Clause 3(xvi) of the said scheme. 8. Per contra, Mr. Galib, learned Advocate for the respondents in course of his submission at the very outset draws attention of this Court to the page No. 12 of the affidavit-in-opposition. It is submitted that from the application as filed by the writ petitioner it would reveal that the commercial production in the unit of the writ petitioner was commenced on 24.08.2010. Galib, learned Advocate for the respondents in course of his submission at the very outset draws attention of this Court to the page No. 12 of the affidavit-in-opposition. It is submitted that from the application as filed by the writ petitioner it would reveal that the commercial production in the unit of the writ petitioner was commenced on 24.08.2010. It is further submitted that there lies a discrepancy with the date of commencement of production as it reveals from the page No. 28 of the affidavit-in-opposition. 9. Learned Advocate for the respondents also places his reliance upon the aforementioned Sub-Clauses of Clause 3 of the said Scheme which deals with ‘definitions’. It is submitted that on perusal of the different Clauses of the said Scheme more specifically Clause 8 and Clause 9, it would reveal that the said Clauses of the said Scheme postulates that for obtaining grant of subsidy towards fixed capital investment and also towards interest subsidy an entrepreneur under the said scheme had to start either its new unit or to expand its existing industrial unit. 10. It is submitted that since from the materials as placed before the respondent authorities it reveals that the writ petitioner has practically applied for subsidy for its expanded portion, by no stretch of imagination it can be said that the order impugned is per se illegal. It is thus submitted that it is a fit case for dismissal of the writ petition since the writ petitioner has not made any application before the respondent No. 2/authority for grant of subsidy for its expanded portion as an existing industrial unit and on the contrary it has wrongly applied for grant of subsidy for the establishment of a new unit. 11. 11. In order to arrive at a logical conclusion of the instant lis this Court considers that some provisions of the said scheme are required to be looked into: “3.(vi) “Unit”/”Enterprise” means any industrial project in the micro and small scale enterprise sectors including industrial cooperatives and industrial self help groups, which has filed Entrepreneurs Memorandum in (Parts I & II) with the DIC.” *********************************************************** “(ix) “New Unit” means an industrial unit/enterprise in micro and small scale sector having investment in fixed capital assets which is established and commissioned by the entrepreneur for the manufacture of goods/products, in West Bengal for the first time on or after the 1st April, 2007 and has filed Entrepreneurs Memorandum (Parts-I and/or II).” “(x) “Existing Industrial Unit” means an industrial unit/enterprise in the micro and small scale enterprise sector having investment in fixed capital assets which exists in West Bengal and manufacture of goods for such unit, immediately before it starts commercial production in its expanded portion on or after the 1st April, 2007.” ************************************************************** “(xiv) “Eligible Unit/Enterprise” means a unit/enterprise in the micro and small scale sectors which has filed Entrepreneurs Memorandum (Parts-I and and/or II) and eligibility certificate has been issued by the DIC.” “(xv) “Expansion of Existing Unit/Enterprise” means expansion for the same item(s) of production within its existing approved capacity or for expansion for enlarged approved capacity or for manufacture of a new item with an approved capacity.” ‘(xvi) “Expanded Portion” means the portion expanded with additional capacity on or after 01.04.2007 with the approval of the State Government for manufacture of goods in West Bengal either in the existing location or in a different area” ***************************************** “6. Eligibility criteria for incentives under SBIS 2007 for MSEs. 6.1 Any industrial unit/enterprise in the micro and small scale shall be eligible for incentives under this scheme subject to the fulfillment of the conditions specified below:- (i) The unit (manufacturing) in the micro sector and small scale sector shall file Entrepreneurs Memorandum (Parts I and/or II). (ii) The project is covered by a detailed feasibility report/project prepared for the purpose. (iii) Eligibility Certificate shall be issued by the General Manager of District Industries Centre. (iv) The project has been approved and sanctioned by the Central Financial Institution or the Commercial Banks or the State Financial Institutions, as the case may be. (ii) The project is covered by a detailed feasibility report/project prepared for the purpose. (iii) Eligibility Certificate shall be issued by the General Manager of District Industries Centre. (iv) The project has been approved and sanctioned by the Central Financial Institution or the Commercial Banks or the State Financial Institutions, as the case may be. In the case of projects with arrangement of finance from own resources, issue of eligibility certificate shall be considered provided the DIC is satisfied about the arrangement of such finance. (v) Industrial cooperatives, undertakings, assisted by KVIC or WBKVIB as well as the undertakings set up under different self-employment schemes receiving benefits in respect of any of the items specified under this scheme shall also be eligible to get the benefit of other items only under this scheme. 6.2 (i) For the benefit of subsidy for conversion to piped gas and for gas charges, man existing unit shall be required to obtain a certificate of expenditure approved by the Greater Calcutta Gas Supply Corporation Ltd. (ii) For the benefit of subsidy for installation of plant facilities for use of piped gas and for gas charges, a new unit expansion project of an existing unit shall be required to obtain a certificate of expenditure approved by the Greater Calcutta Gas Supply Corporation Ltd. 6.3 The Unit will make applications in prescribed forms to the General Manger of District Industries Centre on commencement of commercial production, praying for release of incentives under the Scheme and for registering the unit with DIC under WBIS 2007 for MSES.” 12. On perusal of the aforementioned Clauses of the said Scheme it appears to this Court that under the said Scheme an unit in order to come under the purview of a ‘new unit’ in micro and small scale sector must have made fixed capital asset investment in the said unit and it must have commissioned for the manufacture of goods and products on or after 1st April, 2007 and it must have also filed entrepreneurs memorandum. 13. In order to come under the purview of ‘existing industrial unit’ the said unit also must have investment in fixed capital asset and manufactured goods immediately before it starts commercial production in its expanded portion. 14. 13. In order to come under the purview of ‘existing industrial unit’ the said unit also must have investment in fixed capital asset and manufactured goods immediately before it starts commercial production in its expanded portion. 14. Coming to the factual aspects of the instant writ petition, it reveals that it is not at all disputed that the writ petitioner is a unit/enterprise within the meaning of Clause 3(vi) of said Scheme and which is why the respondent No. 2 by its certificate dated 29.03.2013 granted a certificate of eligibility in favour of the writ petitioner establishments. Admittedly, such establishments have been set up and it has filed its entrepreneurs memorandum. It is also not disputed that investment over capital assets have been made by the writ petitioner, machineries were commissioned and it started commercial production on 24.08.2010. 15. Materials have also been placed before this Court that apart from seeking subsidy from the respondent No. 2/authority the writ petitioner had applied for loan from United Bank of India which was sanctioned on 01.01.2011 and disbursed thereafter. 16. In the impugned order the respondent No. 2/authority have come to a finding that from the conduct of the writ petitioner as well as from the materials placed before the respondent No. 2/authority it is clear that the unit is an existing one and the bank loan was taken for expansion. 17. In order to justify such position learned Advocate for the respondents submits before this Court that on perusal of the different Clauses of said Scheme it would reveal that subsidy was granted for encouraging the entrepreneurs to set up its ‘new unit’ or expansion of its existing industrial and not for reimbursement of the expenses and/or loan as incurred and/or taken by an entrepreneur as has been done by the writ petitioner. 18. On perusal of the said Sub-Clause (ix) and Sub-Clause (x) of the Clause 2 of the said Scheme it reveals that under the said Scheme an unit either ‘new’ or ‘existing’ is required to be set up by fixed capital investment as well as by commissioning of machineries but only the difference is that in case of ‘new unit’ commissioning is necessary for the manufacture of goods and products and in case of ‘existing industrial unit’ manufacturing is also a pre-condition prior to the commencement of the commercial production in its expanded portion. 19. 19. The ‘expanded portion’ has also been defined in Clause 3(xvi). 20. At this juncture, if I look to the order impugned, it reveals that the respondent No. 2 was practically persuaded with the date of commencement of the commercial production that is on and from 24.08.2010 but there is no finding in the said reasoned order that such commercial production was started in the expanded portion of the unit of the writ petitioner as has been specifically mentioned in Clause 3(x) of the said Scheme. 21. In further considered view of this Court, while passing the reasoned order the respondent no. 2 had made no venture as to how it came to a finding with regard to the alleged commencement of the commercial production by the writ petitioner in its expanded portion. 22. This Court is in respectful disagreement with the argument of the learned advocate for the respondent authorities inasmuch as disbursement of subsidy for a ‘new unit’ cannot be held to be barred since an entrepreneur having an unit/enterprise has obtained bank loan for setting up its unit since Clause 6 of the said Scheme clearly specifies that the project of the entrepreneur must have been approved and sanctioned by the Central Financial Institution or the Commercial Bank. 23. In view of the discussion made hereinabove, this Court thus finds that the reasoned order as passed by the respondent no. 2 is vague since he makes no venture while passing the impugned order that as to how he came to a finding that the subsidy was practically applied for alleged expanded portion of the writ petitioner establishment. 24. It appears to this Court that while passing the reasoned order, the respondent no. 2 was persuaded by the date of commencement of the commercial production but he made no venture to assign any logical reason as to why he came to a finding with regard to the alleged demand of subsidy in respect of alleged expanded portion of the ‘existing industrial unit’ of the writ petitioner in absence of any cogent material before it. 25. As a result, the instant writ petition succeeds and is hereby allowed. 26. Consequently, the order of the respondent no. 2 dated 03.10.2016 as communicated to the writ petitioner vide Memo No. 546/DIC/BDN/2016-17, is hereby quashed. 27. Consequently, the respondent authorities more specifically, the respondent no. 25. As a result, the instant writ petition succeeds and is hereby allowed. 26. Consequently, the order of the respondent no. 2 dated 03.10.2016 as communicated to the writ petitioner vide Memo No. 546/DIC/BDN/2016-17, is hereby quashed. 27. Consequently, the respondent authorities more specifically, the respondent no. 2 authority is hereby directed to disburse the admissible amount of subsidy in favour of the writ petitioner towards state capital investment, interest and electricity charges as per the said Scheme positively within 60 days from the date of communication of this order. 28. Accordingly, the instant writ petition being WPA 11752 of 2017 is disposed of. 29. The respondent no. 2 is directed to act on the server copy of this order. 30. Urgent photostat certified copies of this order, if applied for, be supplied to the parties upon compliance with all the necessary formalities.