In a major relief to Adani Wilmar, the Calcutta High Court sanctioned incentives under the West Bengal State Support for Industries Scheme, 2008 post GST.
The petitioner no. 1 opted for an incentive Scheme floated by the respondent authorities and was granted the benefits under the same. Registration Certificates (RC- I and RC-II) were also issued to the said petitioner in terms of the scheme, thereby recognizing the entitlement of the petitioner to be granted the benefits of the scheme.
Subsequently, however, after having disbursed a portion of the dues of the said petitioner under the scheme as lately as on September 1, 2017, the respondent authorities have refused to disburse the rest of the amount of the scheme on the plea that in the altered GST regime, the scheme cannot be continued, since the scheme did not contemplate of such tax.
The counsel for the petitioners placed reliance on Clause 19.2 of the scheme in particular which provides that in the event of the West Bengal Value Added Tax, 2003 being replaced by any other Act, the provision of the scheme will apply mutatis mutandis even after the new Act comes into force.
That apart, it was argued that on September 1, 2017, that is, after the coming into force of the GST regime on July 1, 2017, amounts were disbursed under the Scheme to the said petitioner by including GST components. Thus, it is too late in the day for the respondents to deny the claim of the said petitioner regarding the rest of the amount under the scheme.
The counsel for the respondent contended that the GST Act subsumed all the pre-existing indirect tax statutes, including those relating to VAT. It is sought to be argued that in such scenario, the GST Act has replaced not only the VAT Act but also the other statutes governing indirect tax. Hence, the provisions of Clause 19.2, which only contemplates a statute replacing the VAT Act alone, cannot be considered to be a replacement of the VAT Act in view of the GST taking into account other indirect taxes as well.
A Single Bench of Justice Sabyasachi Bhattacharyya observed that “The concession given by the scheme has been accepted by the petitioners and the petitioners, acting on the said promise of the State, have continued commercial production for a considerable time. The respondents have acceded to the claim of the petitioners under the Scheme, concession or otherwise, by granting RC-I and RC-II and also disbursing a part of the payment. Hence, it is too late in the day to raise a demur to the entitlement of the petitioners to the scheme itself.”
The Court directed the respondents to disburse the balance amount of the claim of Rs.4070 lakhs under the West Bengal State Support for Industries Scheme, 2008, in favour of the petitioners at the earliest, preferably within two months from date, subject to the petitioners complying with the other formalities as contemplated in the said Scheme.
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