Patna HC Directs Verification of Johnson Paints’ VAT and SGST Reimbursement Claim under Industrial Policy Resolution, 2011 [Read Order]

The Patna High Court recently directed the verification of a reimbursement claim made by M/s Johnson Paints Pvt. Ltd. against Value Added Tax (VAT) and State Goods andServices Tax (SGST) as per the requirements of the Industrial Policy Resolution, 2011, after examining whether the requisite documents had been duly submitted.

Johnson Paints approached the High Court seeking directions for reimbursement of 80% VAT for the period April 2017 to June 2017 and reimbursement of the SGST deposited under the Bihar GST Act, 2017 from July 2017 onwards, up to the date of its eligibility.

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It was the claim of the petitioner that Clause 3 of the Industrial Policy Resolution, 2011 required the state provide such incentives to eligible entities, herein, the petitioner had not been reimbursed despite being eligible.

Johnson Paints, represented by Mohit Agarwal stated that it had made an investment proposal for establishing a manufacturing unit, which was approved by the District Level Single Window Clearance Committee in December 2012.

The unit was then granted a VAT Eligibility Certificate by the District Industries Centre in September 2013, and its date of commercial production was recorded as June 1, 2013. The petitioner later submitted applications through the departmental portal seeking incentives under the Industrial Policy Resolution, 2011.

It was further stated that the petitioner had supplied the requisite documents, which were annexured and sought directions for processing the reimbursement within a time-frame.

In response, the State authorities, in their counter-affidavit, stated that due to the large volume of applications received, Cabinet approval was obtained in April 2025 to process claims filed up to August 31, 2023, subject to fulfillment of the conditions prescribed under the Industrial Incentive Policy, 2011.

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It was further stated that though the petitioner was called upon to furnish several documents, including SGST claim formats, statutory certificates, and compliance reports, they had abstained from doing so and the claim had thus not been processed.

Justice A. Abhishek Reddy considered the submissions and directed the Principal Secretary, Department of Industry, Government of Bihar to verify the petitioner’s claim. If it found that the petitioner had submitted the requisite documents as stated, the VAT and GST reimbursement process was to be undertaken, preferably within a period of eight weeks.

If after verification, it is found that the petitioner had not submitted the documents, the authority was to put the petitioner on notice and grant sufficient opportunity to comply.

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