Dharampal Satyapal Ltd. vs Union of India

In these petitions, an interim order was passed by this Court on 9-7-2013 which reads as follows:-

"On 7th May 2013, we had passed a detailed order which reads as follows:

"The Government of India issued a policy known as the New Industrial Policy and other concessions in the North-eastern region. Various Notifications, vide Nos. 32/99-CE, 33/99-CE, 8/2004 and 28/2004 r/w Section 72 of the Finance Act, 2011, were issued by the Central Government granting certain benefits of refund of excise duty to the assessees in case they made investments in the Northeastern States and used the amount refunded for purchase of plant, machinery etc. The scheme was to end on 31st December, 2012.

As per the terms of the scheme the Investment Appraisal Committee comprising of one official of the Revenue Authority along with one representative of the State Government concerned was to verify on or before 31st December, 2012 whether in fact the assessee had utilized the amount of excise refunded to it for the purposes which were provided for in the scheme. With regard to the plant in question no such certification could be done because the representative of the State of Tripura did not attend the meeting of IAC.

In our view, without entering into any other disputes, at this stage, it would be better if the State ensures that an appraisal in accordance with the terms of the scheme is done at the earliest possible.

The State is therefore directed to take up the matter with the Excise Department at the Central Government level so that another meeting of the IAC with regard to the investment made in Tripura can be held. Holding of such a meeting at an early stage would also be for the benefit of the State because it is only this Committee which can find out whether the assessee has actually used the amount of excise refunded to it for the purposes provided for under the scheme. In case the Committee finds that such refunded excise has been used for other purposes the State can be a beneficiary along with the Central Government.

Mr. Datta, learned counsel, may obtain instruction within 6 (six) weeks as to how soon the said Committee can hold it''s meeting.

List on 2nd July, 2013.

The interim direction to continue till the next date."

Pursuant to the said order we have been informed by the learned Advocate General that the State has approached the Central Board of Excise and Customs on 6th June, 2013 to constitute a Committee to finally assess whether the assessee has made the investments in accordance with the notifications referred to in our earlier order.

Counter has been filed by the Union of India and the stand of the Union of India is that since the scheme came to an end on 31st December 2012, there is no statutory provision now for constitution of any Committee to make the assessment.

Mr. Biswas is right, that technically the time is over. However, as already indicated in our earlier order, somebody must assess whether the investments made by the assessee were done in accordance with law and whether it is actually entitled to the benefit of the earlier notification. This question is definitely a question of fact which cannot be decided by this Court. There is no statutory body or authority which can decide this question. No doubt, the notification expired on 31st December, 2012 but as stated in our earlier order the Committee could not meet for certain reasons. Therefore, it would be in the interest of all concerned i.e. the assessee, the State Government as well as the Central Government that an appraisal is done by the Investment Appraisal Committee. It would not be proper to change the constitution of the committee also at this stage. In case, the assessee has actually made the investments in terms of the earlier notification he is entitled to full benefits. In case it is found that the assessee has not made the investments in accordance with the earlier notification, or that part of the investments are not in accordance of the earlier notification, the State as well as the Central Government would be beneficiaries as per the notification. Therefore, we do not understand why such a stand has been taken by the Union of India. We consequently reject this objection and direct that an Investment Appraisal Committee constituted as per the earlier notification shall meet and decide latest by 31st October, 2013 whether the investment made by the assessee are in terms of the notifications referred to in our earlier order as above.

A copy of this order be supplied to the learned counsel of the parties.

In view of the detailed order passed by us the demand notice is kept in abeyance till the next date."

This order was challenged by the Union of India by filing Special Leave Petition (SLP) before the Apex Court and the SLP has been dismissed in the following terms:-

"Upon hearing the learned counsel and upon perusal of the impugned judgment, we do not see any reason to interfere with the impugned order. However, we direct that the Investment Appraisal Committee shall conclude its work within three months from today and shall give its findings.

If the findings of the Investment Appraisal Committee are against the concerned units, which have been given the incentive, the amount of incentive so given shall be recovered within six months thereafter in accordance with law.

The learned counsel appearing for the States of Assam and Tripura have assured this Court that they shall extend their cooperation to the Investment Appraisal Committee. The Special Leave Petitions are disposed of with the above observations."

In view of the judgment now passed by the Apex Court, nothing survives in the petitions and the petitions are, therefore, disposed of as infructuous at this stage with liberty reserved to the petitioners to again approach this Court if they are aggrieved by the orders passed after the verification by the Investment Appraisal Committee.

In view of the fact that the decision of this Court asking the Investment Appraisal Committee to verify the claims of the investors has been upheld by the Apex Court, the impugned demand notices shall be kept in abeyance till the Investment Appraisal Committee give its report. In case, the committee find that any of the investments claimed by the petitioners are entitled to the benefits, then obviously fresh notices will have to be issued. Petitions are disposed of in the aforesaid terms. No costs.