LI Network
Published on: January 12, 2024 at 11:00 IST
The Gauhati High Court ruled that the exclusion of industrial units from benefits under the North East Industrial Investment Promotion Policy, 2007 (NEIIPP) due to their turnover being below the threshold limit or producing exempted goods, is an unreasonable classification.
The Court, in a bunch of writ petitions, held that such exclusion cannot be justified, deeming it arbitrary and in violation of Article 14 of the Constitution of India.
The single-judge bench, headed by Justice Soumitra Saikia, examined the challenge against the Scheme of budgetary support issued by the Ministry of Commerce & Industries.
The petitioners, eligible for NEIIPP benefits, contested the denial of budgetary support because their industrial units were not registered under the Central Excise Act, either due to turnover below the threshold limit or manufacturing exempted goods.
Dr. Ashok Saraf, Senior Advocate for the petitioners, argued that the denial of budgetary support was illegal, emphasizing that the units were eligible for benefits under NEIIPP, 2007, but were exempt from paying central excise duty due to their turnover. He contended that the denial was unreasonable, violating Article 14, and contradicted the doctrine of promissory estoppel and legitimate expectation.
The Court noted that the denial was not based on a reasonable classification, as units eligible for NEIIPP benefits were excluded from the Budgetary Support Scheme due to turnover or exemption from excise duty. It observed that the classification was irrational and lacked nexus with the policy’s objective.
The Court highlighted a government clarification stating that non-filing of refund applications should not imply ineligibility for benefits under area-based notifications.
It declared the circular holding units like the petitioners ineligible as illegal and directed the authorities to examine individual claims within 30 days, extending benefits if the criteria are met.
