Brite Rubber Processor Pvt. Ltd. V. The Union of India and The State of Tripura and The North Eastern Development Finance Corporation Ltd.

WP(C)/224/2016

AI Insights

The case revolves around the petitioner's challenge against the respondents' decision to deny a subsidy under the North Eastern Industrial and Investment Promotion Policy (NEIIPP), 2007, and the Central Capital Investment Subsidy Scheme (CCISS), 2007. The petitioner, Brite Rubber Processor Pvt. Ltd., argued that despite meeting all substantive requirements for the subsidy, the procedural requirement of registering the company before starting production was not adhered to, leading to the denial of the subsidy. The court examined whether strict adherence to procedural requirements should override the legislative intent of promoting industrial growth in the North Eastern region.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 814803 (HC-TRIPURA)
• Appeal Type: Others
• Pronouncement Date: 25-04-2019
• Assessment Year: misc
• Other Referred Cases: Monnet Ispat and Energy Ltd. and Ors. vs. Union of India (UOI) and Ors, Manuelsons Hotels (P) Ltd. Vs. State of Kerala & Ors., Bajaj Tempo Ltd., Bombay Vs. Commissioner of Income Tax, Bombay City-II, Bombay, Textile Machinery Corporation Ltd. v. Commissioner of Income Tax, West Bengal, Commissioner, Trade Tax, UP vs DSM Group of Industries, Commissioner of Central Excise, Surat-I Vs. Favourite Industries
• Laws Referred To: North Eastern Industrial and Investment Promotion Policy (NEIIPP) 2007, Central Capital Investment Subsidy Scheme 2007, Companies Act 1956, Tripura Value Added Tax Act 2004, Central Sales Tax Act 1956, Factories & Boilers Organization, Tripura State Pollution Control Board
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: H DEB
• Assessee Lawyers: A K SARAF
• Keywords: Industrial Unit; Investment; Legal validity; North-Eastern Region; Procedural Requirements; Promissory Estoppel; Subsidy
• Section: 226

Judgement Text

"Page 1 of 34 THE HIGH COURT OF TRIPURA AGARTALA WP (C) No.224 of 2016 1. Brite Rubber Processor Pvt.Ltd., Sakuntala Road,Agartala,West Tripura-799001 and represented by its Director Sri Duli Chand Singhi, Resident of Milanchakra, P.O. A.D.Nagar, P.S. West Agartala, District-West Tripura …..Petitioner. -VERSUS- 1. The Union of India, Represented by the Secretary to the Government of India, Ministry of Commerce & Industry, Department of Industrial Policy & Promotion, Udyog Bhawan, New Delhi-110107. 2. The Under Secretary to the Government of India, Ministry of Commerce & Industry, Department of Industrial Policy & Promotion, Udyog Bhawan, New Delhi-110107 3. The Empowered Committee, For the Central Capital Investment subsidy Scheme under the North East Industrial and Investment Promotion Policy, 2007 Headed by the Secretary, Industrial Policy & Promotion, Government of India, Ministry of Commerce & Industry, Department of Industrial Policy & Promotion, Udyog Bhawan, New Delhi-110107. 4. The State of Tripura, Represented by the Commissioner & Secretary to the Government of Tripura, Department of Commerce and Industries, New Secretariat Building, Agartala, Tripura. 5. The Director of Industries, Department of Industries & Commerce, Government of Tripura, Lichubagan, P.S. New Capital Complex, P.O. Kunjaban,Agartala-799006. 6. The General Manager, District Industries Centre, Lichubagan, P.S. New Capital Complex, P.O. Kunjaban,Agartala-799006 7. The North Eastern Development Finance Corporation Ltd. NEDFi House, Dispur, Guwahati-781006,Assam, & represented by its Chairman-Cum-Managing Director. ….Respondents. Page 2 of 34 For Appellant (s ) : Dr. A K Saraf, Sr.Adv. Mr. S. Chetia, Adv Mr. A. Goyal, Adv. Mr. B. Roy, Adv. For Respondent (s) : Mr. H Deb, Asstt.S.G. Mr.S.M.Chakraborty,Sr.Adv. Mr.A.Sengupta,Adv. Mr.J.Majumder,Adv. Mr.A.Roy Barman,CGC, Ms.P.Sen,Adv. Date of hearing : 29.11.2018 Date of delivery of Judgment & order : 25.04.2019 Whether fit for reporting : Yes HON’BLE MR.JUSTICE ARINDAM LODH JUDGMENT AND ORDER By means of filing this application under Article 226 of Constitution of India the petitioner has challenged the legality and validity of the action of the Respondents disentitling the petitioner-Company to reimburse the subsidy amount due to non- following of one of the prescribed procedures under the provisions of “the North Eastern Industrial and Investment Promotion Policy (NEIIPP) 2007” as well as “the Central Capital Investment Subsidy. 2. Briefly stated, the petitioner is a Private Limited Company incorporated under the provisions of the Companies act, 1956 has its Units Agartala and is engaged in the production of processing of Indian Standard Natural Rubber commonly known as ISNR/Technically Specified Rubber (in short TSR). The petitioner is also registered as a dealer under the Tripura Value Added Tax Act, Page 3 of 34 2004 as well as the Central Sales Tax Act,1956.The petitioner obtained the “Certificate for Consent to Establish” duly issued by the Competent authority, Tripura State Pollution Control Board vide his Certificate No.F.17(10)/TSPCB/W/Rubber/(M- Red)/2667/2733-35 dated 25.09.2007. The Petitioner also received statutory “Licence to work a Factory” dated 04.06.2009 issued by the Factories & Boilers Organization, Government of Tripura & also registered as SSI Unit vide SSI Registration No.160011200309 dated 07.04.2009 before the Department of Industries and Commerce, Government of Tripura & also registered under the NEIIPP,2007 vide Registration No.DIC/West/Tripura/64/NEIIPP,2007/2010 dated 09.11.2010. 3. The Government of India, Ministry of Commerce and Industry, Department of Industrial Policy and Promotion approved a package of fiscal incentives and other concessions for the North Eastern States including Sikkim by way of a policy called North East Industrial and Investment Promotion Policy 2007(for short “NEIIPP, 2007) making it effective from 01.04.2007 vide an Office memorandum under File No.10 (3)/2007-DBA-II/NER dated 01.04.2007.The Policy, besides other incentives such as 100% excise duty and income tax exemption, also provides for Capital Investment Subsidy on investment of Plant and Machineries by the Industrial units in North Eastern Region. Clause(vii) of the said Policy provides for enhancement of Capital Investment Subsidy to 30% of the investment in plant and machinery which was earlier 15% under the North East Industrial Policy 1997 & Clause (x) of the Policy provides for a Negative List of Industries which are not Page 4 of 34 eligible for the benefits under the NEIIPP,2007. The petitioner‟s company was/is not within the province of “Negative List”. 4. In order to uplift the North Eastern India from economic backwardness & to attract investors‟ confidence, the Central Government formulated the North East Industrial and Investment Promotion Policy 2007 dated 24.12.1997 for facilitating industrial development in the North East Region. 5. The policy is named after “North East Industrial and Investment Promotion Policy (NEIIPP), 2007” is reproduced here-in-below:- “File No.10 (3)/2007-DBA-II/NER Government of India Ministry of Commerce and Industry Department of Industrial Policy and Promotion New Delhi dated the 1st April, 2007. OFFICE MEMORANDUM Subject: North East Industrial and Investment Promotion Policy (NEIIPP), 2007 The Government has approved a package of fiscal incentives and other concessions for the North East Region namely the „North East Industrial and Investment Promotion Policy (NEIIPP), 2007‟, effective from 1.4.2007, which, inter-alia, envisages the following: (i) Coverage: The North East Industrial Policy (NEIP), 1997 announced on 24.12.1997 covered the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. Under NEIIPP, 2007, Sikkim will also be included. Consequently, the „New Industrial Policy and other concessions for the State of Sikkim‟ announced vide O.M. No.14(2)/2002-SPS dated 23.12.2002 and the Schemes thereunder i.e. Central Capital Investment Subsidy Scheme, 2002, Central Interest Subsidy Scheme, 2002 and Central Comprehensive Insurance Scheme, 2002, notified vide Notifications No. F.No.14(2)/2002-SPS dated the 24.12.2002 will be discontinued from 1.4.2007. (ii) Duration: All new units as well as existing units which go in for substantial expansion, unless otherwise specified and which commence commercial production within the 10 year period from the date of notification of NEIIPP, 2007 will be eligible for incentives for a period of ten years from the date of commencement of commercial production. Page 5 of 34 (iii) Neutrality of location: Incentives will be available to all industrial units, new as well as existing units on their substantial expansion, located anywhere in the North Eastern Region. Consequently, the distinction between „thrust‟ and „non- thrust‟ industries made in NEIP, 1997 will be discontinued from 1.4.2007. (iv) Substantial Expansion: Incentives on substantial expansion will be given to units effecting „an increase by not less than 25% in the value of fixed capital investment in plant and machinery for the purpose of expansion of capacity/modernization and diversification‟, as against an increase by 33½ % which was prescribed in NEIP, 1997. (v) Excise Duty Exemption: 100% Excise Duty exemption will be continued, on finished products made in the North Eastern Region, as was available under NEIP, 1997. However, in cases, where the CENVAT paid on the raw materials and intermediate products going into the production of finished products (other than the products which are otherwise exempt or subject to nil rate of duty) is higher than the excise duties payable on the finished products, ways and means to refund such overflow of CENVAT credit will be separately notified by the Ministry of Finance. (vi) Income Tax Exemption: 100% Income Tax exemption will continue under NEIIPP, 2007 as was available under NEIP, 1997. (vii) Capital Investment Subsidy: Capital Investment Subsidy will be enhanced from 15% of the investment in plant and machinery to 30% and the limit for automatic approval of subsidy at this rate will be Rs.1.5 crores per unit, as against Rs.30 lakhs as was available under NEIP, 1997. Such subsidy will be applicable to units in the private sector, joint sector, cooperative sector as well as the units set up by the State Governments of the North Eastern Region. For grant of Capital Investment Subsidy higher than Rs.1.5 crore but upto a maximum of Rs.30 crores, there will be an Empowered Committee Chaired by Secretary, Department of Industrial Policy & Promotion with Secretaries of Department of Development of North Eastern Region (DONER), Expenditure, Representative of Planning Commission and Secretary of the concerned Ministries of the Government of India dealing with the subject matter of that industry as its members as also the concerned Chief Secretary/Secretary (Industry) of the North Eastern State where the claiming unit is to be located. Proposals which are eligible for a subsidy higher than Rs.30 crores, will be placed by Department of Industrial Policy and Promotion before the Union Cabinet for its consideration and approval. (viii) Interest Subsidy: Page 6 of 34 Interest Subsidy will be made available @ 3% on working capital loan under NEIIPP, 2007 as was available under NEIP, 1997. (ix) Comprehensive Insurance: New industrial units as well as the existing units on their substantial expansion will be eligible for reimbursement of 100% insurance premium. (x) Negative List: The following industries will not be eligible for benefits under NEIIPP, 2007:- (i) All goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which pertains to tobacco and manufactured tobacco substitutes. (ii) Pan Masala as covered under Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). (iii) Plastic carry bags of less than 20 microns as specified by Ministry of Environment and Forests Notification No.S.O. 705(E) dated 02.09.1999 and S.O.698 (E) dated 17.6.2003. (iv) Goods falling under Chapter 27 of the First Schedule to the Central Excise tariff Act, 1985 (5 of 1986) produced by petroleum oil or gas refineries. (xi) Incentives for Service/other Sector Industries Incentives under NEIIPP, 2007 will be applicable to the following service sector activities/industries:- I. Service Sector: (i) Hotels (not below Two Star category), adventure and leisure sports including ropeways ; (ii) Medical and health services in the nature of nursing homes with a minimum capacity of 25 beds and old-age homes ; (iii) Vocational training institutes such as institutes for hotel management, catering and food crafts, entrepreneurship development, nursing and para- medical, civil aviation related training, fashion, design and industrial training. A number of tax concessions under the existing provisions of Section 10A and 10AA of the Income Tax Act are already available to the IT sector. However, one of the important impediments to the development of Software Technology Parks or IT related SEZs in the North Eastern Region is the non-availability of trained human resources in the North Eastern Region. Accordingly, tax benefits as is availed under Section 80 IC of the Income Tax Act would be extended to IT related training centers and IT hardware units. II. Incentives for Bio-technology industry: The biotechnology industry will be eligible for benefits under NEIIPP, 2007 as applicable to other industries Page 7 of 34 III. Incentives for Power Generating Industries: Power Generating plants will continue to get incentives as governed by the provisions of Section 81A of the Income tax Act. In addition, power generating plants upto 10 MW based on both conventional and non- conventional sources will also be eligible for capital investment subsidy, interest subsidy and comprehensive insurance as applicable under NEIIPP, 2007. (xii) Establishment of a monitoring mechanism for implementation of the NEIIPP, 2007: In order to establish a monitoring mechanism for implementation of NEIIPP, 2007, a „High Level Committee‟ / an „Advisory Committee‟ under the Chairmanship of Secretary, Department of Industrial Policy and Promotion and comprising Secretaries of the Ministries/Departments of Revenue, Department of Development of North Eastern Region (DONER), Banking and Insurance, Representative of Planning Commission, CMD, NEDFi as well as major stakeholders including the industry associations of the North Eastern region would be constituted. In addition, an „Oversight Committee‟ will be constituted under the Chairmanship of the Union Commerce and Industry Minister with Industry Ministers of NE States as its members. (xiii) Value Addition In order to ensure genuine industrial activities in the North Eastern Region, benefits under NEIIPP, 2007 will not be admissible to goods in respect of which only peripheral activities like preservation during storage, cleaning operations, packing, re-packing, labelling or re-labelling, sorting, alteration of retail sale price etc. take place. (xiv) Transport Subsidy Scheme The Transport Subsidy Scheme would continue beyond 31.3.2007, on the same terms and conditions. However, an early evaluation of the scheme will be carried out with a view to introducing necessary safeguards to prevent possible leakages and misuse. (xv) Nodal agency The North East Industrial Development Finance Corporation (NEDFi) will continue to act as the nodal agency for disbursal of subsidies under NEIIPP, 2007. 6. Being implemented the said Policy, the Government of India was pleased to frame a Scheme called “Central Capital Investment Subsidy Scheme, 2007”, (in short, CCISS,2007) vide Notification No.F.No.10(3)/2007-DBA-II/NER, dated 27.07.2007 granting Capital Investment Subsidy for the industrial units in the Page 8 of 34 North Eastern Region with a view to accelerate the industrial development in the said region. Clause 5 of the “Scheme” provides the extent of admissible subsidy & Clause 8 of the “Scheme of 2007” provides procedure for claiming capital investment subsidy. The said Scheme of 2007 is reproduced as under, for convenience, in extenso: “MINISTRY OF COMMERCE & INDUSTRY (Department of Industrial Policy & Promotion) NOTIFICATION New Delhi, the 27th July, 2007 F.No.10(3)/2007-DBA-II/NER – In pursuance of the North East Industrial and Investment Promotion Policy, 2007 (NEIIPP, 2007) issued by the Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) vide O.M. No.10 (3)/2007-DBA- II/NER, dated the 1st April, 2007, the Government of India is pleased to make the following Scheme of Capital Investment Subsidy for industrial units in the North Eastern Region (NER) comprising the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura with a view to accelerating the industrial development in the NER. 1. Short Title:-This Scheme may be called the „Central Capital Investment Subsidy Scheme, 2007‟. 2. Commencement and duration: - It will come into effect from the 1st April, 2007 and remain in force upto and inclusive of 31.3.2017. 3. Applicability:- Unless otherwise specified, all new industrial units as well as existing units which go in for substantial expansion and are located anywhere in NER, will be eligible for capital investment subsidy under this Scheme. The Scheme will also be applicable to the following service sector activities/industries: - I. Service Sector: (i) Hotels (not below Two Star category), adventure and leisure sports including ropeways ; (ii) Medical and health services in the nature of nursing homes with a minimum capacity of 25 beds and old-age homes ; (iii) Vocational training institutes such as institutes for hotel management, catering and food crafts, entrepreneurship development, nursing and para- medical, civil aviation related training, fashion, design and industrial training. II. Bio-technology industry III. Power Generating Industries: Power Generating plants upto 10 MW based on both conventional and non- conventional sources. 3.(a). The Scheme shall not be applicable to the industries listed in Annexure-I Page 9 of 34 4. Definitions: (a) „Industrial unit‟ means any industrial undertaking, suitable servicing unit other than that run departmentally by Government. (b) „New industrial unit‟ means an industrial unit for the setting up of which effective steps were not taken prior to 1.4.2007 (c) „Existing Industrial Unit‟ means an industrial unit for the setting up of which effective steps were taken prior to 1.4.2007. (d) „Substantial expansion‟ means increase in the value of fixed capital investment in plant and machinery of an industrial unit by not less than 25 %, for the purpose of expansion of capacity /modernization and diversification. (e) „Effective steps‟ means one or more of the following steps:- (i) that 10% or more of the capital issued for the industrial unit has been paid up. (ii) that any part of the factory building has been constructed. (iii) that a firm order has been placed for any plant and machinery required for the industrial unit. (f) „Fixed Capital Investment‟ means investment in „plant and machinery‟, for the purpose of this scheme. 5. Extent of admissible Subsidy:- All eligible industrial units located anywhere in the North Eastern Region shall be given capital investment subsidy at the rate of 30% of their investment in Plant and Machinery or additional investment in Plant and Machinery. Such subsidy will be applicable to units in the private sector, joint sector, cooperative sector as well as the units set up by the State Governments concerned of the North Eastern Region. The limit for automatic approval of subsidy at this rate would be Rs.1.5 crore. For grant of capital investment subsidy higher than Rs.1.5 crore but upto a maximum of Rs.30 crore, there will be an Empowered Committee set up vide O.M. F.No.10(3)/2007-DBA-II/NER dated the 21st May 2007. (Annexure-II) Proposals which are eligible for a subsidy higher than Rs.30 crore will be placed by Department of Industrial Policy and Promotion before the Union Cabinet for its consideration and approval. 6. Plant and Machinery (for manufacturing sector) :- (i) In calculating the value of plant and machinery, the cost of industrial plant and machinery as erected at site will be taken into account which will include the cost of productive equipments, such as tools, jigs, dies & moulds, insurance premium etc. (ii) The amount invested in goods carriers to the extent they are actually utilized for transport of raw materials and marketing of the finished products, will be taken into account. (iii) Working capital including raw materials and other consumables stores, will be excluded for computing the value of plant and machinery. 6(a). Definition of „Plant and Machinery‟ and „components‟ which should be taken in to account for the purpose of this Scheme in respect of Service Sector, Bio-technology industry & Power Generating industries referred to in para 3 (I), (II) & (III) above would be notified separately. Page 10 of 34 7. Designated Agency for disbursement of subsidy :- North Eastern Development Financial Corporation (NEDFi), Guwahati shall be the designated nodal agency for disbursement of capital investment subsidy under the Scheme on the basis of the recommendation of State Level Committee (SLC) of the concerned State Government, the Empowered Committee and the Union Cabinet, as the case may be. 8. Procedure for claiming capital investment subsidy:- Industrial units eligible for subsidy under the Scheme will be required to get themselves registered with the State Industry Department concerned prior to taking effective steps for setting up new industrial units or undertaking substantial expansion of existing units and to indicate their assessment of the total new or additional fixed capital likely to be invested by them in the plant and machinery. 9. Procedure for disbursement of capital investment subsidy:- Each State Government concerned will set up a State Level Committee (SLC) consisting of a representative of each of the State Finance Department, State Industries Department, State Directorate of Industries, NEDFi and the Financial Institution concerned (if the industrial unit is to be assisted by a financial institution), to go into details of each case to decide whether the unit qualifies for the grant of subsidy and also about the quantum of subsidy. 10. In respect of a new industrial unit set up without assistance from a Financial Institution or the State Government concerned, the subsidy will be disbursed to the unit by NEDFi on the recommendation of the State Government, the Empowered Committee and the Union Cabinet, as the case may be, at the time the unit goes into production. Similarly, in respect of substantial expansion by an existing industrial unit without assistance from the financial institutions or the State Government concerned, the subsidy will be disbursed to the unit by NEDFi on the recommendation of the State Government concerned, the Empowered Committee and the Union Cabinet, as the case may be after substantial expansion has been effected and the unit has commenced enhanced commercial production. However, in such cases where the concerned State Government is satisfied about the safety of the public funds, not more than half of the amount of the estimated subsidy may be released prior to the unit going into production on the entrepreneur‟s furnishing a proof of having taken effective steps to the satisfaction of State Director of Industries and the remaining amount be released only after the unit goes into production. 11. In respect of an industrial unit assisted/ to be assisted by a Financial Institution or the State Government concerned, the subsidy will be disbursed to the unit by NEDFI on the recommendation of the State Government concerned, the Empowered Committee and the Union Cabinet, as the case may be. However, in such cases, the contract/agreement to be drawn up between the Financial Institution/ State Government and the unit concerned, may cover mortgage, pledge, hypothecation of the assets upto the amount of the subsidy payable/paid to the units. In respect of new Page 11 of 34 industrial unit or in respect of substantial expansion of an existing industrial unit to be assisted by a financial institution, the subsidy will be disbursed to the unit by NEDFi in as many instalments in which the loan is disbursed by the financial institution and simultaneously claimed by the Financial Institution/State Government from NEDFi. 12. Rights of the Centre/State Government/Financial Institutions:- If the Central Government/State Government/Financial Institution concerned is satisfied that the subsidy to an industrial unit has been obtained by misrepresentation as to an essential fact, furnishing of false information or if the unit goes out of production within 5 years after commencement of commercial production, the Central Government/State Government/NEDFi may ask the unit to refund the grant or subsidy after giving an opportunity to the unit of being heard. 13. Without taking prior approval of the Union Ministry of Commerce & Industry (Department of Industrial Policy and Promotion) /State Government/Financial Institution concerned, no owner of an industrial unit after receiving a part or the whole of the subsidy will be allowed to change the location of the whole or any part of industrial unit or effect any substantial contraction or dispose of a substantial part of its total fixed capital investment within a period of 5 years after its going into commercial production. 14. In respect of all units to whom the subsidy is disbursed by the NEDFi, certificate of utilisation of the subsidy for the purpose for which it was given shall be furnished to the Central Ministry of Industry (Department of Industrial Policy and Promotion) by the financial institution/State Government concerned, within a period of one year from the date of receipt of the last instalment/full amount. 15. After receiving the subsidy, each industrial unit shall submit Annual Progress Report (APR) to the Union Ministry of Industry (Department of Industrial Policy and Promotion)/ State Government concerned, about its working for a period of 5 years after going into production. 16. A High Level Monitoring Committee has been set up as in Annexure-III which would monitor implementation of the Scheme. (N.N.Prasad) Joint Secretary ANNEXURE-I Negative List: The following industries will not be eligible for benefits under NEIIPP, 2007:- All goods falling under Chapter 24 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) which pertains to tobacco and manufactured tobacco substitutes. (ii) Pan Masala as covered under Chapter 21 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986). (iii) Plastic carry bags of less than 20 microns as specified by Ministry of Environment and Forests Notification No.S.O. 705(E) dated 02.09.1999 and S.O.698 (E) dated 17.6.2003. (iv) Goods falling under Chapter 27 of the First Schedule to the Central Excise tariff Act, 1985 (5 of 1986) produced by petroleum oil or gas refineries. Page 12 of 34 Value Addition:- Benefits under NEIIPP, 2007 will not be admissible to goods in respect of which only peripheral activities like preservation during storage, cleaning operations, packing, re-packing, labeling or relabeling, sorting, alteration of retail sale price etc. take place.” 7. Being encouraged by the various incentives as declared in that Policy and Scheme, the petitioner-Company established its industrial unit at specified “Industrial Growth Centre, Bodhjungnagar, Agartala-799008” in Tripura” for manufacture and processing of Indian Standard Natural Rubber. The petitioner Company made an investment of Rs.3,82,52,958/- in setting up its industrial unit and started its commercial production on and from 19.01.2009 and also started selling its finished products w.e.f.02.02.2009. 8. Accordingly, the petitioner vide its communication dated 02.12.2010 submitted its claim for Central Capital Investment Subsidy before the General Manager, District Industries Centre, the Respondent no.-6 herein against the investments made in purchasing Plant and Machineries in setting up its industrial unit worth Rs.1,82,11,037/-. The Manager (Credit), O/C, Subsidy Section, Directorate of Industries & Commerce, Tripura vide his letter under F. No. DI/ Sub/4(6)/ 2007/Part/ 7376 dated 20/05.2011 had intimated the petitioner that the State Level Committee(in short, SLC) i.e. the Competent Authority of the Government of Tripura in this regard has approved an amount of Rs.58,33,386/- under Central Capital Investment Subsidy Scheme and accordingly the proposal of the petitioner was sent to NEDFC Ltd. ( for short, NEDFi), Guwahati, Page 13 of 34 Assam (India), which is prescribed as the nodal agency under the NEIIPP,2007 for disbursement of the said subsidy amount to the petitioner. It is pertinent to mention herein that the State Level Committee found that the petitioner went into commercial production on 19.01.2009 and the Unit approached late for registration under NEIIPP,2007 Scheme, and the registration date was on 09.11.2010. However, the SLC after verifying all pros and cons as well as the genuinty of the Unit thought it appropriate to condone the delay in obtaining registration under NEIIPP,2007 and recommended for subsidy under the CCISS,2007 for an amount of Rs.58,33,386/- in favour of the petitioner, the same being forwarded to „NEDFi‟, Respondent no.-7 herein along with all supporting documents with a copy to the Chief Controller of Accounts, Department of Industrial Policy and promotion, Ministry of Commerce & Industry, New Delhi for information and necessary action. 9. Subsequently, the claim of the petitioner was placed before the pre-Audit Team deputed by the Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry, Respondent no.- 1 & 2 herein during their visit in North East Region States from 26.04.2011 to 07.05.2011. The Pre-Audit Team has placed the claim under “objection” stating the ground that the date of commencement of commercial production is before the date of Registration which is one of the procedural requirements to be eligible for subsidy under NEIIPP, 2007 Scheme. Page 14 of 34 10. Dr. Saraf, learned Senior Counsel appearing for the petitioner has candidly submitted that even though the claim of the petitioner has been sanctioned by the State Level Committee, the highest authority of the state in regard to granting of subsidy under the “notified Scheme” way back in the year 2011 and sent to NEDFi for disbursement, but the same has not been disbursed till date despite the subsidy amount as claimed is “automatic” being the amount is well less than Rs 1.5 crore which is the upper limit for automatic granting of subsidy. According to Dr Saraf the refusal of the legitimate claim of the petitioner on the pretext that „commercial production was started before Registration” as noted by the Respondents no.-1, 2 & 3 i.e. concerned ministries of the Union of India is unwarranted, arbitrary and a clear departure from the promise, and infringed the legal and fundamental right of the petitioner as enshrined in Part- III of the Constitution of India. Dr. Saraf has further urged that the government must be liberal to its approach while enforcing or implementing a beneficial policy and the notified Scheme thereof. The Ld. Sr. Counsel further emphasized that strict compliance of procedural requirements should not come in the way of promoting or encouraging the honest investors keeping in view the object the government wanted to achieve as is apparent in the policy and the Scheme as well. Dr. Saraf, the learned Senior counsel strenuously argued that doctrine of promissory estoppel is squarely attracted in the facts of the present case. 11. Per contra, Mr N. Chowdhury, Ld. Govt. Advocate has contended that no statutory or fundamental right of the petitioner Page 15 of 34 has been violated. The petitioner could have filed Money suit instead of the present writ petition. The Ld. GA further submits that legislative notification should be read and construed strictly in the manner it is prescribed. However, the Ld GA has fairly submitted that the state authorities having found the newly established unit of the petitioner in order in all respects, and considering its satisfactory production, and further, keeping in mind the object the Central Government wanted to achieve had thought it justified to recommend the claim of the petitioner to the appropriate authorities after condoning the delay caused in obtaining some Certificates required under the CCISS, 2007 scheme. The state government does not want to disturb the honest investors in any manner whatsoever in their sincere efforts to see the state and the region as well industrially developed. Besides, the state government has always tried to translate the Scheme into actions, if the entrepreneurs has actually set up their Units in tune with the object of introduction of the Scheme by the Central government. 12. Mr. S. M. Chakraborty, learned Senior Counsel appearing on behalf of the NEDFi, the Respondent no. 7 has invited my attention to Annexure R-7/1 enclosed with the Counter Affidavit. In its Counter Affidavit the NEDFi has submitted that it is not competent to disburse the amount of subsidy to any Unit unless and until the sanction order as well the necessary fund is received from the DIPP i.e. the concerned ministries of the Union of India, the Respondents 1, 2 & 3 herein. The Learned Senior Counsel has further submitted that the claim of the petitioner- Page 16 of 34 company has been placed under objection with the remark that production of the Unit was started before Registration as is apparent from Annexure R-7/1 of Counter Affidavit. 13. In the backdrop of aforesaid submissions, according to me, the question falls for consideration by this Court is: (i) Whether the sanction of subsidy below the limit Rs 1.5 crore is automatic; (ii) Whether the NEIIP-2007 as well as the CCISS- 2007 Scheme created a promise towards the investors; (iii) Whether beneficial policies/Schemes of the government mandates strict adherence to the procedural requirements or in other words, whether strict observance of the procedural requirements should defeat the legislative object aimed towards industrial growth of the region. 14. Admittedly, the petitioner had established the unit after the declaration of the NEIIP- 2007 policy in the Industrial Estate provided by the government of Tripura, purchased necessary machineries and equipments, installed the same, and successfully started its production. Undisputedly, the competent authority (Respondent no.-6) being satisfied that the conditions laid down in the policy and the Scheme thereof were fulfilled had approved the claim of the petitioner for subsidy and its recommendation was forwarded to the SLC. The SLC verified the claim afresh. While verification it found that the petitioner obtained late registration certificate whereas the scheme provided for registration of the Unit “prior to taking effective steps for setting up new industrial units” as per Clause 8 of the CCISS -2007 Scheme. It is equally true that SLC being convinced that Unit has already been set up and even successfully started its production at their wisdom Page 17 of 34 condoned the delay to get registered and regularized the procedural defect and forwarded the recommendation to sanction of Rs. 58,33,386/- on account of capital investment subsidy for plant and machineries. 15. Clause 4(b) defines „New Industrial Unit‟ which means an industrial unit for the setting of which effective steps were not taken prior to 1.4.2007; Clause 4(e) defines „Effective Steps which means one or more of the following steps: 16. Clause 5 of CCISS, 2007 deals with “Extent of admissible subsidy”. It stipulates that “all eligible industrial units in the region shall be given capital investment subsidy at the rate of 30% of their investment in Plant and Machinery” and further fixed the limit for automatic approval in the manner as “the limit for automatic approval of subsidy at this rate would be Rs.1.5 crore”. 17. It transpires that the said Clause 5 has 3(three) distinctive components, the first one being automatic as surfaced here-in-above. The 2nd and 3rd components, besides fixing the slabs/range of quantum of subsidy also spoke about the authorities concerned to grant capital investment subsidy in the manner and language that “for grant of capital investment subsidy higher than Rs.1.5 crore but upto a maximum of Rs.30 crore, there will be an Empowered Committee set up vide O.M. F.No.10(3)/2007-DBA-II/NER dated the 21st May 2007. (Annexure-II). Proposals which are eligible for a subsidy higher than Rs.30 crore will be placed by Page 18 of 34 Department of Industrial Policy and Promotion before the Union Cabinet for its consideration and approval.” 18. Significantly, I find similar provision in the NEIIPP, 2007 policy at Clause vii under the caption “Capital Investment Subsidy”. It categorically specified that “for grant of Capital Investment Subsidy higher than Rs.1.5 crore but upto a maximum of Rs.30 crores, there will be an Empowered Committee Chaired by Secretary, Department of Industrial Policy & Promotion with Secretaries of Department of Development of North Eastern Region (DONER), Expenditure, Representative of Planning Commission and Secretary of the concerned Ministries of the Government of India dealing with the subject matter of that industry as its members as also the concerned Chief Secretary/Secretary (Industry) of the North Eastern State where the claiming unit is to be located. Proposals which are eligible for a subsidy higher than Rs.30 crores, will be placed by Department of Industrial Policy and Promotion before the Union Cabinet for its consideration and approval.” 19. In Clause 7, 10 and 11 of CCISS, 2007 a common feature is noticed that capital investment subsidy under the scheme will be disbursed on the basis of recommendation of the State Level Committee (SLC) of the State Government, the Empowered Committee and the Union Cabinet, as the case may be. 20. A plain reading of clause (vii) of the policy conjointly with Clauses 7,10 and 11 of the scheme along with the words “ as Page 19 of 34 the case may be” aptly manifests that in the 1st case i.e. quantum of subsidy below Rs 1.5 shall be disbursed by the NEDFi on the recommendation of the SLC of the concerned State Government; in the 2nd case the quantum of subsidy higher than Rs. 1.5 crore but up to a maximum of Rs.30 crores, shall be disbursed by the NEDFi on the recommendation of the Empowered Committee constituted by the Secretary , Department of Industrial Policy & Promotion with Secretaries of Department of Development of North Eastern Region( DONER), Expenditure, Representative of Planning Commission and Secretary of the concerned Ministries of the Government of India dealing with the subject matter of that Industry as its members as also the concerned Chief Secretary / Secretary( Industry) of the North Eastern State where the claiming Industry is located( herein the State of Tripura); and in the 3rd case, the quantum of subsidy higher than Rs.30 crore shall be placed before the Union Cabinet for its consideration and approval. 21. Further, in my considered view, the legislature by inserting the words “as the case may be” had intended to deal three categories of claims separately and distinctly by three different agencies considering the quantum of capital investment subsidy claimed by the investors. Further, the authorities concerned i.e. the Respondents in the instant case, have misread and misconstrued the terms and conditions for granting of capital investment subsidy laid down in the Office Memorandum dated 1st April, 2007 on the subject NEIIPP,2007 in pursuance whereof the CCISS,2007 Scheme dated 27th April,2007 was notified. The first Page 20 of 34 question is answered accordingly that the claim of the petitioner being far below the maximum limit of Rs.1.5 crore, thus, falls within the first category of claims/cases, as indicated above, ought to have been disbursed „automatically‟ by the concerned Respondents and non-granting of Rs.58,33,383/- against capital investment subsidy in favour of the petitioner is unwarranted, arbitrary and contrary to the legislative object contained NEIIPP,2007 and the CCISS,2007 Scheme as well. 22. Now, before adverting to the question as to whether the government in a given set of facts is bound by the doctrine of promissory estoppels I deem it appropriate to find out true tests for invoking the said doctrine. 23. The Apex Court in “Monnet Ispat and Energy Ltd. and Ors. vs. Union of India (UOI) and Ors” reported in (2012)11 SCC-1, has given the principles regarding the doctrine of promissory estoppels & its scope and ambit and the same can be summarized as under: “(i) Where one party has by his words or conduct made to the other clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in the future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is, in fact, so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties, and this would be so irrespective of whether there is any pre- existing relationship between the parties or not. (ii) The doctrine of promissory estoppel may be applied against the Government where the interest of justice, morality and common fairness dictate such a course. The doctrine is applicable against the State even in its governmental, public or sovereign capacity where it is necessary to prevent fraud or manifest injustice. However, the Government or even a private party under the Page 21 of 34 doctrine of promissory estoppel cannot be asked to do an act prohibited in law. The nature and function which the Government discharges is not very relevant. The Government is subject to the rule of promissory estoppel and if the essential ingredients of this doctrine are satisfied, the Government can be compelled to carry out the promise made by it. (iii) The doctrine of promissory estoppel is not limited in its application only to defence but it can also furnish a cause of action. In other words, the doctrine of promissory estoppel can by itself be the basis of action. (iv) For invocation of the doctrine of promissory estoppel, it is necessary for the promisee to show that by acting on promise made by the other party, he altered his position. The alteration of position by the promisee is a sine qua non for the applicability of the doctrine. However, it is not necessary for him to prove any damage, detriment or prejudice because of alteration of such promise. (v) In no case, the doctrine of promissory estoppel can be pressed into aid to compel the Government or a public authority to carry out a representation or promise which is contrary to law or which was outside the authority or power of the officer of the Government or of the public authority to make. No promise can be enforced which is statutorily prohibited or is against public policy. (vi) It is necessary for invocation of the doctrine of promissory estoppel that a clear, sound and positive foundation is laid in the petition. Bald assertions, averments or allegations without any supporting material are not sufficient to press into aid the doctrine of promissory estoppel. (vii) The doctrine of promissory estoppel cannot be invoked in abstract. When it is sought to be invoked, the Court must consider all aspects including the result sought to be achieved and the public good at large. The fundamental principle of equity must forever be present to the mind of the court. Absence of it must not hold the Government or the public authority to its promise, assurance or representation. 24. Again the scope and application of doctrine of promissory estoppels has vivaciously been dealt in Manuelsons Hotels (P) Ltd. Vs. State of Kerala & Ors. (2016) 6 SCC 766 where the Apex Court has observed thus: [SCC p. 782, Para 19 and 20]: “19.In fact, we must never forget that the doctrine of promissory estoppel is a doctrine whose foundation is that an unconscionable departure by one party from the subject matter of an assumption which may be of Page 22 of 34 fact or law, present or future, and which has been adopted by the other party as the basis of some course of conduct, act or omission, should not be allowed to pass muster. And the relief to be given in cases involving the doctrine of promissory estoppels contains a degree of flexibility which would ultimately render justice to the aggrieved party. The entire basis of this doctrine has been well put in a judgment of the Australian High Court reported in The Commonwealth of Australia v. Verwayen, (1990) 170 C.L.R. 394(Aust), by Deane,J. in the following words: 1. While the ordinary operation of estoppel by conduct is between parties to litigation, it is a doctrine of substantive law the factual ingredients of which fall to be pleaded and resolved like other factual issues in a case. The persons who may be bound by or who may take the benefit of such an estoppel extend beyond the immediate parties to it, to their privies, whether by blood, by estate or by contract. That being so, an estoppel by conduct can be the origin of primary rights of property and of contract. 2. The central principle of the doctrine is that the law will not permit an unconscionable - or, more accurately, unconscientious - departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party's detriment if the assumption be not adhered to for the purposes of the litigation. 3. Since an estoppel will not arise unless the party claiming the benefit of it has adopted the assumption as the basis of action or inaction and thereby placed himself in a position of significant disadvantage if departure from the assumption be permitted, the resolution of an issue of estoppel by conduct will involve an examination of the relevant belief, actions and position of that party. 4. The question whether such a departure would be unconscionable relates to the conduct of the allegedly estopped party in all the circumstances. That party must have played such a part in the adoption of, or persistence in, the assumption that he would be guilty of unjust and oppressive conduct if he were now to depart from it. The cases indicate four main, but not exhaustive, categories in which an affirmative answer to that question may be justified, namely, where that party: (a) has induced the assumption by express or implied representation; (b) has entered into contractual or other material relations with the other party on the conventional basis of the assumption; (c) has exercised against the other party rights which would exist only if the assumption were correct; (d) knew that the other party laboured under the assumption and refrained from correcting him when it was his duty in conscience to do so. Ultimately, however, the question whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula framed to serve as a Page 23 of 34 universal yardstick but by reference to all the circumstances of the case, including the reasonableness of the conduct of the other party in acting upon the assumption and the nature and extent of the detriment which he would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted. In cases falling within category (a), a critical consideration will commonly be that the allegedly stopped party knew or intended or clearly ought to have known that the other party would be induced by his conduct to adopt, and act on the basis of, the assumption. Particularly in cases falling within category (b), actual belief in the correctness of the fact or state of affairs assumed may not be necessary. Obviously, the facts of a particular case may be such that it falls within more than one of the above categories. 5. The assumption may be of fact or law, present or future. That is to say it may be about the present or future existence of a fact or state of affairs (including the state of the law or the existence of a legal right, interest or relationship or the content of future conduct). 6. The doctrine should be seen as a unified one which operates consistently in both law and equity. In that regard, \"equitable estoppel\" should not be seen as a separate or distinct doctrine which operates only in equity or as restricted to certain defined categories (e.g. acquiescence, encouragement, promissory estoppel or proprietary estoppel). 7. Estoppel by conduct does not of itself constitute an independent cause of action. The assumed fact or state of affairs (which one party is estopped from denying) may be relied upon defensively or it may be used aggressively as the factual foundation of an action arising under ordinary principles with the entitlement to ultimate relief being determined on the basis of the existence of that fact or state of affairs. In some cases, the estoppel may operate to fashion an assumed state of affairs which will found relief (under ordinary principles) which gives effect to the assumption itself (e.g. where the defendant in an action for a declaration of trust is estopped from denying the existence of the trust). 8. The recognition of estoppel by conduct as a doctrine operating consistently in law and equity and the prevalence of equity in a Judicature Act system combine to give the whole doctrine a degree of flexibility which it might lack if it were an exclusively common law doctrine. In particular, the prima facie entitlement to relief based upon the assumed state of affairs will be qualified in a case where such relief would exceed what could be justified by the requirements of good conscience and would be unjust to the estopped party. In such a case, relief framed on the basis of the assumed state of affairs represents the outer limits within which the relief appropriate to do justice between the parties should be framed.” (emphasis supplied) 20. The above statement, based on various earlier English authorities, correctly encapsulates the law of Page 24 of 34 promissory estoppel with one difference – under our law, as has been seen hereinabove, promissory estoppel can be the basis of an independent cause of action in which detriment does not need to be proved. It is enough that a party has acted upon the representation made. The importance of the Australian case is only to reiterate two fundamental concepts relating to the doctrine of promissory estoppel – one, that the central principle of the doctrine is that the law will not permit an unconscionable departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of a course of conduct which would affect the other party if the assumption be not adhered to. The assumption may be of fact or law, present or future. And two, that the relief that may be given on the facts of a given case is flexible enough to remedy injustice wherever it is found. And this would include the relief of acting on the basis that a future assumption either as to fact or law will be deemed to have taken place so as to afford relief to the wronged party.” 25. Now, it becomes abundantly clear that the doctrine of promissory estoppel can be applied against the Government on fulfillment of two conditions precedent, namely, (i) a clear unequivocal promise, knowing and intending that the promise would be acted upon by the promisee; and (ii) acting upon such promise, the promisee has altered his position in such a manner that status quo ante cannot be restored and it would be inequitable in law if the Government go back on its promise. It is no longer res integra that the doctrine of promissory estoppel, being an equitable doctrine, must yield when the equity so requires. 26. In the instant case, after careful scrutiny of the policy, in my considered opinion, the NEIIPP, 2007, holds out a promise on behalf of the Government, to the entrepreneurs making investments towards setting up of industrial units located within the North Eastern Region. The Scheme of 2007 has been framed so as to implement the new Industrial Policy by making available the CCISS, 2007 to the eligible units. Therefore, any unit which Page 25 of 34 fulfills the criteria notified under the NEIIPP, 2007 as well as the notification dated 27.07.2007 cannot be denied of the benefits announced under the policy. 27. Once the Central Cabinet takes a policy decision to extend the benefit of capital investment subsidy to an eligible industrial unit, such benefit cannot be restricted by any administrative authority, more so, when such claim of subsidy has already been approved by the government appointed State Level Committee after due consideration of the fact that the Unit has successfully established and started even its production. 28. In the instant case, pursuant to the NEIIP, 2007 and the Scheme thereof the petitioner undisputedly established a new Unit and started its production, thereby, creating a legal relationship between him and the Government as soon as the promise was being acted upon by the promisee, the petitioner herein. Needless to say, that the petitioner had altered his position which he held before setting up the new Unit. Situated thus, the petitioner has been able to make out a clear and sound case which gives rise to a positive foundation for his legitimacy to claim capital investment subsidy as encapsulated above and thus, meets the requirements of invoking the doctrine of promissory estoppel entitling him to draw subsidy in terms of the NEIIPP,2007 and the Scheme as well. 29. Coming now to the issue whether legislative intendment can be allowed to be defeated on the premise of strict interpretation of procedural requirements. So as to substantiate his submission that strict adherence to the procedural Page 26 of 34 requirements should not come in the way of extending the benefit under the notified scheme, Dr. Saraf has brought in to his aid the case of M.K. Jokai Agri Plantations Pvt.ltd & anr vs Commissioner Central Excise & Service Tax in C.Ex.Appl.08/2016, C.Ex.Appl.09/2016 & C.Ex.Appl.10/2016 of the Gauhati High Court and quoted Para -11 of the said judgment: “11.The eligibility of the appellant for the benefit of exemptions and refund of duty paid stands conclusively proved. Clause 2(a) of the Notification only says that the manufacturer shall submit a statement of the duty paid by 7th of next month in which the duty has been paid from the account current. The Notification nowhere mandates the manufacturer to submit a separate claim for refund of duty paid. The appellant has admittedly been submitting statements of the duty paid from account current in RT-12 returns within time with all details before the Assistant Commissioner. The appellant having been once found to be eligible for exemptions and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, in our considered opinion, will cause grave injustice which cannot be permitted. Even otherwise, it is well settled law that non-following of procedural requirement cannot deny the substantive benefit, otherwise available to the assesse. Also exemptions made with a beneficent object like growth of Industry in a Region have to be liberally construed and a narrow construction of the Notification which defeats the object cannot be accepted. For these reasons, we conclude that the impugned order of the Tribunal is not based on correct appreciation of the provisions of Notification and denial of refund (of duty paid) to the appellant on the ground of delay is wholly unjustified. We also hold that statements of duty paid submitted in RT-12 returns by the appellant was substantial compliance of Clause 2(a) of the Notification and there was no need for it to submit a separate statement of the duty paid and claim refund. The Tribunal itself earlier in number of cases viz. Commissioner of Central Excise vs Vinay Cement Ltd.,2002(147) ELT-74;Commissioner of Central Excise vs Napuk Tea Estate,2007 (219) ELT-178 and Dhunseri Tea Estate vs Commissioner of Central Excise,2011(274) ELT-178 has held that statements of duty paid submitted in RT-12 returns amounts to full compliance of Clause 2(a) of the Notification and refund of duty paid cannot be denied for want of separate statement of such duty paid. A long standing decision adopting a particular construction which may have been acted upon by persons in the general conduct of affairs may not be departed from on the doctrine of stare decisis”. Page 27 of 34 30. In Bajaj Tempo Ltd., Bombay Vs. Commissioner of Income Tax, Bombay City-II, Bombay reported in (1992) 3 SCC-78,Para-9, the Supreme Court has observed thus: “9. Initial exercise, therefore, should be to find out if the undertaking was new. Once this test is satisfied then Clause (1) should be applied reasonably and liberally in keeping with spirit of Section-15C(1) of the Act. While doing so various situations may arise for instance the formation may be without anything to do with any earlier business. That is the undertaking may be formed without splitting up or reconstructing any existing business or without transfer of any building material or plant of any previous business. Such an undertaking undoubtedly would be eligible to benefit without any difficulty. On the other extreme may be an undertaking new in its form but not in substance. It may be new in name only. Such an undertaking would obviously not be entitled to the benefit. In between the two there may be various other situations. The difficulty arises in such cases. For instance a new company may be formed, as was in this case a fact which could not be disputed, even by the Income Tax Officer. But tools and implements worth Rs. 3,500 were transferred to it of previous firm. Technically speaking it was transfer of material used in previous business. One could say as that vehemently urged by the learned Counsel for the department that where the language of statute was clear there was no scope for interpretation. If the submission of, the learned Counsel is accepted then once it is found that the material used in the undertaking was of a previous business there was an end of inquiry and the assessee was precluded from claiming any benefit. Words of a statute are undoubtedly the best guide. But if their meaning gets clouded then the courts are required to clear the haze. Sub-section (2) advances the objective of Sub-section (1) by including in it every undertaking except if it is covered by Clause (i) for which it is necessary that it should not be formed by transfer of building or machinery. The restriction or denial of benefit arises not by transfer of building or material to the new company but that it should not be formed by such transfer. This is the key to the interpretation. The formation should not be by such transfer. The emphasis is on formation not on use. Therefore it is not every transfer of building or material but the one which can be held to have resulted in formation of the undertaking.” 31. In Textile Machinery Corporation Ltd. v. Commissioner of Income Tax, West Bengal [1977] 107 SC 195 the Apex Court while interpreting Section 15C observed: Page 28 of 34 “The true test, is not whether the new industrial undertaking connoted expansion of the existing business of the assessee but whether it is all the same a new and identifiable undertaking separate and distinct from the existing business. No particular decision in one case can lay down an inexorable test to determine whether a given case comes under Section 15C or not. In order that the new undertaking can be said to be not formed out of the already existing business, there must be a new emergence of a physically separate industrial unit which may exist on its own as a viable unit. An undertaking is formed out of the existing business if the physical identity with the old unit is preserved”. Even though this decision was concerned with the clause dealing with reconstruction of existing business, but the expression 'not formed' was construed to mean that the undertaking should not be a continuation of the old but emergence of a new unit. Therefore even if the undertaking is established by transfer of building, plant or machinery but it is not formed as a result of such transfer the assessee could not be denied the benefit”. 32. In Commissioner, Trade Tax, UP vs DSM Group of Industries reported in (2005) 1 SCC-657, Para -26, the Supreme Court of India has held that: “26. Even otherwise, the purpose of Notification being to encourage increased production and to give benefit to industries which have invested Rs. fifty crore or more in the State and whose production has thus increased, an interpretation must be given which would extend benefit to such industries. There would be no purpose in denying, an industry which has invested Rs. fifty crore or more and whose production in the State has as a result increased, the benefit of the exemption granted by this Notification merely because the whole of the investment is not in any particular unit. Thus even where the investment is made by the Company in more than one units, so long as the total investment is Rs. fifty crore or more, the benefit of the Notification would be available. Such benefit would then be distributed in the manner set out in the Schedule depending on where a unit in which expansion, diversification or modernization has taken place, is situated. Thus, for example, in respect of the units situated in Barabanki and Moradabad, the benefit would be to the extent of 200% of the fixed capital investment in those units, whereas in respect of units in Bijnore the benefit would be to the extent of 150% of the fixed capital investment in that unit. Similarly, the base production and the starting date of production could be in respect of those units. However, it is the Company which has made the investment. It is the Company which is paying the tax. It is the Company which would be getting the benefit of the exemption. The manner in which the Company gets the benefit would be as set out hereinabove”. Page 29 of 34 33. In Commissioner of Central Excise, Surat-I Vs. Favourite Industries reported in (2012) 7 SCC-153, in Para 36, the Supreme Court of India has held that: “36. In Commissioner of Customs, Kolkata v. Rupa and Co. Ltd. MANU/SC/0543/2004 : (2004) 6 SCC 408, this Court has observed that the exemption notification has to be given strict interpretation by giving effect to the clear and unambiguous wordings used in the notification. This Court has held thus: “7. However, if the interpretation given by the Board and the Ministry is clearly erroneous then this Court cannot endorse that view. An exemption notification has to be construed strictly but that does not mean that the object and purpose of the notification is to be lost sight of and the wording used therein ignored. Where the wording of the notification is clear and unambiguous, it has to be given effect to. Exemption cannot be denied by giving a construction not justified by the wording of the notification”.” The aforementioned observations were made having regard to the nature of exemption claimed by the appellant therein. 34. It would be apposite to refer the case of “Commissioner of Customs (Preventive), Mumbai v. M. Ambalal” reported in (2011) 2 SCC 74, where the Apex Court has observed that the beneficial notification providing the levy of duty at a concessional rate should be given a liberal interpretation: “16. It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many Page 30 of 34 words. In fact, majority of judgments emphasize that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances”. 35. Indisputably, in the instant case, the SLC after inquiry came to the conclusion that the petitioner-company had started new industrial unit, purchased new machineries and other components to set-up the industry, started its production and also started to sell finished products. It cannot be said to be amongst those companies which has abused the benefits provided under the Schemes and flouted its very object. The object of introduction of NEIIPP, 2007 and the scheme thereof, namely, Central Capital Investment Subsidy Scheme, 2007, have been introduced in order to uplift the North-Eastern India from economic backwardness and to attract investors‟ confidence, and with that object in view the Central Government formulated the North East Industrial and Investment Promotion Policy, 2007 dated, 24.12.1997 for facilitating industrial development in the North-East region. 36. I have perused communication dated 23rd Jan., 2016 and the list of companies thereto (Annexure R-7/1) whose names were placed under objection for various reasons captioned therein. The name of the petitioner‟s company is found at Serial no.-18 and the reasons assigned for such objection is mentioned as Page 31 of 34 “Commercial Production Before Registration” and there is another remark as “Regularization still awaited From DIPP. State Govt. Letter dt. 8.8.11 refers”. 37. It is noticed, though, Mr A. Roy Barman, learned CGC had entered appearance of behalf of Union of India, Respondents no.- 1, 2 & 3, but no counter affidavit has been filed despite repeated opportunities. Even, at the time of hearing of this petition there is no representation on behalf of the Union- Respondents to apprise this court as to why the subsidy amount has not been disbursed in favor of the petitioner-company, although, admittedly the same was recommended by the state authorities after due verification of the genuinty of the company. 38. I have given my thoughtful consideration to the submissions of the Learned Counsel of the parties. Here, in this case, the date of registration was 09.11.2010 and the commercial production was started selling its finished products w.e.f. 02.02.2009. However, the State Level Committee(SLC) having found the Unit thus satisfactorily met all the requirements of the notification had reasonably condoned the delayed issuance of Registration Certificate in favour of the petitioner-company and recommended the claim for subsidy under CCISS,2007 for an amount of Rs. 58.33,386/-. 39. After being given my thoughtful considerations to the principles laid down in the above authorities, the mere procedural defect not to get the company registered in terms of Clause 8 of the Scheme i.e. the industrial Unit to get it registered before its establishment, in my view, should not defeat or thwart the object Page 32 of 34 of the beneficent notifications/legislation to deny the benefit under the policy, over and above when it was apparent that the petitioner-company got it registered under other statutory authorities like obtaining of “Certificate to establish Company” from the competent authority, “Factory Boiler License” relevant to the industry, Eligibility Certificate from State Pollution Control Board, etc. before its establishment. It is now well settled that non-following of procedural requirement should not deny the substantive benefit, otherwise available by an honest investor. 40. Considering the aspect that granting of subsidy in consonance with the beneficent object to uplift the North-East region for the growth of industry has to be liberally construed and a narrow construction of the procedural requirement mentioned in the notified policy and the scheme thereof, will defeat the very purpose and object of such scheme which cannot be accepted. In my considered opinion, the plea taken by the Union-respondents i.e. respondents no. 1 to 2 is not based on correct appreciation of the provisions stipulated in the policy and the scheme thereof and denial of subsidy on the ground that the Unit of the petitioner- company started its production and sale before the date of registration, is contrary to the object of the Union-government and is wholly unjustified. A long standing decision adopting a particular construction which may have been acted upon by persons in the general conduct of affairs may not be departed on the doctrine of stare decisis. 41. In the case at hand, the SLC constituted by the concerned state government after going through the details of the Page 33 of 34 petitioner‟s case found the unit qualified for grant of subsidy and also about the quantum of subsidy as per requirement of Clause 9 of the CCISS, 2007 . The only procedural lapse found is that the petitioner did not get his unit registered under the state industry department prior to taking effective steps for setting up his new industrial unit as per requirement of Clause 8 of the said scheme. 42. In my considered opinion, when the SLC found the company actually set the unit in motion and started its production after due compliance with other requirements prescribed under the Scheme, mere omission to not get it registered should not come in the way of issuance of eligibility certificate for granting of subsidy in favour of the unit concerned on the pretext that the Unit of the petitioner has been placed under objection, the reason being indicated that “commercial production started before registration” (Annexure R-7/1, col. 18). 43. Further, having regard to the principles enunciated in the authorities as discussed supra, in my view, when the very object of any beneficial policy or scheme is fulfilled by any industrial unit the procedural requirements should be liberally construed because strict adherence would defeat the legislative intendment. The implementing agency must deal with such issue with adequate care and great sensitivity keeping in mind that any passive demonstration or in other words, any sluggishness on their part may lead not only the concerned unit closed or collapsed but also the entrepreneurs would be ruined. Needless to say, this will be the added problem of alarmingly increased public Page 34 of 34 unemployment which is not at all desirable. The ultimate looser is the region. 44. In view of the discussions on facts and law as encapsulated above and in furtherance thereof, to retain confidence of the investors as well as keeping in mind the time consumed by this time, this court is not inclined to remit the matter to either of the Respondents. Accordingly, I direct the Respondents to disburse the subsidy amount of Rs. 58,33,386/- as per the recommendation of the State Level Committee (SLC) since the claim is below the limit of Rs. 1.5 crore being the said amount to get „automatic approval‟. Simultaneously, this court further directs the Union-respondents to recall the „objection‟, they placed on record in the light of the discussions and spirit culled out here-in-above. All the respondents must complete the entire exercise within a period of three months from the day, they receive the copy of this judgment, failing which the said amount will carry interest @ 6% per annum. 45. With the aforesaid observations and directions, the instant writ petition stands disposed of. No order as to costs. JUDGE Saikat "