The main legal point established is that the entitlement to subsidies under the WBSSIS-2008 should be determined based on the specific provisions of the Scheme, and the refusal of subsidies based on grounds not contemplated in the Scheme is not justified.

JUDGMENT

Sabyasachi Bhattacharyya, J. - The Court:

1. The petitioners have challenged an order dated March 26, 2019, passed by the West Bengal Industrial Development Corporation (WBIDC), being respondent no.2 herein, whereby the petitioners' request for release of a sum of Rs.2.96 crore under the West Bengal State Support for Industry Scheme, 2008 (WBSSIS - 2008) was turned down.

2. The petitioners claimed such sum under three different heads, namely, Fixed Capital Investment Subsidy, Interest Subsidy and Electricity Duty.

3. Learned counsel for the petitioners argues that the petitioner no.1 is entitled to all the incentives as claimed under the said Scheme. Previously, the petitioners had availed of credit facilities from respondent no.2, the latter having acted as a Financial Institution as contemplated in Clause 3.2.1 of the said Scheme. Respondent no.2 subsequently restructured the term loan given to the petitioner no.1 upon such request being made by the petitioners. Ultimately, an OneTime Settlement (OTS) Scheme was offered for a sum of Rs.10,98,72,913.25p, with Rs.8,48,00,000/- as principal and Rs.2,50,72,913.25p as interest. Such scheme was accepted by the petitioners and respondent no.2 issued a 'No Dues' Certificate on December 1, 2017, upon payment of the total sum to the petitioners, certifying that payment obligations of the petitioners had been fulfilled with regard to the term loan.

4. It is submitted by learned counsel for the petitioners that, as per Clause 16 of the 2008 Scheme, the only pre-condition of disbursal of the fixed capital investment subsidy and interest subsidy is the regular payment of the Value Added Tax under the Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956 without any default being committed by the assessee. Clause 16.9 of the Scheme stipulates that, in the event a unit is exempted from paying VAT/CST, payment towards the subsidy will be made by the respondent no.2 to the unit by way of account payee cheque. The petitioners claim to fall under the exempted category. Annexure P-8 at page 146 of the writ petition is relied on to show that the petitioner no.1 was exempted from payment of VAT by a notification dated January 7, 2016. The entire Scheme, according to the petitioners, does not lay down any provision for withholding payment of the subsidies if the concerned industrial unit has paid VAT/CST and interest. The fixed capital investment subsidy and interest subsidy amounts are, thus, payable to the petitioners in view of certification of payment of interest by the concerned Financial Institution, being respondent no.2. That apart, no penal interest was charged, as evidenced from the affidavit affirmed by respondent nos. 2 and 3 on December 18, 2020. The OTS Scheme was, thus, entered into upon due consideration of interest being paid by the petitioners.

5. However, the respondents withheld the payment of such incentives/subsidies, compelling the petitioners to move a writ petition, which culminated in an order dated February 18, 2019 for considering the claim of the petitioners and passing a reasoned order.

6. However, such direction was followed by the order dated March 26, 2019, rejecting the claim of the petitioners illegally and in a vague manner, which is impugned in the present writ petition.

7. In the impugned order, it was observed that the principal amount was not paid and that respondent no.2 had sacrificed the same, leading to a double benefit in favour of the petitioners. However, respondent nos. 2 and 3 have admitted in their affidavit dated December 18, 2020 that the entire principal amount was required to be paid under the OTS. After issuing the No Dues Certificate, the respondents could not allege that the term loan had not been paid in full by the petitioners. The pre-condition for payment of the fixed capital investment subsidy under the Scheme is payment of VAT/CST by the concerned unit. The petitioners have paid such amount till the petitioner no.1 becam