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1995 Supreme(Gau) 258
GAUHATI HIGH COURT
S. L. SARAF, J.
Vinay Cements Limited -Appellant
Versus
State of Assam and others -Respondent
Civil Rule No. 751 of 1993,
Decided On : 06-12-1995
P. K. Goswami, A. K. Bhattacharyya and Ms. M. Hazarika, P. C. Deka, Dr. (Ms) M. Pathak, C. K. Das and G.Sharma, Govt. Advocate, for Respondents
The State Government is bound to comply with its assurances and promises given to entrepreneurs to set up industries in the State.
Headnote:
INCENTIVES SCHEME - ELIGIBILITY CERTIFICATE - CONTINUING INDUSTRY - EFFECTIVE STEPS - INDUSTRIAL POLICY - INDUSTRIAL DEVELOPMENT - INDUSTRIAL UNIT - MANUFACTURING INDUSTRY - STATE GOVERNMENT - SCHEME OF 1982 - SCHEME OF 1986 - UDYOG SAHAYAK - UDYOG VIKASH:
Fact of the Case:
The petitioner company, encouraged by the incentives contained in the 1982 Scheme of the Government of Assam, decided to set up a cement factory in the State of Assam. The company took various effective steps, both initial and final, as required under the scheme. However, the State Government refused to issue an Eligibility Certificate to the company under the 1982 Scheme, claiming that the company was not eligible for the incentives.
Finding of the Court:
The court found that the petitioner company had complied with all the effective steps required under both the 1982 and 1986 Schemes. The court also found that the State Government had given assurances and promises to the company to set up the cement factory in the backward district of Assam. The court held that the State Government could not resile from its assurances and promises and was bound to comply with the same.
Issues: 1. Whether the petitioner company was eligible for an Eligibility Certificate under the 1982 Scheme. 2. Whether the State Government was bound to comply with its assurances and promises to the company.
Ratio Decidendi: 1. The court held that the petitioner company had complied with all the effective steps required under both the 1982 and 1986 Schemes. The court also found that the State Government had given assurances and promises to the company to set up the cement factory in the backward district of Assam. The court held that the State Government could not resile from its assurances and promises and was bound to comply with the same. 2. The court held that the State Government was bound to comply with its assurances and promises to the company.
Final Decision: The court directed the respondents authorities to issue Eligibility Certificate to the petitioner Company and grant all the incentives entitled under the said Scheme of 1982. The Rule issued therein is made absolute. Such Eligibility Certificate should be issued within a period of 2 months from the date.
ORDER:- By this writ petition, the petitioners have sought for a writ of mandamus for a direction on the respondents to grant eligibility certificate under the incentive scheme of the Government of Assam, Department of Industries known as 1982 Scheme issued by the Department of Industries on 12th of October, 1982. By the said scheme, the Government of Assam announced a package of incentives on new industries and existing industries for undertaking expansion and or diversification of the existing industries. The said incentives intended to give an impetus to a speedy industrial development and extend assistance to individual entrepreneurs and in particular, encourage local entrepreneurs to take up industrial ventures, the Government of Assam announced an industrial policy vide Notification No. MI. 60/67 dt. the 8th March, 1969. The policy laid down guidelines in respect of fiscal incentives, provision of infrastructure, marketing facilities, suitable power tariffs and extension of financial assistance and tax concessions. Being faced by certain difficulties, the Government revised its 1969 policy and make it more broad based and effective so as to speed up the pace of industrialisation in the State and framed the said 1982 Scheme. The said scheme was made available to private sector/ to co-operative sector / to joint sector/State/public Sector, Central public sector undertakings was not considered eligible for incentives under the said scheme. The basic requirement for the purpose of 1982 Scheme was to take (i) initial effective steps; and (ii) final effective steps. Under the initial effective steps (i) the unit shall be in effective possession of land; (ii) registration of the firm or company or society; (iii) the unit should have obtained provisional SSI Registration or letter of intent from the Government of India; and (iv) cases not covered under the Industries (Development and Regulations) Act, 1951, the unit should have applied for DGTD registration. The final steps were to be taken are as follows :
(a) Industrial licence/DGTD registration should have been obtained;
(b) Capital goods clearance should have been obtained;
(c) The means of finance for the project should have been completed;
(d) Other clearance, if any, from the Central/State Government should have been obtained;
(e) The unit should have acquired at site fixed assets to the extent of at least 10% of the total fixed assets as envisaged for the project;
(f) The unit should have incurred expenditure on the project to the extent of at least 25% of the capital cost envisaged for the project.
2. The promoters of the petitioner company being encouraged by the incentives contained in the scheme of 1982 and in order to give impetus to the industrial growth of the State decided to let up a cement factory in the State of Assam though otherwise the same was not conducive nor viable proposition.The promoter of the petitioner company by a letter dated 11-4-84 applied under the Industries (Development and Regulations) Act, 1951 to the Government of India, Ministry of Industries for granting of an industrial licence for the manufacture of Portland Cement falling under the Scheduled Industries No. 35(1). By letter dated 2-7-84, the Under Secretary to the Government of India, Ministry of Industries issued under No. L:561 (1984) to the promoter an industrial licence (letter of intent) for the establishment of a new undertaking in the North Cachar Hills District in the State of Assam for the manufacture of Portland Cement up to the annual capacity of 52,000 tones. Subsequently, by a letter dated 2-11-84, the Joint Secretary to the Government of India, Industries Department informed the said promoter that depending upon the viability of the project, the Government of Assam may take up participation under the assisted sector which would be channelised through the Assam Industrial Development Corporation Ltd. to the extent of
