The judgment clarified the conditions for availing transport subsidy under the Central Transport Subsidy Scheme, emphasizing the requirement that raw materials must be brought into the selected areas. It established that the transportation costs of raw materials not brought into the selected areas are not entitled to the benefit of the transport subsidy under the Scheme.

The sole question which falls for consideration in this writ petition is whether stone crushing activity amounts to manufacturing activity so as to enable the petitioner to avail of the benefits extended under the Central Transport Subsidy Scheme, 1971.

2. The facts of the case lie on a narrow compass. The petitioner carries on the business under the name and style of “M/S Paul Enterprise near Railway Station, Kumarghat, North Tripura” and is engaged in stone crushing activity. The petitioner’s unit has been registered as a small scale industry under the Directorate of Industries vides Registration No. 160401738, which was issued on 30-3-2002. According to the petitioner, it had installed up-to-date machineries by investing a huge amount of money. The petitioner’s unit started its production on 16-9-2002 as certified by the General Manager, District Industries Centre, Kailasahar, North Tripura on 21-2-2003.

3. Under the said Transport Subsidy Scheme launched by the Ministry of Industries, Government of India, it was held out that various schemes would be provided to manufacturing and industrial units in the category of small scale industries in the North East Region and that it was declared therein, inter alia, that all new industrial units located in the selected areas would be eligible for transport subsidy equivalent to 50% of the transport cost of both raw materials as well as finished goods. It was further declared by the Notification dated 29-9-2005 that the Government of India might provide for appropriate arrangement for payment of the transport subsidy directly to the units after a single stage as directed by the State Level Committee with the representation of the Central Government, particularly, from the Department of Expenditures. However, by the Notification dated 28-7-1993, the earlier period for granting the subsidy was reduced from 10 years to 5 years from the date of commencement and this arrangement came into force with effect from 1-9-1993. Under the same Scheme, there is also a provision for granting Central Interest Subsidy to the extent of 3% on the working capital advanced to them by the Schedule Banks or Central Financial Institutions for a maximum period of 10 years from the date of commencement of production. However, no arguments were advanced on the entitlement of the petitioner to Central Interest Subsidy and Central Investment Subsidy. Therefore, I refrain from deciding these two issues.

4. It is the case of the petitioner that acting upon the promise of the State respondents under the said Scheme that such subsidy would be granted, it set up the stone crushing unit by altering its position. According to the petitioner, after commencement of the production, it has been striving to get those subsidies as the appropriate authority duly declared its unit to be eligible for such subsidy by granting pre-registration certificate, namely, industrial unit eligible for claiming Central Transport Subsidy on 21-2-2003. The petitioner duly submitted its claim for the transport subsidy for the period commencing from September, 2002 to March, 2003 up to the period commencing from 1-1-2004 to 31-3-2004 to the respondent No. 3 (General Manager, District Industries Centre, Kailasahar). To cut the story short, the applications of the petitioner were never acceded to whereupon this writ petition has been filed for appropriate directions.

5. Resisting the writ petition, the State-respondents in their affidavit state that though the petitioner started its unit as production unit, yet it shifted its industry from manufacturing activity to job work activity, which activity is not eligible for availing any benefits under the Transport Subsidy Scheme. It is submitted by the answering respondents that the Scheme clearly indicates that the unit availing of the subsidy cannot discontinue its production within five years from the date of commencement of commercial production, but the activity of the unit was sh