KUNDANMAL SHARMA Vs. STATE OF ASSAM

JUDGEMENT

(1.) THE proceedings witness successive stages of the challenge pertaining to transport subsidy for oil cake produced in the industrial unit of the petitioner. Whereas, the subject matter of impugnment in Civil Rule No. 5685/1997 is the decision against the admissibility of such subsidy for by products in a manufacturing process likely to include oil cake, the assailment in WP (C) No. 3979/2000 is on the direction for refund of Rs. 22,43,369/- paid to the petitioner on the said account for oil cake treating it to be a by product. By order dated 28. 07. 2000, this Court while issuing Rule had stayed the demand of refund contained in the impugned letter dated 27. 06. 2000. The foundational facts being the same and the primary issue common, the petitions were analogously heard and are being disposed of together. The essential facts are in WP (C) No. 3979/2000.

(2.) I have heard Mrs. Millie Hazarika, Senior Advocate assisted by Ms. A. Ajitsaria, Advocate for the petitioner and Mr. B. C. Saikia, learned State Counsel for the official respondents.

(3.) THE petitioner is the proprietor of Shree Mahabir Rice Flour and Oil Mills which is a registered S. S. I. Unit under the Directorate of Industries and Commerce, Assam. It is engaged in the business of manufacturing mustard oil and oil cake in the said mill. The certificate of registration is also to the above effect. In the year 1971, the Government of India promulgated a scheme called 'transport Subsidy Scheme of 1971' (for short hereafter as 'scheme') for the grant of cash subsidy for transport of raw materials and finished goods to and from certain selected areas, primary objective thereof being to promote industrial growth therein. Whereas, 'raw material' signifies the raw materials actually required by the industrial unit in its manufacturing process as approved by the Government of India and/or Government of the State concerned, 'finished goods' denote the goods actually produced by the industrial unit in accordance with the manufacturing programme approved by the Government of India or the Government of the State in which it is located. According to the petitioner, the said scheme which was initially valid upto 31. 03. 1979 was extended till 2007. In terms of the scheme, the State Level Committee set up by the Government of Assam was required to scrutinize, sanction and pass the claims for transport subsidy of the claimants. As per the procedure, on completion of the above exercise by the State Level Committee, the Director of Industries, Assam who is the Member Secretary of the State Committee has to accord sanction for disbursement of the transport subsidy to the claimants through the Assam Industrial Development Corporation Ltd. or the Assam Financial Corporation. The expression "finished goods" envisaged under the scheme understandably has to be synonymous with a manufactured product. On being registered under the scheme, the petitioners unit was provided registration No. TIDC- (TS) 82-11 dated 09. 12. 1983. The petitioner had been claiming transport subsidy in respect of raw materials used in its mill and mustard oil and oil cake being the finished products manufactured therein. The petitioner's claim for transport subsidy for the period 01. 04. 89 to 31. 08. 93 having been scrutinized, verified and passed by the State Level Committee, an amount of Rs. 32,21,980. 00 was accordingly disbursed. The said amount included an amount of Rs. 22,40,369. 00 being transport subsidy on oil cake for the said period. By letter dated 14. 07. 1997 issued by the Under Secretary to the Govt. of India, Ministry of Industries, Department of Industrial Policy and Promotion it was communicated that the transport subsidy of a by-product which may include oil cake also was not admissible and accordingly the State Government was advised not to entertain any claim for such subsidy for a by product. Comprehending that the observations in the said letter vis-a-vis oil cake had the potential of annihilating his claim for transport subsidy for oil cake which according to him was a finished product, the petitioner sought to invoke the writ jurisdiction of this Court for quashing the said letter. Civil rule No. 5685/1997 was thus filed. During the pendency of the said proceeding, by letter dated 27. 06. 2000 issued by the Additional Director (U. S.), Directorate of Industries and Commerce, Assam, the petitioner was intimated that transport subsidy was not allowable on oil cake which was a by product and that therefore, the amount of Rs. 22,40,369. 00 paid to his unit for the period 01. 04. 89 to 31. 08. 93 was liable to the refunded. The petitioner was thereby required to deposit the said sum in the related Revenue Head. Being aggrieved, the petitioner followed up his earlier challenge in WP (C) No. 3979/2000.