HON’BLE SRI JUSTICE C.V. RAMULU W.P.No. 14698 of 2005 Date: 23-09-2010 Between: Arun Plywoods Private Ltd., ………. Petitioner and The General Manager, District Industries Centre, Visakhapatnam and two others ……….. Respondents HON’BLE SRI JUSTICE C.V. RAMULU W.P.No. 14698 of 2005 ORDER: This writ petition is filed seeking a Mandamus declaring the proceedings in Lr.No.30/4/2005/0359/0359/ID, dated 23-05-2005 of the second respondent whereunder petitioner was declared as not eligible, either for sale tax based incentives as pipeline industry under the provisions of G.O.Ms.NO.588, Industries & Commerce (IP) Department, dated 20-11-2000, or under NIP 2000-05 scheme vide G.O.Ms.No.9, Industries & Commerce (IP) Department, dated 05-01-2001, as illegal and arbitrary. 2. It appears, the petitioner is a Plywood SSI unit. It had started production on 25-07-2003 and filed an application on 24- 11-2003 seeking incentives as per G.O.Ms.No.588, dated 20-11-2000. The said application was returned on 18-05-2004 asking the petitioner to resubmit the same along with necessary permissions as required under the scheme. According to the petitioner, it has resubmitted the Application on 18-10-2004 seeking incentives under G.O.Ms.No.588, dated 20-11-2000. However, the said Application was rejected through the impugned order, dated 23-05-2005 stating as under: d. Despite the advice by the General Manager, District Industries Centre to submit claim application under NIP-2000-05 vide his letter dt.9/12/2003, you have submitted claim application belatedly under NIP-2000-05 on 18/10/2004 i.e., after lapse of 1 year 2 months 23 days from the date of commencement of commercial production. As per Para 10.1 of Guidelines for implementation of the Scheme of State Facilities/Incentives Scheme 2000-2005 for Investment Subsidy “New Industrial units eligible for incentives should file their claim in the form “application cum verification” within six months from the date of commencement of commercial production, to the General Manager, DIC concerned. All belated application filed after six months from the date of commencement of commercial production, but before one year will be eligible only 50% Investment Subsidy. All claims filed beyond one year from the date of commencement of commercial production are not eligible for any incentives. e. The Target-2000 Scheme has expired by 31/03/2000 and NIP-2000- 05 Scheme by 31/03/2005. f. The orders issued by the Government in G.O.Ms.No.290 Indus. & Com. (IP) Dept., dated 20/11/2004 extending the time limit for implementation of the pipeline projects to avail Sales Tax Incentives etc., from 31/3/2002 to 31/3/2005, was kept in abeyance vide G.O.Rt.NO.306 Inds. & Com. (IP) Department dt. 10/12/2004. The State Investment Promotion Board in it’s meeting held on 25/03/2005 has finally decided to cancel the G.O.Ms.No.290 Inds. & Com. (IP) Dept., Dt. 20//11/2004. This is for your information. Aggrieved by the said order, the present writ petition is filed. 3. There is no necessity of going into all the details. A detailed counter affidavit has been filed by the respondents and it is suffice to notice the following: D. The above Industrial Policy–2000-2005 – Scheme of State facilities/Incentives for setting up of New Industries in Andhra Pradesh will be in operation w.e.f. 1/4/2000 to 31/3/2005. In reply para 7, it is submitted that the petitioner filled before Hon’ble High Court. The Hon’ble High Court has passed the following orders in WP No.5854/2005 dated 24/03/2005. “Having heard the learned counsel for the petitioner and the learned Government Pleader for Industries appearing for the respondents and having regard to the facts and circumstances of the case, without expressing any opinion on merits, the writ petition is disposed of with a direction to respondents 1 and 2 to consider the representation of the petitioner dated 03.08.2004, 13.02.2005 and 02.03.2005 and to pass appropriate orders in accordance with law, as expeditiously as possible, preferably within a period of six weeks from the date of receipt of this order. No costs.” Keeping in view of the above Government Orders and Guidelines issued by the Government from time to time and in view of the orders passed by the Hon’ble High Court, the petitioner request for sanction of incentives as Pipeline Industry under the provisions of Target-2000 Scheme in G.O.Ms.No.588 Inds. & Com. (IP) Department dated 20/11/2000 OR under the provisions of NIP-2000-05 vide G.O.Ms.NO.9 Inds. & Com. (IP) Department Dt. 05/01/2001 has been examined and it is decided that M/s. Arun Plywoods Private Limited., B-12 & B-13, Ancillary Industrial Estate, Pedagantyada, Visakhapatnam is not eligible for either for Sales Tax Based Incentives as Pipeline Industry under the provisions of G.O.Ms.NO.588 Inds. & Com. (IP) Department OR under NIP-2000- 05 Scheme vide G.O.Ms.No.9 Inds. & Com. (IP) Department Dt. 05/01/2001 on the following grounds. a. The petitioner unit has been issued Show-Cause notice vide this office letter dated 17/03/2003 to show cause as to why the E.C. issued to the petitioner unit as Pipeline Industry should not be cancelled. The petitioner failed to submit any reply to the show- cause notice. This issue was placed before SLC Meeting held on 30/6/2003 and as per the decision of SLC, the Eligibility Certificate issued to Petitioner unit on 19/1/2001 was cancelled vide this office lr.No.10/1/2000/2076/FD dated 15/07/2003. b. Admittedly, petitioner unit has commenced commercial production on 25/07/2003 and filed claim application on 24/11/2003 for sanction of incentives as Pipeline Industry under the provisions of G.O.ms.No.588 Inds. & Com. (IP) Department dt. 20/11/2000. However, the claim was returned by the Respondent No.1 to submit the claim under NIP-2000-05, as petitioner unit did not commence production on or before 31/3/2002 and not eligible for sales tax based incentives. c. The petitioner unit failed to fulfill one of the most important criteria i.e., commencement of commercial production on or before 31/03/2002 as per the condition stipulated in the Eligibility Certificate issued vide E.C.No.10/1/2000/2076, dated 19/01/2001. d. Despite the advice by the Respondent No.1 to submit claim application under NIP – 2000-05 vide his letter dt. 9/12/2003, the petitioner unit submitted claim application belatedly under NIP- 2000-05 on 18/10/2004 i.e., after lapse of 1 year 2 months 23 days from the date of commencement of commercial production. As per Para 10.1 of Guidelines for implementation of the Scheme of the State Facilities/Incentives Scheme 2000-2005 for Investment Subsidy “New Industrial units eligible for incentives should file their claim in the form “application cum verification” within six months from the date of commencement of commercial production, to the General manager, DIC concerned. All belated application filed after six months from the date of commencement of commercial production, but before one year will be eligible only 50% Investment Subsidy. All claims filed beyond one year from the date of commencement of commercial production are not eligible for any incentives.” 4. From the above, it is seen that the very Eligibility Certificate issued by the Industries Department in favour of the petitioner on 19-01-2001 under the scheme was cancelled vide order in Lr.No.10/1/2000/2076/FD, dated 15-07-2003. In fact, it appears, a show cause notice was issued vide letter, dated 17-03-2003 asking the petitioner as to why the Eligibility Certificate issued to it’s unit as pipeline industry should not be cancelled. However, the petitioner seems to have failed to submit any reply to the show cause notice. Therefore, the said cancellation order was passed on 15-07-2003. Thus the very eligibility of the petitioner for the incentives extended by the Government under the above G.Os cannot be considered. 5. However, it is the case of the petitioner that aggrieved by the cancellation of the Eligibility Certificate, they have already filed an application before the Industries Department to reconsider the decision made on 15-07-2003 and the same is pending. 6. May be the petitioner commenced the production on 25-07-2003 and filed application on 24-11-2003 seeking extension of the benefits under G.O.Ms.No.588, dated 20-11-2000, which was returned on 18-05-2004 asking it to comply with certain deficiencies and it was purported to have been complied and resubmitted on 18-10-2004. May be the department has returned the application on the ground that there was delay of more than one year two months in filing the application and the same was not in time as contemplated in the scheme. May be the benefits of the scheme were also extended under G.O.Ms.No.9, dated 05-01-2001, for other industrial units which had commenced its’ production on or before 31- 03-2005. May be that once the application is submitted in time and resubmission cannot be said to be beyond limitation. But, unless and until the Eligibility Certificate issued by the Industrial Department is subsisting, the very application for extending the benefits could not have been entertained by the respondents. Under these circumstances, I am of the opinion that it cannot be said that the impugned order passed by the respondents is either arbitrary or illegal calling for interference of this Court. 7. However, in view of the submissions made by the petitioner that against the cancellation of Eligibility Certificate, they have already filed an application for revising the E.C. and the same is pending, the writ petition is disposed of directing the petitioner to work out its remedies available under law in respect of E.C. 8. However, it is made clear that this will not preclude the petitioner from filing a fresh application after obtaining a valid Eligibility Certificate from the concerned department for claiming incentives, and it is for the respondents to decide such application on it’s own merits without reference to the impugned order. No order as to costs. _____________ C.V.RAMULU, J Date: 23-09-2010 YCR