Full Text
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 10653 OF 2022
Karan Distilleries Pvt. Ltd. ) having its registered office at )
Shikhare Wadi, Nashik-Pune Road, )
Nandadeep Compound, Nashik Road )
Nashik – 422 101 (MH) ) and having its factory at AH No.131/2)
Village Navegaon, Shahapur, )
District – Bhandara, Maharashtra, ) through its Director and Authorised )
Signatory Mr.Rustom Erach Bharucha) ...Petitioner
Vs.
1. The State of Maharashtra )
Through the Secretary, State Excise )
Department, Mantralaya, Mumbai )
2. The Home Department, )
State of Maharashtra, ) through the Secretary, )
Home Department, having its )
Office at Mantralaya, Mumbai-32. )
3. The Commissioner, )
Maharashtra State Excise, )
Old Custom House, Fort, )
Mumbai. ) ...Respondents
Mali for the Petitioner.
Mr. Kedar Dighe, Addl. GP with Ms. Savina Crasto, AGP for State/ Respondent
Nos.1 to 3.
JUDGMENT
1. Rule. Respondents waive service. By consent of the parties, heard finally.
2. The petitioner primarily seeks a relief that the respondents be directed to grant a special subsidy/incentive of Rs. 10/- per bulk litre of alcohol produced by it, under the State Government’s policy notified in the Government Resolution dated 08 June 2007, provided for new units manufacturing grain alcohol. The title of the policy is to the following effect:- “To promote and encourage new distilleries to produce alcohol from the substances other than molasses.”
3. The amount of subsidy claimed by the petitioner is an amount of Rs.11.06 Crores. The petitioner’s application for grant of such subsidy has been rejected by the State Government by the impugned order dated 24 November 2021.
4. The substantive prayers as made in the petition (as amended) are required to be noted which read thus:- “Amended prayer A) That this Hon’ble Court may by appropriate writ, order or direction, quash the impugned order bearing No. SUT- 0812/P.K.157/RUS.[2] dated 24.11.2021 at Exhibit ‘L’, passed by the Respondent No. 2, thereby rejecting the request for the grain-based subsidy as per the G.R. dated 08.06.2007, made by the Petitioner vide letters dated 28.06.2017 at Exhibit ‘D’ and 12.04.2019 at Exhibit ‘E’. Amended prayer B) This Hon’ble Court may direct the Respondents to grant the application of the Petitioner vide letters dated 28.06.2017 at Exhibit ‘D’, 12.04.2019 at Exhibit ‘E’ and 25.06.2021 at Exhibit ‘K’ for the grant of grain-based subsidy as per the G.R. dated 08.06.2007 and pay the grain-based subsidy accrued till the year 2012, along-with the interest w.e.f. the year 2012 till the date of realization of payment.” FACTS
5. The relevant facts:- It is the petitioner’s case that in the year 2003 the petitioner in an auction held by SICOM, took over the grain-based distillery, which was sick unit. The petitioner contends that it has also been manufacturing the grain alcohol from jowar. It is contended that from the year 2006-07, the manufacturing was approximately 50% of its annual capacity.
6. The State Government issued Government Resolution dated 8 June 2007 setting out conditions, on which a special subsidy/incentive of Rs. 10/- per bulk litre was announced to be granted to units manufacturing grain alcohol which were situated in ‘D’ or ‘D+’ areas. Such policy inter alia provides that those distilleries which were started up to the end of 2009, were entitled to the said subsidy.
7. It is the petitioner’s case that the petitioner made an application dated 28 December 2009 to the Hon’ble State Excise Minister praying for grant of grain distillery subsidy/incentive under the said policy. As the petitioner’s application was not being decided, the petitioner approached this Court by filing Writ Petition No. 3491 of 2011 which came to be disposed of by the Division Bench of this Court by an order dated 04 May 2011, whereby the State Excise Department was directed to take a decision on the petitioner’s application/representation dated 28 December 2009, as expeditiously as possible and preferably within a period of 10 months from the date of the receipt of the order of the Court. Such order was passed without expressing any opinion on merits of the petitioner’s contention.
8. In pursuance of such order passed by this Court, the petitioner’s application/ representation came to be rejected by a communication dated 10 August 2011 inter alia on the ground that the benefits under the subsidy policy as contained in the said G.R. dated 8 June 2007, is admissible only to those industries which are set up after the date of the said G.R. The contents of the said communication are required to be noted which read thus:- “(Official Translation of a photocopy of a LETTER, typewritten in Marathi) Exh. P No. F. L. R. 1209/ C. R.-110/S. E. – 2 Home Department, Mantralaya, Mumbai – 32. Date: - 10th August, 2011. To, The Director, Karan Distillery Pvt. Ltd. K.H No. 131/2, Navegaon, Taluka – Shahapur, District – Bhandara. Subject: - Regarding getting the benefit of the Scheme viz. ‘Food Grain based production of Liquor Financial Aid – 2007’. Reference:- Your Representations dated 07th January, 2009 and 28th July, 2009. Sir, Pursuant to the directions given in view of your abovereferred representations in connection with the above mentioned subject, you are informed as under. The Government, vide Government Resolution dated 08th June, 2007 has declared a Scheme viz. Food Grain Based Distillery and Integrated Unit Financial Aid – 2007. As per the said Scheme, the benefit of this Scheme is admissible to those units which have started the production by setting up the projects within a prescribed period after the Scheme is declared. The Licence (Form ‘I’ Licence) for producing the grain based liquor has been issued to you in the year 2003 i.e. before this Scheme was declared. Therefore, the benefit of the Financial Aid mentioned in this Scheme is not admissible to you. Besides this, as per the decision taken by the Hon’ble Cabinet on the date 20.08.2009 in respect of this Scheme, this Scheme has been terminated and it is has been stopped to issue Letter of Indent (LOI) afresh under this Scheme to the units formed after the date 20th August,
2009. Therefore, your request of including you in this Scheme for getting the benefit of financial aid under the Financial Aid - 2007 Scheme cannot be allowed and we regret for the same. (Signature Illegible) (Yashwant Budhwant) Section Officer, Home Department, Government of Maharashtra.” (emphasis supplied)
9. Being aggrieved by the aforesaid decision, the petitioner again approached this Court by filing Writ Petition No. 5535 of 2012 which came to be decided by a co-ordinate Bench of this Court by an order dated 10 March 2017, whereby the proceedings were remanded to the State Government, in terms of the following order:- “1. The submissions of the learned Counsel appearing for the parties were heard earlier in this petition which was on final hearing cause list. The controversy involved in this petition is very limited.
2. With a view to appreciate the controversy, a brief reference to the facts of the case will be necessary. According to the case of the Petitioner, it has set up a distillery having a license for manufacturing of alcohol from grain. It is the case made out in the petition that for manufacturing alcohol, the Petitioner is using jowar. It is stated that from the year 20062007, the manufacturing is approximately 50% of its annual capacity.
3. Reliance is placed by the Petitioner on the State Government Resolution dated 8th June, 2007. A copy of the resolution is annexed as Exhibit A. The resolution records that the manufacture of alcohol by the use of jowar is a viable option. The said Government Resolution records that demand for alcohol is ever increasing. Therefore, the Government Resolution (GR) was issued to encourage manufacturing of liquor without using sugarcane. The GR records that an incentive will be payable to those projects which will be set up and commissioned before the end of the year 2009. Under the GR, to the eligible industries, incentive is made payable at the rate of Rs.10/ per litre.
4. The Petitioner applied for subsidy under the said GR. Thereafter, representations were made from time to time. The prayer in this petition under Article 226 of the Constitution of India is for directing the State Government to reconsider the application of the Petitioner dated 28th December, 2009. There is a reply filed by Shri Yeshwant Manga Pawar, Deputy Commissioner of State Excise. In paragraphs (4) and (5) of the said reply, Shri Pawar has stated thus: “(4). With reference to para 3(f) of the Petition, I say that the Government Resolution (Exhibit A to the Petition) clearly stats that the Distillery and Integrated Unit Financial Assistance Scheme 2007 is entitled to new units becoming operational in industrially backward areas as declared by the Indian Industries Department, who are in D or D+ zone. I say that as per this Government Resolution, none other than those units coming up in other parts of the State except D or D+ zone would be entitled to financial assistance. (5) With reference to Para 3(g to I) of the Petition, I say that the Petitioner has made representations from time to time but the Government vide its letter dated 10.08.2011 (ExhibitP to the Petition) has conveyed to the Petitioner that the scheme for financial assistance is applicable only to those units who have commenced production after the announcement of the scheme and not to those who had been operational prior to the announcement of the scheme.” (underline supplied)
5. Thus, the stand taken by the State Government is the same as the stand reflected from the communication dated 10th August, 2011 (Exhibit P to the petition) addressed by the State Government to the Petitioner. The stand taken is that the benefits under the GR dated 8th June, 2007 will be admissible only to those industries which are set up after the date of the said GR. It is further stated that the scheme has been closed and the scheme has ceased to apply with effect from 20th August,
2009. In paragraph 16 of the reply, it is stated that the scheme under the GR is applicable only to those units which became operational between 8th June 2007 and 20th August, 2009.
6. The learned Senior Counsel appearing for the Petitioner submitted that on plain reading of the said GR it is apparent that it does not provide that the benefits thereunder will not be available to those industries which are in existence prior to the date of the said GR. He submitted that the GR states that the benefits thereunder will be available only to those industries which come into existence by the end of the year 2009. He also relied upon the decision of the Apex Court in the case of K.J.S. Buttar vs. Union of India[1]. He submitted that arbitrary cut off date for applicability of a GR cannot be fixed by the State Government as the same will be violative of Article 14 of the Constitution of India. The learned AGP supported the stand taken in the reply filed by Shri Pawar.
7. We have given careful consideration to the submissions. We have carefully perused the GR dated 8th June, 2007. The perusal of the same shows that the benefits available under the scheme floated under the said GR have been set out in clause (10) thereof. Clause (9) imposes a condition that the scheme will apply only to those projects which are set up in D and D+ zones and if the industry is set up in any other zone, the same will not be entitled for the benefit under the scheme. The clause (5) of the scheme records that the scheme has been brought with a view to encourage the industries to manufacture alcohol by using jowar, bajra etc.
8. Clause (2) of the GR provides that only those industries which are set up and commissioned by the end of the year 2009 will be entitled to benefits of the scheme. There is no clause in the said GR which provides that the scheme will not apply to the existing industries as of 8th June, 2007 which are otherwise covered by the scheme. Thus, the stand taken in the affidavit of Shri Pawar and in particular in paragraph 16 that the financial assistance under the said GR is available only to those units which became operational between 8th June, 2007 and 20th August, 2009 appears to be completely contrary to the contents of the said GR. There is no indication in the GR that the industries which are already in existence and which are otherwise covered by the GR are excluded only on the ground that the same were in existence on the date of the GR.
8. Therefore, in our view, the case of the Petitioner could not have been rejected only on the ground that the Petitioner's industry was in existence as of 8th June, 2007. Therefore, the case of the Petitioner will have to be reconsidered by the State Government. Needless to add that even if the State Government finds that the Petitioner is eligible to the benefits under the said scheme covered by the said GR, the Petitioner will be entitled to receive the benefits under the scheme from the date of the said GR and not from the date on which the Petitioner started its manufacturing activity. Needless to add that in such a case, the Petitioner will be entitled to benefit only till the date of the closure of the scheme as set out in the affidavit of Shri Pawar.
9. Accordingly, we dispose of the petition by passing following order: i) We direct the State Government to reconsider the case of the Petitioner for grant of benefits under the Government Resolution dated 8th June, 2007 in the light of what is held in this judgment. The prayer of the Petitioner shall not be rejected only on the ground that the production unit of the Petitioner was already functional on the date of the said Government Resolution; ii) We make it clear that we have not examined whether the Petitioner is otherwise eligible for the benefits under the Government Resolution dated 8th June, 2007. Suffice it to say that the case of the Petitioner shall not be rejected only on the ground that the industry was operational on the date of the Government Resolution; iii) Appropriate decision shall be taken by the State Government within a period of three months from the date on which an authenticated copy of this judgment and order is produced with the concerned department of the State; iv) Rule is made partly absolute in above terms. v) All concerned to act upon an authenticated copy of this Order.”
10. On remand, a fresh decision was taken by the State Government in terms of the impugned order dated 24 November 2021, which holds that the petitioner is not eligible for subsidy scheme under the policy dated 08 June 2007. The impugned communication is required to be noted which reads thus:- “EXHIBIT ‘L’ (Emblem) [The Truth Alone Prevails] GOVERNMENT OF MAHARASHTRA Home Department. Mantralaya Annexe, 5th Floor, Chamber No. 553, Madam Cama Road, Hutatma Rajgugu Chowk, Mumbai – 400032. e-Mail ID – home-exc-2@maharashtra.gov.in. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - No. SUT-0812/M. No. 157/S.E.-2 Date: 24th November, 2021. To, The Commissioner, State Excise, Maharashtra State, Mumbai. Subject: Writ Petition No. 5535 of 2012. Messrs Karan Distilleries
VERSUS
Government of Maharashtra and Others. Reference: 1) Government Resolution bearing No. NMA- 0206/M. No. 3/S.E.-2, dated 08.06.2007.
2) Government Circular No. NMA-0907/M. No.24/S.E.-2, dated 28.12.2007.
3) Applications dated 07.01.2009 and 28.07.2009 of Messers Karan Distilleries Private Limited, District – Bhandara.
4) Government’s Letter bearing Even Number, dated 10.08.2011.
5) Orders dated 10.03.2017, passed by the Hon’ble Bombay High Court, Mumbai in Writ Petition No. 5535/2012.
6) Letter dated 12.04.2019 of Advocate Kamlesh Y. Mali, for Messrs Karan Distilleries Pvt. Ltd..
7) Government’s Letter bearing Even Number, dated 13.05.2019.
8) Your letter bearing No. DYS-112012/ 9702 / Four, dated 05.08.2019. In order to promote and to encourage setting up new distilleries for producing alcohol from the substances other than molasses, a Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007" was implemented under the Government Resolution dated 08.06.2007, referred to hereinabove at Sr. No.1. In order to resolve the difficulties that are being faced in implementation of the said Scheme, a clarification was published by the Government Circular referred to hereinabove at Sr. No.2. In order to gain the benefit under the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007", Messrs Karan Distilleries Pvt. Ltd., District – Bhandara, had made a request under its Applications dated 07.01.2009 and 28.07.2009 referred to hereinabove at Sr. No.3. As the Licence in Form ‘I’ granted for the production of the food grain based alcohol to Messrs Karan Distilleries was granted prior to the commencement of the said Scheme (Year 2003), the benefit of financial aid under the said Scheme was not admissible to Messrs Karan Distilleries and therefore, by the Government Letter dated 10.08.2011, referred to hereinabove at Sr. No.4, the Distillery was informed that its request was rejected.
2. The Distillery challenged the said Government Letter dated 10.08.2011 by filing a Writ Petition bearing No. 5535/2012 before the Hon’ble High Court, wherein the Hon’ble High Court has passed its Order on the date 10.03.2017. However, as no steps were taken pursuant to the said Order, the Advocate for the Applicant - Distillery, by his letter referred to at Sr. No. 6 above, issued a notice to the Government about filing a Contempt Petition against it. When the said matter was again examined on the background of the views submitted by the Commissioner, State Excise pursuant to the Order dated 10.03.2007 passed by the Hon’ble Bombay High Court, the provisions that are made in the Government Resolution dated 08.06.2007, the earlier representation made by Messrs Karan Distilleries and the points mentioned in the said Judgement, it was found that it would not be consistent with the provisions of the Rules to grant benefit of the Scheme mentioned in the Government Resolution bearing No. NAM- 0206 / M. No.3 / S.E.-2, dated 08.06.2007 to the distillery and therefore, by the Letter dated 13.05.2019, referred to at Sr. No.7 above, the Distillery had been informed that the Government has taken a decision to reject the prayer of the Distillery of granting the benefits of the Scheme viz. The "Food Grain Based Distillery and Integrated Unit
3) However, as the Government, by its letter dated 13.05.2019, has rejected the prayer of the Distillery of granting to it the benefits under the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007" without giving any substantial reason therefor, the Advocate of the Distillery, by his letter dated 12.07.2019, has requested to pass a clear-cut order in order to get clarity on the reasons mentioned therein. Similarly, he has also warned in the said letter that if no steps are taken in that regard, further action as per the provisions of the Act would be initiated. In pursuance thereof, the Office of the Commissioner, State Excise, under its letter dated 05.08.2019, referred to at Sr. No. 8 above, has submitted this matter to the Government. In connection with your letter on the aforesaid subject, referred to at Sr. No. 8 above, you are informed that, after taking into consideration the following points mentioned in the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007", made applicable by the Government under the Government Resolution bearing No. N.A.M.-0206/M. No.3/S.E. - 02, dated 08.06.2007, the Government has taken a decision to reject the prayer of the Distillery to grant the benefit of the Scheme to the said Distillery and to grant reimbursement of the same.
3.1) At Sr. No. 2 in the Government Resolution dated 08.06.2007, it has categorically been mentioned therein that, “all the new Food Grain Based Distilleries or Integrated Units (Distillery + alcoholic beverages) which will be set up and become operational by the end of the year 2009 shall be eligible for getting financial aid”. Considering the said provision, it becomes clear that the Scheme declared under the said Government Resolution becomes applicable only to the new food grain based distilleries or integrated units.
3.2) In order to resolve the difficulties being faced while implementing the Scheme declared under the Government Resolution dated 08.06.2007, the State Government, under the Government Circular dated 18.12.2007 has issued a clarification in that regard. In the said Circular, it has clearly been mentioned: only the distilleries which produce alcohol from the substances other than the molasses shall be eligible for granting the licence for production of liquor and it is necessary that such distilleries and the liquor producing projects should be set up separately. The benefit of this Scheme cannot be availed by carrying out some changes in the licence presently in force, issued for the distilleries and liquor production projects based on molasses. Similarly, the distilleries producing alcohol from the molasses and other substances shall not be eligible to grant them licence for producing country liquor – foreign liquor and to avail the benefit of this Scheme. From this also, it is seen that the said Scheme is admissible only to the new food grain based Distilleries or Integrated Units.
3.3) Considering the provisions made in the Government Resolution dated 08.06.2007 and the Government Circular dated 18.12.2007, the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007" becomes applicable only to the new distilleries producing food grain based alcohol to which the Letter of Intent had been granted while declaring the said Scheme or the set up of which distilleries has been completed after the Government Resolution has been issued.
3.4) The Scheme declared under the Government Resolution dated 08.06.2007 was declared in order to mainly see that the consumption of the food grain based alcohol is increased and also the new capital investment in this field is made. As per the Government Resolution dated 08.06.2007, in order to see that the capital expenditure invested by every distillery is compensated under this Scheme, it has been prescribed to grant reimbursement of Rs.10/- per litre on the alcohol that has been consumed, to the distillery producing food grain based alcohol, set up newly in the classes viz. ‘D’ and ‘D+1’ in Vidarbha, Marathwada and in other areas of the State by the Department of Industries. The objective of the said Scheme is to create new employment in order to achieve a comprehensive development of the backward areas of Vidarbha, Marathwada and other industrially backward areas in the State, to increase the local supplementary businesses and to increase investment in new capital expenditure in these industrial areas with a view to make available new sources of income for the locals.
3.5) Messrs Karan Distilleries Private Limited has purchased the said distillery for the price of Rs.3.20 Crores in an auction held in the year
2003. Therefore, as Messrs Karan Distilleries Private Limited has not set up a new distillery in accordance with the provisions of the present Scheme, it appears that the said distillery has not spent any new capital expenditure for setting up of the said distillery and therefore, it appears that the establishment viz. Messrs Karan Distilleries Private Limited has not been set up / production thereof has not been taken for fulfilling the prescribed objectives of the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007", of the Government. Hence, the said Scheme is not applicable to the distillery viz. Messrs Karan Distilleries Private Limited and as such, the said distillery does not become eligible for getting any reimbursement under this Scheme.
3.6) Considering all the aforesaid facts, as the said distillery does not fall within the criteria of the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007", declared under the Government Resolution dated 08.06.2007, no reimbursement becomes admissible / due and payable to the distillery as demanded by it as per the provisions made in the said Government Resolution.
4. The facts mentioned in the aforesaid paragraphs shall be intimated to the said distillery and the compliance report in respect of the steps taken in that regard shall be intimated to the Government. This is the request. Enclosure: Nil. (Signature Illegible) [S. S. YADAV] Under Secretary, Home Department, Government of Maharashtra. Copy to the Superintendent, State Excise, Bhandara, for information and for taking necessary steps.”
11. Being aggrieved by the aforesaid decision, the petitioner has filed the present petition.
12. Reply affidavit of Mr. Shankar Jagtap, Deputy Commissioner of State Excise, is filed on behalf of the respondents, supporting the impugned decision. The affidavit inter alia contends that the subsidy is to be provided only for the manufacture of spirit from grains. It states that the main object of providing the subsidy was to compensate the capital expenditure incurred by the unit. It is further contended that the government had issued circular instructions dated 06 September 2010 wherein it was provided that the grain based spirit manufacturing units which started the production within two years from the date of issuing of letter of intent would be eligible for the financial assistance and the assistance would be provided only upto 4 years from the date of production. It is contended that after scrutinizing the relevant documents submitted by the petitioner and scrutinizing the petitioner’s case it was observed that the subsidy scheme announced by the G.R. dated 08 June 2007 was applicable only to the newly erected and functional plants and that financial assistance could be provided only to those units which have incurred capital expenditure to set up such new unit. It is stated that as the petitioner had not incurred any capital expenditure to set up new unit, the petitioner was ineligible for grant of financial assistance. It is further contended that vide circular dated 18 December 2007 issued by the State Government it has been clarified that the existing molasses based and other distilleries along with the country liquor and foreign liquor manufacturing units were not eligible for the subsidy under the said subsidy scheme which was applicable only to the units which were constructed and activated by the end of 2009. The relevant contents of the aforesaid affidavit are required to be noted which read thus:- “2. I say that the Government of Maharashtra, Home Department issued the G.R. dated 08/06/2007 for providing financial assistance/subsidy to the spirit producing units using grains. In the said G.R. it is stated that only those distilleries which would be setup and activated before the end of 2009 would be eligible for subsidy or financial assistance. The subsidy would be provided only for the manufacture of spirit from the grains. The main motive of providing the subsidy was to compensate the capital expenditure incurred by the unit. The subsidy would be given only to the unit setup in D and D+ industrial zones. The aim of the scheme was to boost investment in the backward areas and create employment in that area. Another objective was to provide good remuneration to the grain producing farmers.
3. The present applicant applied to this office vide his letter dated 02.08.2007 for sanction of subsidy. The government had issued circular instructions dated 06.09.2010 wherein it is stated that the grain based spirit manufacturing units which has started the production within 2 years from the date of issuing of letter of intent would be eligible for the financial assistance and this assistance would be provided only upto 4 years from the date of production.
4. The present petitioner made several applications for grant of subsidy but as the petitioner was ineligible for the assistance, as per the prevailing policy dated 8.6.2007 his request was rejected. Thereafter, the petitioner approached to the Hon'ble High court by way of filing Writ Petition No.5535/2012. The Hon'ble high court directed the state Government that government should reconsider the case of petitioner for grant of benefits under G.R. dated 08.06.2007. The Hon'ble court also instructed the state that the prayer of petitioner shall not be rejected only on the ground that production unit of petitioner was already functional on date of said G.R.. Further, Hon'ble High court made it clear that they have not examined whether the petition otherwise eligible for benefits under the scheme. Hon'ble high court instructed state Government to take appropriate decision after receiving authenticated copy of judgement.
5. After scrutinizing the relevant records produced by the petitioner and verifying the documents available in the matter the respondent No.1 observed that the scheme announced by the G.R. dated 08.06.2007 is applicable only to the newly erected and functional plants. Point No.4 of the Resolution states that "(4) Rs. 10/- per litre will be given as a reimbursement to the manufacturing unit of grain based spirit on the spirit utilised from the excise duty on the liquor/ medicines/cosmetics made from the spirit sold to the manufacturers of the liquor and M & T.P. units in order to recover the capital expenditure made from the investment made by the every unit will he given.” From this, it is clear that financial assistance would have been provided only to those units who has incurred capital expenditure to set up the new unit. As the Petitioner has not incurred any capital expenditure to setup new unit, he is in-eligible for grant of financial assistance. So also, vide circular dated 18.12.2007 issued by the government it has been clarified that the existing molasses based and other distilleries along with the Country liquor and foreign liquor manufacturing units were not eligible for the subsidy under the scheme. The scheme was applicable only to the units which were constructed and activated by 2009 end. As per point No.2 of G.R. dated 8.6.2007 "All the grain based new distilleries or units (distillery + potable liquor units) commenced and activated till the end of the year 2009 would be eligible for financial assistance" Hence, it makes clear that only new distilleries or their integrated unit (means distillery alongwith liquor producing units) were eligible for subsidy. In the case of the petitioner it is observed that the petitioner unit was setup 4 years before the announcement of the scheme. Therefore, the petitioner did not fulfill the eligibility criteria. The petitioner has purchased his unit from the other company and not constructed the plant by himself. Also, the petitioner had not incurred any capital expenditure to setup the plant. It was stated in the Government Circular dated 06.09.2010 that the financial assistance would be provided if only the unit would have been started its productions within a period of 2 years from obtaining letter of intent and the assistance would be provided up to 4 years from start of productions. The petitioner unit had started its productions and completed 4 years of productions before announcement of the scheme. This ground also makes petitioner ineligible for the financial assistance.”
13. A rejoinder affidavit is filed on behalf of the petitioner to contend that it was not permissible for the State Government to reject the petitioner’s application for subsidy on the ground that such reasons would be contrary to the orders passed by this Court on 10 March 2017 on the petitioner’s Writ Petition No. 5535 of 2012 (supra). Submissions:-
14. Mr. Gorwadkar, learned senior counsel for the petitioner has made elaborate submissions reiterating the contentions as raised in the petition to contend that the petitioner is entitled for the subsidy as prayed for in its application. Mr. Gorwadkar’s emphasis is primarily on the order dated 10 March 2017 passed by this Court (supra) to submit that when the Court directed the State Government to reconsider the petitioner’s application for entitlement of the subsidy, in terms of what was observed by the Court in paragraphs 8 and 9 of the said order which was to the effect, that there is no clause in the policy GR providing that the scheme will not apply to the existing industries as of 8 June 2007, which would otherwise be covered by the scheme and further that the prayer of the petitioner shall not be rejected only on the ground that production unit of petitioner was already being functional on the date of the said G.R.
15. Mr. Gorwadkar submits that on a perusal of the impugned decision, it is clear that the State Government has erred in reiterating the contention which fell for determination of the Court in the prior proceedings filed by the petitioner, hence, the petitioner would become entitled for subsidy by the impugned order being set aside. In supporting such contention that in case of some industries, such relief was granted by a co-ordinate Bench of this Court, reliance is placed on the orders passed by this Court in Writ Petition No. 10312 of 2010 (M/s. Grainotch Industries Limited vs. State of Maharashtra & Ors.) decided on 01 April 2011, Writ Petition No. 207 of 2011 (M/s. Anand Distilleries Private Limited vs. State of Maharashtra & Ors.) decided on 24 March 2011, Writ Petition No. 2285 of 2011 (M/s. Grainotch Industries Limited vs. State of Maharashtra & Ors.) decided on 24 March 2011 and Writ Petition No. 6286 of 2014 (M/s. Grainotch Industries Limited vs. State of Maharashtra & Ors.) decided on 12 December 2014.
16. On the other hand, Mr. Dighe, learned Addl. Government Pleader has supported the impugned order to contend that the petitioner is not eligible, in as much as the petitioner’s case would not in any manner fall within the purview of the said policy as notified in the G.R. dated 08 June 2007. He submits that even considering the observations of this Court in paragraph nos.[8] and 9 of the order dated 10 March 2017 in Writ Petition No. 5535 of 2012 (supra), the petitioner is not entitled to the subsidy, as the petitioner does not comply, with the “other requirements” as contemplated by the policy which are de hors to what has been observed by this Court in the said order. It is contended that in fact, in paragraph 9(ii) of the operative order passed by this Court, it was clearly observed that the Court has not examined whether the petitioner is otherwise eligible for the benefits under the Government Resolution dated 8 June 2007, except that the petitioner's application shall not be rejected on the ground that the industry was operational on the date of the G.R. and it is in such context, the State Government was called upon to take a decision which has been taken in the impugned order. It is submitted that the petitioner’s contention that the impugned order is a reiteration of the earlier decision of the State Government, which was interfered by this Court in its order dated 10 March 2017, passed on Writ Petition No. 5535 of 2012 (supra), is not correct, as the impugned order certainly takes into consideration the other parameters to hold that the petitioner is not eligible. He accordingly prays for dismissal of the Writ Petition.
17. It is on such backdrop, we have heard learned counsel for the parties and with their assistance, we have perused the record. Analysis
18. At the outset, we state some admitted facts. It is not in dispute that the petitioner is the owner of the distillery which was initially a sick unit and which was taken over by the petitioner in the year 2003 in an auction. The petitioner has contended that it was also producing grain-based alcohol by using jowar, bajra etc. It is not the petitioner's case that it was engaged in the exclusive production of grain based alcohol. Thus, the petitioner was an existing unit when the State Government notified a subsidy policy under the Government Resolution dated 8 June 2007. As noted above the intention of the policy is also clear from its title which is to promote and encourage new distilleries to produce alcohol from the substances other than molasses.
19. It is the petitioner’s case as set out in the petition that those distilleries which commenced operations upto the end of the year 2009 to manufacture grain-based alcohol were entitled to the said subsidy or in other words all units which were operational, irrespective of their establishments or were engaged in the production activity would be entitled for subsidy under the said policy of the State Government. It is on such premise, the petitioner intended to avail the subsidy. Accordingly, the petitioner made an application to the Hon’ble Minister for State Excise dated 20 December 2009, which initially came to be rejected by a communication dated 10 August 2011, as noted hereinabove, which was challenged by the petitioner before this Court in the proceedings of Writ Petition No.5535 of 2012 which came to be disposed of vide order dated 10 March 2017 (supra), remanding the proceedings to the State Government for a fresh decision in terms of the observations, as made in the said order, which were to the effect that the petitioner’s application shall not be rejected only on the ground that the industry was operational on the date of the G.R. It is such application of the petitioner on remand which stands rejected by the impugned order.
20. To consider the contentions as urged on behalf of the petitioner, it would be necessary to first consider as to what are the essential requirements of the subsidy policy of the State Government as stipulated in the Government Resolution dated 8 June 2007. It is hence imperative to extract the said Government Resolution to appreciate its purport (we have underscored the relevant portions):- (Translation of a photocopy of a Government Resolution, typewritten in Marathi) EXHIBIT- “B”
GOVERNMENT OF MAHARASHTRA HOME DEPARTMENT Government Resolution NO. N.M.A.-0206/M.No.3/S.E.-2 Mantralaya, Mumbai 400032. Date: 8th June, 2007. PREFACE:- Alcohol is used as an alcoholic beverage, for industrial purposes and as a blend in petrol. As a result, the demand for alcohol has increased significantly in the last few years for all three of these purposes. The demand for alcoholic beverages was 10.98 crores B. L. in the year 2001-02 and it increased to 18 crores B.L. in the year 2006-07. The demand of Alcohol for industrial purpose is 40 crores B.L. during the year 2006-07. Due to the policy decision of the Government of India to blend 5 percent ethanol in petrol is expected to generate a demand of 60 crores B. L. of ethanol across the whole country. As per the expected change as per this Policy, the 5% blending ratio will be increased to 10%. If that happens, the demand for this purpose will increase upto approximately 120 crore B.L.
2. Sugarcane, the main source of alcohol production, has almost reached the point of non-growth. If there is a need to increase alcohol production from this source, using sugarcane directly for alcohol production could be an option. However, if it is done so, it would affect the production of sugar in the State. On the other hand, there is much more scope in increasing the production of Jowar. However, there has been a decline in the area under jowar cultivation and per acre production thereof in the State. To promote and encourage new distilleries to produce alcohol from the substances other than molasses.
3. Jowar is a major rainfed crop in the State. Jowar cultivation is mainly done in backward areas like Marathwada, Vidarbha etc. To meet the alcohol requirement of the alcoholic beverage producing Units, creating an alternative system of grain-based alcohol production will increase the demand for jowar, Bajra, maize etc. and in turn, such grains will fetch good prices.
4. Alcohol produced from grains is used for alcoholic beverages all over the World. Since such alcohol is available in small quantities in our Country, alcohol produced from molasses is used for alcoholic beverages. Therefore, there is no demand in European countries for such domestically produced alcoholic beverages because alcoholic beverages made from grains are considered to be of good and superior quality.
5. In the Report prepared by the Organization viz. ‘MITCON’, it has been mentioned that producing alcohol from grains is Rs. 6 to 7 per liter more expensive than making alcohol from molasses. Therefore, encouraging such factors to bridge the gap in production costs between alcohol from molasses and alcohol from grains, will increase investment in the grain-based alcohol production sector. In backward areas like Marathwada and Vidarbha in Maharashtra, farmers who depend on rains, produce jowar, bajra, maize etc. due to inadequate irrigation facilities and at the same time, due to the vagaries of nature, the grain produce spoil and become unsuitable for consumption. Such grains do not get a fair price, which cause losses to the farmers. In order to increase the production of alcohol from grains and to avoid losses to the farmers, it is necessary to encourage the production of alcohol from such grains.
6. In view thereof, as per the Resolution passed in the meeting of the Hon’ble Cabinet held on the date 16.05.2007, the Government has taken a decision as follows:- RESOLUTION:-
1) This Scheme shall be known as ‘Grain-based Distillery and Integrated Unit Financial Aid, 2007’.
2) All new grain-based Distilleries or integrated Units (distillery + alcoholic beverages units) that are set up and become operational by the end of the year, 2009 will be eligible for financial aid.
3) This financial aid will be provided only for liquor produced from grains in the State.
4) Under this scheme, in order to compensate the capital expenditure invested by each Distillery, a reimbursement of Rs. 10/- per litre on the alcohol consumed, will be given to the grain-based alcohol producing Distillery, from the Excise Duty to be levied on the alcohol/ medicines /cosmetics produced from the alcohol sold by the said Distillery to the Liquor Producer and M. & T. P. Units.
5) The maximum limit for reimbursement of capital expenditure invested by the Unit shall be 150% of the capital expenditure or Rs.
37.50 crores for "D" areas and 200% of the capital expenditure or Rs. 50 crores for "D+" areas declared by the Department of Industries for Vidarbha and Marathwada as per the industrial backwardness, whichever is less. For the remaining industrially backward and declared as "D" and "D+" areas of the State excluding Vidarbha and Marathwada areas, this maximum limit shall be 100% of the capital expenditure or Rs. 50 crores, whichever is less.
6. The above exemption will remain applicable till the extent of reimbursement of capital expenditure invested by the Unit or till the end of the year 2013, whichever is earlier. However, this exemption will not be admissible under any circumstances after the year 2013.
7. The Units will commence production within two years from the date of approval of the Letter of Intent and as per the progress of the project and in eligible cases, granting extension of the Letter of Intent may be considered by the State Government from time to time as required, subject to the condition that the final date of exemption will not be changed.
8. The Units which have already been granted a Letter of Intent will be able to relocate to the "D" and "D+" areas notified by the Government and set up the projects.
9. If new Units which will set up the projects in the areas other than the above "D" and "D+" areas which have been declared as industrially backward areas by the Department of Industries, will not get the benefit of this scheme.
10) If grain-based alcohol is used for the Alcoholic Beverages and Cosmetics (M & T. P.) category in the State of Maharashtra and proper records thereof are maintained and if the same are certified by the State Excise Department, a subsidy of Rs. 10/- per liter will be provided as mentioned above.
11) Procedure will be determined with the approval of the Finance Department to ensure immediate provision of financial aid as mentioned hereinabove. By order and in the name of the Governor of Maharashtra. (Signature Illegible) (G.J. Rasal) Deputy Secretary, Home Department, Government of Maharashtra.”
21. We analyse the contents of the aforesaid subsidy policy of the State Government, so as to note the essential requirements, which were required to be satisfied by an applicant (petitioner) to become entitled for the subsidy under such policy. From a bare reading of the policy, the following are its salient features:- (1) The object of the policy is to promote and encourage new distilleries to produce alcohol from substances other than molasses. (2) It is a policy decision of the Government of India to blend 5% ethnol in petrol, which is expected to generate a higher demand of ethnol across the country. (3) There is an expected change of such policy of the Government of India whereunder 5% blending ratio will be increased to 10%. If this happens, the demand for ethnol will increase approximately upto 120 crore B.L. (4) Sugarcane is the main source of alcohol production, which has almost reached the point of saturation/ non-growth, and hence for increase in alcohol production, it cannot be expected that the sugar industries are the only option. Also production of alcohol from these industries would affect the production of sugar. There is much more scope in increasing the production of alcohol from jowar. However, there has been a decline in the area under jowar cultivation per acre production in the State.
(v) Jowar is a major rain-fed crop in the State. Jowar cultivation is mainly undertaken in backward areas like Marathwada, Vidarbha etc. in which the alcohol requirement of the ‘alcoholic-beverage’, producing units is encouraging an alternative system of grain based alcohol production. This in turn would increase the demand for Jowar, Bajra, Maize etc. and such grains will fetch good prices.
(vi) Alcohol produced from grains is used for alcoholic beverages all over the world. Since in our Country such alcohol is available in small quantities, alcohol produced from molasses is used for alcoholic beverages. The report prepared by ‘MITCON’ records that producing alcohol from gains is expensive by Rs.[6] to 7 per liter than making alcohol from molasses.
(vii) Therefore, it is necessary to encourage and bridge the gap in production costs between alcohol from molasses and alcohol from gains, by increasing investments in grain based alcohol production sector.
(viii) In backward areas like Marathwada, Vidarbha in Maharashtra, rain dependent farmers undertake the production of Jowar, Bajara, Maize etc. due to inadequate irrigation facilities. Often, due to whims of nature, the produced grains become spoiled and become unfit for consumption. Such grains do not get the fair price, which cause losses to the farmers. To increase the production of alcohol from such grains and to avoid losses to the farmers, it is necessary to encourage the production of alcohol from such grains. For such reasons, the Government has taken following policy decision in the meeting of its Cabinet held on 16 May 2007:-
(i) The scheme shall be known as ‘Grain-based Distillery and
(ii) All grain-based Distilleries or integrated units (distilleries + alcoholic beverage units) that are set up and become operational by the end of the year 2009 will become eligible for financial aid.
(iii) The financial aid will be provided only for alcohol produced from grains in the State.
(iv) Under this scheme to compensate the capital expenditure invested by each Distillery, a reimbursement of Rs.10/- per liter on the alcohol produced would be paid under the scheme in order to compensate a capital expenditure of each distilleries. (v)A reimbursement of Rs.10/- per liter on the alcohol consumed, will be granted to the grain-based alcohol producing Distillery, from the Excise Duty to be levied on the alcohol /medicines/cosmetics produced from the alcohol sold by the said Distillery to the Liquor producer and M. & T. P. Units.
(vi) The maximum limit for reimbursement of capital expenditure invested by the unit shall be 150% of the capital expenditure of or Rs.37.50 crores for “D” areas and 200% of the capital expenditure or Rs.50 crores for “D+” areas, declared by the Department of Industries for Vidarbha and Marathwada as per the Industrial backwardness.
(vii) For the remaining industrially backward areas declared as “D and D+” areas excluding Vidarbha and Marathwada areas, the maximum limit shall be 100% of the capital expenditure or Rs.50 crores whichever is less.
(viii) The exemption as granted will remain applicable till the extent of reimbursement of capital expenditure invested by the unit or till the end of the year 2013. However, this exemption will not be admissible under any circumstances after the year 2013.
(ix) The units will commence production within two years from the approval of the Letter of Intent and as per the progress of the project, and in eligible cases, granting any extension on the Letter of Intent may be considered by the State Government from time to time as required, subject to the condition that the final date of exemption will not be changed. (x)The units which have already been granted a Letter of Intent will be able to relocate to the “D” and “D+” areas as notified by the Government and set up the projects.
(xi) The new units would set up the projects in the areas other than the “D” and “D+” areas which have been declared as industrially backward areas by the department of Industries, will not get the benefit of the scheme.
(xii) The grain based alcohol shall be used for the alcoholic beverages and cosmetics (M. & T. P.) within the State of Maharashtra and proper record thereafter maintained and if the same are certified by the State Excise Department, a subsidy of Rs. 10 per liter will be provided as mentioned.
22. Thus, the above essentials were required to be satisfied by any applicant and/or by the petitioner to avail of the benefit of subsidy. However, insofar as the petitioner is concerned, an exception was required to be made in what has been observed in the orders dated 10 March 2017 passed by this Court on the petitioner’s previous writ petition, which was to the effect that the petitioner’s application was required to be considered and/or not rejected on the ground that the petitioner’s unit was an existing unit on the date of issuance of the said policy / Government Resolution dated 8 June 2007, and/or that the prayers for subsidy as made by the petitioner shall not be rejected only on the ground that the production unit of the petitioner was already functional on the date of Government Resolution. Thus, excluding such consideration, the scope of examination of the petitioner’s entitlement to be undertaken by the State Government was in terms of paragraph 9(ii) of the order dated 11 March 2011, which was to examine whether the petitioner was “otherwise eligible” for the benefits under the Government Resolution dated 8 June 2007. It is in the context of such requirements, we examine the petitioner’s contentions and whether the petitioner satisfied the requirements of the subsidy policy as contained in the GR dated 8 June 2007 (supra).
23. The petitioner’s application dated 28 December 2009 seeking subsidy under such policy was required to satisfy the aforesaid requirements as discussed by us. Thus, to appreciate as to what is the nature of the petitioner's application in regard to the various requirements/perspectives/terms and conditions the petitioner was required to satisfy, it would be imperative to extract the petitioner’s application demanding subsidy. The petitioner's subsidy application dated 28 December 2009 reads thus: Date: 28/12/2009 To The Honorable State Excise Minister, Mantralaya, Fort, Mumbai Subject: Grain Distillery Subsidy/Incentive Respected Sir, We are a Grain Based Distillery having "I" License for manufacturing Alcohol from Grain at Bhandara near Nagpur. We have been manufacturing Grain Alcohol since 2003. The above Grain Distillery was a sick & closed unit which was taken over by us from SICOM Ltd and since 2003 we have been manufacturing Grain Alcohol from Jowar especially from the whole of Vidarbha region. As you are aware in recent few years farmers of Vidharbha have been suffering and committing suicides due to which the Government of Maharashtra through its Home Department Notification no. NMA- 0206/ Letter no.3 / State Excise Duty -2 dated 08.06.2007 have declared that a special subsidy /incentive of Rs. 10/- per bulk liter will be given to all units manufacturing Grain Alcohol which are situated in D or D+ areas. This was done so that, the farmers of Vidhrbha would get better prices for their crops/produce. The above subsidy was an excellent way of boosting the farmers confidence in growing more grain products so that they get better returns by way of higher prices thereby helping them economically and we have been a part of this since 2003 buying grain directly from the regional mandi's of Vidharbha. We are having our unit in the heart of the Vidharbha region and the above notification has been specially made for the benefit of the farmers of the groin. Since the time the above notification came into effect we have written several letters to The Commissioner, State regarding eligibility for subsidy to our grain distillery but we have received no response on the above matter. We have been told verbally that we do not qualify for the subsidy as our grain distillery ha started production before the subsidy notification / declaration came into effect and subsidy will only be given to grain distillery which have started production after 08.06.2007 and before 31.12.2009. Since 2003 we have been selling our grain Alcohol to bottling plants all over Maharashtra and also to other States creating awareness on the excellent quality of products made from Grain Alcohol, but all of a sudden our business has become unviable as we have not been considered for the subsidy in the above notification as we are in production before June 2007. Other than our Grain distillery the only distillery in Maharashtra since 2003 has been the unit of Seagrams (Pernod Ricard) at Nasik who are using all of their production of Grain Alcohol for there own bottling purpose (Captive Consumption). Seagrams (Pernod Ricard) is a multinational company and all the profit they earn are taken back to their parent country and our own country does not benefit from such a company., as we are a purely Indian Company and The Sons of the Soil we feel we should be considered as an exceptional case for the subsidy. Sir, since the day we started production in 2003 we have suffered losses but still we have worked very hard to promote Grain Alcohol as good product against Molasses Alcohol and have faced stiff competition from Molasses Alcohol. The special subsidy/incentive given by the Government to the new Grain Alcohol units will further create problems and we will not be able to compete with the new units and this will ultimately result in closure of our unit. In the past subsidy /incentive has also been declared and given to the Winery Industry also wherein the old Winery units who were already into production were also considered for such a subsidy. With reference to such similar subsidy/incentive as given previously to the winery Industry we would request you to please help in bringing an amendment in the notification wherein our Grain Alcohol unit shall also get the benefit of the subsidy/incentive without which we would have to close our unit. Respected Sir, we request you to kindly grant us the above mentioned subsidy without which our Industry will die resulting in great loss for us as well as the worked of our unit and the Bhandara region who will stand benefited from your positive decision in our favor. We remain hopeful that you will do justice with us. Thanking you Yours faithfully For Karan distillery Pvt.Ltd. Sd/- Authorised signatory Enclosed: Government of Maharashtra Subsidy notification regarding Wineries. Letter of the Superintendent to The Commissioner, State Excise, Maharashtra,
24. A perusal of the aforesaid application would clearly indicate that the application is totally bereft of many essentials/details the policy contemplates more particularly capital investments. This more particularly considering the object and intention and the terms the policy would mandate. The reason being that the reimbursement is intended to compensate the capital expenditure invested by the applicant. This forms the basis for capital investment disbursement of the incentives.
25. Thus, on a bare reading of this application many of the essential requirements of the policy dated 8 June 2007 appears to be not complied by the petitioner. The petitioner’s application was silent on the capital expenditure invested by the petitioner in terms of what has been provided for in paragraph 4 & 5 of the GR, as noted hereinabove, as compliance of condition No. 4 & 5 of the GR was necessary for applicability of paragraph No.6 thereof which provides that the exemption will be applicable till the extent of reimbursement of capital expenditure invested by the units or till the year 2013. Also perusal of the other clauses of the policy whether petitioner had commenced production within two years from the date of approval of the letter of intent was also not specified. The application also fails to provide the details of the excise record on the amount of excise duty paid.
26. It is inter alia on such consideration of the petitioner’s application by the impugned order dated 24 November 2021, the petitioner's claim for a subsidy under its application dated 28 December 2009 (supra) has been rejected. This is clear from the reading of the following relevant paragraphs of the impugned decision which are required to be extracted which reads thus:
3.1) At Sr. No. 2 in the Government Resolution dated 08.06.2007, it has categorically been mentioned therein that, “all the new Food Grain Based Distilleries or Integrated Units (Distillery + alcoholic beverages) which will be set up and become operational by the end of the year 2009 shall be eligible for getting financial aid”. Considering the said provision, it becomes clear that the Scheme declared under the said Government Resolution becomes applicable only to the new food grain based distilleries or integrated units.
3.2) In order to resolve the difficulties being faced while implementing the Scheme declared under the Government Resolution dated 08.06.2007, the State Government, under the Government Circular dated 18.12.2007 has issued a clarification in that regard. In the said Circular, it has clearly been mentioned: only the distilleries which produce alcohol from the substances other than the molasses shall be eligible for granting the licence for production of liquor and it is necessary that such distilleries and the liquor producing projects should be set up separately. The benefit of this Scheme cannot be availed by carrying out some changes in the licence presently in force, issued for the distilleries and liquor production projects based on molasses. Similarly, the distilleries producing alcohol from the molasses and other substances shall not be eligible to grant them licence for producing country liquor – foreign liquor and to avail the benefit of this Scheme. From this also, it is seen that the said Scheme is admissible only to the new food grain based Distilleries or Integrated Units.
3.3) Considering the provisions made in the Government Resolution dated 08.06.2007 and the Government Circular dated 18.12.2007, the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007" becomes applicable only to the new distilleries producing food grain based alcohol to which the Letter of Intent had been granted while declaring the said Scheme or the set up of which distilleries has been completed after the Government Resolution has been issued.
3.4) The Scheme declared under the Government Resolution dated 08.06.2007 was declared in order to mainly see that the consumption of the food grain based alcohol is increased and also the new capital investment in this field is made. As per the Government Resolution dated 08.06.2007, in order to see that the capital expenditure invested by every distillery is compensated under this Scheme, it has been prescribed to grant reimbursement of Rs.10/- per litre on the alcohol that has been consumed, to the distillery producing food grain based alcohol, set up newly in the classes viz. ‘D’ and ‘D+1’ in Vidarbha, Marathwada and in other areas of the State by the Department of Industries. The objective of the said Scheme is to create new employment in order to achieve a comprehensive development of the backward areas of Vidarbha, Marathwada and other industrially backward areas in the State, to increase the local supplementary businesses and to increase investment in new capital expenditure in these industrial areas with a view to make available new sources of income for the locals.
3.5) Messrs Karan Distilleries Private Limited has purchased the said distillery for the price of Rs.3.20 Crores in an auction held in the year
2003. Therefore, as Messrs Karan Distilleries Private Limited has not set up a new distillery in accordance with the provisions of the present Scheme, it appears that the said distillery has not spent any new capital expenditure for setting up of the said distillery and therefore, it appears that the establishment viz. Messrs Karan Distilleries Private Limited has not been set up / production thereof has not been taken for fulfilling the prescribed objectives of the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007", of the Government. Hence, the said Scheme is not applicable to the distillery viz. Messrs Karan Distilleries Private Limited and as such, the said distillery does not become eligible for getting any reimbursement under this Scheme.
3.6) Considering all the aforesaid facts, as the said distillery does not fall within the criteria of the Scheme viz. The "Food Grain Based Distillery and Integrated Unit Financial Aid-2007", declared under the Government Resolution dated 08.06.2007, no reimbursement becomes admissible / due and payable to the distillery as demanded by it as per the provisions made in the said Government Resolution.
27. Thus on a bare reading of the aforesaid reasons, the impugned order sets out, by no stretch of imagination, it can even be remotely inferred that the petitioner satisfied the terms and condition of the policy. Such requirements are pointedly referred in the impugned order. Thus, even if the benefit of the order passed by the Division Bench of this Court being granted to the petitioner, on the petitioner’s non-compliance of the such basic requirements, we do not find that there is any illegality in the impugned order. It cannot be petitioner’s case that the petitioner’s entitlement for grant of subsidy under the GR dated 8 June 2007, be considered de hors the specific provisions of the said policy.
28. Significantly, a perusal of the application for subsidy (supra) in no manner whatsoever indicates that such primary requirements as envisaged by the subsidy policy are in any manner fulfilled in the petitioner’s application, so as to claim entitlement to the subsidy. There cannot be two opinions, that it would be obligatory for the State Government to implement the policy in terms of what the policy provides, and as to what is intended to be achieved by the policy. None of the clauses of the policy can be rendered redundant and/or of no consequence. Every clause of the policy has a cascading effect on what it intends to achieve, and accordingly would be required to be given its true meaning, and keeping in mind the very object of public benefit for which, a subsidy is being offered. A subsidy is in a form of a public largesse being made available to such industries/applicants and which has to remain, within the confines of the policy and not outside such policy or exploited otherwise.
29. As to what are the principles of law on a policy the State may promulgate for any public benefit to be conferred, as interpreted by the Court’s also needs to be seen. In such context, we refer to the following decisions:-
30. In Rustom Cavasjee Cooper vs Union Of India[1], (supra), the Supreme Court held that it is not for the Court to consider the relative merits of the 1 (1970) SCC (1) 248 different political stearin or economic policy. In Premium Granites vs State Of, it was observed that it is not the domain of the Court to embark upon uncharted public policy and that such exercise would be left to discussion of the executive and legislative authorities as the case may be. A policy cannot be read, as if, it a statute as held by the Supreme Court in Secretary, Ministry of Chemicals and Fertilizer, Government of India Vs. Cipla Limited & Ors.3. In such decision, the Supreme Court observed that it is axiomatic that the contents of a policy documents cannot be read and interpreted as statutory provisions. It was observed that too much of legalism cannot be imported in understanding the scope and meaning of the clauses contained in the policy formulations. In State of MP & Anr. Vs. Narmada Bachao Andolan[4] referring to an earlier decision in State of Punjab & Ors. Vs. Ram Lubhaya Bagga[5], it was observed that the wisdom and emissivity of the policies are ordinarily not amenable to judicial review unless the policies are contrary to statutory for constitutional provisions or arbitrary or irrational or abuse of powers.
31. Further in Asha Sharma Vs. Chandigarh Administration & Ors.[6] it was held that the Government is entitled to make pragmatic adjustments and policy decisions, which may be necessary or called for under the prevalent and peculiar circumstances. It was held that the Court would not be in a position to hold that another decision would have been more fair or wise, scientific or logical and that the interpretation of a policy would always depend upon the facts and circumstances of the case as it was observed to be held by the Supreme Court in Netai Bag & Ors. Vs. State West Bengal & Ors.7.
32. The Supreme Court in Census Commissioner & Ors. Vs. R. Krishnamurthy[8] held that the Courts are not to plunge into policy-making by adding something to the policy by way of issuing a writ of mandamus and that the judicial restraint in that regard is called for. It was held that the Courts are required to understand the policy decisions framed by the executive.
33. Adverting to the aforesaid settled principles of law we may observe that, it would not be permissible for the petitioner to contend that irrespective of the lacuna and/or shortcomings in the petitioner’s application so as to become entitled for the subsidy, the Court would simplicitor on the petitioner’s contentions of the order dated 10 March 2017, passed by this Court on Writ Petition No.5535 of 2012 (supra), interfere in the impugned decision and hold that the petitioner was entitled for grant of subsidy to the petitioner. If such contentions of the petitioner are accepted, it would amount to the Court stepping into the domain of the executive, in arriving at such conclusion not recognized by the policy. This is certainly not the function of the Court in issuance of a Writ under Article 226 of the Constitution. The parameters of judicial review in such matters would be only in regard to the decision making process and whether the impugned decision is in any manner arbitrary, illegal and/or unconstitutional.
Further accepting the contentions as urged on behalf of the petitioner, it would amount to the Court substituting the executive’s wisdom by modifying and/or altering the intention and meaning of the policy, different from what is conveyed by the policy decision as contained in the subsidy GR dated 8 June 2007.
34. The Court certainly cannot rewrite the policy and/or introduce a intention which is alien to the actual contents of the policy and/or the object, the policy wields. We may also observe that the policy decision as contained in the GR dated 8 June 2007 insofar as its validity is concerned, is not challenged by the petitioner. In fact on a reading of paragraph 6 of the order dated 10 March 2017 passed on the petitioner’s previous Writ Petition (supra), it appears to be the clear understanding of the petitioner, as canvased before the Court that the GR dated 8 June 2007 did not provide the benefits to those industries which are in existence prior to the date of the said GR. Also, a submission was made that the arbitrary cut of date for applicability of the GR, could not have been fixed by the State Government as the same is violative of the Article 14 of the Constitution of India. Although such contentions were urged, the petitioner never challenged the validity of the subsidy policy as contained in the GR dated 8 June 2007, nor it is challenged in the present petition.
35. Be that as it may, the subsidy policy is legal and valid. The reasons as set out in the impugned order which are on factors, whether the petitioner was “otherwise eligible”, for the benefit being made available under the subsidy policy as contained in the GR dated 8 June 2007 i.e. by excluding the grounds as set out in the order dated 10 March 2017 (supra) [passed by the Division Bench on the earlier petition filed by the petitioner], we are of the clear opinion, that no fault or any illegality can be attributed to the reasons as set out in the impugned order so as to hold that the petitioner could be held to be eligible much less entitle for the award of subsidy. We are satisfied that neither on the merits touching the petitioner's application for subsidy as also on the legal position in that regard, the petitioner could not be held to be entitled for the grant of subsidy under the State’s policy dated 8 June 2007.
36. In the light of the above discussion, we find no merit in this petition. It is accordingly rejected. No costs. (ADVAIT M. SETHNA, J.) (G. S. KULKARNI, J.) Designation: PA To Honourable Judge