Budgetary Support Scheme 2018 & Turnover Incentive Scheme 2021 Could Not Have Operated Simultaneously: J&K&L High Court
The Jammu and Kashmir and Ladakh High Court said that the Budgetary Support Scheme, 2018 and the Turnover Incentive Scheme 2021 could not have operated simultaneously.
The Court was dealing with petitions filed by Small/Medium/Large scale Industries set up in the State of Jammu and Kashmir on different dates in the year 2011 and before.
A Division Bench of Justice Sanjeev Kumar and Justice Rajesh Sekhri observed, “The two schemes, the Budgetary Support Scheme, 2018 and the Turnover Incentive Scheme 2021 could not have operated simultaneously. At the cost of repetition we may say once again that the Budgetary Support Scheme envisaged under SRO 431 of 2018 stood subsumed in the Turnover Incentive Scheme 2021 which brought within its sweep the gross turnover of the industrial unit and the gross turnover would include the taxable turnover with respect to interstate supplies made under the IGST Act, 2017.”
Advocate B.L. Narsimhan represented the petitioners while Advocate General D.C. Raina represented the respondents.
In this case, the petitioners were aggrieved by the order issued by the Government of J&K, whereby the Budgetary Support Scheme was withdrawn. The said order was challenged by the petitioners primarily on the ground that it was hit by the doctrines of promissory estoppel and legitimate expectation. In 2004, the Government came up with Industrial Policy-2004 offering certain incentives to the entrepreneurs who would set up their industries in the State. The petitioners were allured by the incentives offered by the said policy to set up their units.
In the meanwhile, the said policy was promulgated and all existing units were held entitled to incentives specifically provided in the policy subject to guidelines/procedures issued in respect of such incentives. Thereafter, the Integrated Goods and Service Tax Act, 2017 (IGST Act) was implemented and the Government notified a new scheme for providing budgetary support to the manufacturing units. The grievance of the petitioners was that the Government could not have withdrawn the scheme prematurely without allowing the petitioners to avail the benefit for complete period ending with March 31, 2026.
The High Court in the above context of the case, noted, “The doctrine of promissory estoppel is clearly not attracted in the instant case. SRO 431 of 2018 was issued immediately upon adoption of GST regime by the State of Jammu and Kashmir. With the coming into operation of the IGST Act, 2017, the CST Act stood abolished and, therefore, continuance of the benefit of exemption from payment of CST was out of question.”
The Court added that, instead of extending the refund/budgetary support in respect of IGST, the new scheme gave benefit to existing industrial units on the basis of fixed percentage of the gross turnover of a unit which would necessarily include the taxable turnover with respect to interstate supplies made under IGST Act 2017.
“Viewed from any angle, both the doctrines i.e. doctrine of promissory estoppel and the doctrine of legitimate expectations are not attracted nor do we find issuance of the impugned SO in violation of Article 14 of the Constitution of India”, it concluded.
Accordingly, the High Court dismissed the writ petitions.
Cause Title- Sudhir Power Limited v. Union Territory of Jammu and Kashmir & Ors.
Appearance:
Petitioners: Advocates B. L. Narsimhan, Ankit Awal, J. A. Hamal, Surjit Singh Andotra, and Jatin Mahajan.
Respondents: Advocate General D.C. Raina and Dy. A.G. K.D.S. Kotwal.
