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Sikkim High Court Ruling On POCSO Acquittal Appeal : Verdict On Child Sexual Assault Case.

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Case title: State of Sikkim v. Pintso Bhutia

Case no: Crl.A. No.11 of 2022

Order on: May 23, 2023

Quorum: THE HON’BLE MRS. JUSTICE MEENAKSHI MADAN RAI

Fact of the case:

The case involves an appeal filed by the State of Sikkim against the acquittal of the respondent, Pintso Bhutia, in a Sessions Trial (POCSO) Case. The prosecution’s narrative states that an FIR was lodged by the Ward Panchayat on behalf of the victim’s mother, alleging that the respondent attempted to rape the victim, a 10-year-old girl, at her aunt’s house. The victim reported that the respondent pinched her breast, causing her pain. Medical examination revealed tenderness on the victim’s breast.

Issues framed by the court:

  • Whether the impugned Judgment acquitting the respondent can be considered as perverse, meaning “against the weight of evidence”.
  • Whether the evidence presented by the prosecution is sufficient to convict the respondent under Section 9(m) of the POCSO Act.
  • Whether formalities prescribed under Section 145 of the Indian Evidence Act, 1872 was complied with or not, as it was the duty of the Court to go through the Section 164 Cr.P.C. statement.

Legal provisions:

Section 378(1)(b) of the Code of Criminal Procedure, 1973 (CrPC): This provision deals with appeals against acquittal filed by the State.

Sections 8, 9(m), and 10 of the Protection of Children from Sexual Offences Act, 2012 (POCSO Act): These sections define various sexual offenses against children and prescribe penalties for the same.

Section 354A(1)(i) of the Indian Penal Code, 1860 (IPC): This section deals with sexual harassment and prescribes punishment for the same.

Section 164 of the Code of Criminal Procedure, 1973 (CrPC): This section deals with recording of confessions and statements by the Magistrate.

Contentions of Appellant:

The victim, a 10-year-old girl, accused the respondent of sexually assaulting her by pinching her breast. The FIR was lodged immediately after the incident, and medical examination confirmed tenderness on the victim’s breast. The victim’s consistent statement and corroborative evidence from witnesses support the prosecution’s case. The trial court’s acquittal of the respondent is obstinate and against the weight of evidence. The Appellant argued that the respondent should be convicted under Section 9(m) of the POCSO Act.

Contentions of Respondents:

The respondent denied the allegations and claimed he was falsely implicated. Inconsistencies in the victim’s statement and lack of evidence from eyewitnesses cast doubt on the prosecution’s case. The victim’s statement changed between the FIR, Section 164 CrPC statement, and trial, undermining her credibility. Witness testimonies were not consistent and failed to establish the respondent’s guilt beyond reasonable doubt. The trial court’s acquittal was justified, and the appeal should be dismissed.

Court Analysis:

In this case, The court noted that the victim’s statement was consistent and corroborated by other witnesses. The court found the respondent’s defense unconvincing and noted discrepancies in his statements. The court observed that the victim’s tender age and the nature of the offense required careful consideration of her testimony. The court referred to precedents to establish that a victim’s testimony, if cogent and consistent, can lead to a conviction. The court found the respondent guilty under Section 9(m) of the POCSO Act and set aside the trial court’s acquittal. The court ordered the respondent to surrender for sentencing.

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Judgement Reviewed By- Antara Ghosh

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Sikkim High Court Allows Compounding of Cheque Bounce Case Under Section 147 NI Act.

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Case title: Alpesh Narendra Shah and Another vs. Manoj Agarwal

Case no: Crl.Rev.P. No.02 of 2019

Order on: May 4, 2023

Quorum: THE HON’BLE MRS. JUSTICE MEENAKSHI MADAN RAI

Fact of the case:

The respondent, Manoj Agarwal, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) against the petitioners, Alpesh Narendra Shah and Another. The complaint alleged that the petitioners had issued a cheque of ₹20,00,000 from Jankalyan Sahakari Bank Ltd., which was dishonored due to insufficient funds. The trial court convicted the petitioners and sentenced them to three months’ imprisonment and a fine of ₹20,00,000 each, with a default clause of further imprisonment. The appellate court upheld the trial court’s decision, leading to the filing of a criminal revision petition.

Legal provisions:

Section 138 of the Negotiable Instruments Act, 1881: Deals with the dishonor of a cheque for insufficiency of funds.

Section 147 of the Negotiable Instruments Act, 1881: Provides for the compounding of offences under the Act, allowing for the withdrawal of the complaint by the payee.

Section 320(9) of the Code of Criminal Procedure, 1973: Deals with no offence shall be compounded except as provided by this section, unless specifically permitted by other laws.

 Contentions of Appellant:

The petitioners, represented by their counsel, submitted an application under Section 147 of the Negotiable Instruments Act, 1881, seeking permission to compound the offence. They argued that compounding of the offence is permissible at any stage of the proceedings, as provided under Section 147 of the NI Act. The petitioners emphasized that the parties had reached a compromise, as evidenced by the Deed of Compromise submitted before the court.

They argued on relevant legal precedents, including M. Rangaswamaiah vs. R. Shettappa, to support their contention that compounding of offences under the NI Act is allowed even during the appellate stage.

Contentions of Respondents:

The respondent, represented by counsel, agreed with the petitioners’ submission regarding the permissibility of compounding the offence under Section 147 of the NI Act. They acknowledged the compromise reached between the parties and did not oppose the application for compounding. The respondent’s counsel cited the Supreme Court judgment in Damodar S. Prabhu vs. Sayed Babalal H. to support the proposition that compounding of the offence is permissible at any stage of the proceedings.

Court analysis:

The court determined the provisions of Section 147 of the NI Act, which allow for the compounding of offences under the Act. Referring to relevant Supreme Court judgments, including Damodar S. Prabhu vs. Sayed Babalal H., the court affirmed that compounding of the offence can indeed be permitted at any stage of the proceedings. Considering the compromise reached between the parties and the absence of any opposition from the respondent, the court accepted the Deed of Compromise submitted before it. The court concluded that the offence under Section 138 of the NI Act could be compounded, and therefore, the petitioners were acquitted of the offence. Moreover, the court permitted the petitioners to withdraw the amount deposited as per an earlier court order. The court disposed of the criminal revision petition

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High Court of Sikkim Upheld Lower Court’s Decision and dismissed both the appeals made in case of claims made by appellant regarding delay of work by tender

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Case title:  Union of India VS M/s M.G. Contractors Pvt. Ltd. (Arb. A. No. 1 of 2022)

                         M/s M.G. Contractors Pvt. Ltd. VS Union of India (Arb. A. No. 2 of 2022)

Case no.:  Arb. A. No. 1 of 2022 and Arb. A. No. 2 of 2022

Dated on: 28th May, 2024

Quorum:  Hon’ble. MR JUSTICE BHASKAR RAJ PRADHAN

 

FACTS OF THE CASE

Two connected appeals were made under Section 37 of the Arbitration and Conciliation Act, 1996 assailing the final judgment dated 27.12.2021, one filed by the Union of India and the other by M/s M.G. Contractors Pvt. Ltd.

Tender was invited by CPWD, Chungthang, for construction of ITBP road sometime in the year 2010. In response, M/s M.G. Contractors Pvt. Ltd. submitted its tender which was found to be lowest, accepted and awarded in its favour. The value of work awarded under the contract was Rs.70,65,65,490/- (Rupees seventy crores, sixty-five lakhs, sixty-five thousand, four hundred and ninety only) which was 24.55% above the estimated cost put to tender of Rs.56,72,94,653/- (Rupees fifty-six crores, seventy-two lakhs, ninety-four thousand, six hundred and fifty-three only). Twenty-four months to be reckoned from 22nd day after the date of issue of acceptance letter dated 10.09.2010 was the time allowed for carrying out the work. The stipulated date of start of work was 02.10.2010 and the date of completion was 01.10.2012. The Agreement was executed in the year 2011. The work was delayed due to various reasons and finally completed on 30.06.2015. Certain disputes arose between the parties and M/s M.G. Contractors Pvt. Ltd. invoked Arbitration Clause 25 of the Agreement. The Sole Arbitrator was appointed who entered reference vide letter dated 14.03.2020.

ISSUES

  • Whether the claim 7 of M/s M.G. Contractors Pvt. Ltd. Was barred to limitation?
  • Whether the applications by the Union of India under Sections 34 and 37 maintainable?

LEGAL PROVISIONS

Section 37 of The Arbitration and Conciliation Act, 1996

The Arbitration and Conciliation Act, 1996 Section 37 provides for filing of appeals against orders of the Court or for that matter an Arbitrator.

Article 55 of The Limitation Act, 1963

For compensation for the breach of any contract, express or implied, not herein specially provided for. Three years When the contract is broken or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs or (where the breach is continuing) when it ceases.

CONTENTIONS OF THE APPELLANT

M/s M.G. Contractors Pvt. Ltd. made 15(fifteen) claims by filing their Statement of Claims. The Union of India did not prefer any counter-claim. The total claim made by M/s M.G. Contractors Pvt. Ltd. was Rs.29,11,26,419/- (Rupees twenty-nine crores, eleven Arb. A. No.1 of 2022 4 Union of India vs. M/s M.G. Contractors Pvt. Ltd. & Arb. A. No.2 of 2022 M/s M.G. Contractors Pvt. Ltd. vs. Union of India lakhs, twenty-six thousand, four hundred and nineteen only) along with interest, GST and cost as actual.

Claim No.7 was for an amount of Rs.8,16,41,135/- (Rupees eight crores, sixteen lakhs, fourty-one thousand, one hundred and thirty-five only) claimed as due and payable for escalation compensation for period October 2012 to June 2015. Claim No.13 was for interest at the rate of 18% from due date to date of payment. Claim No. 14 was the claim for GST at applicable rate as per actual on the claim amounts.

CONTENTIONS OF THE RESPONDENTS

The Union of India filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the learned Commercial Court, being Arbitration Case No. 1 of 2021, in the matter of Union of India vs. M/s M.G. Contractors Pvt. Ltd. The Union of India prayed for setting aside Claim No.7 and associate interest under Claim No. 13 and associate GST under Claim No.14 Arb. A. No.1 of 2022 5 Union of India vs. M/s M.G. Contractors Pvt. Ltd. & Arb. A. No.2 of 2022 M/s M.G. Contractors Pvt. Ltd. vs. Union of India granted in favour of M/s M.G. Contractors Pvt. Ltd on the ground that it was barred by limitation. The Union of India categorically asserted “That the applicant had accepted the claim No.1,2,3,4,5,6,8,9,10,11,12,15 and associated interest under claim 13 and associated GST amount under claim 14.”

The pivotal ground on which the Union of India challenges the impugned judgment is that since the learned Sole Arbitrator had himself considered Claim No.7 as a damage claim, as such, cause of action ought to have been reckoned from the last day of hindrance, i.e., the last day of breach of contract on 30.03.2015 instead of last day of bill on 09.03.2017 as per Article 55 of the Schedule to the Limitation Act, 1963. Although, the Union of India in its statement in defence had not taken the plea of limitation, it is submitted that the Sole Arbitrator had himself held that it was a duty cast upon him to examine whether the claims were barred by limitation and further he would be examining whether each of the claims was barred by limitation. However, the Sole Arbitrator failed to examine whether Claim No.7 was barred by limitation.

COURT’S ANALYSIS AND JUDGEMENT

The court was of the view that both these appeals can be disposed of in terms of the judgment of the Hon’ble Supreme Court in Project Director, National Highways No.45E and 220, National Highways Authorities of India vs. M. Hakeem and another1 and S.V. Samudram vs. State of Karnataka and Another2. In both these judgments, the Hon’ble Supreme Court has held that Section 34 does not empower the Court to modify the award passed by the Arbitrator. The court further held that in the proceedings before the learned Commercial Court, whose judgment is impugned in Arb. A. No. 1 of 2022, the application under Section 34 of the Arbitration and Conciliation Act, 1996, was not for setting aside the Award as the Union of India categorically accepted the award of Claim Nos. 1,2,3,4,5,6,8,9,10,11,12,15 and associate interest under Claim 13 and associate GST under Claim No.14. Thus, the Union of India cannot seek the setting aside of Claim No.7 and associate interest under Claim No.13 and associate GST under Claim No.14 granted in favour of M/s M.G. Contractors Pvt. Ltd. That, in effect, would be to seek modification of the Award by the learned Commercial Court, which had no power to do so. The court was also of the opinion that in a proceeding under Section 37 of the Arbitration and Conciliation Act, 1996, it is not authorised to disturb concurrent findings of facts and law by the learned Sole Arbitrator and the learned Commercial Court.

The court therefore held that the first part of the impugned judgment of the learned Commercial Court, vis-à-vis, the challenge of the Union of India in its application under Section 34 of the Arbitration and Conciliation Act, 1996 need not be interfered with. The applications by the Union of India under Sections 34 and 37 were not maintainable. Accordingly, the court dismissed Arb. A. No. 1 of 2022. The second part of the impugned judgment, however, reflects that the learned Commercial Court on its own examined the Award minutely and modified the Award, vis-à-vis, Claim No.13. While doing so the learned Commercial Court exceeded its jurisdiction and so the court did not hesitate in setting aside the impugned judgment to the extent it modifies the Award. Accordingly, Arb. A. No. 2 of 2022 is allowed.

Both the appeals were dismissed.

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 Judgement Reviewed by – Fathima Sara Sulaiman

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Sikkim High Court Dismisses Writ Petition Due to Disputed Facts and Legal Complexities

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Case Name: Sri Guru Singh Sabha and Another vs. The State of Sikkim through the Secretary, Ecclesiastical Department and Others

Case Number: WP(C) No. 49 of 2017

Dated on: 10th October, 2023

Quorum: Single Bench – The Hon’ble Mrs. Justice Meenakshi Madan Rai, Judge

FACTS OF THE CASE

The petitioners allege that religious articles were removed from a Gurdwara without proper rituals. The respondents counter that they were relocated to facilitate government development works. The land on which the Gurudwara and Monastery were situated is claimed to be forest land by the state respondents. Both parties present conflicting accounts regarding the removal and relocation of the religious articles. The court refers to various legal principles, including those related to environmental protection, religious freedom, and the jurisdiction of writ courts. The court determines that the issues raised require extensive evidence and are better suited for resolution in a civil court. The court dismisses the writ petition. Each party is directed to bear their own costs.

ISSUES

  • Whether the removal and relocation of religious articles from a Gurudwara constituted desecration and if it was done in compliance with religious rituals.
  • Whether the construction of structures for offering worship on forest land without permission violated relevant laws and regulations.
  • Whether the rights to religious freedom under Article 25 of the Constitution were infringed upon due to the alleged unauthorised actions concerning the religious articles and structures.

LEGAL PROVISIONS

  • Article 226 of the Constitution of India, which confers extraordinary jurisdiction on the High Court to issue prerogative writs for enforcement of fundamental rights or for any other purpose.
  • Forest (Conservation) Act, 1980, which regulates the use of forest land for non-forest purposes and requires prior approval from the Central Government for any such activities.
  • Directive Principles of State Policy, specifically Article 48A, which mandates the State to protect and improve the environment and safeguard forests.
  • Articles 25 and 26 of the Constitution, which guarantee the freedom of conscience and the right to profess, practice, and propagate religion, subject to certain restrictions for public order, morality, and health.
  • Public Trust Doctrine, which establishes the State as a trustee of natural resources and imposes a legal duty to protect them.

CONTENTIONS OF THE APPELLANT

The Petitioner No.1 alleges that the removal of the Guru Granth Sahib Ji was done without the requisite preceding religious rituals and was orchestrated by Respondent No.4, in collusion with the State-Respondents. The Petitioner contends that the construction by the Army was intended to serve as a “Dharma Sthal,” a place of worship for all faiths, while Respondent No.4 argues that the location is specifically for Buddhist worship. The Petitioner emphasises the importance of religious freedom, invoking Article 25 of the Constitution, which guarantees the freedom to profess, practice, and propagate religion. The Petitioner argues that every public authority has a duty, coupled with power, and should understand the object and conditions under which such power is exercised. The Petitioner highlights the High Court’s jurisdiction to determine disputed questions of fact, citing case law to support the argument. The Petitioner also raises concerns about the failure to implement the Lachen Monastery as a necessary party in the proceedings. Overall, the Petitioner asserts that there are disputed questions of fact that require extensive evidence and are not suitable for determination in proceedings under Article 226 of the Constitution.

CONTENTIONS OF THE RESPONDENT

The respondent argues that the petitioner has failed to establish the existence of a Gurdwara through their averments in the petition. They assert that the inventory was prepared and articles were handed over to the Lachen Monastery in accordance with a receipt dated 06-07-2001. The respondent contends that the alleged desecration of religious articles is a fabrication by the petitioner. They claim that the removal of religious items on 16-08-2017 was part of a unanimous decision by the Lachen Monk Committee and the Lachen public to relocate the religious items to facilitate government development works. The respondent denies any involvement in the removal of articles from outside the Chungthang Gurudwara, stating that representatives of the Gurudwara requested the relocation of these articles to the Lachen Monastery. The respondent challenges the assertion that the location was intended to be a place of worship for all faiths, arguing that it is specifically designated for Buddhist worship. Additionally, the respondent argues that the petitioner’s invocation of Article 25 of the Constitution does not absolve them from the requirement to obtain permission for the construction of structures on forest land for non-forest purposes. The respondent disputes the petitioner’s reliance on case law regarding the High Court’s jurisdiction to determine questions of fact, asserting that the disputed questions in this case are not suitable for determination under Article 226 of the Constitution. Lastly, the respondent maintains that the petitioner has failed to implement the Lachen Monastery as a necessary party in the proceedings, which complicates the determination of certain issues in the case.

COURT’S  ANALYSIS AND JUDGEMENT

The court begins by emphasising the discretionary and equitable nature of the jurisdiction conferred upon it by Article 226 of the Constitution. It underscores that a writ proceeding cannot serve as a substitute for a civil suit, as the jurisdiction of the civil court is expansive. It highlights that the land on which the structures were situated is claimed to be forest land by the state respondents, which falls under the Concurrent List of the Seventh Schedule to the Constitution. However, neither the petitioners nor the respondent established acquisition of the land or sought permission from the Forest Department for non-forest purposes. The court delves into the disputed removal of religious articles, noting conflicting assertions from both parties regarding the events surrounding the removal. It emphasises the importance of environmental protection, citing legal principles and obligations related to forest conservation and pollution prevention. Addressing the petitioner’s invocation of Article 25 of the Constitution, which guarantees the freedom of conscience and the right to profess, practice, and propagate religion, the court explains that this right is subject to certain limitations, particularly for reasons of public order, health, and morality. The court dismisses the petitioner’s contention that the state respondents were complicit in the removal of holy articles, as this claim remains disputed and cannot be resolved in the writ proceedings. Additionally, the court rejects the petitioner’s reliance on certain legal precedents regarding the jurisdiction of the High Court to determine questions of fact. It emphasises the need for extensive evidence and oral testimony to resolve the complex issues raised in the case. Finally, the court concludes that the issues before it require extensive evidence and fall within the purview of a civil court. Therefore, it dismisses the writ petition and disposes of any pending applications, with each party bearing its own costs.

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Sikkim HC: Mandates Fair Reassessment of GST Refund Claims, Citing Violation of Natural Justice Due to Non-Consideration of Assessee’s Response

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Case Name:
W.P. (C) No. 20 of 2022 – Zydus Wellness Products Ltd. vs Union of India & Ors./
W.P. (C) No. 27 of 2022 – Alkem Laboratories Ltd. vs Union of India & Ors.

Case Number:

For Zydus Wellness Products Ltd. vs Union of India & Ors.:
W.P. (C) No. 20 of 2022

For Alkem Laboratories Ltd. vs Union of India & Ors.:
W.P. (C) No. 27 of 2022

Date of Hearing: 17th August 2023
Date of Judgment: 12th September 2023

Quorum: Single Bench: The Hon’ble Mr. Justice Bhaskar Raj Pradhan, Judge

FACTS OF THE CASE

The petitioners of the case are Zydus Wellness Products Limited, represented by Umesh Parikh, Chief Financial Officer, Alkem Laboratories Limited, represented by Ajay Kumar Prasad, General Manager – Accounts, and the respondents are Union of India, various officials from the Department of Revenue, Ministry of Finance, Department for Promotion of Industry and Internal Trade, and Central Goods & Service Tax authorities. On February 28, 2019, Zydus Wellness-Sikkim, a partnership firm, was converted into Zydus Nutritions Limited under the Companies Act, 2013. On June 4, 2019, Zydus Nutritions Limited changed its name to Zydus Wellness Products Limited. Zydus Wellness Products Limited seeks budgetary support under the “Scheme of Budgetary Support dated 05.10.2017” for the “residual period” during which Zydus Wellness-Sikkim was entitled to exemption under Notification No. 20/2007-C dated April 25, 2007. In October 2019, Unit-V was transferred from Cachet Pharmaceuticals Private Limited to Alkem Laboratories Limited by way of a slump sale. Alkem Laboratories Limited seeks a fresh Unique Identity (UID) for Unit-V and processing of verification and claim applications under the Budgetary Support Scheme for the “residual period” for which Cachet Pharmaceuticals Private Limited was entitled to exemption under Notification No. 20/2007-C dated April 25, 2007.

ISSUES

  • Is Zydus Wellness Products Limited entitled to budgetary support for the period during which Zydus Wellness-Sikkim was entitled to exemption under a specific notification?
  • Should Alkem Laboratories Limited be granted a new Unique Identity (UID) for Unit-V, and should their claims under the Budgetary Support Scheme be processed for the period during which Cachet Pharmaceuticals was entitled to exemption under the same notification?

 

LEGAL PROVISIONS

Central Excise Act, 1944:

  • This Act governs the levy and collection of duties of excise on goods manufactured or produced in India. Relevant provisions within this act were likely referenced in determining the entitlement to exemptions and budgetary support.

Notification No. 71/2003-CE dated 09.09.2003:

  • This notification pertains to excise duty exemptions for units located in specific areas, including the North Eastern States, Sikkim, and Jammu & Kashmir. It outlines the conditions and extent of the exemptions granted to units in these regions.

Goods and Services Tax (GST) regime:

  • The transition from the Central Excise Act to the GST regime involved changes in tax structures and the introduction of budgetary support schemes to ensure smooth transitions for units that previously enjoyed excise duty exemptions.

Budgetary Support Scheme:

  • The scheme was introduced to provide financial support to units located in specified areas that were previously eligible for excise duty exemptions, to mitigate the impact of the transition to GST. This scheme outlines eligibility criteria and the extent of support provided.

CONTENTIONS OF THE APPELLANT

The appellant, M/s Adani Power (Mundra) Ltd., contended that they were entitled to a refund under the Budgetary Support Scheme. This scheme, which was introduced as a replacement for area-based exemptions under the Central Excise regime, was designed to provide budgetary support to units located in specified areas. The appellant argued that they fulfilled all the necessary conditions stipulated under the scheme, and thus, their claim for a refund should be processed favourably. The appellant asserted that the authorities had failed to consider the factual and legal aspects of their case correctly. They emphasised that their claim was rejected without a proper examination of the facts and circumstances, including their compliance with the conditions of the Budgetary Support Scheme and relevant legal provisions. The appellant argued that the transition from the Central Excise regime to the Goods and Services Tax (GST) regime should not affect their entitlement to benefits under the Budgetary Support Scheme. They contended that the objective of the scheme was to support industrial units in specified areas, regardless of the tax regime in force, and that their entitlement to the refund should remain intact post-GST implementation. The appellant invoked the principle of legitimate expectation, arguing that they had a reasonable expectation of receiving the refund based on the scheme’s provisions and the government’s assurances. They contended that the abrupt rejection of their claim was a violation of this principle, which protects the expectations of individuals or entities based on established practices and promises by public authorities. The appellant contended that denying their refund claim amounted to discrimination and inequality, as other similarly placed entities had been granted refunds under the same scheme. They argued that this differential treatment was arbitrary and unjust, and it violated their right to equality under the law. The appellant argued that the authorities had misinterpreted the notifications and the Budgetary Support Scheme’s provisions. They contended that a correct interpretation would support their claim for a refund and that the authorities’ narrow and restrictive interpretation was flawed and contrary to the scheme’s objectives.

CONTENTIONS OF THE RESPONDENT

The respondent, represented by the tax authorities, argued that the appellant had not complied with all the necessary conditions stipulated under the Budgetary Support Scheme. They contended that the scheme had specific eligibility criteria and procedural requirements, which the appellant failed to meet. As a result, the appellant’s claim for a refund could not be processed favourably. The respondents contended that the transition from the Central Excise regime to the Goods and Services Tax (GST) regime introduced significant changes in the tax structure and compliance requirements. They argued that the benefits under the previous regime could not be automatically extended to the new regime without re-evaluating the eligibility and compliance of the claimant under the revised rules. The respondents argued that the principle of legitimate expectation could not be invoked in this case because policy changes, especially in tax laws, are within the government’s purview. They contended that changes in policy or tax regimes could alter the benefits available to taxpayers, and the government had the right to modify or discontinue such schemes in light of new policy objectives or fiscal considerations. The respondents maintained that their interpretation of the notifications and the provisions of the Budgetary Support Scheme was correct and in accordance with the law. They argued that the scheme’s benefits were limited and conditional, and their interpretation was intended to prevent undue claims and ensure that only eligible units received support.The respondents contended that the rejection of the appellant’s claim was consistent with the broader policy objectives of the government. They argued that the Budgetary Support Scheme aimed to promote specific economic activities and industrial development in designated areas, and the appellant’s situation did not align with these objectives under the new tax regime. The respondents cited relevant precedents and case law to support their position. They argued that judicial interpretations of similar schemes and notifications had consistently upheld the government’s right to define eligibility and interpret scheme provisions. They contended that these precedents supported their rejection of the appellant’s claim for a refund. The respondents argued that granting a refund to the appellant could result in unjust enrichment. They contended that the appellant might receive a financial benefit that they were not entitled to under the revised scheme, which would be contrary to the principles of equity and fairness in tax administration.

COURT’S ANALYSIS AND JUDGEMENT

The High Court of Sikkim analysed the two writ petitions filed by Zydus Wellness Products Limited and Alkem Laboratories Limited. Both petitions sought clarification on their eligibility for budgetary support under the Budgetary Support Scheme. The court considered several key points: Both petitioners underwent significant changes, including changes in ownership and the transition from partnership firms to private limited companies. The respondents argued that these changes disqualified the petitioners from the Budgetary Support Scheme. The court examined the definition of an “eligible unit” under the Budgetary Support Scheme. It noted that the scheme was intended to provide support to existing manufacturing units that were eligible for benefits under earlier excise duty exemption/refund schemes. The eligibility criteria were based on the unit itself, not the ownership. The court considered the opinions of the Ministry of Commerce and the Central Board of Indirect Taxes and Customs (CBIC), which stated that units undergoing changes like relocation, expansion, or change of ownership would no longer be eligible for the Budgetary Support Scheme. The court referenced relevant provisions of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) and the Central Excise Act, 1944 to interpret the legal framework surrounding the Budgetary Support Scheme.

After careful consideration of these factors, the court made the following observations: The Budgetary Support Scheme was intended to support existing manufacturing units eligible under earlier excise duty exemption/refund schemes. The eligibility of a unit was based on its status as an “eligible unit” prior to the transition to GST, irrespective of changes in ownership. While the government’s interpretation was noted, the court emphasised that the scheme’s language and intent were crucial in determining eligibility. Based on these findings, the court concluded that both petitioners remained eligible for budgetary support under the scheme, despite changes in ownership. The court directed the authorities to consider their applications accordingly. This judgement highlights the importance of interpreting government schemes in line with their objectives and statutory provisions, ensuring fair treatment for eligible entities seeking benefits.

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 Judgement Reviewed by – Shruti Gattani

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