Gauhati High Court
M/S Jericho Agro Processors And Anr vs The Union Of India & Ors on 12 July, 2016
Author: A. K. Goswami
Bench: A. K. Goswami
1
THE GAUHATI HIGH COURT
(THE HIGH COURT OF ASSAM: NAGALAND: MIZORAM AND ARUNACHAL PRADESH)
WP(C) 2207/2009
1. M/s Jericho Agro Processors,
a registered partnership firm, registered under the provisions of Indian
Partnership Act, 1932 and having its registered office at House No. 3, Bye
Lane No. 3, Tarun Nagar, G.S. Road,
Guwahati, Assam.
2. Shri Ashish Agarwal,
Managing Partner of the Petitioner Firm, residing at Kalicharan Bharali
Complex, Opp. Rabindra Bhawan, GNB Road,
Guwahati-781001, Kamrup, Assam.
- Petitioners
-Versus-
,
1. The Union of India,
Represented by the Secretary to the Government of India,
Ministry of Finance, Department of Revenue,
North Block, New Delhi-110001.
2. The Secretary to the Government of India,
Ministry of Industrial Policy and Promotion,
Udyog Bhawan, New Delhi-110001.
3. The Planning Commission of India,
An authority constituted by a resolution of the Government of India in
March, 1950, and having its office at Parliament Street,
New Delhi-110001.
4. The State of Assam,
Represented by the Principal Secretary to the Government of Assam,
Planning and Development Department, Dispur, Guwahati-781006.
5. The Commissioner and Secretary to the Government of Assam,
Industries and Commerce Department, Dispur, Guwahati-781006.
6. The Directorate of Industries and Commerce,
Represented by the Director, Industries and Commerce,
Bamunimaidam, Guwahati-781021.
7. The Chairman,
Agricultural and Processed Food Products Exports Development Authority
(Ministry of Commerce and Industry, Government of India), NCUI Building,
3 Siri Institutional Area, August Kranti Marg, New Delhi-110016.
8. The Office Executive,
Regional Division Agricultural and Processed Food Products Exports
Development Authority (Ministry of Commerce and Industry, Government of
India), NCUI Building,
3 Siri Institutional Area, August Kranti Marg, New Delhi-110016.
9. The Assistant General Manager,
Agricultural and Processed Food Products Exports Development Authority
(Ministry of Commerce and Industry, Government of India), NCUI Building,
3 Siri Institutional Area, August Kranti Marg, New Delhi-110016.
W P(C ) 2 207/ 2009
2
10. The Regional Manager,
Agricultural and Processed Food Products Exports Development Authority
(Ministry of Commerce and Industry, Government of India),
Jain Complex, 3rd Floor, Opp. Dispur Old Post Office,
G.S. Road, Dispur, Guwahati-781005.
- Respondents
BEFORE
HON'BLE MR. JUSTICE A. K. GOSWAMI
Advocates present:
For the petitioners : Mr. K. Agarwal, Senior Advocate
Mr. K. Goswami, Advocate
For the respondents : None appears.
Date of hearing and judgement : 12.07.2016
JUDGMENT AND ORDER
(ORAL)
Heard Mr. K. Agarwal, learned Senior counsel, appearing for the petitioner. None appears for the Union of India though affidavit was filed on behalf of respondent Nos. 7 to 10.
2. Agricultural and Processed Food Products Export Development Authority (for short, 'APEDA') was established under the Agricultural and Processed Food Products Export Development Authority Act, 1985 (for short, 'the Act') with the objective of development and promotion of exports of certain agricultural and processed food products.
3. The petitioner applied for registration under APEDA for financial assistance for purchasing a Sortex Machine for electronic colour sorting and refining of rice in a rice mill proposed to be set up by the petitioner to produce rice, chirwa, rice flakes, bran etc. The cost of the machine was, at the relevant point of time, 66,500 pounds. The petitioner was duly granted a certificate of registration and the petitioner submitted an application dated 12.03.2007 to APEDA for financial assistance under the scheme for Infrastructure Development (Part II) (B) (iii) (a) dealing with setting up of mechanical handling facilities including sorting, grading, washing, waxing, ripening, packaging and palletisation etc. Under the said scheme, 25% of the cost of equipments, subject to a ceiling of Rs. 10 lakhs per beneficiary, was payable. The petitioner had placed an order with Buhler (India) Pvt. Ltd. for purchasing the Sortex Machine, which is manufactured in the United Kingdom by Sortex Ltd., London. The petitioner also transmitted Letter of Credit (for short, 'LC') in favour of W P(C ) 2 207/ 2009 3 Sortex Ltd., U.K., for the machine in question in order to enable the company to start manufacturing process immediately. On 04.05.2007, the application of the petitioner dated 12.03.2007 was rejected by the respondent authorities on the ground that the petitioner firm had opened the LC before approval was granted for financial assistance. This rejection order dated 04.05.2007 is the subject-matter of challenge in the instant writ petition. Additional prayer is also made for a writ of mandamus to direct the respondents to consider the case of the petitioner for grant of financial assistance under the scheme of APEDA. The plea taken in the writ petition is that under the Financial Assistance Scheme, there was no such condition that LC cannot be opened until in-principle approval is granted.
4. Mr. K. Agarwal, learned Senior counsel for the petitioner has submitted that LC was opened by the petitioner as, otherwise, manufacturing of the machine would not have been undertaken by the manufacturer and there may have been escalation of price. Under the scheme that was annexed to the writ petition, there was no such embargo for opening of LC before approval was granted. However, learned Senior counsel has submitted that the scheme that was annexed to the writ petition is apparently amended subsequently with effect from 01.04.2006 in which there is a clause in the Checklist, amongst others, not to open LC before the date of issue of in-principle approval. Learned Senior counsel has submitted that even if there is such a clause requiring the beneficiaries not to open LC before in-principle approval is granted, merely because the LC had been opened before the in-principle approval was granted, the same ought not to have been a ground for rejection of the case of the petitioner for grant of financial assistance. He has submitted that infraction of the said guideline is, at the most, a technical violation and the same ought not to have visited the petitioner with rejection of the claim for financial assistance. In support of his submission, Mr. Agarwal has placed reliance on the judgement of the Apex Court in the case of M angalore Chem icals and Fertilisers Ltd. v. Dy. Com m issioner of Com m ercial Tax es , reported in 1992 Supp (1) SCC 21 . He has also placed before the Court the amended financial scheme.
5. The details of the schemes of APEDA are compiled in a booklet. In the preface of the booklet it is indicated that detailed Checklist had been prepared for each of the schemes for the convenience of the applicants to enable them to ensure that the applications are submitted complete in all respects with all necessary documents and other requirements. The applicants are also advised to carefully study the Checklist and ensure that their applications are in order and in accordance with the Checklist. There is a Checklist for the scheme for infrastructure development under which the petitioner was seeking financial W P(C ) 2 207/ 2009 4 assistance. As indicated therein, the objective of the Checklist is to facilitate the beneficiary in filing his claim with APEDA. It reads as follows:
"If application is incomplete in any respect, the same shall be returned. Assistance would be admissible once in a plan period in case where the applicant has more than one processing/manufacturing unit at a geographically segregated location, the same would qualify for assistance. The service providers would be eligible for assistance if they are deemed exporters within the definition of "Deemed Exporters" under Foreign Trade Policy and get free foreign exchange from exporters for their services. Only Part-II (A) of the scheme is applicable to the meat exporters."
6. It is followed by the Checklist for obtaining the in-principle approval. The relevant extract of the Checklist for obtaining in-principle financial approval reads as under:
"The in-principle approval is a pre-condition for eligibility for financial assistance and no expenditure should be incurred or payment made or financial commitment made such as opening of LC, etc. before the date of issue of IPA."
7. A perusal of the same goes to show that before issuance of in-principle approval no expenditure is to be incurred or payment made or financial commitment, such as opening of LC, is made. This is a condition precedent for consideration of in-principle approval. Apparently, even before in-principle approval was granted, the petitioner had opened the LC for 66,500 pounds. May be the petitioner was not aware of the above stipulation in the scheme for infrastructure development as in the affidavit filed in the year 2012 also the petitioner reiterated at paragraphs 5 and 6 that the reasoning assigned in the rejection order is arbitrary and unjust. The contention of Mr. Agarwal that even if there was such a prohibition on opening of the LC, the same ought not to have merited rejection of the petitioner's claim for financial assistance, does not merit acceptance. As noticed above, the in-principle approval was a pre-condition for eligibility for financial assistance. It is also mandated that no expenditure should be incurred or payment made or financial commitment made such as opening of LC, etc. before the date of issue of in-principle approval and, therefore, it is the considered opinion of the Court that the same has to be scrupulously observed as the said condition in the scheme is substantive in nature. It is to be noted that in the original scheme, prior to the amendment, such a clause was not there and thereafter this clause was inserted. The application for financial assistance was made by the petitioner almost after a year of the amendment.
W P(C ) 2 207/ 2009 5
8. The factual matrix of M angalore Chem icals and Fertilisers Ltd. (supra) is entirely different from that of the instant case. In the aforesaid case, the Apex Court noted that the appellant did not have prior permission because it was withheld by the Revenue without any justification as there was no disentitling circumstance which would have justified refusal of the permission. The only controversy in the aforesaid case was as to whether the appellant not having actually secured "prior permission" would be entitled to adjustment of sales tax. It is in the aforesaid context it was held that permission of this kind was a technical requirement and was a matter of formal procedure and not of substance.
9. In view of the above, I am of the considered opinion that there is no merit in this writ application and, accordingly, the same is dismissed.
JUDGE RK W P(C ) 2 207/ 2009