Introduction:

The Gauhati High Court’s recent judgment challenges the exclusion of industrial units from the Budgetary Support Scheme based on the criterion of not paying Central Excise Duty. Justice Soumitra Saikia declares the classification arbitrary, invoking Article 14 of the Constitution, and questions the denial of benefits to units under the North East Industrial Investment Promotion Policy, 2007 (NEIIPP) due to turnover thresholds and manufacturing exemptions.

Arguments of Both Sides:

Petitioners, eligible under NEIIPP, contested the denial of budgetary support based on non-registration under the Central Excise Act or manufacturing exempted goods. The State argued the legality of the exclusion, emphasizing post-GST registrations. The petitioners asserted their eligibility and challenged the discriminatory classification, invoking Article 14 and the doctrine of promissory estoppel.

Court’s Judgment:

Justice Saikia criticizes the classification, deeming it arbitrary and contrary to Article 14. The court underscores that non-claiming of refunds doesn’t negate eligibility under NEIIPP. Referring to a 2023 clarification, the judge condemns the circular deeming units ineligible as illegal. The court directs the authorities to reassess individual claims within 30 days, extending benefits if criteria are met, emphasizing the irrationality of discriminatory exclusion.