Adani Wilmar Eligible For Sanction Of Incentives Under West Bengal State Support For Industries Scheme, 2008 Post GST: Calcutta High Court

The Calcutta High Court has held that Adani Wilmar is eligible for sanction of incentives under the West Bengal State Support for Industries Scheme, 2008, post GST.

The bench of Justice Sabyasachi Bhattacharyya has directed the respondent department to disburse the balance amount of the claim of Rs. 4070 lakhs under the West Bengal State Support for Industries Scheme, 2008, in favor of the petitioners at the earliest, preferably within two months from the date, subject to the petitioners complying with the other formalities as contemplated in the Scheme.

The petitioner opted for an incentive scheme floated by the respondent authorities and was granted the benefits under the same. The registration certificates were also issued to the petitioner in terms of the scheme, recognizing the petitioner's entitlement to be granted the benefits of the scheme. Subsequently, however, after having disbursed a portion of the dues of the petitioner under the scheme as recently as on September 1, 2017, the respondent has refused to disburse the rest of the amount of the scheme on the plea that in the altered GST regime, the scheme cannot be continued since the scheme did not contemplate such a tax.

The petitioner contended that, as per Clause 19.2 of the scheme in particular, which provides that in the event that the West Bengal Value Added Tax, 2003, is replaced by any other Act, the provisions of the scheme will apply mutatis mutandis even after the new Act comes into force. On September 1, 2017, that is, after the coming into force of the GST regime on July 1, 2017, amounts were disbursed under the scheme to the petitioner by including GST components. Thus, it was too late in the day for the respondents to deny the claim of the said petitioner regarding the rest of the amount under the scheme.

The department contended that the GST Act subsumed all the pre-existing indirect tax statutes, including those relating to VAT. The GST Act has replaced not only the VAT Act but also the other statutes governing indirect tax. Hence, the provisions of Clause 19.2, which only contemplates a statute replacing the VAT Act alone, cannot be considered to be a replacement of the VAT Act in view of the GST taking into account other indirect taxes as well.

The court held that in the absence of any other Act being introduced apart from the GST Act, which has subsumed the VAT Act, the argument advanced by the respondents cannot be accepted. The GST Act has subsumed all indirect tax, including VAT, which entitled the petitioners to continue to be governed under the subsidy scheme- in question.

Counsel For Petitioner: Rajarshi Dutta, Rahul Dhanuka, Niraj Baheti

Counsel For Respondent: T. M. Siddiqui, T. Chakraborty, S. Adak

Case Title: Adani Wilmar Limited and another Vs. The State of West Bengal and others

Case No.: WPA No. 8525 of 2023

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