Carbon Resources Pvt. Ltd. vs The State Of Assam And 3 Ors.

Court
Gauhati High Court

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GAHC010250612018

2026:GAU-AS:12437
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/7748/2018
CARBON RESOURCES PVT. LTD.
A PRIVATE LIMITED COMPANY HAVING ITS REGISTERED OFFICE AT 55B,
MIRZA GHALIB STREET, KOLKATA- 700016 AND ITS FACTORY AT
VILLAGE. KUKURMARI, DHALIGAON, P.O. DHALIGAON IN THE DIST. OF
CHIRANG (BTAD), PIN - 783385, ASSAM, REP. BY MR MAHENDRA
SHARMA, THE VICE PRESIDENT (FINANCE AND ACCOUNTS ) OF THE
PETITIONER COMPANY.
VERSUS
THE STATE OF ASSAM AND 3 ORS.
REP. BY THE COMMISSIONER AND SECRETARY TO THE GOVT OF ASSAM,
DEPARTMENT OF INDUSTRIES AND COMMERCE,
ASSAM SECRETARIAT, DISPUR, GUWAHATI - 781005.
2:THE COMMISSIONER OF INDUSRIES AND COMMERCE
DEPARTMENT OF INDUSTRIES AND COMMERCE
GOVT. OF ASSAM
UDYOG BHAWAN

BAMUNIMAIDAM
GUWAHATI- 781021.
3:THE GENERAL MANAGER
DISTRICT INDUSTRIES AND COMMERCE CENTRE

CHIRANG
KAJALGAON.
4:THE ADDITIONAL DIRECTOR

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COMMISSIONER OF INDUSTRIES AND COMMERCE
UDYOG BHAWAN

BAMUNIMAIDAN
GUWAHATI -21.
5:THE UNION OF INDIA
REPRESENTED BY THE SECRETARY TO THE GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION
UDYOG BHAWAN
NEW DELHI-110011
6:THE UNDER SECRETARY TO THE GOVERNMENT OF INDIA
MINISTRY OF COMMERCE AND INDUSTRY
DEPARTMENT OF INDUSTRIAL POLICY AND PROMOTION
UDYOG BHAWAN
NEW DELHI-11001
Advocate for the Petitioner : DR. ASHOK SARAF, MR. Z ISLAM,MR. P BARUAH,MR. N N
DUTTA,MR. P DAS,MR. S P SHARMA
Advocate for the Respondent : MR. A KALITA (SC, INDUSTRIES AND COMMERCE), MRS. A
GAYAN (C.G.C.),DR. B AHMED


B E F O R E
Hon’ble MR. JUSTICE SANJAY KUMAR MEDHI

Advocate for the petitioner : Dr. A. Saraf, Senior Advocate.
(assisted by Shri P. K. Bora, Advocate)

Advocates for the respondents : Ms. A. Gayan, CGC.
Ms. U. Das, Addl. Sr. GA, Assam.

Date on which judgment is reserved : 05.08.2026
Date of pronouncement of judgment : 28.08.2026

Whether the pronouncement is of the operative part of the
judgment? : NA

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Whether the full judgment has been pronounced? : Yes

Judgment & Order
The present petition under Article 226 of the Constitution of India has been filed
challenging a communication dated 11.07.2018 issued by the Additional Director
(NAZ), Commissioner of Industries and Commerce to the General Manager,
District Industries and Commerce Centre, whereby the claim of the petitioner for
Central Interest Subsidy has been rejected on the ground that the same is time
barred. The basic ground of challenge is that in absence of any time being
prescribed in the scheme, the aforesaid action is without jurisdiction and is
liable to be interfered with. It is additionally urged that such a claim is in
accordance with a policy and the rejection on the ground of time would be
against the objective of the said policy.

2. As per the facts projected, a new industrial policy was announced in the
year 2007 being North East Industrial Policy, 2007. Amongst others, there was
an incentive in the form of interest subsidy wherein there was no time
prescribed to make such claim. It is also contended that to give effect to the
policy, a scheme was formulated. The claim for the aforesaid subsidy was made
in March, 2016 and as there was no disbursement, the petitioner had earlier
approached this Court in WP(C)/135/2018. This Court vide order dated
12.01.2018 had directed for consideration and passing of necessary orders.
However, upon such remand the impugned communication has been made
whereby the claim of the petitioner has been rejected on the ground of delay.
3. I have heard Dr. A. Saraf, learned Senior Counsel assisted by Shri P. K.
Bora, learned counsel for the petitioner. I have also heard Ms. A. Gayan, learned
CGC and Ms. U. Das, learned Addl. Senior Govt. Advocate, Assam.
4. Dr. Saraf, the learned Senior Counsel for the petitioner has submitted that

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when the policy or the scheme did not prescribe any time limit for submission of
claims, rejection on the ground of delay is without any jurisdiction. He has
submitted that the entire objective of the policy and the scheme is to give
incentive so that there can be development of the region. Under such
circumstances, rejection on the ground of alleged delay in making the claim
without even touching upon the merits would not be in sync with the said policy
and the scheme.
5. The learned Senior Counsel has submitted that judicial precedent would
support his case inasmuch as there has been consistent decision of this Court as
well as the Hon’ble Supreme Court whereby such claims have been directed to
be considered on merits and should not be rejected on technical grounds.
6. To support the plea that denial should not be made on the ground of delay,
the learned Senior Counsel has relied upon a judgment passed by the Hon’ble
Division Bench of this Court in the case of M K Jokai Agri Plantations (P)
Ltd. Vs Commissioner, CEST reported in (2018) 4 GLR 74 and the
following observations have been pressed into service:
11. ... The appellant having been once found to be eligible for exemptions
and refund of duty paid, denial of benefit of exemptions and refund on
the ground of delay, in our considered opinion, will cause grave injustice
which cannot be permitted. Even otherwise, it is well settled law that non-
following of procedural requirement cannot deny the substantive benefit,
otherwise available to the assessee. Also exemptions made with a
beneficient object like growth of Industry in a Region have to be liberally
construed and a narrow construction of the Notification which defeats the
object cannot be accepted. For these reasons, we conclude that the
impugned order of the Tribunal is not based on correct appreciation of the

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provisions of Notification and denial of refund (of duty paid) to the
appellant on the ground of delay is wholly unjustified.
7. Reliance has also been placed on a judgment passed by the Division Bench
of the Hon’ble Tripura High Court in the case of Larsen & Toubro Ltd. Vs
State of Tripura reported in (2025) SCC online Tri 609 and the following
observations have been pressed into service:
“
41) When the bar of limitation is not prescribed in the Act (as discussed
supra) in respect of 'self assessment' returns under Section 29 of the Act,
and when the petitioner submitted the refund claims for each of the
financial years in question on 31.5.2016 (in addition to the previous
refund applications within 7-8 months of end of financial years in
question), the respondents ought to have processed it and could not have
rejected it.
67) In this era where States are expected to be business friendly and
there is much talk of the 'ease of doing business', it behoves the
respondents to eschew conduct of the above nature if it were to attract
business investments in the State and make the State prosperous.”

8. The learned Senior Counsel for the petitioner has emphasized that the
Hon’ble Tripura High Court has taken into consideration the aspect that the
present era has to be business friendly and technicalities would only frustrate
the objectives of the scheme.
9 . Reliance has also been made upon the case of the Hon’ble Supreme Court
reported in (2005) 4 SCC 272 [Tata Iron & Steel Co Ltd. Vs. Sate of
Jharkhand & Ors.] where it has been laid down that it would not be proper for a
Court to prescribe a limitation in matters of the present nature. The following
observations have been pressed into service:

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“ 37. ... However, whether a dealer would be entitled to the benefit of set off
unit-wise or not will depend upon the language employed keeping in view
the object the notifications seek to achieve. It will not be proper for a court
of law to prescribe limitations or restrictions when there is none or vice
versa.
41. This court therein was dealing with a reverse situation. It accepted the
principle of law that the notifications have to be interpreted keeping in view
the object, and the object being to encourage investments and production, it
was held that a liberal interpretation which advances the object of the
notification should be ascribed. ...
52. In CCE Vs. M.P.V. & Engg. Industries a Division Bench of this Court of
which one of us (B.P. Singh, J.) was a member, has clearly held:
"11. ...In dealing with the submission the Tribunal noticed the decision
of this Court in CCE v. Parle Exports (P) Ltd. wherein this Court held
that exemption should be strictly construed although the exemption
clause in the notification may be construed liberally. In other words,
eligibility criteria should be construed strictly but a liberal approach
may be adopted in construing other conditions"
We are concerned in this case with the eligibility criteria.”
10 . The learned Senior Counsel for the petitioner has submitted that while
eligibility criteria are to be construed strictly, the procedural part is to be
construed liberally so that the objective of the scheme is not defeated. In this
connection, the learned Senior Counsel has relied upon the judgment of the
Hon’ble Supreme Court in the case of State of Orissa & Ors. Vs. Tata
Sponge Iron Ltd. reported in (2007) 8 SCC 189 .
11 . The learned Senior Counsel for the petitioner has also submitted that for

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the other period, the petitioner has been granted the interest subsidy which
would mean that so far as the eligibility criteria are concerned there is no
serious dispute and the present rejection is only on the ground of delay.
12 . The learned Senior Counsel for the petitioner has referred to certain other
case laws. However, those being on the same point, for the sake of brevity, the
same are not discussed.
13 . The learned Senior Counsel for the petitioner has accordingly submitted
that the impugned communication dated 11.07.2018 is unsustainable in law as
rejection of the claim of the petitioner on mere technicalities apart from being
not permitted by the scheme would also be against the objective and therefore
the matter may be remanded for consideration of the claim of the petitioner on
merits.
14 . Per contra, Ms. A. Gayan, learned CGC has submitted that the impugned
communication appears to be in accordance with law. She has submitted that
the Office Memorandum connected to the scheme was issued on 01.04.2007
wherein, under Clause 8 interest subsidy of 3% working capital loan has been
prescribed. She has emphasized that the scheme would cease to operate with
effect from 01.04.2007 and the procedure to make claim has also been laid
down. She has submitted that though as a matter of fact no time limit as such
was given in the scheme, the timeline was brought in by a circular dated
16.09.2013. Specific reference has been drawn to the same timeline which has
been enclosed as Annexure-IX of the affidavit-in-opposition which reads as
follows:
“ TIMELINE FOR HANDLING SUBSIY CLAIMS UNDER CENTRAL INTEREST
SUBSIDY SCHEME AND CENTRAL COMPREHENSIVE INSURANACE SCHEME
OF NEIIPP, 2007

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Note: 1. In the bracketed figures are the expected time lines in number
of days.
2. Expected time from the date of submission of claims upto the receipt
of subsidy by the Industrial units - 120 days.
DIC - District Industries Centre,
D of I - Directorate of Industries
SLC - State Level Committee
DIPP - Department of Industrial Promotion and Policy”
15 . She has relied upon the case of the Hon’ble Supreme Court reported in
AIR (1967) SC 1910 , [ Sant Ram Sharma Vs State of Rajasthan ] wherein
it has been laid down that by giving a time limit, the scheme does not become
inconsistent. She has submitted that such time limit will not frustrate the statute
and one year is a reasonably long period. However, the petitioner has made the
claim after 2 years. She has also relied upon the judgment of the Hon’ble
Tripura High Court passed on 24.09.2024 in WP(C)/279/2024 [ M/s Pran
Beverage (I) Pvt. Ltd. Vs UoI ] wherein it has been held that 365 days is an
adequate time to make a claim. She has also emphasized on the bona fide of

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the State authorities by submitting that only the claim under Sl. No. 2 has been
had to be time burnt and all others have been allowed. She has submitted that
since the other claims were applied in time those have been allowed and there
is no reason as to why the present claim was not made within the time.
16 . Supporting the stand of the Centre, Ms. U. Das, learned State Counsel has
submitted that the affidavit-in-opposition has been filed on 31.07.2026. She has
submitted that the claim period is for 01.04.2013 to 31.03.2014 which was not
made within the time of a year and therefore the communication dated
11.07.2018 is in accordance with law. She has also submitted that the
judgments relied upon by the petitioner are on transport subsidy and not on
interest subsidy and therefore those may not be applicable.
17 . The learned Senior Counsel for the petitioner, in his rejoinder has
submitted that though the Government had reserved the right to amend the
scheme, there was no such modification or amendment. He has also submitted
that the case of the Hon’ble Tripura High Court relied upon by the respondents
did not take into account the judgments of the Hon’ble Supreme Court which
have been placed before this Court. He has submitted that if the period was
mandatory in nature, circular also prescribes disbursal time as 365 days. On the
other hand, such disbursal has not been done within the aforesaid 365 days
which would show that the prescriptions are directory. He has specifically
referred to the aspect that so far as the period 2012-13 is concerned, the
rd
approval was done only on 17.07.2018 in the 23 State Level Committee
Meeting. He accordingly submits that the considerations being beyond the time
limit prescribed, the petitioner would also be entitled to the interest for all such
considerations which were in favour of the petitioner.
18 . The rival submissions have been duly considered and materials on record

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have been carefully perused.
19 . The challenge, as indicated above is against the communication between
11.07.2018 whereby the claim for 3% of centrally interest subsidy has been
rejected on the ground that the same was time-barred. A close perusal of the
Policy of 2007 and the scheme framed there under would however show that
there was no time limit prescribed. However, this Court is of the opinion that
though no such time limit has been prescribed, the authorities would be within
their rights to prescribe a module for making a claim. Such an action cannot be
said to be unreasonable or arbitrary. At the same time, this Court cannot be
oblivious of the objective of the scheme which is primarily to develop an
industrial development in the region. The law in this field is very clear wherein
the Hon’ble Supreme Court has laid down that while eligibility criteria are to be
construed strictly, the procedural part is to be construed liberally so that
maximum objective of the scheme can be achieved.
20 . The rejection in the present case is not on merits but on the ground that
the claim was made beyond the period of one year. As noted above, neither the
policy nor the scheme prescribes any time limit. However, there is a circular
whereby a timeline was set of one year. While the respondents have contended
that by giving such time limit, the same would not be inconsistent with the
scheme, this Court is of the view that while such an action may not be per se
described or held to be arbitrary, each case has to be considered on its own
merits. In the instant case, it is not in dispute that so far as the other claim of
the petitioner are concerned, those were considered on merits and only for the
present claim for interest subsidy for the period 2012 in question, the same has
been rejected. A careful perusal of the communication would show that such
rejection is not on the merits.

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21 . The judicial precedents in this field is clear that there is a requirement to
consider the claim on merits. In the instant case, the claim has been made after
a period of two years whereas, the circular dated 16.09.2013 had given a time
limit of one year. The Hon'ble Tripura High Court in the case of M/s Pran
Beverage (supra) had held that 365 days deadline was mandatory. It however
transpires that the decisions of the Hon'ble Supreme Court which are presently
relied upon by the learned Senior Counsel for the petitioner were not placed
before the Hon'ble Tripura High Court. The Hon'ble Supreme Court, as indicated
above has given more emphasis that claims pertaining to a policy for industrial
development is required to be considered on merits.
22 . This Court fully endorses the principles that while eligibility criteria are to
be construed strictly, the procedural part are to be construed liberally so that
there can be maximum achievement of the objective. The present rejection
being only on the ground of limitation, this Court is of the opinion that interest
of justice would be served if the impugned communication dated 11.07.2018 is
set aside and interfered with and the matter be considered on merits.
23 . The impugned communication dated 11.07.2018 accordingly stands
interfered with and set aside and the matter is remanded to the authorities for
consideration of the claim of the petitioner on merits.
24 . Let the aforesaid exercise be done expeditiously and preferably within a
period of 4 months from the date of receipt of the certified copy of this order
and the outcome of such consideration be communicated to the petitioner in
writing. It is further observed that if during such consideration any clarification
is required from the side of the petitioner, its representative may be given an
opportunity to do the same.
25 . The writ petition accordingly stands allowed.

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26 . No order, as to cost.

JUDGE
Comparing Assistant