Hon'ble VYAS, J. - (1.) BY this writ petition the petitioner company, which is duly registered under the Companies Act, 1956 and carrying on business of manufacture and sale of vegetable oil and de-oiled cakes, is challenging the impugned order/decision dated 13.03.2001 (Annex.-9) which is communicated to the petitioner vide Annex.-8 dated 17.05.2002. The petitioner has also prayed for quashing Annex.-4 passed by Deputy Director, Industries on 07.06.1997.
(2.) ACCORDING to the facts narrated in the petition, the petitioner company was set up for manufacture of vegetable oils and applied for availing subsidy under the notification dated 05.09.1990, known as State Capital Investment Subsidy Scheme 1990. Upon application filed by the petitioner company, the State Level Committee constituted under the Subsidy Scheme held the petitioner company entitled for subsidy in its meeting held on 15.05.1996 and, in pursuance of that decision taken in the meeting of the committee, a sanction letter was issued in June 1990 by the Director, Industries, Jaipur whereby it was informed to the petitioner company that a sum of Rs.15,00,000/- has been sanctioned to the petitioner company. It is contended in the communication dated 07.06.1996 it was clearly mentioned that the State Level Committee sanctioned subsidy of Rs.15,00,000/- on the eligible fixed capital investment to the tune of Rs.461.37 lakh. It is submitted that vide communication dated 13.12.1996 it was informed to the petitioner by the Director, Industries, Jaipur that the subsidy sanctioned to the company has been cancelled and the file has been closed for two reasons. First, the petitioner unit does not fall under the definition of diversification and, secondly, the total investment of the petitioner company was Rs.352.76 lakh which was only 41.36% of the total project cost of Rs.853 lakh. It was also informed to the petitioner company that in view of the notification dated 28.10.1995 issued by the State Government the total investment in the project should be more than 75% of the total project cost. The petitioner company made a representation through registered letter on 10.01.1997 requesting to review the case of the petitioner company. Thereafter, again a representation was made on 07.05.1997 to the Commissioner of Industries; but, at last, vide Annex.-4 dated 07.06.1997 the representation of the petitioner was rejected and it was informed that decision has already been communicated vide communication dated 13.12.1996. The petitioner company again approached the Director of Industries through representation dated 13.05.1999 in which it was prayed that as per the decision of the Tax Board the petitioner company is entitled and eligible for the subsidy under the head diversification and made a request for sanction of the subsidy. Yet another representation was made by the petitioner dated 27.09.1999 to the Dy. Director (Subsidy), Directorate of Industries, Jaipur and it was requested by the petitioner company that as per the condition attached in the sanction letter the unit shall lose entitlement to subsidy if it is established that it failed to commence commercial production on its diversification project prior to 31.03.1995 and the investment in diversification is less than 25% of the value of net fixed assets of the original plant. But, in the case of the petitioner company, the commercial production was commenced before 31.03.1995 and it had made more than 25% investment. The petitioner company also clarified the position regarding the actual investment on project upto 31.03.1995 and gave a comparative chart showing that the company had invested more than 75% of the total project cost and, accordingly, prayer was made in the representation that upon fulfillment of the condition, the petitioner company is entitled to avail the benefit of subsidy as per the provisions contained in Subsidy Scheme, 1990. In another representation dated 19.12.1999, it was prayed by the company that the project cost is of Rs.853 lakh and against which the company has spent a sum of Rs.729.22 lakh which is more than 75% of the project cost, therefore, the condition is satisfied even as per subsequent circular dated 28.10.1995, therefore, the petitioner unit was entitled to subsidy as per Subsidy Scheme of 1990. Upon the aforesaid representation, the Directorate of Industries called the petitioner to attend the meeting of the State Level Committee for subsidy and to represent its case. On 13.03.2001, the petitioner appeared before the Committee and pleaded its case. According to the petitioner, it explained before the Committee that subsidy has been sanctioned by the State Level Committee in its meeting dated 15.05.1996 and initially the sanction letter was issued on 07.06.1996 and the company was fulfilling all the conditions for the grant of subsidy but on illegal ground the subsidy already sanctioned to the petitioner by the State Level Committee has been cancelled. The petitioner company is challenging the decision given by the respondents on 13.03.2001 which is communicated to the petitioner on 17.05.2002 while submitting that the impugned action on the part of the respondents in rejecting the case of the petitioner on the basis of circular dated 28.10.1995 is ex facie illegal and contrary to the Subsidy Scheme of 1990.
(3.) IT is contended by learned counsel for the petitioner that the petitioner company is very much entitled to the benefit of subsidy in accordance with the Scheme but the sanction initially granted in favour of the petitioner by the State Level Committee was illegally cancelled and the cancellation order was passed without issuing any notice or affording any opportunity of hearing to the petitioner. IT is argued that availing the benefit of subsidy is a civil right conferred by the Statute and review is permissible only if the statute provides for such a review and, in absence of any express provision for review, the impugned decision for cancelling the sanction order of subsidy is illegal. Learned counsel for the petitioner submits that the petitioner unit has spent more than 75% of the project cost by 31.03.1997 as per the details submitted before the respondents and even according to the subsequent circular dated 28.10.1995 the petitioner is entitled to avail the benefit of subsidy under the Subsidy Scheme 1990. It is also submitted by learned counsel for the petitioner that the impugned decision of the State Level Committee is based upon the circular dated 28.10.1995 issued by the Industries Department and upon perusal of the communication dated 13.12.1996 it is revealed that the earlier decision dated 15.05.1996 was turned down and the application for subsidy has been rejected while relying upon the circular dated 28.10.1995. The petitioner submits that the circular cannot over-ride the express provisions of the Scheme and is in the nature of administrative circular having no statutory force. According to learned counsel for the petitioner, the Scheme duly published in the official gazette does not lay down any such condition that by the end of the Subsidy Scheme or upto 31.03.1995 the unit is required to spend 75% of the total project cost, therefore, the impugned decision of respondent No.2 clearly hinges on the circular dated 28.10.1995 which itself is illegal and ultra vires the Scheme of 1990. On the other hand, by way of filing reply to the writ petition, the respondents fully supported the decision for cancellation of the subsidy to the petitioner on the ground that the petitioner company has failed to fulfill the conditions as required under the rules. It is specifically averred in the reply that as per circular dated 28.10.1995 (Annex.-10) it is clearly mentioned that if the eligible large/medium scale industrial units in the case of expansion/diversification have invested 75% amount of the total investment of expansion/diversification of the project and started commercial production before 31.03.1995 they are entitled for State Capital Investment subsidy as per clause 5 of the Scheme. According to the respondents, the order dated 28.10.1995 is clarification regarding grant of State subsidy to the large/medium units in case of expansion/diversification, therefore, the Government is within its competence to pass clarification order with regard to grant of the benefit under a welfare scheme and, therefore, it cannot be said that the cancellation order is in contravention of the Scheme of 1990. Admittedly, this clarification was issued on 28.10.1995 and sanction order was issued on 07.06.1996, therefore, the said clarification was in existence prior to passing the sanction letter and the decision taken by the respondents on the basis of clarification for fulfillment of the condition is correct in its totality and cannot be questioned by the petitioner nor can it be said that the circular is contrary to the Scheme of 1990 because it is specifically provided as per clause 12 of the Scheme in which it is clearly mentioned that how the subsidy will be sanctioned. ;