- (1.) AFTER the State of Jharkhand was created on 15.11.2000, the Government came with the Industrial Policy to achieve the expected industrial growth and to capitalize industrial potential through planned utilization and also to gradually increase the employment opportunities. The said policy came into being on the very first day of the inception of the State of Jharkhand and was to remain in force till 31.3.2005. Subsequently, it was extended from time to time and ultimately, it was extended until such time, the next policy comes forth. In order to achieve that objectives, various incentives under the Industrial Policy, 2001 were offered. The types of incentives which were to be given to a new entrepreneur or to the existing industry were enumerated in clause 29 of the said policy which are being given hereunder. 1. Capital Investment Incentive
(2.) CAPTIVE Power Generating Subsidy Interest Subsidy Stamp Duty and Registration Employment Generation Based Incentives Special Incentives for Thrust Areas/EOU and SC/ST/ Women/ Ex-servicemen and Handicapped Persons.
(3.) FEASIBILITY Study ­ Project Report Cost Reimbursement Subsidy Pollution Control Equipment Subsidy Incentive for Quality Certification. 2 Further in terms of Clause 29.11, Special Package was to be formulated for projects of more than 50 crores on case to case basis through direct negotiations with prospective investors. 3 In terms of the aforesaid clause of the Jharkhand Industrial Policy, an order was issued vide Memo No.1885 dated 10.6.2003 whereby certain parameters were laid down that those industrial units wherein capital investment of more than 50 crores would be put in, would be classified as Mega Unit which was classified in three categories. New Industrial Units Existing Industrial Units Industrial Units running at a loss. 4 In terms of the said order, capital investment incentive is payable in the following manner. (I) Capital investment subsidy which has tobe paid within three months of the start of the commercial production of the industrial units as per classification of the locational blocks. Category Percentage Maximum Account A 5 3 crores B 10 5 crores C 15 7 crores (ii) After setting up of new unit, on the sale of the goods produced in such units, the State Government receives Sales Tax on sales and other revenues, then during every financial year the amount paid by the industry as sales tax, the amount equivalent to 75%, will be payable as capital investment subsidy. 5 In order to implement the said order as contained in Memo No.1885 dated 10.6.2003, the Department of Industries, State of Jharkhand came up with 'Jharkhand Mega Project Incentive Rules' which was notified on 2.8.2005. 6 Thereupon the petitioner, a private limited company incorporated under the Companies Act, 1950 having come to know about the incentives offered by the State of Jharkhand, expressed its willingness to establish the integrated steel plant with investment of Rs.410 crores entered into a memorandum of understanding with the State of Jharkhand on 18.7.2005. Thereupon the petitioner proceeded to set up an integrated steel plant in the district of Seraikella-Kharswan comprising of Sponge Power Plant, Captive Power Plant, Steel Melting Shop, Rolling Mills and Coal Washeries and completed the project by 1st quarter of 2006 in a record time. The production got started in Sponge Iron Plant with effect from 5.5.2006.The Power Plant and its Steel Melting Shop started production from 17.7.2007. However, 17.7.2007 was reckoned as the date on which production gets started. Hence, a certificate to that effect was issued by the Director, Department of Industries, Government of Jharkhand, vide its memo no.1801 dated 9.8.2008. Thereupon when the petitioner became entitled to have capital investment incentives and other incentives, filed applications on various dates for grant of following incentives. (I) Capital Investment Incentive (ii) Captive Power Generating Subsidy (iii)Interest Subsidy (iv) Stamp Duty and Registration Subsidy (v) Feasibility Study- Project Report Cost Reimbursement Subsidy (vi) Pollution Control Equipment Subsidy (vii) Physical Incentive (Sales Tax Refund) 7 But the authorities did not take any interest to proceed with the matter relating to grant of the aforesaid incentives, except certain correspondences which were made with respect to Stamp Duty and Registration Subsidy. 8 Under the circumstances, writ application was filed for grant of incentives which the petitioner-company was entitled to have under the industrial policy and the Rules made thereunder. 9 A counter affidavit was filed wherein plea has been taken that when the request was made by the petitioner-company to set up integrated steel plant with an estimated project cost of Rs.410 crores. It was considered and acceded to by High Power Committee. Thereupon the State Government entered into with Memorandum of Understanding with the petitioner company but it never invested a sum of Rs.410 crores during first phase, rather invested only a sum of Rs.122.573 crores and got first phase of the project closed. Therefore, the company should have asked for capital subsidy only after making investment of Rs.410 crores. However, statement was made that the State Government is extending full benefit of capital incentive on 1/3rd of the proposed investment. ;