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The Patna High Court has held that the incentive policy extended by the state government cannot be withdrawn based on the audit report issued by the Comptroller And Auditor General Of India (CAG).
The bench of Justice Smt. G. Anupama Chakravarthy has observed that once the State Government has extended the benefit under the particular scheme, the same cannot be withdrawn by the Electricity Department based on the audit report.
Background
The petitioner/assessee is a Company incorporated under the Companies Act and is in the business of manufacture and sale of iron rods and having factories at Mahadevpur, Phulwari and Bihta in the district of Patna.
The petitioner had taken electrical connection from the Bihar Electricity Board under HTSS-II category of consumer having connection.
The State of Bihar in the year 2006 came out with an incentive policy to accelerate the industrial growth of the State and the petitioner’s Industrial Unit, as it qualifies for the benefit under the Industrial Incentive Policy, Bihar 2006, sought benefit of AMG/MMG (Minimum Monthly Charges) w.e.f. 01.04.2006 for five years i.e. till 31.03.2011.
After lapse of about 4 years vide order dated 24.09.2014 passed by the Chief Engineer (Com.) as contained in letter while disallowing the benefit of Incentive Policy 2006 issued the supplementary provisional electricity bill was served on the Petitioner.
The supplementary provisional bill was issued on the basis of the Audit report by the Assistant Audit Officer, RAO (ES) of the office of the Accountant General (Audit), Bihar, Patna.
The audit objection was on the basis of an opinion, that in the case of tampering/theft which is an unlawful activity no incentive can be given to an unit, in terms of the Industrial Incentive Policy, 2006.
The incentive should not be given to the petitioner.
Arguments
The petitioner contended that on the basis of an opinion and on the audit objection without any direction of the State Government the respondents could not have withdrawn the incentive. Hence, the issuance of supplementary provisional electricity bill of Rs. 92 lacs and odd is also bad and illegal and the respondent company has completely misconstrued clause 11.4 of the code with tampering and unauthorized use of electricity as envisaged under section 126 of the Act.
The petitioner argued that the incentive already given should not have been withdrawn and no supplementary provisional electricity bill should have been issued to the petitioner company.
The department contended that the benefit under Industrial Incentive Policy is only applicable for bonafide consumers and not for malafide consumers. The petitioner was availing the benefit under the aforesaid Policy. In order to allowing exemptions the instructions issued was overlooked and by mistake/omission the exemptions were also allowed to such consumers also who had declared their premises tampered under Clause 11.4 of the Code and as such on detection of the same and pointed out by the Audit, the exemptions were withdrawn from the consumers who had voluntarily declared tampered.
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Conclusion
The court while allowing the petition held that the benefit was extended to the petitioner based on the High Powered Committee report, which was constituted by including the members of the Energy Department. In absence of any evidence of theft being committed by the petitioner, the benefit of Intensive Policy cannot be withdrawn.
FAQs
What is a CAG audit report?
Audit Reports (Civil)1 of the Comptroller and Auditor General include the audit findings and observations on the accounts of Central Government Ministries, Departments and their attached and subordinate offices.
Can Incentive Policy Extended By State Govt. Can’t Be Withdrawn Based On CAG Audit Report?
The Patna High Court has held that the incentive policy extended by the state government cannot be withdrawn based on the audit report issued by the Comptroller And Auditor General Of India (CAG).
Case Details
Case Title: M/s Balmukund Concast Limited V/S The Bihar State Power holding Company Limited
Citation: Civil Writ Jurisdiction Case No.1878 of 2015
Counsel for the Petitioner: M/s Y.V.Giri, Sr. Advocate
Counsel for the Respondent: M/s Vinay Kirti Singh, Sr. Advocate
Date of Decision: 10-09-2024