Benefit under Budgetary Support Scheme not available to unit undergoing relocation, expansion & change of ownership

Zydus Wellness Products Limited Vs Union of India (Sikkim High Court)

Sikkim High Court held that as per guidelines of the Budgetary Support Scheme, if any unit undergoes for relocation, expansion and change of ownership, it will not be eligible under the Budgetary Support Scheme.

Facts- The short question which arises for consideration in both the writ petitions is – Are the petitioners entitled to the budgetary support under the Budgetary Support Scheme?

The petitioners contend that the change of ownership and therefore, the grant of fresh UID and registration number do not disentitle the units from availing the budgetary support as the Budgetary Support Scheme seeks to provide budgetary support to ^„eligible units‟ and not to the owners thereof. The respondents are, however, insistent that because of the change in ownership the petitioners are not entitled anymore as ownership has changed and the petitioners are completely new legal entities.

Conclusion- Held that Reading the definition of ^„person‟ under section 2(84) and the requirement of registration under section 22 of such ^„persons‟ makes it clear that Zydus Nutritions Limited (later Zydus Wellness Products Limited) and Alkem Laboratories Limited were required to be registered under section 22 after the change in ownership. Accordingly and admittedly, Zydus Nutritions Limited was registered under Rule 10(1) on 26.03.2019 and Alkem Laboratories Limited on 3.10.2019. Consequently, both the petitioners who were separate and distinct legal entities from the previous ^„persons‟, i.e., Zydus Wellness-Sikkim and Cachet Pharmaceuticals Private Limited, who were eligible under exemption notification 20/2007-CE could not have filed the application for budgetary support under paragraph 7 of the Budgetary Support Scheme. The petitioners, as rightly contended by the respondents, were not ^„eligible units‟ as defined under paragraph 4.1 of the budgetary scheme.

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