Abis Exports India Private Limited Vs State of Chhattisgarh (Chhattisgarh High Court)
The Chhattisgarh High Court quashed an order dated 2 August 2024 rejecting representations seeking continuation of tax incentives under the Agriculture and Food Processing Industrial Policy, 2012. The petitioner contended that the State Government had assured subsidy relaxation and refund of VAT and CST for industries established under the policy, and that these incentives were not withdrawn even after enactment of the Central Goods and Services Tax Act, 2017. It was argued that Section 174(2)(c) of the CGST Act protects accrued rights and privileges unless the exemption notification is specifically rescinded.
The State opposed the petition, stating that after implementation of the CGST regime, the circumstances requiring such subsidies no longer existed. The High Court examined Section 174(2)(c) and its proviso and observed that tax exemptions granted as investment incentives continue unless withdrawn or rescinded. The Court noted that the State had not produced any document showing withdrawal of the tax relaxation prior to the appointed day. Relying on the Supreme Court judgment in Hero Motocorp Limited v. Union of India, the Court held that the authority had failed to properly consider Section 174(2)(c) while rejecting the petitioner’s representations. Consequently, the impugned order was quashed and the respondent authorities were directed to reconsider the representations in light of Section 174(2)(c) and the law laid down by the Supreme Court within 60 days.
