Friday, April 25, 2014

PIL against Nano project loan - rejected Gujarat High Court

Gujarat high court on Thursday turned down a public interest litigation raising objection to the state government's decision to extend soft loan over the value added tax (VAT) paid by Tata's Nano car project. With this, the HC has upheld the government's policy of offering soft loan to the industrial house for setting up industry in the state.

Petitioner Himanshu Patel filed the PIL last year saying that the disbursal of soft loan against payment of VAT by the company was not acceptable. He also objected to the company's projecting inter-depot transfers as sale. This results in higher VAT and ends in the company's eligibility to get more loans.

To this, government pleader Prakash Jani submitted that the project was given facility as part of the state's scheme to increase industrialization and investment so that people of the state get maximum benefit. The government claimed that due to setting up of Nano project near Sanand, there has been a remarkable increase in the micro, small and medium enterprises (MSME). The number of MSMEs has increased from 4,065 in 2006-07 to 35,510 in 2012-13 and investment has rose from Rs 3,162 crore to Rs 14,474 crore. In Ahmedabad district alone, after advent of Nano project, MSMEs have increased from 5,704 in 2009-10 to 15,559 in 2012-13.

The high court has also rejected the argument forwarded by the petitioner that inter-depot transfers of produced units cannot be shown as sale.

The HC also upheld the state government's argument that the policy to promote industrialization by extending financial facilities is not contradictory to the policy implemented in various other states. The government has decided by passing a resolution in 2009 to extend soft loan to the tune of Rs 9,600 crore as against its Rs 2,900 crore project.

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