Tax Sops by Delhi: SC asks JK to Reply in 30 Days after Punjab Raises Objections

Jammu and Kashmir Government has been given a deadline of 30-days by Supreme Court for filing their response to Punjab’s suit against Union Government’s 2010 circular offering duty sops to industrial units in the state along with Uttrakhand and Himachal Pradesh.

A Bench comprising Justices Kurian Joseph and RF Nariman passed the order after being told that the two states were yet to file their statements despite several opportunities given to them, The Tribune reported on Friday.

“This was the last chance and no further opportunity would be given to them if they failed to submit their written statements in a month,” the Bench clarified on July 5 when the 2009 suit came up for hearing.

In fact, another SC Bench had observed in 2013 that Punjab’s suit was prima facie not maintainable. Punjab should have challenged the circular instead of filing a suit, which was meant for resolving inter-state disputes, a Bench comprising Justices Gyan Sudha Misra and PC Ghose had remarked.

Earlier, the SC-appointed mediators had failed in their efforts to find a solution.

The sops were offered for 10 years from June 2002 for Jammu and Kashmir and from January 2003 to the other two states. Before the 10-year period was over, the Union Government issued a circular on December 12, 2010, offering continued excise duty exemption for 10 years even to plants that were added or upgraded by the industrial units to step up output. This prompted Punjab to amend its 2009 suit for challenging the circular.

The amended suit said the renewed duty exemption would hit the existing industrial units in Punjab and result in unemployment and revenue loss to the government, the news report added.

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