Case BriefsHigh Courts

Himachal Pradesh High Court: Tarlok Singh Chauhan, J. dismissed a writ petition where the main issue was ‘whether the manufacturing of corrugated boxes of apple was covered for grant of subsidy as per the scheme appended with the petition.’

The factual matrix was that the petitioner prior to setting up a manufacturing unit of corrugated apple boxes requested the respondent for grant of subsidy by the requisite application. Pursuant to such application respondent carried out an inspection of the premises and after carrying out the same, the application so submitted was rejected with the remarks ‘not covered in National Horticulture Broad Guidelines. Aggrieved by which the petitioner applied to the Court by the way of writ.

The Court observed that Clause II of the said Scheme defined ‘primary processing’ related components, which were eligible for assistance under the scheme. It was further observed that the Coordinate Bench had already concluded that the corrugated boxes which were manufactured by the petitioner was covered under a particular clause i.e. “Horticulture ancillary industry for promoting, indigenous manufacturing of horticulture-related form tools and machineries, equipments, plastics containers, packaging, etc.”

The respondent in compliance to the order passed by the earlier Bench stated that, National Horticulture Board was set up by the Government of India as an autonomous body with a mandate to promote the integrated development of Horticulture with special emphasis on post-harvest management and cold chain to reduce post-harvest loses. The respondent further submitted that for the accomplishment of the said objectives, the respondents provided assistance by way of subsidy under various schemes prescribed for the purpose to facilitate the completion/initiation of such projects. It was further averred that petitioner’s project file was presented before the Appraisal Committee but was found ineligible since manufacturing of corrugated boxes for apple was not covered under that scheme guidelines and as such the application was rejected. It was contended that the interpretation given by the petitioner to the term ‘Packaging’ was incorrect, because as per scheme assistance in case of CFB Cartons, Aseptic Packaging, Polybags, etc. was available on merit for launching a new horticulture product during its first year and for introduction of horticulture products in a market as on-time assistance, as was evident from Clause (iv) of the policy.

The Court held that, it was not in dispute that the petitioner neither launched new horticulture product nor introduced any horticulture product in the market for the assistance of which the petitioner promised the use of the product, therefore, his case was not covered by any of the clauses of the scheme, as the scheme was only attracted in case of CFB Cartons, etc. that were available on merit that too for launch of a new horticulture products during its first year and for the introduction of horticulture produces in the market as a one time assistance. Manufacturing of corrugated boxes in itself was neither a horticulture product nor horticulture produce.[Rajesh Sharma v. Union of India, 2019 SCC OnLine HP 999, decided on 12-07-2019]

Case BriefsHigh Courts

Calcutta High Court: A Division Bench comprising of Sanjib Banerjee and Abhijit Gangopadhyay, JJ. held that the subsidy allowed by the State Government on account of power consumption to new or expanding industrial units was a capital receipt.

The subsidy as referred to above was granted to business units and the question was whether such subsidy is to be regarded as a capital receipt or revenue receipt. The instant appeal was filed at the instance of Income Tax Department. There was a difference of opinion between the judicial member and accountant member of the Appellate Authority.

In order to decide the question, the High Court referred to a few Supreme Court decisions and held that the purpose of grant of subsidy would be the overwhelming consideration in ascertaining whether the subsidy is to be treated as a capital receipt or revenue receipt. A wider interpretation was given to the purpose test and it was held that since the subsidy was provided in lieu of certain other subsidies on account of capital expenditure, the real purpose of the scheme was augmenting capital resources by a new or expanding unit. The difference may be in degrees but the real purpose of the scheme has to be discerned. Accordingly, the Court held that the subsidy as provided in the instant case was a capital receipt and not a revenue receipt. [CIT v. Shyam Steel Industries Ltd., 2018 SCC OnLine Cal 2057, dated 07-05-2018]

Hot Off The PressNews

Advocate Gopal Sankarnarayanan, who had begun his submissions on Day 33 of the Aadhaar hearing, continued with his submissions before he 5-judge bench of Dipak Misra, CJ and Dr. AK Sikri, AM Khanwilkar, Dr. DY Chandrachud and Ashok Bhushan, JJ on day 34 of the Aadhaar Hearing.

Below are the highlights from Day 34 of the Aadhaar Hearing:

  • Chandrachud, J: Aadhaar section 7 seeks to identity the beneficiaries that require subsidies. It doesn’t take away other forms of identity.
  • Sankarnarayanan:
    • Aadhaar is a number which helps identify people who need subsidies. Many don’t need that identity.
    • I support Aadhaar for the control, security and safeguards it provides but Section 139aa of the Income Tax Act takes away those. “Individual Income tax pan holders (non corporates)” are targeted by the State via Aadhaar. With respect to financial scams, the problem was dummy companies, not individuals. Yet companies are not targeted.
    • For the purposes of Income tax, Aadhaar is mandatory, there’s no informed consent, and it is not related to Consolidated fund of India. Therefore proportionality test fails.
    • If the aim was curbing black money and preventing money laundering, then linking pan with individual Aadhaar holders doesn’t achieve that purpose. Therefore there’s no proportionality.
    • Indian law journal: users guide to privacy says Obfuscation is a technique by which privacy can be kept intact. It gives up on trust between individual and states though. Petitioners have a valid ground of lack of trust
    • “Identification of targeted beneficiaries” is key. Aadhaar is voluntary. It can be used as “proof of identity” for someone who doesn’t need subsidies.
    • Section 5 enjoins UIDAI to take special measures for vulnerable groups. It proves there is an element of discharge of obligation by the State.
    • The constitution lays down that any penny from the CFI has to go to the person for whom it was earmarked. It is an onerous obligation on the state. Aadhaar attempts to ensure, with the use of biometric authentication, that this obligation is dispersed.
    • If Aadhaar becomes the universal identity card replacing all other identity documents which were initially required to get an Aadhaar, then it is a concern.
    • Aadhaar identification is as secure and foolproof as one of the eighteen proof of identities taken at the time of enrollment because of the voluntary nature of section 7, there is balance in Aadhaar act, unlike Section 139aa wherein there’s no balance.
  • Chandrachud, J: Section 7 is not voluntary. Someone who wants subsidies will have to have Aadhaar.
  • Sankarnarayanan:
    • Aadhaar Act subserves articles 253 and 266(3) of the Constitution along with fundamental rights.
    • We don’t need the least restrictive test to show proportionality. Trust CIDR with my data.
    • Safeguards, balances and limitations provided under the Aadhaar Act makes it proportional.
    • National informatics centre runs both Supreme court website and UIDAI. SC website was hacked a few days ago.
    • UIDAI needs to plug the holes in the Aadhaar system before rushing with it. Aadhaar is not being able to keep up with technology.
    • Aadhaar has protection under the Aadhaar act and Section 43A of the IT Act, along with SPDI rules.


  • Senior Advocate Neeraj Kishan Kaul:
    • If Aadhaar is a reliable, speedy tool for identification and authentication, then there’s no reason to hold it invalid.
    • Aadhaar authentication has made life easier for women in villages, migrants, etc.
    • Microfinance institutions will have a larger reach by virtue of Aadhaar and predatory financing will reduce.
    • Private players are also governed by the Act. Give private players the choice to use Aadhaar if they want since section 57 is an enabling provision under the Aadhaar Act.
  • Chandrachud, J: The need for verification should not be decided by private players.
  • Kaul:
    • The bench can make Privacy and data security regulations as stringent as possible. But as long as the private player and customer have consensus on using Aadhaar, it shouldn’t be disallowed as Aadhaar is the most effective and powerful tool for verification.
    • Aadhaar is based on matching algorithms, not learning ones like Google and Facebook.
    • I request the bench to not exclude AUAs and KUAs from using Aadhaar for their businesses. Merely because there’s a scope of misuse, a statute cannot be struck down.
    • Location of AUA and KUA is not revealed, so there’s no question of surveillance.


  • Advocate Zoheb Hossain:
    • Socio economic rights are justiciable rights, the SC has held in the past. Article 56 of UN charter talks about inter-relation between socio economic and civil political rights. Positive obligations of the State like food, shelter etc are embedded in Article 21.
    • In this case, the bench is balancing interference with the right to Privacy which is the numerator and denominator is the socio economic rights of the people. It is not just a case where part IV requirements are being read.


To read the highlights from the submissions of Senior Advocate Rakesh Dwivedi, click here , here , here , here and here.

To read the highlights from the submissions by ASG Tushar Mehta, click here and here.

To read the highlights from the submissions by the Attorney General, click here, here , here and here.

To read the highlights from the PowerPoint Presentation made by the CEO of UIDAI, click here.

To read the highlights from submissions of Senior Advocates Meenakshi Arora, Sajan Poovayya, CU Singh, Sanjay Hegde and Counsel Jayna Kothari, click here.

To read the highlights from submissions of Senior Advocates KV Viswanathan and Anand Grover, click here.

To read the highlights from Senior Advocate Arvind Datar’s submissions, click here, here and here.

To read the highlights from Senior Advocate Gopal Subramanium’s submissions, click herehere and here.

To read the highlights from Senior Advocate Kapil Sibal’s arguments, click here, here and here.

Looking for the detailed submissions of Senior Advocate Shyam Divan? Read the highlights from Day 1Day 2, Day 3, Day 4 , Day 5, Day 6 and Day 7 of the hearing.