The Sikkim High Court has set aside a final order in a budgetary support claim by Cipla Limited — in which a discrepancy between the company's declaration and its own CA certificate had been used to deny Rs. 5.27 crore of the claimed benefit — holding that where a discrepancy is apparent from the record, the authority must afford the claimant an opportunity to explain it before concluding the proceedings. The ruling, by Chief Justice A. Muhamed Mustaque in WP(C) No. 38 of 2023 (decided 24.08.2026), reaffirms a basic principle of procedural fairness: apparent discrepancies cannot be silently capitalised upon to the claimant's detriment.
Cipla had claimed budgetary support for its Sikkim unit under the October 2017 scheme for industrial units in NE states and J&K. In its initial declaration, Cipla claimed Rs. 15,28,80,613 as eligible ITC. When the authority directed it to produce a CA certificate, the certificate disclosed actual ITC utilised of only Rs. 10,01,57,759 — a significantly lower figure. The authority's order, however, accepted the higher figure from the original declaration and computed Cipla's entitlement accordingly — effectively accepting an overstatement and penalising Cipla by reducing the benefit for the excess.
Cipla's position was that the higher figure in the declaration was a mistake and that the CA certificate — produced at the authority's own request — correctly reflected the actual position. The Court, in an earlier round (September 2025 order), had directed the authority to hear Cipla on this discrepancy. When the authority passed a fresh order on 24.04.2026 still refusing to consider Cipla's explanation on the ground that there was no provision for post-facto revision of a declaration, the company returned to the High Court.
Chief Justice Mustaque set aside the order without hesitation. The core holding is that where a discrepancy is apparent on the face of the record — and specifically where the potentially corrective document (the CA certificate) was produced pursuant to the authority's own direction — closing the proceedings without affording an opportunity to explain the discrepancy is fundamentally unfair. The court drew a telling analogy: had the CA certificate shown a higher figure than the declaration, the authority would certainly have called for an explanation. The same standard applies when the certificate shows a lower figure. A human error in a declaration cannot be capitalised upon to prejudice the claimant without first asking for an explanation. The authority was given eight weeks to afford Cipla a hearing and allow production of all supporting documents.
2026-juristway.com-2324-HC(Sikkim)-GST | High Court of Sikkim | WP(C) No. 38 of 2023 | 24.08.2026