Delhi HC Directs DSIR to Reconsider 35(2AB) Approval for Earlier Years Citing Maruti Suzuki Ruling:

Delhi HC Directs DSIR to Reconsider 35(2AB) Approval for Earlier Years Citing Maruti Suzuki Ruling M/S Applied Research International Pvt. Ltd. approached the High Court challenging the Department of Scientific & Industrial Research’s (DSIR) refusal to consider its applications for R&D recognition and approval under Section 35(2AB) for FY 2015-16 and FY 2016-17. The company had filed its applications in March 2016 and March 2017 and pursued several follow-ups, but the approvals were never granted. The petitioner argued that DSIR had already recognised its R&D facility in October 2016 and thus granted Form 3CM approval from 01.04.2017 onwards, which indicated that no substantive impediment existed for granting approvals for the prior years as well. The grievance stemmed from DSIR’s communications in 2021, which acknowledged approvals for later years but overlooked the petitioner’s eligibility for earlier financial years despite consistent submissions. Thus, the authorities failed to appreciate this binding legal position and continued to deny retrospective consideration. Main Issue: Whether DSIR was required to consider granting Section 35(2AB) approval for FY 2015-16 and 2016-17 despite recognising the petitioner’s R&D facility in October 2016 and granting approval prospectively from April 2017. HC Held: The High Court held that there was no legal impediment to DSIR considering and granting the petitioner’s Section 35(2AB) approval for the earlier years. Referring to Maruti Suzuki, the Court reiterated that the cut-off date in a DSIR certificate is not determinative. The Court observed that the department’s earlier communications had overlooked this settled principle and had failed to examine the petitioner’s applications in the correct legal framework. Therefore, the Court directed DSIR and the Union of India to re-examine the petitioner’s request afresh for FY 2015-16 and 2016-17 and to issue the requisite certificates/forms within four weeks. If the authorities decide to reject the claim, they must pass a detailed and reasoned order. The Court also emphasised that the reconsideration must explicitly take into account the Maruti Suzuki judgment, which clarified that the date of DSIR approval cannot restrict the benefit when the statutory provision does not contemplate such a limitation. To Read Full Judgment, Download PDF Given Below