THE STATE OF JHARKHAND AND ORS. versus BRAHMPUTRA METALLICS LTD., RANCHI AND ANR.

Citation: [2020] 14 S.C.R. 45 · Decided: 01-12-2020 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Disposed off

Cited by 4 judgment(s) · cites 12 · see the full citation network in Lexace

Judgment (excerpt)

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THE STATE OF JHARKHAND AND ORS.
v.
    BRAHMPUTRA METALLICS LTD., RANCHI AND ANR.
(Civil Appeal Nos. 3860-3862 of 2020)
DECEMBER 01, 2020
[DR. DHANANJAYA Y CHANDRACHUD AND
INDU MALHOTRA, JJ.]
Bihar Electricity Duty Act, 1948 – s.9 – Jharkhand Industrial
Policy, 2012 – The Industrial Policy 2012 was notified by the State
government on 16.06.2012 providing an exemption from payment
of 50 per cent of the electricity duty for a period of five years – The
policy envisaged that the industrial units will be entitled for
reimbursement/payment of subsidy etc. under the different categories
only from the next financial year of the date of production – It was
also stipulated in the policy that notifications enforcing the terms
of the industrial policy would be issued within a period of one month
by the Departments of the State government – The Departments of
the State government failed to comply with the one month time
schedule – Eventually, the State government issued an exemption
notification on 08.01.2015 but made it effective from the date on
which it was issued – Writ petition by the respondent – Before the
High Court, the respondent claimed that the clause in the notification
making it prospective should be effaced since it was contrary to the
representation that was held out by the Industrial Policy 2012 –
Alternately, the respondent sought a direction that it would be entitled
to an exemption from electricity duty for a period of five years from
the date of the issuance of the notification – High Court held that
there was no specific reason for delay and that ‘but for the lethargic
approach of the state authorities’ the exemption should have been
issued within a month of the issuance of the Industrial Policy 2012
– The High Court concluded that the notification dated 08.01.2015
issued by the Commercial Tax Department of the State government
ought not to be construed with prospective effect and the clause
making it prospective would have to be struck down – The
notification was deemed to be in effect from the date of the Industrial
Policy 2012 (1 April 2011) – The electricity duty deposited for FYs
2011-12, 2012-13 and 2013-14 was directed to be adjusted against
   [2020] 14 S.C.R. 45
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SUPREME COURT REPORTS
[2020] 14 S.C.R.
the future liability of the respondent towards electricity duty – On
appeal, held: The State government issued a statutory notification
u/s. 9, but by doing so prospectively with effect from 08.01.2015 it
negated the nature of the representation which was held out in the
Industrial Policy 2012 – Absolutely no justification bearing on
reasons of policy or public interest has been offered before the
High Court or before the Supreme Court for the delay in issuing a
notification – Since the State has offered no justification for the
delay in issuance of the notification, or provided reasons for it being
in public interest, such a course of action by the State is arbitrary
and is violative of Art.14 – In the instant case, the respondent is
entitled to a rebate/deduction from electricity duty – However, the
respondent would not be entitled to a rebate/deduction for FY 2011-
12 – In terms of the Industrial Policy 2012, the entitlement ensues
from the financial year following the commencement of production
– The respondent commenced production on 17.08.2011 – Therefore,
the order of the High Court for the FYs 2012-13 and 2013-14 is
confirmed.
Principles/Doctrines – Promissory estoppel – Origins and
evolution – discussed.
Principles/Doctrines – Promissory estoppel and legitimate
expectation – Difference between – discussed.
Disposing of the appeals, the Court
HELD:  Expectations breached by the State of Jharkhand
1. In the present case, this Court is unable to perceive any
substance in the submission of the State which was urged in
defense before the High Court. Not only did the State in the
present case hold out a solemn representation, this
representation was founded on its stated desire to encourage
industrialization in the State. The policy document spelt out:
(i)
The nature of the incentives;
(ii)
The period during which the incentives would be
available; and
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(iii)
The time limit within which follow-up action would be
taken by the State government through its
departments for implementing the Industrial Policy
2012. [Para 43][78-F-H]
2.  The State having held out a solemn representation in
the above terms, it would be manifestly unfair and arbitrar

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