Summary
The Court held that Jharkhand’s unexplained delay in implementing its promised captive-power electricity-duty concession, followed by a prospective-only notification, arbitrarily frustrated legitimate expectations. It sustained the industrial unit’s entitlement to a 50% rebate for 2012–13 and 2013–14, with adjustment of excess duty, but excluded 2011–12 because the policy made eligibility commence in the financial year after production began.
Issues
- Whether unexplained delayed and prospective implementation of the industrial-policy concession violated legitimate expectations and Article 14.
- Whether assessment procedure, delay or unjust enrichment barred relief, and which financial years qualified.
Provisions considered
- Article 14, Constitution of IndiaGrounded substantive legitimate expectation in fairness and non-arbitrariness, holding that unexplained frustration of the policy representation violated the constitutional guarantee. (¶¶ 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46)
- Section 9, Bihar Electricity Duty Act, 1948, as adopted in JharkhandConsidered the exemption power and the implementing notification against the State’s express commitment to timely implementation of its industrial policy. (¶¶ 6, 8, 21, 22, 23, 44, 46, 47)
- Clauses 32.10, 35.7(b) and 38(b), Jharkhand Industrial Policy, 2012Enforced the represented concession and timely follow-up commitment, but limited entitlement to financial years following commencement of production. (¶¶ 5, 20, 21, 22, 43, 46, 51)
- Article 226, Constitution of IndiaSustained writ recourse to challenge the prospective-effect clause that statutory assessing officers were bound to apply. (¶¶ 47, 48)
Held
- An exemption’s existence and terms ordinarily lie within the State’s discretion. Here the State had already made specific commitments about the concession, its duration and implementation within one month, and later issued the notification. No overriding policy or public-interest justification explained the delay or prospective limitation. (¶¶ 20, 21, 22, 23, 43, 44)
- Substantive legitimate expectation is a public-law expression of Article 14 fairness and non-arbitrariness and should not simply be conflated with private-law promissory estoppel. The unexplained departure from the State’s policy commitments unfairly deprived eligible units of the promised benefit and violated Article 14. (¶¶ 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 45, 46)
- Failure to claim the earlier-period concession in assessment returns did not bar relief: the assessing officer remained bound by the notification’s prospective clause. Challenging that clause through writ proceedings was the available remedy. (¶ 47)
- The State had not raised delay before the High Court or as an SLP ground, nor shown detrimental change of position or third-party prejudice. Delay alone did not justify reversing the legally sustainable relief in these circumstances. (¶ 48)
- The High Court ordered adjustment rather than refund, and the unit had specifically pleaded that it bore the duty without passing the burden to customers. Unjust enrichment was not established on these facts. (¶¶ 49, 50)
- Production began on 17 August 2011, and Clause 35.7(b) made eligibility commence in the following financial year. Relief therefore covered 2012–13 and 2013–14, but not 2011–12. (¶ 51)
Result
Appeals disposed of by confirming electricity-duty relief for 2012–13 and 2013–14 and excluding 2011–12. Adjustment of the excess duty sustained for the qualifying years; no order as to costs. Pending applications disposed of.