Case Note & Summary
The Supreme Court allowed the appeal filed by the State of Jharkhand against the judgment of the Jharkhand High Court, which had directed the State to grant retrospective exemption from electricity duty to the respondent, Brahmputra Metallics Ltd., for FYs 2011-12, 2012-13, and 2013-14. The respondent had set up a captive power plant and commenced commercial production on 17 August 2011. The Jharkhand Industrial Policy 2012, notified on 16 June 2012, provided in Clause 32.10 for a 50% exemption from electricity duty for captive power plants for five years from the date of commissioning. However, the exemption notification under Section 9 of the Bihar Electricity Duty Act, 1948 was issued belatedly on 8 January 2015 and made prospective from the date of issue. The respondent filed a writ petition in the High Court in August 2019, seeking to have the prospective clause struck down or alternatively to get the exemption for five years from the notification date. The High Court, relying on the doctrine of promissory estoppel, struck down the prospective clause and directed that the notification be deemed effective from 1 April 2011, the date when the Industrial Policy 2012 was enforced. The Supreme Court reversed this decision, holding that the Industrial Policy 2012 was a general policy statement and not a specific promise to the respondent. The court noted that the policy itself required a statutory notification under Section 9 to give effect to the exemption, and the delay in issuing the notification was not mala fide but due to administrative reasons. The court distinguished earlier cases like Motilal Padampat and Kalyanpur Cement Ltd., stating that promissory estoppel cannot be applied to compel the State to act contrary to law or to grant retrospective benefits when the policy itself did not specify a retrospective effect. The court emphasized that the doctrine of legitimate expectations cannot override statutory requirements, and the State's action in making the notification prospective was reasonable and in public interest. The appeal was allowed, and the High Court's judgment was set aside.
Headnote
A) Promissory Estoppel - Representation by State - Industrial Policy - The State must make a clear and unequivocal promise to attract promissory estoppel; mere policy announcement without statutory notification does not create an enforceable right. The court held that the Industrial Policy 2012 was a general policy statement and not a specific promise to individual units, and the delay in issuing the notification was due to administrative reasons, not mala fides. (Paras 3-12) B) Legitimate Expectations - Doctrine - Applicability - The doctrine of legitimate expectations cannot be invoked against a statutory provision requiring a notification for exemption; the State's failure to issue a timely notification does not give rise to a legitimate expectation that the exemption would be granted retrospectively. The court distinguished earlier precedents on promissory estoppel. (Paras 13-20) C) Electricity Duty - Exemption - Notification - Section 9 of the Bihar Electricity Duty Act, 1948 - The exemption notification under Section 9 must be issued by the State government; a policy announcement alone cannot substitute for the statutory notification. The court held that the notification dated 8 January 2015 was validly made prospective, and the High Court erred in giving it retrospective effect. (Paras 6-9) D) Industrial Policy - Implementation - Time Frame - Clause 38(b) of Industrial Policy 2012 - The policy required follow-up notifications within one month, but this was directory, not mandatory; the delay in issuing the notification did not invalidate the policy or create a right to retrospective exemption. (Paras 5-8)
Issue of Consideration
Whether the respondent is entitled to a rebate/deduction of 50% of electricity duty for FYs 2011-12, 2012-13 and 2013-14 based on the Industrial Policy 2012 and the doctrine of promissory estoppel, despite the exemption notification being issued prospectively on 8 January 2015.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court judgment, and held that the respondent is not entitled to retrospective exemption from electricity duty for FYs 2011-12, 2012-13, and 2013-14. The notification dated 8 January 2015 is valid and prospective.
Law Points
- Promissory estoppel
- Legitimate expectations
- Electricity duty exemption
- Industrial policy
- Retrospective effect of notification
