The State of Jharkhand & Ors Vs Brahmaputra Metallics Limited, Ranchi
Forum-Supreme Court of India
Civil Appeal No 3860-62 of 2020
Date-01/12/2020
Sub: Electricity duty which was promised to be charged at 50% of the normal rate for industries set up in terms of Industrial Policy, delay in issuing notification by more than 3 years- Doctrine of Promissory estoppel , Doctrine of Legitimate Expectation and Concept of Unjust Enrichment explained- The appeal of State dismissed.

The apex court today in a landmark decision dismissed the appeal of the State of Jharkhand by holding that the rebate of electricity duty which it had promised in terms of Jharkhand Industrial Policy 2012 and which was supposed to be notified by it by way of notification which was not issued and thus depriving the respondents of the benefit was hit by doctrine of promissory estoppel and doctrine of legitimate expectation. The court held that the State having held out a solemn representation in the above terms, it would be manifestly unfair and arbitrary to deprive industrial units within the State of their legitimate entitlement. It is one thing for the State to assert that the writ petitioner had no vested right but quite another for the State to assert that it is not duty bound to disclose its reasons for not giving effect to the exemption notification within the period that was envisaged in the Industrial Policy 2012. The court also brushed aside the argument of State on account of Unjust enrichment noting that the respondent did not collect any amount towards electricity duty.

This is undoubtedly one of the best judgement which will be helpful in all branches of law wherever the state goes back on its promise. It will also help in the Indirect tax while interpreting the concept of Unjust enrichment.

Ramesh Patodia
01-12-2020