Court affirms the exemption linked to the Eligibility Certificate under the Package Scheme of Incentives, 1993, and orders the State to refund the electricity duty collected from 2012 to 2019.
In a landmark decision, the Bombay High Court has ruled in favor of M/s. JSW Steel Limited, declaring that the company is entitled to an exemption from electricity duty until August 5, 2019. The court ordered the State of Maharashtra to refund Rs. 47,47,61,492/- to JSW Steel, which was paid under protest between August 2012 and August 2019.
The ruling came after the court examined the linkage between the exemption notification under Section 5A of the Bombay Electricity Duty Act, 1958, and the Eligibility Certificate issued under the Package Scheme of Incentives, 1993. The court found that the language of the notification explicitly linked the exemption to the validity period of the Eligibility Certificate, thereby entitling JSW Steel to the benefit until the certificate's extended date.
The bench, comprising Justices B.P. Colabawalla and Amit S. Jamsandekar, emphasized that the exemption was intended to encourage industrial growth in underdeveloped areas by providing incentives, including exemption from electricity duty. The court noted that the State had not issued any notification to revoke this exemption following the extension of the Eligibility Certificate.
The judgment also addressed the introduction of the Maharashtra Electricity Duty Act, 2016, affirming that the new Act did not override the existing exemptions granted under the 1958 Act. The court underscored that the savings clause within the 2016 Act preserved the rights and privileges acquired under the earlier legislation.
The decision is a significant affirmation of the principle of promissory estoppel, where the State's assurances through the incentive package and subsequent notifications were deemed binding. The court criticized the State's Finance Department for its arbitrary decision to deny the exemption, which contradicted the initial promises made to JSW Steel.
In conclusion, the court's directive to refund the collected duty within 12 weeks marks a substantial victory for JSW Steel, reinforcing the legal principle that state promises, once made, must be honored unless lawfully revoked.
Bottom Line:
The exemption from electricity duty granted under Section 5A of the Bombay Electricity Duty Act, 1958, is directly linked to the validity of the Eligibility Certificate issued under the Package Scheme of Incentives, 1993.
Statutory provision(s): Bombay Electricity Duty Act, 1958 Section 5A, Maharashtra Electricity Duty Act, 2016 Sections 4 and 16
