50% Electricity Duty Rebate Affirmed for FYs 2012-14; Promissory Estoppel Applied Against State's Delay.

The HC affirmed the Respondent's entitlement to a 50% rebate on electricity duty for FYs 2012-13 and 2013-14, based on the Industrial Policy 2012. The doctrine of promissory estoppel was applied due to the State's delay in issuing the exemption notification. The rebate was denied for FY 2011-12, as entitlement begins the financial year after production commencement. The appeals were disposed of without costs, and future payments could be adjusted, negating unjust enrichment claims.

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Issues Involved:
1. Captive power plant: assessment to electricity duty
2. Industrial Policy 2012
3. Exemption from Electricity Duty
4. Doctrine of Promissory Estoppel
5. Legitimate Expectations
6. Delay in issuance of notification
7. Technical defenses to the claim
8. Unjust enrichment

Detailed Analysis:

Captive power plant: assessment to electricity duty
The Respondent commenced commercial production on 17 August 2011 and was liable to pay duty for distribution and/or consumption of energy from 1 October 2011. Assessment orders were passed for FY 2011-12, 2012-13, and 2013-14 based on returns submitted by the Respondent.

Industrial Policy 2012
The Industrial Policy 2012, notified on 16 June 2012, provided an exemption from the payment of 50% of electricity duty for five years for captive power plants established for self-consumption. Clause 35.7(b) stipulated that entitlements would begin from the financial year following the Date of Production (DoP).

Exemption from Electricity Duty
Despite the policy's stipulation that notifications enforcing its terms should be issued within one month, the State failed to comply. An exemption notification was eventually issued on 8 January 2015, but it was made effective prospectively, contrary to the policy's representation.

Doctrine of Promissory Estoppel
The High Court relied on the doctrine of promissory estoppel, holding that the State's failure to issue a timely exemption notification was contrary to the representation in the Industrial Policy 2012. The doctrine was applied based on precedents like Motilal Padampat and Kalyanpur Cement Ltd., which emphasize that a promise made by the State must be honored to prevent injustice.

Legitimate Expectations
The State's representation in the Industrial Policy 2012 created a legitimate expectation for the Respondent to receive a 50% rebate on electricity duty for five years. The High Court noted that the delay in issuing the notification was due to "bureaucratic lethargy," and the prospective application of the exemption negated the legitimate expectation created by the policy.

Delay in issuance of notification
The State's delay in issuing the exemption notification was unjustified. The High Court found no specific reason for the delay and held that the State's lethargy should not deprive the Respondent of the promised benefit. The notification was deemed effective from the date of the Industrial Policy 2012 (1 April 2011).

Technical defenses to the claim
The State argued that the Respondent did not claim the exemption in its assessment returns and paid the duty without protest. However, the Court noted that the Respondent's only remedy was to challenge the terms of the exemption notification, which it did through writ proceedings. The issue of delay in filing the writ petition was not raised before the High Court or in the Special Leave Petition, and thus could not be a ground for denying relief.

Unjust enrichment
The High Court did not order a refund but allowed an adjustment of future payments. The Respondent had specifically pleaded that the burden of the differential amount of electricity duty was not passed on to its customers, negating the State's claim of unjust enrichment.

Conclusion
The Court affirmed the High Court's judgment that the Respondent was entitled to a rebate/deduction from electricity duty for FYs 2012-13 and 2013-14. The Respondent would not be entitled to a rebate/deduction for FY 2011-12, as the entitlement ensues from the financial year following the commencement of production. The appeals were disposed of accordingly, with no order as to costs.

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