Promissory estoppel and limited administrative power barred curtailment of industrial incentive benefits after reliance-based investment.

Under an industrial incentive scheme, the Commissioner's limited power to specify the effective date of an Eligibility Certificate did not include authority to curtail its validity period, so the reduction was liable to be quashed. The State was also bound by promissory estoppel because the scheme induced investment and the industrial unit altered its position in reliance on that promise; in the absence of overriding public interest, the incentives could not be withdrawn or diluted to the unit's detriment. The petition succeeded, the impugned order was set aside, and the incentive benefits were directed to be implemented without curtailment.

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Issues: (i) Whether the Commissioner of Sales Tax could curtail the validity period of the Eligibility Certificate while specifying the effective date under the Incentive Scheme; (ii) Whether reduction of incentives under the Incentive Scheme after the industrial unit had acted on the State's promise was hit by promissory estoppel.

Issue (i): Whether the Commissioner of Sales Tax could curtail the validity period of the Eligibility Certificate while specifying the effective date under the Incentive Scheme.

Analysis: Clause 3.1 placed the decision on eligibility with the Implementing Agency and confined the Commissioner's role to specifying the date from which the certificate would take effect. The power to specify the effective date did not include any authority to modify, enlarge, or curtail the validity period already fixed in the Eligibility Certificate. The curtailment therefore exceeded the limited power conferred under the Scheme.

Conclusion: The curtailment of the validity period was without authority and was liable to be quashed, in favour of the petitioner.

Issue (ii): Whether reduction of incentives under the Incentive Scheme after the industrial unit had acted on the State's promise was hit by promissory estoppel.

Analysis: The Scheme operated as a governmental promise intended to induce industries to establish units in underdeveloped areas, and the petitioner altered its position by making substantial investment in reliance on that promise. In the absence of material showing an overriding public interest or other exceptional facts justifying withdrawal or dilution, the State could not resile from its assurance or reduce the incentives already conferred. The Scheme also served the constitutional objective reflected in Article 39(c), and its dilution would undermine the promised benefit.

Conclusion: The State was bound by promissory estoppel and could not reduce or restrict the incentives to the petitioner's detriment, in favour of the petitioner.

Final Conclusion: The petition succeeded, the impugned order was set aside, and the respondents were directed to implement the incentive regime without curtailing the petitioner's benefits.

Ratio Decidendi: Where a State incentive scheme induces investment and the beneficiary acts upon that promise, the State is bound by promissory estoppel and an authority exercising a limited role under the scheme cannot curtail the substantive benefits unless overriding public interest is established.

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