Industrial incentive entitlements cannot be denied by importing earlier-policy requirements or later procedural changes.

Under the Bihar Industrial Incentive Policy, 2011, incentive claims could not be rejected for want of additional approval where the projects had already been considered and approved within the policy framework. The State also could not defeat accrued entitlements by relying on the earlier 2006 policy or a later reimbursement procedure, because the 2011 regime was distinct and governed the claims. Having acted on the policy promise and been found eligible, the units were entitled to the incentive benefits, and the rejection orders were quashed with directions to release the admissible incentives.

---

---

Issues: (i) whether the rejection of the petitioners' claims for incentive benefits under the Bihar Industrial Incentive Policy, 2011 on the ground of absence of approval of the competent authority was sustainable; (ii) whether the State could deny the incentives by relying on the earlier 2006 policy or a later change in reimbursement procedure; and (iii) whether the petitioners, having acted on the State's policy promise and been found eligible, were entitled to the incentive benefits.

Issue (i): whether the rejection of the petitioners' claims for incentive benefits under the Bihar Industrial Incentive Policy, 2011 on the ground of absence of approval of the competent authority was sustainable.

Analysis: The policy itself provided for a committee mechanism for clarification and implementation, and the record showed that the petitioners' projects had been considered and approved by the competent authorities under the 2011 policy framework. The rejection orders rested on a notion of competent authority drawn from the 2006 policy and its 2006 notification, although the 2011 policy was a fresh and distinct policy regime. The Court found no basis in the 2011 policy for insisting on additional approval from the Chief Minister or Cabinet where the proposals had already been approved and acted upon within the policy structure.

Conclusion: The rejection on the ground of lack of competent authority approval was unsustainable and was set aside.

Issue (ii): whether the State could deny the incentives by relying on the earlier 2006 policy or a later change in reimbursement procedure.

Analysis: The 2011 policy superseded the earlier policy regime, except to the limited extent expressly preserved. The Court held that a later administrative procedure or the shift to an online reimbursement process under the 2016 regime could not defeat entitlements already flowing from the 2011 policy. The State departments also took inconsistent stands on the reason for stoppage of benefits, which reinforced the absence of a lawful basis for denial.

Conclusion: The State could not deny the incentives by invoking the earlier policy or the later procedural change.

Issue (iii): whether the petitioners, having acted on the State's policy promise and been found eligible, were entitled to the incentive benefits.

Analysis: The petitioners had invested and commenced operations in reliance on the incentive promise. Their eligibility was not disputed, and some benefits had already been granted for a period. In these circumstances, the State was bound by its policy commitment and could not withdraw the benefits on a technical objection lacking foundation. The Court treated the impugned action as arbitrary and contrary to the policy promise.

Conclusion: The petitioners were entitled to the incentive benefits under the 2011 policy.

Final Conclusion: The impugned rejection orders were quashed, and the State authorities were directed to release the admissible incentives under the 2011 policy within the time fixed by the Court.

Ratio Decidendi: Where an industrial incentive policy confers benefits on eligible units and the competent authority under that policy has approved the project, the State cannot deny the promised incentives by importing requirements from an earlier policy or by relying on later procedural changes inconsistent with the governing policy.

---