Accrued entitlement under industrial policy cannot be retrospectively withdrawn when investment and eligibility conditions are fulfilled.

A State industrial policy representation can crystallise into an accrued reimbursement entitlement once an expanded unit has acted on it, made substantial investment, commenced production, and satisfied the stipulated conditions; retrospective withdrawal then cannot defeat that right absent overriding public interest. The selective cancellation and retrospective amendment were also arbitrary and discriminatory because the record did not show a rational basis for excluding similarly placed units, and the State's prior representation attracted promissory estoppel and legitimate expectation. On that footing, the policy benefit already earned by the petitioners was protected and could not be curtailed by retrospective amendment or cancellation.

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Issues: (i) Whether the petitioners had acquired an enforceable entitlement to VAT or SGST reimbursement under the industrial policy, which could not be withdrawn retrospectively; (ii) Whether the impugned cancellation and retrospective amendment were arbitrary, discriminatory, and hit by promissory estoppel and legitimate expectation.

Issue (i): Whether the petitioners had acquired an enforceable entitlement to VAT or SGST reimbursement under the industrial policy, which could not be withdrawn retrospectively.

Analysis: The petitioners had been issued eligibility, verification, and thrust-sector certificates after detailed inspection, and the sanctioned reimbursement was granted on the footing that the expanded unit satisfied the policy criteria. Once the unit had acted on the policy, made substantial investment, commenced commercial production, and fulfilled the stipulated conditions, the benefit had crystallised into an accrued right. A retrospective withdrawal could not defeat that accrued entitlement in the absence of a legally sustainable basis or overriding public interest.

Conclusion: The entitlement to reimbursement had accrued in favour of the petitioners and could not be taken away retrospectively.

Issue (ii): Whether the impugned cancellation and retrospective amendment were arbitrary, discriminatory, and hit by promissory estoppel and legitimate expectation.

Analysis: The State had held out a policy representation on which the petitioners altered their position and expanded the unit. The material placed on record did not establish any overriding public interest justifying the selective retrospective exclusion of cement manufacturing or grinding units. The withdrawal was also applied in a manner that singled out the petitioners without a rational basis, notwithstanding prior administrative recognition of similarly placed units. Such action was inconsistent with the doctrines of promissory estoppel and legitimate expectation and offended the requirement of non-arbitrary State action.

Conclusion: The impugned cancellation and retrospective amendment were arbitrary and discriminatory and were not sustainable.

Final Conclusion: The policy benefit already earned by the petitioners was protected, and the State could not retrospectively curtail it by selective amendment or cancellation.

Ratio Decidendi: Where a State representation induces substantial investment and the claimant has fulfilled the stipulated conditions, the resulting benefit becomes an accrued entitlement that cannot be retrospectively withdrawn absent overriding public interest, and selective curtailment of such benefit is arbitrary under Article 14.

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