JUDGMENT :

Arun Monga, J.

D.B. Civil Writ Petition No. 1151/2023.

1. The issue raised by petitioner before us is qua the enforceability of policy assurances made by the State in the context of renewable energy promotion (solar power), and the extent to which such assurances can be withdrawn, allegedly to the detriment of petitioners/investors who have acted upon them.

2. The State of Rajasthan, with a view to promote solar energy, introduced the Solar Policy, 2019, which, inter alia, assured exemption from payment of electricity duty for a period of seven years from the date of commissioning of solar power plants. Acting upon such representation, the petitioner made investments in establishing its captive solar power project.

3. The Petitioner No. 1 company, UltraTech Cement Limited (“UltraTech”), operates two cement manufacturing plants in Rajasthan, namely Aditya Cement Works and Kotputli Cement Works, for which it has established captive solar power generation facilities after declaration of the State Solar policy.

4. The grievance of the petitioner arises from the subsequent action of the State, whereby the benefit of exemption was withdrawn by way of impugned amendment dated 10.05.2022 in the Solar policy, thereby subjecting such project to electricity duty. The petitioner’s case, inter alia, is anchored on promissory estoppel and legitimate expectation. More of it later.

CHRONOLOGY OF FACTS

5. Succinct factual narrative, shorn of unnecessary details, which, the petitioners state, led to their decision in setting up Solar power plants in Rajasthan, is as below :-

5.1. On 21.05.1962, the Rajasthan Electricity (Duty) Act, 1962 (“ED Act”) came into force. Section 3 thereof levies a duty on a consumer consuming electricity generated by itself, at such rate as may be notified by the State Government. Section 3(3) further empowers the State Government, where it is of the opinion that it is necessary or expedient in public interest, to reduce or remit electricity duty, inter alia, for consumers in the manufacturing industry or persons generating energy for their own consumption.

5.2. On 10.06.2003, the Electricity Act, 2003 came into force. The Act seeks to promote efficient and environmentally benign policies, as reflected in its Statement of Objects and Reasons, and incorporates several provisions aimed at encouraging efficient use of captive as well as renewable energy through various facilitative measures.

5.3. On 12.02.2005, the Government of India notified the National Electricity Policy under Section 3 of the Electricity Act. Clause 5.12 thereof envisages the need to promote electricity generation from non-conventional (renewable) sources through appropriate promotional measures.

5.4. On 06.01.2006 (as revised on 28.01.2016), the Government of India notified the Tariff Policy under Section 3 of the Electricity Act, which has a statutory force. Clause 6.4 of the said policy mandates that State Electricity Regulatory Commissions (“SERCs”) shall endeavour to promote renewable energy by prescribing a minimum percentage for procurement of power from such sources.

5.5. On 08.03.2006, the Government of Rajasthan issued a notification remitting electricity duty on consumption of electricity by a person generating such electricity for its own use.

5.6. In July 2012, the Government of Rajasthan issued the “Policy for Promoting Generation of Electricity from Wind, 2012” (“Wind Policy, 2012”). Clause 9.1 thereof provided that energy consumed by a power producer for captive use would be exempt from payment of electricity duty.

5.7. On 04.03.2014, the Government of Rajasthan issued a notification amending, inter alia, Clause 9.1 of the Wind Policy, 2012, to restrict the exemption to energy consumed for captive use within the State of Rajasthan.

5.8. On 18.10.2014, the Government of Rajasthan introduced the Rajasthan Investment Promotion Scheme, 2014 (“RIPS, 2014”), which provided, inter alia, that eligible manufacturing enterprises would be granted ex