The main legal point established in the judgment is that the State Government is bound by the principle of Promissory Estoppel and cannot arbitrarily withdraw promised benefits, especially when individuals have relied on such promises and altered their positions.

Headnote:
Promissory Estoppel - Sugar Industry Promotion Policy - 2004, G.O. No. 1216SC/18-2-2007-185/2006 - Summary of Acts and Sections Referred: The judgment discusses the withdrawal of the Sugar Industry Promotion Policy-2004 by the State Government through G.O. No. 1216SC/18-2-2007-185/2006 and the implications of promissory estoppel, natural justice, and legitimate expectations on the decision.
Fact of the Case:

The State Government of Uttar Pradesh declared a Sugar Industry Promotion Policy, 2004 to attract investments by private entrepreneurs to establish new sugar mills in the State. The Policy promised various benefits in the form of exemptions/remissions in taxes, reimbursements of duties, and cash subsidy for varying periods depending upon the level of investment made. The Policy was amended to extend the benefits to investments made for expansion of existing sugar mills and establishment of ancillary industries. The State Government suddenly withdrew the Policy through an executive order without any notice, causing prejudice to the petitioners who had relied on the promises and assurances made by the State government under the Policy.
Finding of the Court:

The Court found that the withdrawal of the Policy by the State Government was in violation of the principles of Promissory Estoppel, Natural Justice, and Legitimate Expectations. The Court quashed the executive order and held that the petitioners are entitled to all the benefits promised under the Sugar Industry Promotion Policy-2004 for the entire period of its validity.
Issues: The issues raised in the case included the breach of promissory estoppel, the legality of withdrawing promised benefits, and the denial of benefits accrued under the Policy.
Ratio Decidendi: The Court held that the withdrawal of the Policy by the State Government was illegal and in violation of the principles of Promissory Estoppel, Natural Justice, and Legitimate Expectations. The Court emphasized that the State Government should be compelled to honor its promises when individuals have altered their positions relying on such promises.
Final Decision: The writ petitions were allowed, and the State Government's executive order was quashed. The petitioners were entitled to all the benefits promised under the Sugar Industry Promotion Policy-2004 for the entire period of its validity. The Court directed the consideration and granting of benefits to the petitioners within a maximum period of two months from the date of the order.

JUDGMENT :

SHABIHUL HASNAIN, J.

1. The questions of facts and law raised in these writ petitions being substantially common, all the writ petitions have been heard together and are being decided by this common judgment. It is not necessary to delve into facts of each case separately and it would be sufficient to refer to the facts and pleadings in Civil Misc (MB) Writ Petition No. 2679 of 2008 in Mawana Sugars Limited Versus State of Uttar Pradesh and Others for deciding this bunch of writ petitions.

2. In order to appreciate the gamut of submissions advanced, it is imperative to extract the crucial and necessary facts leading to the present controversy.

3. The State Government of Uttar Pradesh vide G.O. No. 1631(1)SC/18-2-2004-57/2004 dated 24th August 2004 declared a Sugar Industry Promotion Policy, 2004 (the Policy) to attract investments by private entrepreneurs to establish new sugar mills in the State to ensure better utilization of sugar cane produced in the State and also to provide direct employment to at least 1000 persons by each of the investor. To attract such fresh investments, the State Government promised to provide various benefits in the form of exemptions/remissions in taxes, reimbursements of duties and cash subsidy etc. for varying periods depending upon the level of investment made.

4. Investments made upto Rs. 350 crore (Level-1) for setting up of new sugar mills would entail the benefits for a period of five years from the date of commencement of commercial production from the new facility and investment of Rs. 500 crores or above (Level-2) entailed these benefits for a period of ten years.

5. The preamble of the Policy indicated that the Policy was in the interest not only of sugar industry but in public interest as well. The Policy was amended vide G.O. No.2591SC/18-2-2004-57/2004 dated 17.12.2004 to extend the benefits under the Policy also to investments made for expansion of existing sugar mills and establishment of ancillary industries like distilleries for manufacture of Ethanol and also for cogeneration of power. The implementation and commissioning of the new sugar mills or expansion of existing mills or establishing distillery or cogeneration facility were required to be completed within 3 years from 1.4.2004 to 31.3.2007. However, the period for implementation and commissioning of the new projects under the Policy was extended by another year from 31st March 2007 up to 31st March 2008 vide G.O. No.1965SC/18-2-2006-185/2006 dated 14th November 2006. The duration and validity of the Policy was thus extended up to 31.03.2008.

6. The promised benefits in the form of exemptions and reimbursements on the investments made for setting up of new sugar mills as well for carrying out expansion in the crushing capacities of the existing sugar mills along with the ancillary plants, are summarized as follows:

Exemption/Remission

(a)-Uttar Pradesh Trade Tax (now called VAT) and Central Sales Tax on Sale of Molasses

(b) -Administrative Charges on Molasses

(d) -Purchase Tax on Sugarcane

(e) -Registration Charges and Stamp Duty on Land purchase

Reimbursement

(a) -10% Capital Subsidy (one-time) (b)-Society Commission on purchase of

Cane (c)-Sugar Transportation

(d) -Additional cost on Sugarcane Transportation

The Policy also stipulated that aggregate of benefits shall under no circumstances exceed the total investments made under the Policy.

7. A company/unit making the requisite investment under the Policy, and starting commercial production from the new project(s) within the stipulated period, was required to make an application in the prescribed proforma to the Cane Commissioner for being declared “Eligible” to avail the benefits promised under the Policy. The State Government laid down a detailed and meticulous procedure to consider and examine the eligibility of the applicant for grant of benefits under the Policy. A High Powered Committee under the Chairmanship of the Chief Secretar