Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Bom) 968

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
B. P. COLABAWALLA, AMIT S. JAMSANDEKAR, JJ.
M/s. JSW Steel Limited - Petitioner
Versus
Electricity Inspector – Respondent
WRIT PETITION NO. 12477 OF 2015, WRIT PETITION NO. 13941 OF 2016 WITH INTERIM APPLICATION (ST) NO.40287 OF 2025
Decided On : 02-04-2026
Advocates Appeared :
For the Petitioner : Mr. Janak Dwarkadas a/w. Chirag Kamdar a/w. Vineet Unnikrishnan a/w. Ms. Sonu Bhasi a/w. Veena Hari a/w. Karthika Sanjay i/b. Cyril Amarchand Mangaldas, Advocates
For the Respondent : Ms. Shruti D. Vyas, Additional Government Pleader a/w. Mr. M.M. Pabale, AGP, Mr. Uddhav Dahiphale, Mr. Sandip Patil, Ms. Kirti Deshmukh

Advocates:
For the Appellants/Petitioners: Janak Dwarkadas, Chirag Kamdar, Vineet Unnikrishnan, Sonu Bhasi, Veena Hari, Karthika Sanjay
For the Respondents: Shruti D. Vyas, M.M. Pabale, Harinder Toor

Where an electricity duty exemption is explicitly linked to the duration of an industrial incentive eligibility certificate, the exemption remains valid for the certificate's extended period. Subsequent legislation and savings clauses preserve such accrued rights, precluding arbitrary denial of the promised incentives.

Headnote:(A) Electricity Duty Act, 1958 - Section 5A - Electricity Duty Act, 2016 - Sections 4 and 16 - Industrial Incentive Schemes - Exemption from electricity duty - Exemption notifications linked to eligibility certificates for industrial incentives must be interpreted in alignment with the underlying period of validity of such certificates - If an incentive certificate is extended by administrative authorities, the associated tax exemptions, expressly linked to the “period of eligibility,” automatically extend for the permitted duration - Statutory savings clauses in new legislation protect rights and privileges accrued under previous enactments. (Paras 29, 36, 41, 47)

(B) Interpretation of Statutes - Exemption notifications issued for beneficial purposes under incentive schemes should be read purposively - Where primary legislation grants power to exempt based on conditions, administrative action following those conditions creates a legitimate expectation, and arbitrary denial is contrary to established equitable principles such as promissory estoppel. (Paras 30, 32, 46)

Facts of the case:
A large-scale industrial entity was granted an exemption from electricity duty under a state-sponsored incentive scheme for underdeveloped regions, which was explicitly tied to the duration of its eligibility certificate. Upon the expiry of the initial 14-year term, the validity of the eligibility certificate was extended for an additional 7 years by the relevant authorities. The state revenue authorities subsequently denied the electricity duty exemption for this extended period, contending that the notification was limited to the initial term and that new legislation had since been enacted, thus requiring a fresh notification which was not issued.

Findings of Court:
The court observed that the language of the exemption notification clearly linked the benefit to the “period of eligibility” of the project. It held that the extension of the eligibility certificate by the competent authorities necessarily extended the associated duty exemption. Furthermore, the court emphasized that the subsequent electricity duty legislation contained specific savings clauses protecting orders and rights established under the prior act, rendering the state's denial of the benefit legally unsustainable.

Issues: The main issues were whether an electricity duty exemption notification linked to an incentive eligibility certificate subsists during an extension of that certificate, and whether the introduction of new legislation curtails such benefits in the absence of a renewed notification.

Ratio Decidendi: The exemption is predicated upon the validity of the overarching incentive certificate. Therefore, unless the government explicitly amends the notification to limit its scope, the notification remains operational for the full duration of said certificate. Purposive interpretation must be employed in cases involving beneficial incentive schemes to fulfill the state's promise and avoid arbitrary administrative shifts.

Result: Petitions allowed; authorities ordered to refund the duty collected under protest within the stipulated timeframe.

Table of Content
1. establishing the factual history, the specific incentive scheme, and the sequence of extensions to the eligibility certificate. (Para 1 , 2 , 3 , 4)
2. parties' contentions regarding the interpretation of tax exemption notifications and the scope of administrative incentives. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 34 , 35)
3. analyzing the nexus between the 1999 notification and the project's eligibility certificate period. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28)
4. exemption notifications linked to valid certificates must be interpreted to cover the full period of eligibility. (Para 29 , 30 , 31 , 32 , 33 , 36 , 37 , 38 , 39 , 44 , 45)
5. statutory savings clauses in new legislation protect vested rights and existing exemption orders. (Para 40 , 41 , 42 , 43 , 46 , 47)
6. final order granting the petitioner's relief and directing the refund of duty paid under protest. (Para 48 , 49 , 50 , 51 , 52)

JUDGMENT :

Amit Satyavan Jamsandekar, J.

1. By the present petitions, the Petitioner has challenged the acts and decisions of the Respondents by which the Respondents have denied the Petitioner the exemption from payment of electricity duty. It is the case of the Petitioner that the Petitioner is entitled to exemption from payment of electricity duty for the period beginning from 6th August 2012 up to 5th August 2019. This exemption from payment of electricity duty is sought by the Petitioner by virtue of Notification dated 29th December 1999 (the Notification) issued by the State of Maharashtra (the State) in exercise of its powers under Section 5A of the Bombay Electricity Duty Act, 1958 (the BEDA, 1958).

2. Rule. The service is waived by Ms. Vyas, the Learned AGP, on behalf of the State and Mr. Toor, the Learned Counsel, on behalf of the 1st and 2nd Respondents. The pleadings in the proceedings are complete. With the consent of parties, Rule is made returnable forthwith and heard finally.

3. The above captioned two Writ Petitions are in respect of the same subject matter. However, the subsequently filed Writ Petition No.13941 of 2016 covers all subsequent facts, circumstances, and actions of the Respondents arising from their decision to deny the Petitioner the benefit of exemption from payment of electricity duty. The decision in Writ Petition No.13941 of 2016 would cover the entire subject matter in dispute. Therefore, Writ Petition No.13941 of 2016 is taken up for hearing first, by consent of the Learned Counsels appearing for the parties.

4. Before we proceed to decide the rival contentions of the parties, it would be apposite to set out the undisputed facts and the sequence of events.

i) In 1964, the State, through its Industries, Energy and Labour Department, implemented a Package of Incentive Scheme. The intention behind the scheme was to disperse industries outside the Bombay, Thane and Pune area of the State and to attract industry to the underdeveloped areas of the State. The scheme has been amended from time to time since the year 1964. The amendment, which took effect in the year 1988, was operative from 1st October 1988 to 30th September 1993. Thereafter, by its Resolution dated 7th May 1993, the State modified the said scheme and extended it with effect from 1st October 1993 (the Scheme). Under this extension, the unit holding an Eligibility Certificate issued by the implementing agency was entitled to claim the facilities in accordance with the guidelines laid down therein. The Scheme was further amended by the State by its Resolution dated 20th June 1997. As per the said Resolution, the projects having a fixed capital investment of a minimum of Rs. 1000 Crores were called ‘Mega Projects’. By this amendment, ‘Mega Projects’ were held to be eligible to avail certain incentives for a period of 14 years, with the option to extend the said period for a further seven years. It is undisputed that the Petitioner was eligible as a ‘Mega Unit’. Therefore, it applied unde

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2026 Supreme(Bom) 968

Cases Referred (11)