M/S. JSW STEEL LIMITED v. ELECTRICITY INSPECTOR AND ORS.
Linkage of Electricity Duty Exemption to Eligibility Certificate Validity and the Saving of Accrued Rights under Successor Taxing Statutes.
Court: Bombay High Court
Citation: 2026:BHC-AS:16014-DB
Decision Date: 02-04-2026
List of Laws
Bombay Electricity Duty Act, 1958; Maharashtra Electricity Duty Act, 2016; Constitution of India, Article 226; Doctrine of Promissory Estoppel; Doctrine of Legitimate Expectation; Interpretation of Taxing Statutes (Exemption Notifications); Package Incentive Scheme, 1993 (Maharashtra)
- Facts: The Petitioner, M/s. JSW Steel Limited (a 'Mega Project'), was granted an Eligibility Certificate under the State’s Package Incentive Scheme, valid from August 1998 to August 2012. In 1999, the State issued a Notification under Section 5A of the Bombay Electricity Duty Act, 1958, exempting Mega Projects from electricity duty "for the period of Eligibility of the said project as mentioned in the Eligibility Certificate". Subsequently, the Directorate of Industries issued 'Addenda III', extending the Petitioner's Eligibility Certificate validity until August 2019. However, the Respondents (State and MSEDCL) denied the electricity duty exemption for the extended period, arguing that the 1999 Notification did not automatically apply to the extension and that a fresh notification was required. The Petitioner paid over Rs. 47 Crores under protest to avoid disconnection and challenged the denial.
- Procedural Posture: The Petitioner filed Writ Petition No. 12477 of 2015 and later Writ Petition No. 13941 of 2016 before the Bombay High Court under Article 226 of the Constitution of India, seeking a declaration that they are entitled to the exemption and a refund of the duty paid.
- Issue: 1. Whether the electricity duty exemption granted under the 1999 Notification is inherently linked to the validity period of the Eligibility Certificate. 2. Whether the Petitioner remains entitled to this exemption after the enactment of the Maharashtra Electricity Duty Act, 2016, in the absence of a new notification.
- Holding: Yes, the exemption is directly linked to the Eligibility Certificate, and the Petitioner is entitled to the benefit until August 2019. The 2016 Act expressly saved rights and notifications issued under the 1958 Act.
- Reasoning: The Court reasoned that the 1999 Notification used "plain and simple" language linking the exemption to the "period of Eligibility... as mentioned in the Eligibility Certificate". Since the State extended the certificate's validity via Addenda III, the exemption period stood automatically extended. The Court rejected the State's attempt to distinguish between "validity period" and "eligibility period", noting that the State's own affidavits used the terms interchangeably. Applying the principle that exemption criteria must be strictly construed but the benefit liberally granted once eligibility is met, the Court held that the State could not arbitrarily deny the benefit. Furthermore, the Court invoked the doctrine of promissory estoppel, as the Petitioner had made massive investments relying on the State's promises. Finally, Sections 4 and 16 of the 2016 Act were found to expressly save prior notifications and accrued rights until their expiry.
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