The Bombay High Court has held that JSW Steel Limited is entitled to exemption from payment of electricity duty till August 5, 2019, and directed the State authorities to refund ₹47.47 crore collected from the company towards electricity duty.
The Court was dealing with petitions challenging the denial of electricity duty exemption despite the extension of the petitioner’s Eligibility Certificate under the State’s Package Scheme of Incentives. The dispute centred on whether such extension also extended the benefit of exemption granted under a 1999 notification issued under the Bombay Electricity Duty Act, 1958.
Rejecting the State’s stand, the Court held that the exemption notification was explicitly linked to the “period of eligibility” mentioned in the Eligibility Certificate, and therefore, once the certificate was extended till 2019, the exemption also continued for the same period.
The Bench further observed that the State could have restricted or withdrawn the exemption by issuing a fresh notification but failed to do so. In absence of such withdrawal, the benefit could not be denied on administrative interpretation.
The Court also rejected the argument that the introduction of the Maharashtra Electricity Duty Act, 2016 extinguished the exemption, noting that the statute expressly saves prior notifications and accrued rights.
Emphasising principles of promissory estoppel and legitimate expectation, the Court held that JSW had made substantial investments relying on the State’s promise of incentives, and denying the exemption would be arbitrary and inequitable.
Accordingly, the Court declared the denial of exemption illegal, restrained the authorities from recovering electricity duty, and directed refund of ₹47.47 crore paid by the petitioner between 2012 and 2019 within 12 weeks.
The petitions were allowed, with no order as to costs.
Appearances:
For the Petitioner:
Mr. Janak Dwarkadas, Senior Advocate, with Mr. Chirag Kamdar, Mr. Vineet Unnikrishnan, Ms. Sonu Bhasi, Ms. Veena Hari and Ms. Karthika Sanjay, instructed by Cyril Amarchand Mangaldas, for the Petitioner in both Writ Petitions and the Applicant in IA (ST) No. 40287 of 2025.
For the State/Respondents:
Ms. Shruti D. Vyas, Additional Government Pleader, with Mr. M.M. Pabale, AGP, for the State/Respondents in both Writ Petitions and Interim Application.
For Respondent Nos. 1 & 2:
Mr. Harinder Toor, instructed by M/s Expletus Legal, in WP No. 13941 of 2016 and IA.
Officers Present in Court:
Mr. Uddhav Dahiphale, Joint Secretary, Energy Department;
Mr. Sandip Patil, Chief Electrical Inspector;
Ms. Kirti Deshmukh, Deputy Director, Industries Department, Government of Maharashtra.
