The Supreme Court has held that Clause 16(a) of the Himachal Pradesh Industrial Policy, 2019 and Rule 16(i)(a) of the 2019 Rules were always intended to apply only to new industrial enterprises, whereas existing industrial enterprises undergoing substantial expansion were entitled only to the rebate benefit under Clause 16(b) and Rule 16(i)(b). The amendment notification dated Apr 29, 2022, to the extent it replaced “eligible” with “new” and inserted “substantial expansion,” was clarificatory and therefore retrospective, since it merely clarified the true scope and intent of the original provisions without introducing new substantive rights.
The doctrine of promissory estoppel was held inapplicable because no representation could be enforced contrary to the true meaning of the Policy, and because the respondent had already received the benefit legitimately available to its class under Clause 16(b). The Court also held that mere issuance of the COP certificate did not create any vested or accrued right to claim the concessional tariff benefit under Clause 16(a) in the absence of a specific sanction or approval.
A Two-Judge Bench comprising Justice J.B. Pardiwala and Justice K.V. Viswanathan examined Clause 5, Clause 16, the definitions in Rule 2, and the contemporaneous tariff orders issued before and after the 2019 Policy, to hold that, although the respondent was undeniably an “existing industrial enterprise” that had undertaken “substantial expansion” and therefore fell within the broad class of “eligible enterprises,” the structure of Clause 16 itself, read with the tariff orders, showed that Clause 16(a) was intended to apply only to new industrial enterprises, while Clause 16(b) was intended to govern existing industrial enterprises undertaking substantial expansion.
The Bench observed that accepting the respondent’s interpretation would produce an anomalous result by allowing the same class of enterprise to claim both the general concessional tariff under Clause 16(a) and the incremental consumption rebate under Clause 16(b), thereby creating an unintended double benefit. The Bench further observed that the amendment notification dated Apr 29, 2022, insofar as it substituted the word “eligible” with “new” in Clause 16(a) and inserted “substantial expansion” in Clause 16(b), was clarificatory in nature because it did not create a new class of beneficiaries or alter substantive rights, but merely clarified the original intent of the Policy.
On promissory estoppel, the Bench held that the doctrine could not be invoked to compel the State to confer a benefit never intended for the respondent’s category, particularly when the respondent had already received the rebate under Clause 16(b). It also observed that the COP certificate merely recognised the respondent’s status as an existing industrial enterprise undergoing substantial expansion and did not amount to sanction or approval of the Clause 16(a) benefit, especially in the absence of sanction under Rule 27 of the 2019 Rules.
Briefly, the appeal arose from the High Court of Himachal Pradesh’s judgment dated May 07, 2025, by which the High Court directed the State to issue an enabling notification granting the respondent the incentive under Clause 16(a) of the Himachal Pradesh Industrial Policy, 2019, and set aside Clause 5B of the Policy and Rules 4(B) and 4(F) of the 2019 Rules to the extent of inconsistency.
The respondent was an existing industrial enterprise engaged in metal processing and stamping, which had commenced commercial production on Apr 11, 2006 and thereafter undertook substantial expansion in 2020. Under Clause 5(A) of the Industrial Policy of 2019, both new industrial enterprises and existing industrial enterprises undertaking substantial expansion were “eligible enterprises” for incentives, subject to specified conditions. Clause 16(a), as originally framed, stated that “eligible enterprises” would receive energy charges 15% lower than the approved charges for three years, whereas Clause 16(b) provided that existing industrial consumers would receive a rebate of 15% on additional power consumption beyond the preceding financial year.
The respondent claimed that, having undertaken substantial expansion and obtained the substantial expansion/COP certificate on Feb 12, 2021, it became entitled to the concessional tariff benefit under Clause 16(a), and that the later amendment dated Apr 29, 2022 substituting “eligible enterprises” with “new enterprises” could operate only prospectively. The State, on the other hand, contended that the use of “eligible” in Clause 16(a) was a drafting error, that Clause 16(a) was always intended only for new industrial enterprises, that Clause 16(b) alone applied to existing enterprises undergoing substantial expansion, and that the Apr 29, 2022 amendment was merely clarificatory.
