State Govt Can’t Speak In Two Voices; Can’t Withhold Benefits Once Policy Decision Is Taken: Himachal Pradesh High Court
The Himachal Pradesh High Court allowed a Writ Petition seeking a direction to issue the enabling notification in terms of Incentives under Clause 16(a) of the Industrial Policy, 2019 with effect from the date of commercial production.
Justice Tarlok Singh Chauhan, Justice Sushil Kukreja, Himachal Pradesh High Court
The Himachal Pradesh High Court held that the State Government cannot withhold the benefits simply for want of notification once it has taken a policy decision.
The Court held thus in a Writ Petition seeking a direction to issue the enabling notification in terms of Incentives under Clause 16(a) of the Industrial Policy, 2019 with effect from the date of commercial production.
A Division Bench comprising Justice Tarlok Singh Chauhan and Justice Sushil Kukreja observed, “… the State Government cannot speak in two voices. Once the Government has taken a policy decision to extend certain benefits to the petitioner, the same cannot be withheld simply for want of notification.”
Senior Advocate Shrawan Dogra appeared for the Petitioner while Advocate General (AG) Anup Rattan and Senior Advocate Sunita Sharma appeared for the Respondents.
Facts of the Case
It was averred in the Petition that it was the State itself which notified a Policy under the name “The Himachal Pradesh Industrial Investment Policy, 2019”. Under the said Industrial Policy, it was assured to the eligible enterprises that they would be charged 15% less the energy charges in case they do substantial expansion in accordance with the “Rules regarding Grant of Incentives, Concessions and Facilities for Investment Promotion in Himachal Pradesh-2019” (Incentive Rules). After the enactment of the Industrial Policy, the tariff order for the year 2019-2020 was passed by the Himachal Pradesh Electricity Regulatory Commission (HPERC) relating to Large Industrial Power Supply. The Petitioner thereafter acting on the representation held out by the State Government applied for expansion of the manufacturing unit before the State by filing a common application form.
Later, HPERC issued a tariff order for the year 2020-2021 whereby the tariff fixed was not as per the representation held out by the State and Industrial Policy 2019. Resultantly, the Petitioner vide its letter addressed to the Chief Minister, sought redressal of its grievance regarding the non-implementation of the incentives held out in the 2019 policy. Meanwhile, the expansion of the Unit was carried out by the Petitioner and the same was approved by the State Single Window Clearance & Monitoring Authority. The Department of MPP and Power issued a certificate of substantial expansion. Since the tariff incentives had yet not been announced, the Petitioner wrote a letter to the Chief Secretary, H.P. State intimating that the Petitioner and similarly situated persons felt cheated by the State as notification qua incentives relating to electricity was not being issued. Thereafter, the incentives as promised were not granted to the Petitioner and being aggrieved, it was before the High Court.
Reasoning
The High Court in view of the above facts, directed, “… we find merit in this petition. Accordingly, respondent No.2 is directed to issue the enabling notification in terms of the incentive under clause 16 (A) of the Industrial Policy 2019 w.e.f. the date of commercial production qua the petitioner within a period of four weeks from today.”
The Court said that it was the Respondents themselves who had categorically held out in their letter that the enabling notification relating to tariff and incentive would be notified and the Petitioner in terms of the policy, rules and the promise held out to it had done substantial expansion.
“Therefore, in such circumstances, clause 5B of the Industrial Policy, 2019 along with Rule 4B(b) and 4F of the Rules regarding grant of incentives, concessions and facilities for investment promotion to the extent they are inconsistent with the Industrial Policy, 2019, is set-aside”, it ordered.
Accordingly, the High Court allowed the Petition.
Cause Title- M/s. Kundlas Loh Udyog v. State of H.P. & Ors. (Neutral Citation: 2025:HHC:13047)
Appearance:
Petitioner: Senior Advocate Shrawan Dogra and Advocate Manik Sethi.
Respondents: AG Anup Rattan, Senior AAG Yashwardhan Chauhan, Senior Advocate Sunita Sharma, AAGs Ramakant Sharma, Navlesh Verma, Sharmila Patial, Dy. AGs Swati Draik, Shalabh Thakur, and Advocate Dhananjay Sharma.
