Ultra Tech Cement Ltd. Vs Energy Department (Rajasthan High Court)
In a significant ruling for investor confidence in the green energy sector, the Rajasthan High Court (DB Civil Writ Petition No. 1151/2023) has held that the State cannot arbitrarily withdraw fiscal incentives after investments have been made based on specific policy assurances.
The Core Issue: The Rajasthan Solar Policy 2019 promised a 7-year exemption from Electricity Duty for captive solar plants. Acting on this, UltraTech invested approx. ₹89 Crores in solar infrastructure. However, the State subsequently amended the policy on 10.05.2022, withdrawing the exemption.
The Verdict (Per Justice Arun Monga & Justice Sunil Beniwal):
√ Promissory Estoppel Applies: The Court ruled that the State made a clear, unequivocal representation to induce investment. Having altered their position to their detriment, investors are protected from arbitrary policy reversals.
√ Prospective Application Only: While the State retains the power to amend policy for public interest, such changes cannot retrospectively defeat accrued/vested rights.
√ Relief Granted: UltraTech is entitled to the 7-year duty exemption from their respective Commercial Operation Dates (COD) for projects commissioned prior to the amendment.
Key Takeaway for RE Developers & Legal Counsels:
This judgment reinforces that while fiscal policy can evolve, the sanctity of government assurances in long-gestation infrastructure projects is judicially protected. It strikes a crucial balance between State flexibility and investor reliance.
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