Sudhir Power Limited Vs Union Territory of Jammu and Kashmir (Jammu & Kashmir High Court)
Budgetary Support Scheme is not hit by Doctrine of Promissory Estopple and Legitimate Expectations: Jammu & Kashmir High Court
Summary: In Sudhir Power Ltd. vs Union Territory of Jammu and Kashmir, the Jammu & Kashmir High Court dismissed a petition challenging the government’s withdrawal of the Budgetary Support Scheme (BSS) and its replacement with the Turnover Incentive Scheme, 2021. The petitioners claimed the government had violated the doctrines of promissory estoppel and legitimate expectation by ending BSS prematurely, arguing that BSS was meant to last until 2026 as per the earlier Industrial Policy. However, the court found that both schemes aimed at benefiting industrial units and the change was not arbitrary, irrational, or unreasonable. The court stated that the doctrines were not applicable in this case, as the government acted within its rights by adjusting the policy based on current needs. The court emphasized that the BSS provided tax reimbursements, while the Turnover Incentive Scheme based incentives on gross turnover, effectively continuing support to industrial units. Referencing several Supreme Court rulings, the High Court clarified the distinctions between promissory estoppel and legitimate expectations, noting that while legitimate expectations rely on fairness, promissory estoppel requires a clear and unequivocal promise. The court concluded that there was no violation of the petitioners’ rights under Article 14 of the Constitution and upheld the withdrawal of BSS, asserting that government policy changes are permissible, especially when they aim to streamline industrial incentives under new frameworks like the GST regime.
