Industrial Expansion Does Not Make an Existing Unit a New Industry for Claiming Electricity Concession

Case Name: State of Himachal Pradesh & Ors. v. M/s Kundlas Loh Udyog

Citation: 2026 INSC 534

Date of Judgment/Order: 25 May 2026

Bench: Justice J.B. Pardiwala and Justice K.V. Viswanathan

Held: The Supreme Court 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 and not to existing industrial enterprises undertaking substantial expansion. The Court clarified that existing industries undergoing substantial expansion were entitled to the separate rebate benefit under Clause 16(b), namely 15% rebate on additional power consumption, and not the concessional tariff meant for new industries. The Court further held that the amendment dated 29.04.2022 substituting “eligible enterprises” with “new enterprises” in Clause 16(a) was clarificatory and retrospective, and that promissory estoppel cannot be used to claim a benefit contrary to the true scope of the policy or to obtain double benefit.

Summary: The respondent, an existing industrial unit in Himachal Pradesh, undertook substantial expansion after the Industrial Policy of 2019 and claimed entitlement to concessional electricity charges under Clause 16(a), which originally used the expression “eligible enterprises”. The State contended that Clause 16(a) was meant only for new industrial enterprises, while existing industrial enterprises undergoing substantial expansion were covered separately under Clause 16(b), which granted a 15% rebate on additional power consumption beyond the preceding financial year. During the pendency of the writ petition, the State amended the policy on 29.04.2022 and replaced “eligible enterprises” with “new enterprises” in Clause 16(a), stating that the amendment merely clarified the original intent. The High Court allowed the respondent’s writ petition and directed issuance of enabling notification for the concession under Clause 16(a). The Supreme Court reversed the High Court, holding that the scheme of the policy, the tariff orders before and after the policy, and the structure of Clause 16 clearly showed two separate benefits for two separate classes: new industries under Clause 16(a), and existing industries expanding their units under Clause 16(b).

Decision: The Supreme Court allowed the appeal filed by the State of Himachal Pradesh and set aside the judgment of the Himachal Pradesh High Court. The Court held that the respondent, being an existing industrial enterprise which had undertaken substantial expansion, was entitled only to the rebate benefit under Clause 16(b) read with Rule 16(i)(b), which had already been extended to it, and not to the concessional tariff benefit under Clause 16(a). The Court further held that the COP Certificate dated 12.02.2021 did not create any vested right to claim the new-industry electricity concession, and the doctrine of promissory estoppel had no application because no enforceable equity survived in favour of the respondent. Pending applications were disposed of.