Electricity duty exemption linked to an eligibility certificate extends automatically with the certificate’s formal extension.

The Petitioner, a "Mega Project" under the State’s Package of Incentive Scheme, was issued an Eligibility Certificate (EC) on August 3, 1998, for 14 years (ending August 5, 2012).

Under Section 5A of the Bombay Electricity Duty Act (BEDA), 1958, the State issued a Notification on December 29, 1999, exempting Mega Projects from electricity duty for the "period of eligibility... as mentioned in the Eligibility Certificate".

On October 6, 2012, via Addenda III, the Directorate of Industries extended the EC's validity to August 5, 2019, as the Petitioner had not exhausted its sales tax incentives.

While the Energy Department initially supported extending the electricity duty exemption, the Finance Department denied it, leading to a demand for arrears.

The Petitioner paid ₹47,47,61,492/- under protest and challenged the denial, arguing that the exemption was tied to the life of the EC.

The court applied Section 5A of the BEDA, 1958, which empowers the State to grant exemptions in public interest.

It relied on the 1999 and 2001 Notifications issued thereunder, which tied exemption duration to the "period of eligibility" in the EC.

The court also applied the doctrine of promissory estoppel, referencing State of Jharkhand v. Brahmputra Metallics Ltd., holding that the State cannot withdraw a promise after a party has made significant investments.

Furthermore, it applied Sections 4 and 16 of the Maharashtra Electricity Duty Act, 2016, which contain "Repeals and Savings" provisions to protect rights and orders issued under the previous Act.

The Court observed that the 1999 Notification’s language was plain and unambiguous, specifically linking the exemption to the "period of eligibility" mentioned in the EC.

Since Addenda III extended the EC’s validity until 2019, the exemption period was automatically extended by operation of the Notification’s own terms.

The Court rejected the State's distinction between "validity period" and "eligibility period," noting that the State’s own affidavit admitted the "eligibility period" was extended.

Regarding the 2016 Act, the Court reasoned that Sections 4 and 16 expressly saved rights accrued and orders issued under the 1958 Act, meaning the existing exemption remained in force until the EC expired in 2019.

Finally, the Court held that the Petitioner had a legitimate expectation based on the State’s promise, and the Finance Department's sudden reversal was arbitrary and inequitable.

It held that the Petitioner was entitled to the electricity duty exemption until August 5, 2019, by virtue of the 1999/2001 Notifications read with Addenda III.

The Court ordered the Respondents to refund the sum of ₹47,47,61,492/- paid under protest within 12 weeks of the judgment.