Legal Analysis: State of Himachal Pradesh & Ors. v. M/s Kundlas Loh Udyog

Citation: 2026 INSC 534
Court: Supreme Court of India
Bench: A Division Bench comprising Justice B. Pardiwala and another judge
Date of Decision: May 25, 2026
Nature of Judgment: Civil Appeal arising out of Special Leave Petition No. 26731 of 2025 against the judgment of the Himachal Pradesh High Court.

Synopsis of the Judgment

The respondent, an existing industrial enterprise that undertook substantial expansion, claimed the benefit of a 15% concession on energy charges under Clause 16(a) of the Himachal Pradesh Industrial Policy, 2019, which promised “eligible enterprises” a 15% discount for three years. The State argued that Clause 16(a) was meant only for new industrial enterprises, whereas existing enterprises undergoing expansion were entitled only to a rebate on additional consumption under Clause 16(b). A subsequent amendment notification dated 29.04.2022 substituted the word “eligible” with “new” in Clause 16(a). The High Court allowed the respondent’s writ petition, directing the State to issue the enabling notification and struck down certain provisions. The Supreme Court reversed, holding that (i) Clause 16(a) was always intended to apply only to new industrial enterprises; (ii) the 2022 amendment was clarificatory and retrospective; (iii) the respondent, being an existing enterprise undergoing expansion, was entitled only to the rebate under Clause 16(b), which it had already received; and (iv) the doctrine of promissory estoppel did not apply as no vested right had accrued and the COP certificate did not grant the specific incentive.

1. Basic Information of the Judgment

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

• Citation: 2026 INSC 534

• Civil Appeal No.: Arising out of SLP No. 26731 of 2025

• Bench: Division Bench (Justice B. Pardiwala and a co‑judge)

• Date of Decision: May 25, 2026

• Court: Supreme Court of India (Civil Appellate Jurisdiction)

• Impugned Order: Judgment dated 07.05.2025 of the Himachal Pradesh High Court in Civil Writ Petition No. 1667 of 2021.

2. Legal Framework

Major Laws and Provisions Involved

• Himachal Pradesh Industrial Policy, 2019 – Clause 5 (eligible enterprises), Clause 16 (concessional rate of electricity charges), Clause 5B (admissibility of incentives), Clause 5C (duration of incentives).

• Rules regarding Grant of Incentives, Concessions & Facilities for Investment Promotion in Himachal Pradesh, 2019 – Rule 4 (eligibility), Rule 16(i) (concessional rate of electricity charges), Rule 27 (sanction and disbursement of incentives), definitions of “eligible enterprise”, “existing industrial enterprise”, “substantial expansion”.

• Tariff orders issued by Himachal Pradesh State Electricity Board (appe

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