Kerala HC: Subsidy provided by Govt Can’t Be Withdrawn with Retrospective Effect

Kerala HC Law Insider

LI Network

Published on: 18 January 2023 at 20:28 IST

In a landmark ruling The Kerala High Court observed that the action of taking away benefits of concessions/subsidies promised by Government Can’t Be Withdrawn with Retrospective Effect.

Kerala High Court made it clear that benefits of concessions/subsidies promised by Government can only be done prospectively.

Kerala High Court Bench of Justice Amit Rawal said, the principle of estoppel arises while extending the promise of steps that have been taken where benefit can’t be taken away after the expiry of some years.


The dispute arose after State government retracted its order of September 26, 2000, wherein it had declared concessions on electricity charges for industrial units like 5-star hotels in order to promote the tourism industry.

Pursuant to the same, the petitioner established a 5-star hotel and claimed tariff concession from 2013-2018 for the electricity they consumed.

However, the State government in February 2019 the concession it had granted in 2015.

For the same Petitioner challenged the government’s action in the High Court and argued that the action of taking away the benefits of concession by promulgating a subsequent order would be considered inappropriate and such administrative order should be considered prospectively.

High Court after hearing submissions said, thereferred to Kusuman Hotels Pvt Ltd versus KSEB wherein the Supreme Court had reiterated that the doctrine of promissory estoppel applies to the State and all administrative orders should ordinarily be considered prospective in nature.

High Court added, the government’s intention was to attract persons like the petitioner and provide them with financial benefits and also the contents of the said GO did not reveal retroactive operation.

Going through the facts Court quashed the impugned order and directed the respondent to disburse the electric tariff concession to the petitioner along with a 6% interest within two months.

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