In Brief
The State of Jammu and Kashmir issued notifications granting 100% CST refunds to small-scale industrial units on raw materials purchased outside the State. A later notification capped the refund at Rs. 2 lacs per annum per unit. The units challenged this cap via writ petitions. The High Court rejected promissory estoppel but held the cap arbitrary and unjustified. The Supreme Court reversed, holding that the State's policy modification was valid based on evidence of fraudulent claims and revenue loss. The Court clarified that previously granted and availed benefits cannot be reopened, but the modified policy applies prospectively.
The lawyer headnote and full judgment text are available to registered users.