Budgetary Support Scheme 2018 Withdrawal For Reimbursement Of IGST To Manufacturing Units: J & K HC Upholds UT Govt’s Decision

The Jammu and Kashmir and Ladakh High Court upheld the UT government’s decision to withdraw the Budgetary Support Scheme, notified in 2018, which provided reimbursement of Integrated Goods and Service Tax (IGST) to manufacturing units. The petitioners, including Sudhir Power Limited, challenged the withdrawal, arguing that it violated the principle of promissory estoppel. The High Court found that promissory estoppel applies even in the legislative field and against the government when acting in its sovereign or executive functions. The court ruled that the withdrawal of the scheme was within the government’s rights and did not violate any legal principles. This decision underscores the government’s authority to modify or withdraw fiscal policies and the limited scope of promissory estoppel in such cases. Manufacturing units affected by the withdrawal must now adjust to the revised fiscal landscape.