Orissa High Court invalidates retrospective SGST reimbursement withdrawal

The Orissa High Court has ruled that the State of Odisha cannot retrospectively exclude cement manufacturing and grinding units from net SGST reimbursements. The decision addressed a writ petition filed by JSW Cement Limited challenging a 2020 resolution that sought to withdraw benefits originally granted under the Industrial Policy Resolution, 2015, effective from July 1, 2017.

The court distinguished between the authority to modify incentives prospectively and the retrospective withdrawal of benefits for investments already undertaken. The petitioners had made significant capital investments and commenced commercial production prior to the amendment.

In its ruling, the court held that financial implications alone do not constitute an overriding public interest sufficient to justify retrospective exclusion. The court also noted that the state failed to provide a justification for the selective denial of reimbursements to cement and blast furnace slag-based units, declaring the move arbitrary.