The Supreme Court ruled that tax concessions granted by a government are not indefeasible rights and can be withdrawn in the public interest. The bench of Justices P.S. Narasimha and Alok Aradhe allowed Maharashtra’s appeal against captive power generators, affirming the state’s decision to pull back electricity duty exemptions that had been in force since 1994. Key Developments Since 1994, Maharashtra provided electricity duty exemptions to industries engaged in captive power generation under Section 5A of the Bombay Electricity Duty Act, 1958 . In 2000‑2001, the state partially withdrew these exemptions citing fiscal constraints and the need to augment public revenue. The High Court struck down the withdrawal as arbitrary; Maharashtra appealed to the Supreme Court. The Supreme Court held that such exemptions are statutory concessions, not contractual guarantees, and can be modified or withdrawn if a genuine public interest exists. Doctrines of promissory estoppel and legitimate expectation were deemed inapplicable. The Court emphasized that the withdrawal must satisfy reasonableness and fairness, ensuring that affected industries are not subjected to abrupt policy changes without adequate adjustment time. Important Facts The withdrawal notifications dated 01‑04‑2000 and 04‑04‑2001 will take effect after a one‑year grace period. The Court found no evidence of irrelevant considerations or manifest arbitrariness in the state’s decision. The judgment underscores that the right to enjoy a concession is defeasible —it can be taken away under the very power that granted it. UPSC Relevance This case illustrates several core concepts tested in the UPSC syllabus: Administrative Law: The balance between governmental power to modify policies and the principles of fairness, reasonableness, and non‑arbitrariness. Fiscal Policy: How states manage revenue generation through tax concessions and the legal limits of such incentives. Constitutional Doctrines: Application of public interest in curbing arbitrary state action. Legal Doctrines: Understanding why promissory estoppel and legitimate expectation may not apply to statutory concessions. Way Forward Policymakers should draft concession notifications with clear clauses on revocability, specifying the conditions under which withdrawal may occur. Adequate notice periods and transitional assistance can mitigate hardship for industries that have structured investments based on the concessions. For aspirants, the case reinforces the need to analyse the interplay between statutory powers, constitutional safeguards, and economic imperatives when answering questions on governance and fiscal management.