Wind farm developer Energiekontor (UK) Limited was granted planning permission to erect two wind turbines on farmland in Rhydcymerau, near Llandeilo, in March 2016.
The consent, granted by Carmarthenshire County Council, was subject to 22 conditions, including a 100-metre restriction on the tip height of the turbines.
In August 2016, the developer applied to the council under section 73 of the Town and Country Planning Act 1990 for the removal or variation of that condition, to enable the erection of taller turbines, measuring 125 metres.
The council refused the application, but Energiekontor successfully appealed to a planning inspector, who granted permission for the taller turbines.
In permitting the development to proceed without compliance with the original 100-metre height restriction, the inspector altered the description of the development by excising that condition from the new planning permission. Drawings of the 125-metre turbines were substituted.
A challenge to the inspector's decision was brought by objector, professor John Finney, but the planning permission was upheld by the High Court in a landmark judgment last November.
At the time, experts concluded that the judgment could allow developers far greater leeway to amend existing permissions without having to resubmit applications from scratch.
Now, however, three Court of Appeal judges have upheld professor Finney's appeal against that decision, ruling that the inspector simply had no power to decide as she did.
Lawyers for the Welsh Government had expressed concern that a ruling in professor Finney's favour would lead to a curtailment of their ability to refine development proposals after the granting of planning permission, as more information comes to light about what might be financially viable or physically deliverable.
Giving the court's ruling, Lord Justice Lewison said there could be no challenge to the inspector's exercise of her planning judgment.
The sole issue in the case was whether she had power under section 73 to grant planning permission for a proposal that was not covered by the description of the development in the body of the original planning permission.
Although local authorities have power to discharge conditions attached to planning permissions, or replace existing conditions with new ones, the judge said that such conditions are invalid if they alter the extent or nature of the development originally permitted.
On a true interpretation of section 73, it was not open to the inspector to alter the description of the development contained in the operative part of the planning permission, he ruled.
The judge, who was sitting with Lord Justice David Richards and Lord Justice Arnold, noted that section 73 on the face of it enables grants of permission for developments without complying with conditions subject to which a previous permission has been granted.
However, the judge ruled that it cannot be used to "change the description of the development" and, by purporting to do that, the inspector had acted beyond her statutory powers.
Lord Justice Lewison did not accept that the impact of the court's decision on developers would be as 'dire' as suggested. If material changes to existing planning permissions were proposed, he could see no objection to fresh planning applications being required.
The judge concluded: "I would allow the appeal and quash the inspector's decision because it was beyond her powers."
The court's decision did not affect the validity of the original planning permission to which the 100-metre height restriction was attached.