Supermarket giant Tesco said it was disappointment plans to build a new store in Cleckheaton have been rejected.
Kirklees Council's Heavy Woollen planning committee decided to reject the application as a condition to reduce the height of the proposed store had not been met.
A Tesco spokesman said: "Naturally we are disappointed with the decision to refuse our application. We are now going to consider what our next steps will be."
The committee members voted last month to delay the decision to approve the plans until a number of conditions were met, including a reduction in the height of the store and the removal of provision for a future additional floor to be addressed.
Cleckheaton has been at the heart of a battle between supermarket giants Tesco and Asda for more than a year.
The chains have both submitted applications for superstores in the town.
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