Legislative exemption cancellation by notification is not barred by equitable estoppel or absence of hearing and reasons.

The power to grant or cancel exemption by notification under section 10 of the Kerala General Sales Tax Act was treated as legislative in character. On that basis, equitable estoppel could not prevent the State from withdrawing the exemption, and the absence of a hearing or recorded reasons did not vitiate the cancellation unless the statute required them. The cancellation was also not shown to be contrary to public interest. The Kerala HC therefore upheld the cancellation notification and rejected the challenge to its validity.

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Issues: Validity of the cancellation of exemption granted under section 10 of the Kerala General Sales Tax Act, 1963, and the availability of equitable estoppel or want of public interest or reasons to invalidate the cancellation.

Analysis: The exemption had been granted by notification under section 10(1) and was later cancelled under section 10(3). The power under section 10(3) was treated as a legislative power, and the Court held that the doctrine of equitable estoppel could not be used to prevent the State from exercising that power. The Court further held that the cancellation was not shown to be outside public interest and that no requirement of hearing or recorded reasons could be imported into a legislative notification of this kind. The challenge based on the cancellation notification therefore failed.

Conclusion: The cancellation notification was upheld and the challenge to its validity was rejected.

Ratio Decidendi: A statutory power to grant or cancel exemption by notification, when exercised as legislative power, is not ordinarily defeated by equitable estoppel, and the validity of such cancellation will not be impeached merely for absence of hearing or recorded reasons unless the statute so requires.

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