Promissory estoppel cannot stop withdrawal of a statutory sales tax exemption where the State revises fiscal policy.

Promissory estoppel did not bar the State from withdrawing a sales tax exemption granted to small-scale industrial units under the taxing statute, because the exemption formed part of the statutory fiscal field and could be modified by notification. The earlier wording limiting exemption to a maximum of ten years also supported the State's ability to curtail the concession. The challenge that the withdrawal was discriminatory or otherwise unconstitutional failed, as no violation of Article 14 or excess of statutory power was shown. The impugned sales tax notification was therefore upheld as intra vires and the writ petitions were dismissed.

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Issues: (i) Whether the State was estopped by promissory estoppel from withdrawing the sales tax exemption granted to small-scale industrial units by the impugned notification; (ii) Whether the withdrawal of exemption for the petitioners' units was discriminatory or otherwise unconstitutional.

Issue (i): Whether the State was estopped by promissory estoppel from withdrawing the sales tax exemption granted to small-scale industrial units by the impugned notification.

Analysis: The exemption was issued in exercise of the State's taxing power under section 5 of the Jammu and Kashmir General Sales Tax Act, 1962. A notification granting tax exemption is part of the legislative or statutory field, and the doctrine of promissory estoppel does not operate to prevent the State from withdrawing or modifying such fiscal concessions. The wording of the earlier notification, which stated that no unit shall be entitled to exemption for a period exceeding ten years, was also treated as leaving room for curtailment of the concession.

Conclusion: The plea of promissory estoppel was rejected and the withdrawal of exemption was held valid.

Issue (ii): Whether the withdrawal of exemption for the petitioners' units was discriminatory or otherwise unconstitutional.

Analysis: The impugned notification was made under the authority of the taxing statute and applied in the field of fiscal policy. The Court found no constitutional infirmity in the State's decision to alter the class of exempted goods. The petitioners failed to establish that the notification violated article 14 of the Constitution of India or was beyond the State's powers.

Conclusion: The challenge based on discrimination and unconstitutionality failed.

Final Conclusion: The impugned sales tax notification was upheld as intra vires, and the writ petitions were dismissed.

Ratio Decidendi: Promissory estoppel cannot be invoked to restrain the State from exercising its statutory taxing power to withdraw or modify a fiscal exemption granted under a sales tax enactment, and such withdrawal is not unconstitutional merely because it alters an earlier concession.

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