Promissory estoppel secured octroi exemption, and a sales tax notification was applied to grant industrial tax relief.

An executive industrial policy promise of octroi exemption was enforceable under promissory estoppel where entrepreneurs altered their position by establishing and commencing production in reliance on it. A later policy revision could not defeat the assurance because the State showed no statutory bar or overriding public interest sufficient to justify withdrawal, so the five-year exemption remained available. The later sales tax notification under the Orissa Sales Tax Act, 1947 also operated according to its terms, and the petitioners satisfied the conditions for exemption on raw materials, machinery, spare parts and packing materials for five years from certification. The article states that the petitions succeeded in part and both fiscal incentives were recognised to the extent provided by the policy and notification regime.

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Issues: (i) Whether the State was bound by promissory estoppel to grant octroi exemption promised in the Industrial Policy Resolution notwithstanding the later revision; (ii) Whether the petitioners were entitled to sales tax exemption under the amended notification and the Industrial Policy Resolution.

Issue (i): Whether the State was bound by promissory estoppel to grant octroi exemption promised in the Industrial Policy Resolution notwithstanding the later revision.

Analysis: The promise of octroi exemption was made in an executive industrial policy intended to induce entrepreneurs to establish new units, and the petitioners altered their position by setting up and commencing production of the mills in reliance upon that promise. The State had power under the Orissa Municipal Act, 1950 to secure exemption from octroi for new industries, and no legislative prohibition or material showing overriding public interest was established to justify withdrawal of the assurance. A mere change of policy was held insufficient to defeat the equitable doctrine of promissory estoppel.

Conclusion: The subsequent revision could not defeat the promised octroi exemption, and the petitioners were entitled to the benefit for the stipulated five-year period.

Issue (ii): Whether the petitioners were entitled to sales tax exemption under the amended notification and the Industrial Policy Resolution.

Analysis: The later notification under section 6 of the Orissa Sales Tax Act, 1947 introduced item 26-A granting exemption for raw materials, machinery, spare parts and packing materials for five years from certification of the unit, and the petitioners satisfied the conditions for availing that exemption. The exemption was in force and had not been withdrawn, and the authorities conceded its applicability on the facts found.

Conclusion: The petitioners were entitled to sales tax exemption in accordance with item 26-A and the governing procedure.

Final Conclusion: The writ petitions succeeded in part, and the petitioners obtained relief for both octroi and sales tax benefits to the extent recognised by the policy and notification regime.

Ratio Decidendi: An executive promise of fiscal incentive that induces alteration of position is enforceable against the Government unless a legally substantiated public interest or statutory bar justifies withdrawal, and a valid exemption notification must be given effect according to its terms.

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