Promissory estoppel barred curtailment of sales tax exemption for units established under an earlier notification.

Promissory estoppel prevented the State from withdrawing a sales tax exemption for industrial units that had been established and had acted on an earlier exemption notification. The earlier notification granted qualifying tiny rural industrial units exemption for a fixed period, and the petitioners had set up their units and obtained exemption certificates while it was in force. A later notification introduced a turnover limit and curtailed the concession, but the HC held that it could operate only prospectively for units established after its commencement. The later notification therefore did not apply to the petitioners, who remained entitled to exemption on their entire turnover for the stipulated period under the earlier notification.

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Issues: Whether the later notification restricting sales tax exemption could be applied to industrial units that had already been established and had acted upon the earlier exemption notification.

Analysis: The earlier notification granted exemption to qualifying tiny rural industrial units for a fixed period, and the petitioners had established their units and obtained exemption certificates while that notification was in force. The later notification introduced a turnover limit and curtailed the exemption for existing units. The Court held that the State could not withdraw or curtail the concession in respect of units that had been set up in reliance on the earlier promise. The later notification was held to operate only prospectively for units established after its commencement. The rule of promissory estoppel was applied to prevent the State from going back on its representation.

Conclusion: The later notification did not apply to the petitioners' units, and they remained entitled to exemption on their entire turnover for the stipulated period under the earlier notification.

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