Promissory estoppel barred curtailing a promised sales tax exemption after the industrial unit relied on the original government representation.

A later notification could not reduce a promised sales tax exemption period where a small-scale industrial unit had been established in reliance on the original government representation and eligibility certification. The earlier order and clarification had induced the petitioner to alter its position, so promissory estoppel prevented the State from defeating the benefit already extended. The reduced three-year period was therefore inapplicable, and the unit remained entitled to the five-year exemption period stated in the original representation.

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Issues: Whether the State could curtail the petitioner's sales tax exemption period from five years to three years after the petitioner had established the industrial unit acting on the original government representation.

Analysis: The initial government order and the clarification issued under it extended a longer exemption benefit to units like the petitioner, who had established a new small-scale industrial unit and acted on the representation by setting up the unit and obtaining eligibility certification. A later notification reducing the exemption period could not be applied to defeat the benefit already promised and relied upon, since the petitioner had altered its position on the faith of the earlier representation. The doctrine of promissory estoppel therefore applied.

Conclusion: The reduction of the exemption period was impermissible, and the petitioner remained entitled to sales tax exemption for five years from 1 January 1984.

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