Promissory estoppel barred withdrawal of granted tax exemption for tiny industrial units, but khadi and village industries remained subject to the later notification.

A later notification under the Haryana General Sales Tax Act could not retrospectively curtail an exemption already granted to tiny industrial units where the beneficiaries had altered their position by setting up units on that assurance. Promissory estoppel applied because the exemption was conferred by executive notification under delegated power, and no overriding legislative change or equitable basis for withdrawal was shown. The notification was therefore unenforceable against that class. By contrast, khadi and village industries were treated as a different category of concession, with no sufficient representation or detrimental reliance established; the notification was valid as to that class and could be withdrawn.

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Issues: (i) Whether the State could curtail the tax exemption already granted to tiny industrial units by a later notification under the Haryana General Sales Tax Act, 1973; (ii) whether the later notification was valid as applied to khadi and village industries.

Issue (i): Whether the State could curtail the tax exemption already granted to tiny industrial units by a later notification under the Haryana General Sales Tax Act, 1973.

Analysis: The earlier exemption was granted to induce setting up of rural tiny industrial units, and the petitioners altered their position by establishing such units on that assurance. The later notification reduced the benefit by imposing a turnover ceiling and deeming existing certificates modified. The governing principle of promissory estoppel applied because the concession had been extended by executive notification under delegated power, not by an overriding legislative enactment, and no material was shown to justify withdrawal on equitable grounds. The later notification could not retrospectively defeat the accrued exemption.

Conclusion: The later notification was not enforceable against the tiny industrial units, and the petitioners in that class were entitled to continue with the exemption originally granted.

Issue (ii): Whether the later notification was valid as applied to khadi and village industries.

Analysis: The khadi and village industries stood on a different footing because the exemption there was treated as a concession which the State could withdraw, and the record did not establish the kind of representation and detrimental reliance necessary to attract promissory estoppel. The later notification was therefore within the Governor's powers as regards that class of units.

Conclusion: The later notification was valid for khadi and village industries, and the challenge by that class of petitioners failed.

Final Conclusion: The notification was quashed insofar as it affected tiny industrial units, but it remained operative against khadi and village industries.

Ratio Decidendi: An exemption granted by subordinate legislative notification, when acted upon by the beneficiaries and not superseded by a plenary legislative change, cannot be withdrawn to their detriment in violation of promissory estoppel; but a mere concession unaccompanied by such enforceable equity may be withdrawn.

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