Withdrawal of sales tax exemption upheld where public interest, legislative power, and no enforceable promissory estoppel were established.

A general sales tax exemption granted by delegated legislative action may be withdrawn in public interest where the governing statute permits rescission. Promissory estoppel failed because the exemption was a general fiscal measure, not a clear promise to identified dealers, and it could not operate against legislative policy or in support of a claim contrary to law. Legitimate expectation also failed because continuation of a fiscal concession cannot override overriding public interest. The Government was held to have power to revoke the exemption, and no prior notice or hearing was required for legislative action. The challenge based on Articles 19(1)(g) and 300-A, and the plea of waiver, also failed.

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Issues: (i) Whether the withdrawal of the sales tax exemption was barred by promissory estoppel; (ii) Whether the petitioners had a legally enforceable legitimate expectation of continuation of the exemption for five years; (iii) Whether the Government had power to rescind the exemption and whether natural justice was required before doing so; (iv) Whether the impugned Government Order violated Articles 19(1)(g) and 300-A of the Constitution of India or was invalid on the plea of waiver.

Issue (i): Whether the withdrawal of the sales tax exemption was barred by promissory estoppel.

Analysis: Promissory estoppel requires a clear and unequivocal promise, intended to create legal relations, and acted upon by the promisee. The exemption was a general fiscal measure and not a promise to any identified petitioner. The petitioners failed to establish that they had started new industries or altered their position on the basis of the exemption. The exemption had also been obtained on misrepresentation, and the withdrawal was part of a legislative policy measure. Promissory estoppel does not operate against legislative action or in aid of a claim contrary to law.

Conclusion: The plea of promissory estoppel failed and the challenge on that ground was rejected.

Issue (ii): Whether the petitioners had a legally enforceable legitimate expectation of continuation of the exemption for five years.

Analysis: Legitimate expectation cannot defeat an overriding public interest. The withdrawal of exemption was made to augment State revenue in support of a broader policy decision, and therefore the continuation of the earlier concession was not enforceable as of right. Mere expectation from an earlier policy decision does not create a crystallised legal entitlement where public interest justifies a different fiscal course.

Conclusion: The doctrine of legitimate expectation did not apply and the challenge on that ground failed.

Issue (iii): Whether the Government had power to rescind the exemption and whether natural justice was required before doing so.

Analysis: Section 9 of the Andhra Pradesh General Sales Tax Act empowered the Government to grant exemption, and Section 15 of the General Clauses Act carried with it the power to rescind or revoke the exemption. The court treated the impugned Government Order as a legislative act, and for such legislative action no prior notice or hearing was required to be given to individual dealers. The plea that the exemption could not be withdrawn in the absence of an express enabling provision was therefore untenable.

Conclusion: The Government had power to rescind the exemption, and no violation of natural justice was made out.

Issue (iv): Whether the impugned Government Order violated Articles 19(1)(g) and 300-A of the Constitution of India or was invalid on the plea of waiver.

Analysis: The petitioners did not establish that their industries had been closed or that their business was unreasonably destroyed by the withdrawal of exemption. The tax regime remained comparatively moderate, and the fiscal measure was justified by public interest. The plea of waiver also failed because it had not been pleaded or factually laid, and waiver is a question of fact requiring proper pleading and proof.

Conclusion: No constitutional infirmity or waiver was proved, and this challenge also failed.

Final Conclusion: The withdrawal of the earlier sales tax exemption was upheld as a valid fiscal and legislative measure taken in public interest, and the writ petitions were dismissed.

Ratio Decidendi: A general fiscal exemption granted by delegated legislative action may be rescinded in public interest, and neither promissory estoppel nor legitimate expectation can bar such rescission against a legislative measure; prior notice is not required for legislative action, and the power to grant exemption includes the power to withdraw it where the governing statute so permits.

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