Promissory estoppel protects tax incentive reliance, preventing later notification from cancelling an earned sales tax exemption.

A tax exemption granted under a government incentive scheme could not be withdrawn against an industrial unit that had already set up operations in reliance on the State's promise and had satisfied the scheme conditions. The later notification excluding the industry from the benefit was held inapplicable to the petitioner because promissory estoppel prevented the State from defeating an accrued incentive by subsequent withdrawal. On that basis, cancellation of the exemption certificate was illegal, and the petitioner remained entitled to the promised sales tax exemption.

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Issues: Whether the petitioner, having set up its new industry in reliance on the Government's sales tax incentive scheme and the notification issued to implement it, was entitled to continue to receive the exemption despite the later notification excluding its industry from the benefit, and whether the cancellation of the exemption certificate was valid.

Analysis: The industry was established in a backward area pursuant to the Government's resolutions promising sales tax incentives, and the competent authorities had granted eligibility and exemption certificates. The later notification, issued under section 49(2) of the Gujarat Sales Tax Act, 1969, withdrew the benefit for certain industries, but the Court held that the notification could not be applied to units that had already acted on the Government's promise and had fulfilled the scheme conditions. The concession of exemption may ordinarily be withdrawn, but such withdrawal is subject to the doctrine of promissory estoppel where the industry was set up in reliance on the promise.

Conclusion: The subsequent notification did not apply to the petitioner, the cancellation of the exemption certificate was illegal, and the petitioner remained entitled to the sales tax exemption promised under the scheme.

Ratio Decidendi: A statutory notification withdrawing a tax exemption cannot be applied retrospectively to defeat a benefit promised under a government incentive scheme where an was established in reliance on that promise and the scheme conditions were satisfied.

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