Promissory estoppel protected a sales tax holiday where later procedural guidelines could not cut down a notified fiscal concession.

A notified Government Order granting small-scale industrial units a five-year sales tax holiday up to a ceiling of Rs. 35,00,000 could not be curtailed by a later Manual of Guidelines that dealt only with procedure. The later restriction limiting the concession to 100 per cent of fixed capital investment, and the District Committee orders based on it, were held inconsistent with the substantive promise already made. A notified concession can be altered only by another notified order issued with equal legal force and in the prescribed manner, and the promise was enforceable under promissory estoppel because the units had acted upon it.

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Issues: Whether small-scale industrial units were entitled to sales tax holiday up to Rs. 35,00,000 under G.O. Ms. No. 498, or whether the entitlement could be restricted to 100 per cent of fixed capital investment under the later Manual of Guidelines and the District Committee orders.

Analysis: The Government Order granted a sales tax holiday for five years subject only to a ceiling of Rs. 35,00,000. The later Manual of Guidelines was issued subsequently and was confined to prescribing forms, time-limits and other procedural matters. It did not authorise the State to cut down the substantive concession already promised. The restriction introduced by the Manual and followed by the District Committee could not override the notified Government Order, and an alteration of that notified order could be made only by another notified order issued in the same manner. The petitioners had acted on the promise contained in the Government Order, so the doctrine of promissory estoppel applied against the respondents.

Conclusion: The petitioners were entitled to the full sales tax holiday promised in the Government Order, subject to the ceiling of Rs. 35,00,000 for the five-year period. The restriction limiting the benefit to fixed capital investment, and the consequential assessments based on that restriction, were invalid and unenforceable.

Final Conclusion: The statutory and executive action reducing the promised incentive could not stand, and the writ petitions succeeded with a direction to extend the full concession in terms of the Government Order.

Ratio Decidendi: A substantive fiscal concession granted by a notified Government Order cannot be curtailed by later procedural guidelines unless the concession is altered by an instrument of equal legal force and in the prescribed manner; a promise so made and acted upon is enforceable under promissory estoppel.

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