Promissory estoppel fails against withdrawal of sales tax exemption, leaving later sales of end-products taxable.

Promissory estoppel could not stop levy of sales tax on end-products sold after withdrawal of an exemption notification, because the earlier notification granted no perpetual exemption and contained no term preserving relief for goods later manufactured from pre-withdrawal raw materials. The State was exercising its taxing power to withdraw an existing concession, and the later notification validly applied to sales on and after its effective date. The levy on the end-products was therefore upheld, while the exemption for raw materials remained under the later notification.

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Issues: Whether the petitioners could invoke promissory estoppel to prevent levy of sales tax on end-products manufactured after withdrawal of the earlier exemption notification, where the raw materials had been purchased before the withdrawal.

Analysis: The State had authority under item 4 of the Second Schedule to tax both raw materials and end-products. By Notification No. 49/82 dated 24 March 1982, exemption was granted to the end-products subject to conditions, but G.O.P. No. 253 dated 17 March 1986 withdrew that exemption and made the end-products taxable thereafter while exempting the raw materials. The earlier notification did not promise perpetual exemption, and there was no term preserving exemption for goods manufactured later out of pre-notification stock. Since the State was only withdrawing an existing exemption in exercise of its taxing power, and the later notification validly governed sales on and after its date, promissory estoppel had no application.

Conclusion: The plea of promissory estoppel failed, and the levy of sales tax on the end-products sold on or after 17 March 1986 was upheld.

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