Promissory estoppel protected sales tax exemption where a later notification could not reduce the promised benefit period.

An industrial unit set up in reliance on a Government Order promising six years' sales tax exemption under section 4-A of the U.P. Sales Tax Act was held entitled to that period of benefit. The later notification could not curtail the exemption to four years for units that had already commenced production, because the State's representation had been acted upon and promissory estoppel applied. The absence of gazette publication did not invalidate the Government Order on these facts, given consistent state conduct and treatment of similarly placed units. An investment-based restriction could not be implied into the earlier promise to defeat the exemption.

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Issues: Whether the petitioner was entitled to sales tax exemption for six years under the Government Order issued under section 4-A of the U.P. Sales Tax Act, 1948, and whether the later notification and the alleged investment-based restriction could reduce that exemption to four years.

Analysis: The petitioner had set up the industrial unit acting upon the State's representation that new units in the specified area would receive exemption for six years. The Court held that the subsequent notification could not curtail the benefit already promised to units that had entered production before the later notification, and that the doctrine of promissory estoppel applied because the representation was made under the statutory exemption power and had been acted upon. The Court further held that the absence of gazette publication did not invalidate the Government Order in the facts of the case, since it had been acted upon consistently by the State and by similarly placed units, and a contrary view would be discriminatory. The investment-related condition could not be read into the earlier representation so as to defeat the promised exemption.

Conclusion: The petitioner was entitled to exemption for six years from the date of production, and the reduction of the exemption period to four years was unsustainable.

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