Power to rescind tax exemption upheld: withdrawal in public interest defeated claims of legitimate expectation and promissory estoppel.

The State's power to grant a sales tax exemption also includes the power to rescind it, and withdrawal in public interest is therefore lawful. The challenge based on arbitrariness, legitimate expectation, promissory estoppel, and constitutional infringement failed because an exemption granted under the taxing statute did not create an enforceable right to its continuation. Reliance on Directive Principles did not alter that position, and article 31-C did not assist on these facts. The claim of double jeopardy was also untenable because entitlement under a separate government order raised a distinct issue. The exemption withdrawal was upheld, and the writ petitions were not sustainable.

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Issues: Whether the State Government could withdraw the sales tax exemption granted to lime manufacturing units, and whether such withdrawal was invalid on the grounds of arbitrariness, legitimate expectation, promissory estoppel, or violation of constitutional guarantees.

Analysis: The exemption was granted under section 9(1) of the Andhra Pradesh General Sales Tax Act, 1957, which empowers the State to grant exemption or reduction in tax. The reasoning applied in earlier binding authority treated the power to grant exemption as including the power to rescind it, aided by section 15 of the General Clauses Act. On that basis, withdrawal of exemption in public interest was held not to attract the doctrine of legitimate expectation or promissory estoppel. The reliance on Directive Principles was also rejected because they do not create an enforceable fundamental right to continue a tax exemption, and article 31-C did not assist the petitioners on these facts. The claim of double jeopardy was also found untenable, as entitlement under a different government order was a separate question.

Conclusion: The withdrawal of exemption was upheld, and the challenge based on illegality, arbitrariness, legitimate expectation, promissory estoppel, and constitutional infringement failed.

Final Conclusion: The exemption could lawfully be rescinded by the State, and the writ petitions were not sustainable.

Ratio Decidendi: The power to grant a tax exemption includes the power to rescind it, and withdrawal of exemption in public interest does not violate legitimate expectation or promissory estoppel.

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