Sales tax exemption under industrial policy limited by statutory scheme; no enforceable promise or promissory estoppel against the State.

The 1991 industrial policy did not create an enforceable promise of full sales tax exemption for existing units undertaking expansion, modernisation or diversification, because the scheme was read with Section 9(4) of the Assam General Sales Tax Act, 1993, which authorised the State to grant exemption subject to conditions and restrictions. Existing units were entitled only to incentives linked to the expanded portion, not to full exemption. The 1995 sales tax concession scheme was upheld as a valid statutory scheme; it was not treated as retrospective merely because it operated from an earlier date, and no promissory estoppel arose against the fiscal measure. The classification and production-linked conditions were not found arbitrary or unconstitutional.

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Issues: Whether the 1991 industrial policy and eligibility certificates created an enforceable promise or vested right to full sales tax exemption for existing units undertaking expansion, modernisation or diversification, and whether the 1995 sales tax concession scheme was ultra vires, retrospective, or unconstitutional.

Analysis: The policy framework was read with the statutory power under Section 9(4) of the Assam General Sales Tax Act, 1993, which authorised the State Government to frame schemes granting full or partial exemption and to prescribe conditions and restrictions. Section 74(3)(f) preserved only exemptions already granted prior to the appointed day; it did not disable the State from issuing a later statutory scheme. The 1991 policy was held to confer full incentives only on new units, while existing units were entitled only to benefits linked to the expanded portion, subject to prescribed conditions. The Court also held that the 1995 scheme did not operate retrospectively merely because it was given effect from an earlier date within the statutory framework, and that no enforceable promise was shown which could found promissory estoppel against a fiscal measure. The criteria linking concession to increased production and the classification within the scheme were not found arbitrary or violative of Articles 14 or 19(1)(g) of the Constitution of India.

Conclusion: The challenge to the 1995 scheme failed, and the State was not estopped from limiting sales tax exemption to the extent provided under the statutory scheme.

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