Promissory estoppel and legitimate expectation could not compel continuation of a withdrawn tax subsidy for private sugar mills.

The Tribunal's jurisdiction extended to disputes on purchase tax and connected recovery issues because the statute covered levy, assessment, collection and incidental matters. The claimed entitlement to subsidy under the earlier policy failed: the subsidy was confined to new co-operative and public sector factories, no clear promise was shown for private mills generally, and the later order substituted a deferral scheme while withdrawing further subsidy. The Article 14 challenge also failed because the petitioners were not similarly situated to two other mills that had received special relief earlier, and the State's policy shift had a rational basis. The demand under the later scheme was upheld, as it matched the petitioners' own returns and the recoverable excess, with no breach of natural justice.

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Issues: (i) Whether the Tribunal had jurisdiction to entertain disputes concerning purchase tax and connected questions under the special tribunal statute; (ii) whether the petitioners were entitled, on promissory estoppel or legitimate expectation, to purchase tax subsidy under the earlier government policy despite the later deferral scheme; (iii) whether denial of the earlier subsidy, especially when compared with two other sugar mills, violated Article 14; and (iv) whether the demand for tax under the later scheme offended natural justice and the statutory provisions governing recovery.

Issue (i): Whether the Tribunal had jurisdiction to entertain disputes concerning purchase tax and connected questions under the special tribunal statute.

Analysis: The jurisdictional provision vested the Tribunal with authority over matters of levy, assessment, collection and enforcement of tax, including matters connected with or incidental thereto. The challenge to the levy and recovery of purchase tax, and the interpretation of the statutory and delegated provisions governing that recovery, fell within that wide grant of jurisdiction.

Conclusion: The issue was answered in favour of the petitioners.

Issue (ii): Whether the petitioners were entitled, on promissory estoppel or legitimate expectation, to purchase tax subsidy under the earlier government policy despite the later deferral scheme.

Analysis: The earlier government order granting subsidy was confined to new sugar factories in the co-operative and public sectors. The materials did not show any clear promise to private sector sugar mills generally, and the isolated relief granted to two private mills did not establish a policy representation binding the State in favour of all private units. The later order replaced subsidy with a deferral scheme and expressly withdrew further subsidy. The facts also showed that the petitioners had accepted the deferral regime for their returns and tax calculations. The doctrines of promissory estoppel and legitimate expectation could not be invoked to compel continuance of a benefit never promised to the petitioners.

Conclusion: The issue was answered against the petitioners.

Issue (iii): Whether denial of the earlier subsidy, especially when compared with two other sugar mills, violated Article 14.

Analysis: Equality analysis required a real parity of circumstances. The two sugar mills that had obtained special relief had applied earlier and their cases were considered on their own facts. The petitioners had not sought such relief before the later policy change and commenced production after the deferral scheme came into force. The petitioners were thus not similarly placed with those two units, and the record disclosed rational grounds for the State's policy shift, including the burden of subsidy commitments and the move to a uniform deferral policy. No arbitrariness or hostile discrimination was established.

Conclusion: The issue was answered against the petitioners.

Issue (iv): Whether the demand for tax under the later scheme offended natural justice and the statutory provisions governing recovery.

Analysis: The disputed demand related to tax shown in the petitioners' own returns and to the amount recoverable beyond the ceiling permitted under the deferral order. The statutory recovery mechanism applied to that excess, and any grievance as to assessment or recovery could be pursued through ordinary appellate or revisional remedies. On those facts, there was no breach of natural justice in raising the demand.

Conclusion: The issue was answered in favour of the Revenue.

Final Conclusion: The challenge to the denial of purchase tax subsidy failed on merits, the later deferral regime was upheld as applicable, and no constitutional or procedural infirmity was found in the demand raised against the petitioners.

Ratio Decidendi: A government subsidy or tax concession can be enforced by promissory estoppel or legitimate expectation only when a clear and general promise is shown; where the benefit was confined by policy, later withdrawn in public interest, or the claimant was not similarly situated to favoured comparators, the State is not bound to continue the concession.

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