Statutory power to withdraw tax exemption upheld where public interest justified rescission and promissory estoppel could not bar it.

An exemption granted under a taxing statute may be withdrawn where the statute expressly authorises withdrawal, and the power to grant exemption includes the power to rescind or modify the notification. Promissory estoppel cannot be used to defeat a statutory power, and the withdrawal may be sustained where supported by public interest, including fiscal stabilisation. On the facts stated, no material supported allegations of arbitrariness or discrimination, so the challenge to the withdrawal of the sales tax exemption failed.

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Issues: Whether the State Government could withdraw the sales tax exemption earlier granted to the petitioner, and whether such withdrawal was barred by arbitrariness, discrimination, or promissory estoppel.

Analysis: The exemption had been granted under section 6 of the Orissa Sales Tax Act, 1947, which expressly empowers the State Government not only to exempt goods from tax but also to withdraw that exemption by notification. The power to grant exemption carries with it the power to modify or rescind the notification, and section 22 of the Orissa General Clauses Act, 1937 supports that position. The Court further held that promissory estoppel cannot be invoked against a statute. The withdrawal was justified on the basis of supervening public interest arising from the State's grave fiscal imbalance and need for revenue stabilisation. No material was found to support the allegation of arbitrariness or discrimination.

Conclusion: The withdrawal of sales tax exemption was valid and enforceable, and the challenge based on promissory estoppel and arbitrariness failed.

Final Conclusion: The writ petition was rejected as the impugned notification withdrawing the exemption was upheld in exercise of statutory power and in public interest.

Ratio Decidendi: An exemption granted under a taxing statute may be withdrawn where the statute expressly authorises withdrawal, and promissory estoppel cannot defeat such statutory power, particularly when the withdrawal is justified by public interest.

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