Interim stay of a fiscal statute needs prima facie invalidity; promissory estoppel cannot block a prospective tax amendment.

Interim restraint on a fiscal statute requires a prima facie showing of constitutional invalidity or jurisdictional defect; a stay granted only on balance of convenience was unjustified and was set aside. In indirect tax matters, the balance of convenience ordinarily favours the revenue because any levy ultimately upheld may cause irrecoverable loss to the State exchequer. The prospective amendment to section 39 was not barred by promissory estoppel and did not defeat any accrued vested right, as the Legislature could withdraw or modify a tax concession in accordance with the statutory scheme and public interest. The Tribunal was directed to decide the main challenge on merits.

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Issues: (i) Whether the Tribunal was justified in staying the operation of section 39(4) of the West Bengal Sales Tax Act, 1994 on the basis of balance of convenience without a prima facie finding of constitutional invalidity. (ii) Whether the amendment to section 39 was barred by promissory estoppel or affected any accrued vested right of the dealers.

Issue (i): Whether the Tribunal was justified in staying the operation of section 39(4) of the West Bengal Sales Tax Act, 1994 on the basis of balance of convenience without a prima facie finding of constitutional invalidity.

Analysis: A court or tribunal may stay the operation of a statute only on limited grounds such as want of legislative competence or prima facie infringement of fundamental rights. In a matter of indirect taxation, the burden is passed on and the balance of convenience does not ordinarily lie in favour of the dealer because the State exchequer suffers irrecoverable loss if the levy is ultimately upheld. On the facts, the Tribunal granted stay only on balance of convenience and did not record any prima facie constitutional infirmity.

Conclusion: The stay order was not justified and was liable to be set aside.

Issue (ii): Whether the amendment to section 39 was barred by promissory estoppel or affected any accrued vested right of the dealers.

Analysis: The amendment was expressed to operate prospectively and did not take away any accrued right that had crystallised before its commencement. The earlier exemption could be altered by the Legislature, and promissory estoppel cannot prevent the State from changing a fiscal policy or withdrawing a tax concession, particularly where public interest or the statutory scheme so permits.

Conclusion: The doctrine of promissory estoppel did not bar the amendment, and no accrued vested right was infringed.

Final Conclusion: The writ petition succeeded, the interim stay granted by the Tribunal was vacated, and the Tribunal was directed to decide the main challenge independently on merits.

Ratio Decidendi: Interim restraint against a fiscal statute requires a prima facie constitutional or jurisdictional infirmity, and in indirect tax matters balance of convenience ordinarily favours the revenue; promissory estoppel cannot defeat a prospective legislative withdrawal or modification of a tax exemption.

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