Promissory estoppel and turnover tax: later statutory levy not covered by earlier sales tax exemption.

Section 16B of the West Bengal Sales Tax Act, 1994 was described as imposing turnover tax on dealers already liable under sections 9 or 10, and the article notes that the constitutional challenge under Articles 14 and 19(1)(g) was rejected for lack of substantiated discrimination or shown restraint on business. It further states that the revival and incentive framework granted exemption from sales tax and purchase tax, but did not clearly and unambiguously extend to turnover tax, which was a later and distinct levy introduced by statute. On that basis, promissory estoppel was held unavailable to block recovery of the turnover tax.

---

---

Issues: (i) Whether section 16B of the West Bengal Sales Tax Act, 1994 was unconstitutional under Articles 14 and 19(1)(g) of the Constitution of India; (ii) Whether the State had promised exemption from turnover tax under the revival and incentive framework; (iii) Whether the demand for turnover tax was barred by promissory estoppel.

Issue (i): Whether section 16B of the West Bengal Sales Tax Act, 1994 was unconstitutional under Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The challenge under Article 14 failed for want of any substantiated case of hostile discrimination or irrational classification. The challenge under Article 19(1)(g) was also not pressed in any meaningful manner. Section 16B created a liability to turnover tax on dealers already liable to tax under sections 9 or 10, and the provision did not, on the material placed, disclose any constitutional infirmity.

Conclusion: The constitutional challenge to section 16B failed and was rejected.

Issue (ii): Whether the State had promised exemption from turnover tax under the revival and incentive framework.

Analysis: The revival scheme and the Government orders granted exemption from sales tax and purchase tax, and the scheme used the expression "sales tax due for payment" in a defined sense. However, turnover tax was not in existence when the promise was made and the exemption orders were issued. The turnover tax introduced later by section 16B was a distinct levy and not a substitute for the taxes expressly covered by the promise. The promise did not clearly and unambiguously extend to that later levy.

Conclusion: There was no enforceable promise covering turnover tax.

Issue (iii): Whether the demand for turnover tax was barred by promissory estoppel.

Analysis: Promissory estoppel can operate against the Government only where there is a clear promise within the authority of the State and the promisee has acted upon it. Here, the later levy of turnover tax arose from a statutory amendment, and promissory estoppel could not be used to compel exemption from a tax not covered by the original promise. Since turnover tax was a separate levy and not a promised substitute for sales tax or purchase tax, the doctrine could not defeat its recovery.

Conclusion: The demand for turnover tax was not barred by promissory estoppel.

Final Conclusion: The Tribunal upheld the turnover tax demand and found no constitutional or equitable basis to restrain its recovery.

Ratio Decidendi: Promissory estoppel cannot be invoked to exempt a later statutory tax levy unless the original governmental promise clearly and unambiguously covered that levy, and a separate tax introduced by statute is not automatically included within an earlier exemption from sales tax.

---