Promissory estoppel sustained tax exemption for hotel developers, but only until the enabling provision was omitted.

Promissory estoppel applied to protect tourism hotel developers who constructed the hotel in reliance on a Government promise of tax concession under the Kerala Building Tax Act, 1975. The absence of an exemption notification did not defeat relief, because a clear governmental promise and detrimental reliance were sufficient, and no overriding public interest or inequity was shown. However, once Section 3A was omitted with effect from 01.03.1993, the statutory basis for exemption ended, so building tax could not be levied or collected only for the period when Section 3A remained in force; no relief was available after that date.

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Issues: Whether the appellants were entitled to exemption from building tax on the basis of the Government's promise and the statutory exemption regime, despite no exemption notification having been issued and Section 3A of the Kerala Building Tax Act, 1975 having later been omitted, and if so, for what period.

Analysis: The Government Order of 11.07.1986 promised tax concessions to tourism-related hotels, and Section 3A was subsequently enacted to enable exemption by notification. The appellants altered their position by constructing the hotel in reliance on that promise. The absence of an actual exemption notification did not defeat relief, because promissory estoppel can operate where the Government has held out a clear promise and the promisee has acted upon it. The principle yields only where overriding public interest or inequity is shown, and no such justification was established. However, once Section 3A was omitted with effect from 01.03.1993, there was no statutory basis to continue the exemption.

Conclusion: The appellants were entitled to the benefit of promissory estoppel for the period during which Section 3A remained in force, and building tax could not be levied or collected for that period. Relief was unavailable for the period after 01.03.1993.

Ratio Decidendi: Where a statutory power to grant exemption exists and a person has altered position in reliance on a Government promise, the Government may be held bound by promissory estoppel even if the implementing notification has not been issued, but the doctrine cannot be invoked to confer a benefit after the enabling statutory provision has been omitted.

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