Promissory estoppel cannot extend a fiscal exemption beyond a bona fide policy amendment limiting the incentive scheme.

A fiscal exemption under a delegated incentive scheme may be withdrawn or limited prospectively in public interest, and promissory estoppel does not require the State to extend the concession beyond the valid terms of the amended policy where bona fide action is shown. The earlier judgment had left open only the quantum of exemption, and the Court held that the relevant amendment protected investments made up to the date the solvent extraction plant was included in the negative list. The quantified exemption fixed by the authorities was therefore consistent with the scheme, and the claim for exemption on the entire post-amendment investment was rejected.

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Issues: Whether the respondent was entitled to sales tax exemption on the entire investment made in setting up the industrial unit, or only on the investment made up to 16.12.1996 when the solvent extraction plant was included in the negative list under the amended rules.

Analysis: The earlier decision had held only that the respondent was entitled to exemption and had expressly left open the question of quantum. The Court held that the doctrine of promissory estoppel did not compel grant of exemption on the entire post-amendment investment because the exclusion of solvent extraction plants from the incentive scheme was a bona fide policy decision taken in public interest. Exemption under a fiscal scheme is a concession and can be withdrawn or modified by the State in accordance with policy, particularly where no fraud, mala fides, or lack of bona fides is shown. The relevant note to the amendment protected investments made up to the date of insertion in the negative list, and the quantification by the lower authorities to that date was consistent with the earlier judgment.

Conclusion: The respondent was not entitled to exemption on the entire investment and the benefit was correctly confined to investment made up to 16.12.1996.

Final Conclusion: The High Court's view granting the exemption on the whole investment was set aside and the quantified exemption determined by the authorities was restored.

Ratio Decidendi: A fiscal exemption, being a concession granted under delegated legislation, may be withdrawn or limited prospectively in public interest, and promissory estoppel cannot extend it beyond the terms of the valid policy or amendment when the State acts bona fide.

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