Promissory estoppel against the State made a sales tax exemption enforceable when the assessee relied on an authorised government promise.

Waiver of sales tax exemption failed because intentional relinquishment of a known right was neither pleaded nor proved, and the record did not show that the assessee knowingly abandoned its claim by accepting concessional rates. Promissory estoppel applied because an authorised government assurance of exemption was clear, within statutory power, and intended to be acted upon; the assessee relied on it by altering its position through borrowing funds, purchasing machinery, and setting up the factory. Mere change of policy or executive necessity could not defeat the promise absent overriding public interest or illegality. The promised exemption was therefore enforceable against the State, with consequential refund relief.

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Issues: (i) whether the assessee had waived its right to claim exemption from sales tax by accepting concessional rates; (ii) whether a clear assurance given on behalf of the State to grant sales tax exemption was binding and enforceable against the State under the doctrine of promissory estoppel.

Issue (i): Whether the assessee had waived its right to claim exemption from sales tax by accepting concessional rates.

Analysis: Waiver requires an intentional relinquishment of a known right and must be properly pleaded and proved. The plea was not raised in the State's affidavit in reply and no factual foundation was laid. On the facts, there was nothing to show that the assessee had full knowledge of its enforceable right or that it deliberately abandoned that right when it wrote accepting the concessional rates.

Conclusion: The plea of waiver failed and was rejected.

Issue (ii): Whether a clear assurance given on behalf of the State to grant sales tax exemption was binding and enforceable against the State under the doctrine of promissory estoppel.

Analysis: A clear and unequivocal promise intended to be acted upon and in fact acted upon can create an enforceable equity against the promisor. The Court held that the doctrine is not confined to pre-existing contractual relations and may apply against the Government when its officer acts within authority and the promisee alters position in reliance on the promise. The State cannot invoke executive necessity or a mere change of policy to defeat the promise unless overriding public interest or illegality is shown. Here, the Government's assurance was within the statutory power to grant exemption, was made by an authorised officer, and induced the assessee to borrow funds, purchase machinery, and set up the factory. The Court further held that alteration of position, not independent proof of detriment, is sufficient.

Conclusion: The assurance was enforceable against the State and the assessee was entitled to exemption and consequential refund relief.

Final Conclusion: The State was bound to honour the promised sales tax exemption for the stipulated period, the contrary levy could not be sustained, and the assessee obtained consequential refund and relief.

Ratio Decidendi: Where the Government, through an authorised officer, makes a clear promise intended to be acted upon and the promisee alters its position in reliance on it, the promise is enforceable in equity against the Government unless enforcing it would be contrary to law or clearly defeated by overriding public interest.

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