Promissory estoppel and retrospective tax exemption both failed where no clear promise was proved and the statute lacked retrospective power.

Promissory estoppel could not be invoked for purchase tax exemption because the alleged ministerial promise was not proved by clear, unambiguous material, and there was no satisfactory evidence of a definite assurance, reliance, or prejudice. The challenge to the exemption notification also failed because section 10 of the Kerala General Sales Tax Act, 1963 then allowed exemption and cancellation or variation of a notification, but did not authorise retrospective exemption. Subordinate legislation could not create retrospective effect without express or necessarily implied statutory authority, so the retrospective notification was ineffective and its cancellation was valid.

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Issues: (i) Whether the appellants were entitled to claim exemption from purchase tax on the basis of promissory estoppel; (ii) Whether the Government had power under section 10 of the Kerala General Sales Tax Act, 1963 to cancel the exemption notification and whether the retrospective exemption notification was effective.

Issue (i): Whether the appellants were entitled to claim exemption from purchase tax on the basis of promissory estoppel.

Analysis: The alleged representation by Ministers was not established by clear and unambiguous material. No satisfactory proof was produced that a definite promise of exemption had been made, that the appellants altered their position in reliance on it, or that they suffered prejudice sufficient to found an estoppel. The conduct of the parties after the alleged meeting and the absence of specific supporting evidence negatived the plea.

Conclusion: The plea of promissory estoppel failed and was against the appellants.

Issue (ii): Whether the Government had power under section 10 of the Kerala General Sales Tax Act, 1963 to cancel the exemption notification and whether the retrospective exemption notification was effective.

Analysis: Section 10, as it then stood, empowered the Government to grant exemption and, under sub-section (3), to cancel or vary a notification issued under sub-section (1), but it did not authorise retrospective exemption. A delegate cannot confer retrospective operation on subordinate legislation unless the enabling statute expressly or by necessary implication permits it. The later legislative amendment introducing express retrospective power confirmed that such power was absent earlier. The notification granting retrospective exemption was therefore ineffective, and the cancellation notification was validly issued under section 10(3).

Conclusion: The retrospective exemption notification was ineffective and its cancellation was valid, against the appellants.

Final Conclusion: The appellants failed on both the promissory estoppel plea and the challenge to cancellation of the exemption notification, so no relief was available to them.

Ratio Decidendi: A retrospective exemption under a taxing statute cannot be created by subordinate legislation unless the parent enactment expressly or by necessary implication authorises it, and promissory estoppel requires a clear representation, reliance, and prejudice.

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