Promissory estoppel barred retrospective milk purchase tax demand after the State's clear tax abolition representation was relied upon.

The State's clear and unequivocal representation, made through executive announcements, a budget speech, memoranda, circulars and departmental communications, that purchase tax on milk stood abolished from 1 April 1996 bound it in promissory estoppel. The representation was within the State's power to exempt milk from tax by notification, and the affected parties altered their position by acting on it and passing on the benefit to producers. As no overriding public interest or legal bar was shown, the State could not resile from the representation or demand purchase tax retrospectively for the period during which it operated.

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Issues: Whether the State was bound by promissory estoppel to abolish purchase tax on milk from 1 April 1996 despite the absence of a formal notification under the statute.

Analysis: The State had, through announcements by the highest executive authorities, a budget speech, official memoranda, circulars and departmental communications, made a clear and unequivocal representation that purchase tax on milk stood abolished from 1 April 1996. The respondents acted on that representation and altered their position by not collecting and remitting the tax and by passing on the benefit to milk producers. The statute empowered the State to exempt or remove milk from tax by notification, and there was nothing in law prohibiting the grant of such exemption. The doctrine of promissory estoppel applies against the Government when a promise is made within the scope of its power and is acted upon, unless overriding public interest or illegality is shown. No overriding public interest or legal bar was established to justify resiling from the representation.

Conclusion: The State was bound by promissory estoppel and could not demand purchase tax retrospectively for the period during which the representation operated.

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