Promissory estoppel barred withdrawal of a time-bound excise exemption promised for seven years to a new industrial undertaking.

An excise exemption notification was construed as a time-bound incentive for new industrial undertakings, operating for seven years from the date of first clearance of tyres and not merely for the life of the notification. The Government was held bound by promissory estoppel because the assessee had acted on the representation by establishing the undertaking and altering its position on that basis. Withdrawal of the concession during the promised period was therefore impermissible, and the earlier entitlement was upheld.

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Issues: (i) Whether the excise exemption notification granted the petitioner a concession for seven years from the date of first clearance of tyres. (ii) Whether the Government could rescind that concession during the seven-year period, or whether promissory estoppel prevented such withdrawal.

Issue (i): Whether the excise exemption notification granted the petitioner a concession for seven years from the date of first clearance of tyres.

Analysis: The notification was framed as an incentive for new industrial undertakings and contained language indicating that the exemption was available only for a specified period measured from the first clearance of tyres. The provisos and explanation, read together, showed that the concession was not meant to continue merely for the life of the notification, but was tied to a seven-year period from the date of first clearance, with an express exclusion of a specified period for computation.

Conclusion: The concession was held to be time-bound and available for seven years from the date of first clearance.

Issue (ii): Whether the Government could rescind that concession during the seven-year period, or whether promissory estoppel prevented such withdrawal.

Analysis: The Court applied the doctrine of promissory estoppel to a tax concession issued under the exemption power in the excise rules. It held that where an exemption was promised and acted upon, and the assessee altered its position by setting up the undertaking and issuing capital on the strength of the representation, the Government could not withdraw the benefit within the promised period. The objection based on acquiescence also failed because the later notification did not displace the earlier time-bound entitlement and, on the materials before the Court, did not negate the benefit already assured.

Conclusion: The Government was held bound by promissory estoppel and was not entitled to rescind the concession during the promised period.

Final Conclusion: The writ petition succeeded, the impugned exemption withdrawal could not defeat the petitioner's seven-year entitlement, and relief was granted in favour of the petitioner without costs.

Ratio Decidendi: A fiscal exemption granted as a time-bound incentive under delegated exemption power can bind the Government for the stated period where the assessee has acted upon the representation and altered its position, and such concession cannot be withdrawn in violation of promissory estoppel.

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