Statutory tax exemption ends when manufacture is redefined; legitimate expectation cannot preserve the benefit against the amended law.

A sales tax exemption tied to goods manufactured by the dealer ceased once the amended definition of "manufacture" excluded tea blending from 01.08.2001. The exemption under Section 39 was treated as a conditional concession, not a vested right, so the dealers could not continue claiming tax holiday benefits after the statutory change. Legitimate expectation and promissory estoppel could not override the amended statute, and the withdrawal operated prospectively from the date of exclusion.

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Issues: (i) Whether, after the amendment of Section 2(17) of the West Bengal Sales Tax Act, 1994 with effect from 01.08.2001 excluding tea blending from the definition of manufacture, the appellants remained entitled to exemption from sales tax under Section 39 of the Act.

Analysis: The exemption under Section 39 was available only to sales of goods manufactured by the dealer. Once tea blending ceased to fall within the statutory definition of manufacture, the appellants ceased to be manufacturers for the purposes of the exemption. The exemption was a conditional concession and not a vested right. Legitimate expectation and promissory estoppel could not override the amended statute, and the withdrawal operated prospectively from the date on which tea blending was excluded from the definition.

Conclusion: The appellants were not entitled to continue the exemption after 01.08.2001, and the issue is answered against the appellants.

Final Conclusion: The amended statutory definition controlled eligibility for the tax holiday, so the earlier exemption could not survive once tea blending was removed from the scope of manufacture. The appeals therefore failed.

Concurring / Dissenting Opinion: Krishna Murari, J. dissented on the second issue and held that the doctrine of legitimate expectation protected the benefit promised under the original scheme in the absence of demonstrated public interest. On that view, the appeals would have been allowed.

Ratio Decidendi: A tax exemption that depends on a statutory definition ceases to operate when that definition is prospectively amended, and neither legitimate expectation nor promissory estoppel can preserve the exemption against the amended statute in the absence of overriding public interest.

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