Promissory estoppel cannot enforce a State promise to refund lawfully collected tax as an industrial incentive.

Promissory estoppel may bind the State where a governmental promise is made and relied upon to the promisee's detriment, but it cannot compel performance of a promise that conflicts with constitutional limits, a taxing statute, or public policy. The text distinguishes a permissible tax exemption granted as an industrial incentive from a promise to refund sales tax already lawfully collected. A refund of lawfully realised tax would divert public revenue to a private party and is inconsistent with the constitutional scheme of taxation, so such an assurance cannot be validated by equity and would be void as against public policy.

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Issues: Whether the State could be held bound by promissory estoppel to refund sales tax and inter-State sales tax to induce establishment of an industrial unit, and whether such a promise was enforceable in law.

Analysis: A governmental promise may found promissory estoppel where it is made by or on behalf of the State and is acted upon to the promisee's detriment. However, the doctrine cannot be applied to compel performance of a promise that is contrary to constitutional norms, statutory limits, or public policy. A distinction was drawn between permissible tax exemption, which may be granted as an industrial incentive, and refund of tax already lawfully realised under a taxing statute. Refund of sales tax collected in accordance with law would amount to diversion of public revenue to a private person and would be inconsistent with the constitutional scheme governing taxation. Such a promise could not be validated by equity, and any agreement to that effect would be void as opposed to public policy.

Conclusion: The promise to refund sales tax was unenforceable, and promissory estoppel could not be invoked against the State. The issue is decided against the assessee.

Final Conclusion: Governmental assurances cannot override the Constitution or the taxing statute where the relief sought is refund of tax lawfully collected; the appeal therefore could not succeed.

Ratio Decidendi: Promissory estoppel cannot be used to enforce a governmental promise that is contrary to the Constitution, a taxing statute, or public policy, and a lawful tax refund cannot be compelled merely because it was promised as an industrial incentive.

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