Summary
Manufacturers invoked promissory estoppel against withdrawal of area-based excise exemptions for pan masala and tobacco products. The Court held that an exemption, even one promised for a fixed period, could be withdrawn in overriding public interest. Considering the health material and legislative policy, it sustained withdrawal for pan masala with and without tobacco and reversed the High Court relief preserving the concessions.
Issues
- Whether promissory estoppel prevented withdrawal of a fixed-period excise exemption in public interest.
- Whether the challenged withdrawal for pan masala and tobacco products served overriding public interest.
Held
- Promissory estoppel may operate against government, but it is an equitable doctrine requiring consideration of the entire circumstances and public good. It yields where holding government to its representation would be inequitable in light of overriding public interest. (¶¶ 12, 13, 14, 18, 19, 20, 21, 22, 23, 24, 25)
- A statutory exemption suspends collection rather than permanently removing the underlying levy. The power to grant includes modification or withdrawal in the prescribed manner; specification of an exemption period does not prevent public-interest withdrawal. (¶¶ 14, 15, 16, 17, 20, 21, 25)
- The scientific material considered by the Court addressed health hazards of pan masala both with and without tobacco. Withdrawal of manufacturing incentives therefore served larger public interest, outweighing the manufacturers’ asserted investment-based loss. The contrary High Court reasoning could not sustain continued exemption. (¶¶ 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36)
Result
All three Union appeals were allowed without costs. The Sikkim High Court judgment and the Gauhati High Court appellate judgments were set aside. The Gauhati Single Judge’s dismissal of the manufacturers’ writ petitions was upheld, sustaining withdrawal of the exemptions.