STATE OF RAJASTHAN & Anr. v. M/S. MAHA VEER OIL INDUSTRIES & Ors.

the instant case, without noticing the judgment of this Court in Gopal Oil A , Mills *case dismissed the appeal of State. Hence the present appeal. On behalf of the appellant-State it was contended that it was open in public interest to withdraw any concession which it may have granted under the incentive scheme. On the other hand, the contention of the respondents was that by framing the incentive scheme, the State had held out a promise and relying upon that promise they had taken out effective steps to set up the new industrial unit within that period. Hence on the doctrine of promissory estoppel, it would not be open to the State to withdraw the benefit of the scheme by the notification of 7.5.1990. B C Disposing of the appeal, this Court HELD: 1. The notification dated 7.5.1990, withdrawing the benefits under the incentive scheme, was issued in valid exercise of power by the D appellant-State. Thus, respondent-industries were not entitled to the benefit of the incentive scheme, exempting payment of sales tax under the Rajasthan Sales Tax Act, 1954. (807-G]

2.1. Public interest requires that the State be held bound by the promise held out by it. But this does not preclude the state from withdrawing the E benefit prospectively even during the period of the scheme, if public interest so requires. Even in a case where a party has acted on the promise, if there is any supervening public interest which requires that the benefit be withdrawn or the scheme be modified, that supervening public interest would prevail over any promissory estoppel. (805-F-GJ • F