Judgment

R. M. SAHAI, J.:- Promissory estoppel, its extent and applicability apart, one of the important issue, that arises for consideration in this appeal, directed against the judgment and order of a Division Bench of the Punjab and Haryana High Court* exercising jurisdiction under Letters Patent and setting aside order of the learned single Judge directing refund of sales tax and inter-State sales tax, is if the Government of a State could agree expressly or impliedly to refund sales tax realised by a manufacturer.

(*Reported in AIR 1977 Punj & Har 268)

2. Facts, found by the learned single Judge, which were sufficient to direct the Government to honour its commitments of refunding sales tax to the appellant on principle of promissory estoppel were announcement of policy by the Government to refund sales tax, as an incentive to those who were willing to set up large scale selective industries in the focal points, letter of the appellant seeking details of policy as he was willing to set up a Vanaspati manufacturing unit, favourable response from the Director of Industries followed by exchange of letters and meetings between appellants representatives and Secretary of Industries extending assurance that the incentives shall be available to the appellant acting on which it purchased land, machinery etc., laying of foundation stone by the Governor and issuance of notification declaring the land, on which unit was established, in focal point. The order was set aside in appeal and it was held that even though rule of equitable estoppel should be observed by all Government and public authorities but its scope was restricted and it could not be extended too widely so as to bind a Government even where its officials in excess of their authority or against the interest of the Government extended the promise. The Bench drew inference against the appellant from its letters seeking written assurance that the concession would be extended to it which came, as well, in June 1969 but before that the policy had already undergone change in May, 1969. The Bench further felt mystified that even though there was a decision of Cabinet Sub-Committee as far back as 1966 not to give any refund of sales tax yet the Government officials acting contrary to it issued the brochure and corresponded with the appellant in, wholly, unauthorised manner therefore their action could not create any right in favour of the appellant. It also negatived the claim of appellant, as refund of an amount paid as sales tax by the appellant would be raising revenue by the Government not for itself or for public but for a private person which would be contrary to Arts. 265 and 266 of the Constitution of India.

3. Law of Promissory Estoppel which found its most eloquent exposition in Union of India v. Indo Afghan Agencies (1968) 2 SCR 366, crystallised in Motilal Padampat Sugar Mills v. State Of U.P. (1979) 2 SCR 641 as furnishing cause of action to a citizen, enforceable in a Court of law, against Government if it or its officials in course of their authority extended any promise which created or was capable of creating legal relationship, and it was acted upon, by the promisee irrespective of any prejudice. It was reiterated in Union of India v. Godfrey Philips India Ltd. (1985) 4 SCC 369 (370) and was taken further when it was held that no duty of excise was assessable on cigarettes manufactured by assessee by including cost of corrugated fibreboard containers, when it was clearly represented by the Central Board of Excise and Customs in response to the submission made by the Cigarette Manufacturers Association and this representation was approved and accepted by the Central Government that the cost of corrugated fibreboard containers would not be includible in the value of the cigarettes for the purpose of assessment of excise duty. In Delhi Cloth and General Mills Ltd. v. Union of India (1988) 1 SCR 383 it was held:

"All that is now required is that the party asserting the