The judgment of the Court was delivered by

G. T. NANAVATI, J. - The case of the petitioner is that relying upon the sales tax incentive scheme for new industries declared by the Government on December 22, 1977 and August 27, 1980, it has set up a new industry to manufacture mild steel wires out of iron strips in a backward area. It started commercial production on July 23, 1981. Eligibility certificate was granted by the Industries Commissioner on December 17, 1982. Exemption certificate was granted by the sales tax authorities on February 6, 1982. In order to give effect to the scheme, the Government had also issued a notification on February 5, 1981 under section 49(2) of the Gujarat Sales Tax Act, 1969, by inserting entry No. 118 in the Schedule to the parent notification of 1970. However, by a subsequent notification dated August 17, 1982, the Government, in exercise of the powers under section 49(2) of the Act, amended entry at serial No. 118 and included the industry of "wire-drawing of steel and items requiring wire rods as essential raw materials" in the list of the excluded industries. Respondent No. 2 thereafter issued a notice to the petitioner stating therein that the exemption certificate granted to it was liable to be cancelled in view of the said notification of August 17, 1982. Not only that but the Commissioner of Sales Tax also issued a circular on February 10, 1982, wherein it is stated that in spite of the exemption certificates granted prior to August 17, 1982 benefit of exemption cannot be made available to the excluded industries. Apprehending that the certificate granted to it will be cancelled, the petitioner has filed this petition not only challenging the proposed action but also for getting a declaration application to the petitioner's industry. Subsequent to the filing of the petition, respondent No. 2 passed an order on December 9, 1983, cancelling the exemption certificate granted to the petitioner. By amending the petition, the petitioner has also challenged the said order.

The fact that the petitioner has set up a new industry in a backward area pursuant to the resolutions of 1977 and 1980 is not in dispute; so also the fact that the petitioner had started commercial production on and from July 23, 1981. The competent authority under the Schedule had also issued eligibility certificate mentioning therein that the petitioner had invested in fixed assets Rs. 1,21,931.69, and that the petitioner was eligible for the sales tax incentive benefits. As pointed out earlier, the benefit to which the petitioner had become entitled is now denied only on the ground that on and from August 17, 1982, the petitioner's industry came to be included in the list of excluded industries and, therefore, the exemption from payment of sales tax was not available to it after that date. The petitioner is claiming relief invoking the doctrine of promissory estoppel and the respondents are resisting the same on the ground that the exemption has been now taken away by statutory notification and there cannot be any estoppel against the exercise of any legislative powers.

Obviously, in view of the admitted facts of this case, the petitioner can validly invoke the doctrine of promissory estoppel. Further it is to be noted that the notification dated February 5, 1981, issued under section 49(2) of the Act was issued for the purpose of giving effect to the sales tax incentive, scheme declared by the Government by its resolution dated August 27, 1980. It was not an independent act of the State Government as can be seen from entry 118 itself. The notification dated February 5, 1981, was thus issued in discharge of its obligation under the scheme. Even if such a notification had not been issued, the new industry which had become entitled to the benefit under the scheme could have approached the court and compelled the Government to extend the benefit under the scheme to it. Therefore, eventhough it is true that a concessi