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(P) Ltd. V. State of Kerala, (2016) 6 SCC 766
Doctrine of Promissory Estoppel-Doctrine of Promissory Estoppel doctrine of promissory estoppel is a doctrine whose foundation is that an unconscionable departure by one party from the subject matter of an assumption which may be of fact or law, present or future, and which has been adopted by the other party as the basis of some course of conduct, act or omission, should not be allowed to pass muster. And the relief to be given in cases involving the doctrine of promissory estoppels contains a degree of flexibility which would ultimately render justice to the aggrieved party applicability of. It is not the law that there can be no promissory estoppels against the government in exercise of its severing, governmental, public or excusive powers. The government can legitimately bound by Government can legitimately be held bound by its promise to exempt the appellant from payment of sales tax. It is true that taxation is a sovereign or governmental function, but, for reasons which we have already discussed, no distinction can be made between the exercise of a sovereign or governmental function and a trading or business activity of the Government, so far as the doctrine of promissory estoppel is concerned. Whatever be the nature of the
function which the Government is discharging, the Government is
subject to the rule of promissory estoppel and if the essential
ingredients of this rule are satisfied, the Government can be
compelled to carry out the promise made by it.