Amidst the ongoing debate regarding the fate of various tax incentives and area-based exemptions under the coming goods and services tax (GST) regime, the recent ruling of Karnataka High Court in the case of Nandi Infrastructure is a positive sign as it reaffirms the established principle that in a constitutional democracy the government stands on the same footing as a private individual or entity so far as legal obligations are concerned.
Promissory estoppel is a common law doctrine which extends to all aspects of civil and taxation law except in situations of national importance and public policy. The sum and substance of the philosophy underlying the doctrine of promissory estoppel is that the state is bound to make good its promises to its subjects and cannot retract by claiming the cover of being “sovereign”, as by way of this doctrine the state and its subjects are to be treated equally as far as the promises made by them are concerned.
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Kumar Visalaksh is an associate partner and Rajat Chhabra is a senior associate at Economic Laws Practice. This article is intended for informational purposes and does not constitute a legal opinion or advice.
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