Case: M/S Motilal Padampat Sugar Mills Co. (P.) Ltd Vs. State Of Uttar Pradesh And Ors

This appeal by certificate raises a question of considerable importance in the field of public law. How far and to what extent is the State bound by the doctrine of promissory estoppel ? It is a doctrine of comparatively recent origin but it is potentially so fruitful and pregnant with such vast possibilities for growth that traditional lawyers are alarmed lest it might upset existing doctrine which are looked upon almost reverential and which have held the field for a long number of years. The law in regard to promissory estoppel is not yetthough it has been the subject of considerable debate in England as well as the United States of America and it has also received consideration in some recent decisions in India and we, therefore, propose to discuss it in some detail with a view of defining its contours and demarcating its parameters. We will first state briefly the facts giving rise to this appeal. This is necessary because it is only where certainexist that promissory estoppel can be invoked andappellant is a limited company which is primarily engaged in the business of manufacture and sale of sugar and it has also a cold storage plant and a steel foundry. On 10th October, 1968, a news item appeared in the National Herald in which it was stated that the State of Uttar Pradesh had decided to give exemption from sales tax for a period of three years under sectionof the U.P. Sales Tax Act to all new industrial units in the State with a view to enabling them "to come on firm footing in developing stage". This news item was based upon a statement made by Shri M. P. Chatterjee, the the then Secretary in the Industries Department of the Government. The appellant, on the basis of this announcement, addressed a letter dated 11th October, 1968, to the Director of Industries stating that in view of the sales tax holiday announced by the Government, the appellant intended to set up a hydrogenation plant for manufacture of vanaspati and sought for confirmation that this industrial unit, which they proposed to set up, would be entitled to sales tax holiday for a period of three years from the date it commences production. The Director of Industries replied by his letter dated 14th October, 1968, confirming that "there will be no sales tax for three years on the finished products of your proposed vanaspati factory from the date it gets power connection for commencing production". The appellant thereupon started taking steps to contact various financiers for financing the project and also initiated negotiations with manufacturers for purchase of machinery for setting up the vanaspati factory. On 12th December, 1968, the appellants representative met the 4th respondent who was at that time the Chief Secretary to the Government as also the Advisor to the Governor and intimated to him that the appellant was setting up the vanaspati factory solely on the basis of the assurance given on behalf of Government that the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of commercial production at the factory and the 4th respondent reiterated the assurance that the appellant would be entitled to sales tax holiday in case the vanaspati factory was put up by it. The appellant by its letter dated 13th December, 1968, placed on record what had transpired at the meeting on the previous day and requested the 4th respondent "to please confirm that we shall be allowed sales tax holiday for a period of three years on the sale of vanaspati from the date we start production". On the same day the appellant entered into an agreement with M/s. De Smet (India) Pvt. Ltd., Bombay, for supply of plant and machinery for the vanaspati factory, providing clearly that the appellant would have to (sic) option to terminate the agreement, if within 10 weeks exemption from sales tax was not granted by the State Government. The 4th respondent replied on 22nd December, 1968, confirming that "the State Government will be willing to consider your request for grant of exemption from U.P. sales tax for a period of three years from the date of production" and asked the appellant to obtain the requisite application form and submit a formal application to the Secretary to the Government in the Industries Department and, in the meanwhile, to "go ahead with the arrangements for setting up the factory". The appellant had in the meantime submitted an application dated 21st December, 1968, for a formal order granting exemption from sales tax under sectionof the Act. It appears that the letter of the 4th respondent dated 22nd December, 1968, was not regarded as sufficient by the financial institution which were approached by the appellant for financing the project since it merely stated that the State Government would be willing to consider the request for grant of exemption and did not convey any decision of the State Government that the exemption would be granted. The appellant, therefore, addressed a letter dated 22nd January, 1969, to the 4th respondent pointing out that the financial institutions were of the view that the letter of the 4th respondent dated 22nd December, 1968, "did not purport to commit the Government for the concession mentioned" and it was, therefore, necessary to obtain a formal order of exemption in terms of the application submitted by it. The 4th respondent, however, stated categorically in his letter in reply dated 23rd January, 1969, that the proposed vanaspati factory of the appellant "will be entitled to exemption form U.P. sales tax for a period of three years from the date of going into production and that this will apply to all vanaspati sold during that period in Uttar Pradesh itself" and expressed his surprise that "a letter from the Chief Secretary to the State Government stating this fact in clear and unambiguous words should not carry conviction with the financial institutions". In view of this unequivocal assurance given by the 4th respondent, who not only occupied the post of Chief Secretary to the Government but was also the Advisor to the Governor functioning under the Presidents rule, the appellant went ahead with the setting up of the vanaspati factory. The appellant by its letter dated 25th April, 1969, advised the 4th respondent that the U.P. Finance Corporation, being convinced by the clear and categorical assurance given by the 4th respondent that the vanaspati factory of the appellant would be entitled to exemption from sales tax for a period of three years from the date of commencement of production, had sanctioned financial assistance to the appellant and the appellant was going ahead with the project in full speed to enable it to start production at the earliest. The appellant made considerable progress in the setting up of the vanaspati factory but it seems that by the middle of May, 1969, the State Government started having second thoughts on the question of exemption and a letter dated 16th May, 1969, was addressed by the 5th respondent, who was the Deputy Secretary to the Government in the Industries Department, intimating that a meeting has been called by the Chief Minister on 23rd May, 1969, "to discuss the question of giving concession in sales tax on vanaspati products" and requesting the appellant to attend the meeting. The appellant immediately by its letter dated 19th May, 1969, pointed out to the 5th respondent that so far as the appellant was concerned, the State Government had already granted exemption from sales tax by the letter of the Chief Secretary dated 23rd January, 1969, but still, the appellant would be glad to send its representative to attend the meeting as desired by the 5th respondent. The proposed meeting was, however, postponed and the appellant was intimated by the 5th respondent by its letter dated 23rd May, 1969, that the meeting would now be held on 3rd June, 1969. The appellants representative attended the meeting on that day and reiterated that so far as the appellant was concerned, it had already been granted exemption from sales tax and the State Government stood committed to it. The appellant thereafter proceeded with the work of setting up the vanaspati plant on the basis that in accordance with the assurance given by the 4th respondent, on behalf of the State Government, the appellant would be exempt from payment of sales tax for a period of three years from the date of commencement of production.The State Government however went back upon this assurance and a letter dated 20th January, 1970, was addressed by the 5th respondent intimating that the Government had taken a policy decision that new vanaspati units in the State which to into commercial production by 30th September, 1970, would be given partial concession in sales tax at the following rates for a period of three yearsyear of production 3 1/2 per cent. Second year of production 3 per cent. Third year of production 2 1/2 perappellant by its letter dated 25th June, 1970, pointed out to the Secretary to the Government that the appellant proposed to start commercial production of vanaspati with effect from 1st July, 1970, and stated that, as notified in the letter dated 20th January, 1970, the appellant would be availing of the exemption granted by the State Government and would be charging sales tax at the rate of 3 per cent. instead of 7 per cent. on the sales of vanaspati manufactured by it for a period of one year commencing from 1st July, 1970. The factory of the appellant thereafter went into production from 2nd July, 1970, and the appellant informed the Secretary to the Government about the same by its letter dated 3rd July, 1970. The State Government, however, once again changed its decision and on 12th August, 1970, a news item appeared in the Northern India Patrika stating that the Government had decided to rescind the earlier decision, i.e., the decision set out in the letter dated 20th January, 1970, to allow concession in the rates of sales tax to new vanaspati units. The appellant thereupon filed a writ petition in the High Court of Allahabad asking for a writ directing the State Government to exempt the sales of vanaspati manufactured by the appellant from sales tax for a period of three years commencing from 2nd July, 1970, by issuing a notification under sectionand not to collect or charge sales tax from the appellant for the said period of three years. It appears that in the writ petition, as originally filed, there was no plea of promissory estoppel taken against the State Government and the writ petition was, therefore, amended by obtaining leave of the High Court with a view to introducing the plea of promissory estoppel. The appellant urged in the amended writ petition that the 4th respondent acting on behalf of the State Government had given an unequivocal assurance to the appellant that the appellant would be entitled to exemption from payment of sales tax for a period of three years from the date of commencement of the production and this assurance was given by the 4th respondent intending or knowing that it would be acted on by the appellant and, in fact, the appellant, acting in reliance on it, established the vanaspati factory by investing a large amount and the State Government was, therefore, bound to honour the assurance and exempt the vanaspati manufactured and sold by the appellant from payment of sales tax for a period of three years from 2nd July, 1970. This plea based on the doctrine of promissory estoppel was, however, rejected by the Division Bench of the High Court principally on the ground that the appellant had waived the exemption, if any, by accepting the concessional rates set out in the letter of the Deputy Secretary dated 20th January, 1970. The appellant thereupon preferred the present appeal after obtaining a certificate of fitness from the High Court.

Reasoning: It is a doctrine of comparatively recent origin but it is potentially so fruitful and pregnant with such vast possibilities for growth that traditional lawyers are alarmed lest it might upset existing doctrine which are looked upon almost reverential and which have held the field for a long number of years. The law in regard to promissory estoppel is not yetthough it has been the subject of considerable debate in England as well as the United States of America and it has also received consideration in some recent decisions in India and we, therefore, propose to discuss it in some detail with a view of defining its contours and demarcating its parameters. We will first state briefly the facts giving rise to this appeal. This is necessary because it is only where certaint that promissory estoppel can be invoked andfacts of this last-mentioned case, Municipal Corporation of Bombay v. Secretary of State ((1905) I.L.R. 29 Bom. 580), are a little interesting and it would be profitable to refer to them. The Government of Bombay, with a view to constructing an arterial road, requested the Municipal Commissioner to remove certain fish and vegetable markets which obstructed the construction of the proposed road. The Municipal Commissioner replied that the markets were vested in the Corporation of Justices but that he was willing to vacate certain municipal stables, which occupied a portion of the proposed site, if the Government would rent other land mentioned in his letter to the municipality at a nominal rent, the municipality undertaking to bear the expenses of levelling the same and permit the municipality to erect on such land "stables of wood and iron with rubble foundation to be removed at six months notice on other suitable ground being provided by Government". The Government accepted the suggestion of the Municipal Commissioner and sanctioned the application of Municipal Commissioner for a site for stabling on the terms set out above and the Municipal Commissioner thereafter entered into possession of the land and constructed stables, workshops and chawls on the same at considerable expenses. Twenty-four years later the Government served a notice on the Municipal Commissioner determining the tenancy and requesting the Municipal Commissioner to deliver possession of the land within six months and in the meantime to pay rent at the rate of Rs. 12, 000 per month. The Municipal Corporation declined to hand over possession of the land or to pay the higher rent and the Secretary of State for India thereupon filed a suit against the Municipal Corporation for a declaration that the tenancy of the municipality stood determined and for an order directing the municipality to pay rent at the rate of Rs. 12, 000 per month. The suit was resisted by the Municipal Corporation on the ground that the events which had transpired had created an equity in favour of the municipality which afforded an answer to the claim of the Government to eject the municipality. This defence was upheld by a Division Bench of the High Court and Jenkins, C.J., speaking on behalf of the Division Bench, pointed out that, in view of the following facts, namely :"... the municipality gave up the old stables, levelled the ground, and erected the moveable stables in 1866 in the belief that they had against the Government an absolute right not to be turned out until not only the expiration of six months notice, but also other suitable ground was furnished : that this belief is referable to an expectation created by the Government that their enjoyment of the land would be in accordance with this belief : and that the Government knew that the municipality were acting in this belief so createdequity was created in favour of the municipality which entitled it "to appeal to the court for its aid in assisting them, to resist the Secretary of States claim that they shall be ejected from the ground". The learned Chief Justice pointed out that the doctrine which he was applying took its origin "from the jurisdiction assumed by the Courts of Equity to intervene in the case of or to prevent fraud" and, after referring to Ramsdenv. Dyson ((1866) L.R. 1 H.L. 129 at170), observed that the Crown also came within the range of this equity. This decision of the Bombay High Court is a clear authority for the proposition that it is open to a party who has acted on a representation made by the Government to claim that the Government shall be bound to carry out the promise made by it, even though the promise is not recorded in the form of a formal contract as required by the Constitution. That is how this decision has in fact been interpreted by this Court in Union of India v. Indo-Afghan Agencies ([1968] 2 S.C.R.do not find any decision of importance thereafter on the subject of promissory estoppel until we come to the decision of this Court in Collector of Bombay v. Municipal Corporation of the City of Bombay ([1952] S.C.R. 43). The facts giving rise to this case were that in 1865 the Government of Bombay called upon the predecessor-in-title of the Municipal Corporation of Bombay to remove old markets from a certain site and vacate it and on the application of the Municipal Commissioner, the Government passed a resolution approving and authorising the grant of another site to the municipality. The resolution stated further that "the Government do not consider that any rent should be charged to the municipality as the markets will be like other public buildings for the benefit of the whole community". The Municipal Corporation gave up the site on which the old markets were situated and spent a sum of Rs. 17 lakhs in erecting and maintaining markets on the new site. In 1940, the Collector of Bombay assessed the new site to land revenue and the Municipal Corporation thereupon filed a suit for a declaration that the order of assessment was ultra vires and it was entitled to hold the land for ever without payment of any assessment. The High Court of Bombay held that the Government had lost its right to assessee the land in question by reason of the equity arising on the facts of the case in favour of the Municipal Corporation and there was thus a limitation on the right of the Government to assessee under section 8 of the Bombay City Land Revenue Act. On appeal by the Collector to this Court, the majority Judges held that the Government was not, under the circumstances of the case, entitled to assess land revenue on the land in question, because the Municipal Corporation had taken possession of the land in terms of the Government resolution and had continued in such possession openly, uninterruptedly and of right for over seventy years and thereby acquired the limited title it had been prescribing for during the period, that is to say, the right to hold the land in perpetuity free of rent. Chandrasekhara Aiyar, J., agreed with the conclusion reached by the majority but rested his decision on the doctrine of promissory estoppel. He pointed out that the Government could not be allowed to go back on the representation made by it and stressed the point in the form of an interrogation by asking : "if we do so, would it not amount to our countenancing the perpetration of what can be compendiously described as legal fraud which a court of equity must prevent being committed ?" He observed that even if the resolution of the Government amounted merely to "the holding out of a promise that no rent will be charged in the future, the Government must be deemed in the circumstances of this case to have bound themselves to fulfil it. Whether it is the equity recognised in Ramsdens case ((1866) L.R. 1 H.L. 129) or it is some other form of equity, is not of much importance. Courts must do justice by the promotion of honesty and good faith, as far as it lies in their power". This was of course the solitary view of Chandrasekhara Aiyar, J., but it was approved by this Court in no uncertain terms in Indo-Afghan Agencies case ([1968] 2 S.C.R. 366).Then we come to the celebrated decision of this Court in the Indo-Afghan Agencies case ([1968] 2 S.C.R. 366). It was in this case that the doctrine of promissory estoppel found its most eloquent exposition. We may briefly state the facts in order to appreciate the ratio of the decision. Indo-Afghan Agencies Ltd., who were the respondents before the court, acting in reliance on the Export Promotion Scheme issued by the Central Government, exported woollen goods to Afghanistan and on the basis of their exports claimed to be entitled to obtain from the Textile Commissioner import entitlement certificate for the full f.o.b. value of the goods exporter as provided in the scheme. The scheme was not a statutory scheme having the force of law but it provided that an exporter of woollen goods would be entitled to import raw material of the total amount equal to 100 per cent. of the f.o.b. value of his exports. The respondents contended that, relying on the promise contained in the schemes, they had exported woollen goods to Afghanistan and were, therefore, entitled to enforce the promise against the Government and to obtain import entitlement certificate for the full f.o.b. value of the goods exported on the principle of promissory estoppel. This contention was sought to be answered on behalf of the Government by pleading the doctrine of executive necessity and the argument of the Government based on this doctrine was that it is not competent for the Government to fetter its future executive action which must necessarily be determined by the needs of the community when the question arises and no promise or undertaking can be held to be binding on the Government so as to hamper its freedom of executive action. Certain observations of Rowlatt, J., in Rederiaktiebolaget Amphitrite v. The King ([1921] 3 K.B. 500) were sought to be pressed into service on behalf of the Government in support of this argument. We have already referred to these observations earlier and we need not reproduce them over again. These observations undoubtedly supported the contention of the Government but it was pointed out by this Court that these observations were disapproved by Denning, J., in RobertsonMinister of Pensions ([1949] 1 K.B.227), where the learned Judge said that "the Crown cannot escape by praying in aid the doctrine of executive necessity, that is, the doctrine that the Crown cannot bind itself so as to fetter its future executive action ..... the defence of executive necessity is of limited scope. It only avails the Crown where there is an implied term to that effect or where that is the true meaning of the contract" and this statement of Denning, J., was to be preferred as laying down the correct law on the subject. Shah, J., speaking on behalf of the Court, observed : "We are unable to accede to the contention that the executive necessity releases the Government from honouring its solemn promises relying on which citizens have acted to their detriment. Under our constitutional set-up, no person may be deprived of his right or liberty except in due course of and by authority of law : If a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of power derived from the law - common or statute - the courts will be competent to, and indeed would be bound to, protect the rights of the aggrieved citizen."The defence of executive necessity was thus clearly negatived by this Court and it was pointed out that it did not release the Government from its obligation to honour the promise made by it, if the citizen, acting in reliance on the promise, had altered his position. The doctrine of promissory estoppel was in such a case applicable against the Government and it could not be defeated by invoking the defence of executivethis is the kind of detriment contemplated, it would necessarily be present in every case of promissory estoppel, because it is on account of such detriment which he promisee would suffer if the promisor were to act differently from his promise, that the court would consider it inequitable to allow the promisor to go back upon his promise. It would, therefore, be correct to say that in order to invoke the doctrine of promissory estoppel it is enough to show that the promisee has, acting in reliance on the promise, altered his position and it is not necessary for him to further show that he has acted to his detriment. Here, the appellant clearly altered its position by borrowing moneys from various financial institutions, purchasing plant and machinery from M/s. De Smet (India) Pvt. Ltd., Bombay, and setting up a vanaspati plant, in the belief induced by the representation of the Government that sales tax exemption would be granted for a period of three years from the date of commencement of the production. The Government was, therefore, bound on the principle of promissory estoppel to make good the representation made by it. Of course, it may be pointed out that if the U.P. Sales Tax Act, 1948, did not contain a provision enabling the Government to grant exemption, it would not be possible to enforce the representation against the Government, because the Government cannot be compelled to act contrary to the statute, but since section 4 of the U.P. Sales Tax Act, 1948, confers power on the Government to grant exemption from sales tax, the 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. We are, therefore, of the view that in the present case the Government was bound to exempt the appellant from payment of sales tax in respect of sales of vanaspati effected by it in the State of Uttar Pradesh for a period of three years from the date of commencement of the production and was not entitled to recover such sales tax from the appellant.Now, for the assessment year 1970-71, that is, 2nd July, 1970, to 31st March, 1971, the appellant collected from its customers sales tax amounting to Rs. 6, 81, 178.95 calculated at the rate of 3 1/2 per cent. on the sale price. But when the assessment was made by the sales tax authorities, sales tax was levied on the appellant at the rate of 7 per cent. and the appellant was required to pay up a further sum of Rs. 6, 80, 949.42. The appellant had prayed for an interim order in the present appeal staying further proceedings, but this Court, by an order dated 3rd April, 1974, granted interim stay only on the appellant paying up the amount of sales tax due for the assessment year 1970-71 before 31st July, 1974, and so far as the assessment years 1971-72, 1972-73 and 1973-74 were concerned, the court directed that the assessments for those years may proceed, but only the final order shall not be passed. The result was that the appellant had to pay up the further sum of Rs. 6, 80, 949.42 for the assessment year 1970-71. The appellant collected from the customers for the assessment year 1971-72 an aggregate sum of Rs. 9, 91, 206.17 by way of sales tax at the rate of 3 1/2 per cent. for the period 1st April, 1971, to 1st July, 1971, 4 per cent. for the period 2nd July, 1971, to 24th January, 1972, and 7 per cent. for the period 25th January, 1972, to 31st March, 1972, and deposited this amount in the treasury. Similarly, for the assessment year 1972-73, the appellant collected from its customers an aggregate sum of Rs. 19, 36, 597.23 as and by way of sales tax at the rate of 7 per cent. of the sale price and this amount was deposited by the appellant in the treasury, and so also for the first quarter of the assessment year 1973-74 up to the end of which the exemption from sales tax was to continue, the appellant collected and paid an aggregate sum of Rs. 4, 48, 884.05 at the rate of 7 per cent. of the sale price. It appears that surcharge amounting to Rs. 2, 85, 008.09 for the period of the exemption was also paid by the appellant into the treasury. The assessments for the assessment years 1971-72, 1972-73 and 1973-74 were, however, not competed in view of the stay order granted by this Court. Now, obviously, since the Government is bound to exempt the appellant from payment of sales tax for a period of three years from 2nd July, 1970, being the date of commencement of the production, the appellant would not be liable to pay any sales tax to the State in respect of sales of vanaspati effected during that period and hence the State would have to refund to the appellant the amount of sales tax paid for the period 2nd July, 1970, to 31st March, 1971, subject to any claim which the State may have to retain any part of such amount under any provision of law. If the State has any such claim, it must be intimated to the appellant within one month from today and it must be adjudicated upon within a further period of one month after giving proper opportunity to be heard to the appellant. If no such claim is made, or, if made, not adjudicated upon within the time specified, the State will refund the amount of sales tax to the appellant with interest thereon at the rate of 6 per cent. annum from the date when such refund becomes due and if such claim is made and adjudicated upon within the specified time and it is found that a part of this amount is liable to be retained by the State under some provision of law, the State will refund the balance to the appellant with interest at the like rate. So far as the assessment years 1971-72, 1972-73 and 1973-74 are concerned, the sales tax authorities will proceed to complete the assessments for those assessment years in the light of the law laid down in this judgment and the amounts of sales tax deposited by the appellant will be refunded to the appellant to be extent to which they are not found due and payable as a result of the assessments, subject to any claim which the State may have to retain those amounts under any provision ofshall first deal with the question of waiver since that can be disposed of in a few words. The High Court held that even if there was an assurance given by the 4th respondent on behalf of the State Government and such assurance was binding on the State Government on the principle of promissory estoppel, the appellant had waived its right under it by accepting the concessional rates of sales tax set out in the letter of the 5th respondent dated 20th January, 1970. We do not think that this view taken by the High Court can be sustained. In the first place, it is elementary that waiver is a question of fact and it must be properly pleaded and proved. No plea of waiver can be allowed to be raised unless it is pleaded and the factual foundation for it is laid in the pleadings. Here it was common ground that the plea of waiver was not taken by the State Government in the affidavit filed on its behalf in reply to the writ petitions, nor was it indicated even vaguely in such affidavit. It was raised for the first time at the hearing of the writ petition. That was clearly impermissible without an amendment of theor a supplementary affidavit raising such plea. If waiver were properly pleaded in thethe appellant would have had an opportunity of placing on record facts showing why and in what circumstances the appellant came to address the letter dated 25th June, 1970, and establishing that on these facts there was no waiver by the appellant of its right to exemption under the assurance given by the 4th respondent. But, in the absence of such pleading in thethis opportunity was denied to the appellant. It was, therefore, not right for the High Court to have allowed the plea of waiver to be raised against the appellant and that plea should have been rejected in limine.Secondly, it is difficult to see how, on the facts, the plea of waiver could be said to have been made out by the State Government. Waiver means abandonment of a right and it may be either express or implied from conduct, but its basic requirement is that it must be "an intentional act with knowledge" : per Lord Chelmsford, L.C., inEarl of Darnley v. London, Chatham and Dover Rly. Co. ((1867) L.R. 2 H.L. 43 at57) There can be no waiver unless the person who is said to have waived is fully informed as to his right and with full knowledge of such right, he intentionally abandons it. It is pointed out in Halsburys Laws of England (4th Ed.), Volume 16, in paragraph 1472, at page 994, that for a "waiver to be effectual it is essential that the person granting it should be fully informed as to his rights" and Isaacs, J., delivering the judgment of the High Court of Australia in Crainev. Colonial Mutual Fire Insurance Co. Ltd. ((1920) 28 C.L.R,305), has also emphasised that waiver "must be with knowledge, an essential supported by many authorities". Now, in the present case, there is nothing to show that at the date when the appellant addressed the letter dated 25th June, 1970, it had full knowledge of its right to exemption under the assurance given by the 4th respondent and that it intentionally abondoned such right. It is difficult to speculate what was the reason why the appellant addressed the letter dated 25th June, 1970, stating that it would avail of the concessional rates of sales tax granted under the letter dated 20th January, 1970. It is possible that the appellant might have though that since no notification exempting the appellant from sales tax had been issued by the State Government under sectionthe appellant was legally not entitled to exemption and that is why the appellant might have chosen to accept whatever concession was being granted by the State Government. The claim of the appellant to exemption could be sustained only on the doctrine of promissory estoppel and this doctrine could not be said to be soin its scope and ambit and so free from uncertainly in its application that we should be compelled to hold that the appellant must have had knowledge of its right to exemption on the basis of promissory estoppel at the time when it addressed the letter dated 25th June, 1970. In fact, in the petition as originally filed, the right to claim total exemption from sales tax was based on the plea of promissory estoppel which was introduced only by way of amendment. Moreover, it must be remembered that there is no presumption that every person known the law. It is often said that every one is presumed to know the law, but that is not a correct statement : there is no such maxim known to the law. Over a hundred and thirty years ago, Maule, J., pointed out in Martindalev. Falkner ((1846) 2 C.B.706) : "There is no presumption in this country that every person known the law : it would be contrary to common sense and reason if it were so." Scrutton, L.J., also once said : "It is impossible to know all the statutory law, and not very possible to know all the common law." But it was Lord Atkin who, as in so many other spheres, put the point in its proper context when he said in Evansv. Bartlam ([1937] A.C.473) : "... the fact is that there is not and never has been a presumption that every one knows the law. There is the rule that ignorance of the law does not excuse, a maxim of very different scope and application." It is, therefore, not possible to presume, in the absence of any material placed before the court, that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dated 25th June, 1970. We accordingly reject the plea of waiver raised on behalf of the State Government.That takes us to the question whether the assurance given by the 4th respondent on behalf of the State Government that the appellant would be exempt from sales tax for a period of three years from the date of commencement of production could be enforced against the State Government by invoking the doctrine of promissory estoppel. Though the origin of the doctrine of promissory estoppel may be found in Hughesv. Metropolitan RailwayCo. ((1877) 2 App. Cas.439) and BirminghamDistrict Land Co. v. London &Railway Co. ((1888) 40 Ch.D. 268),authorities of old standing decided about a century ago by the House of Lords, it was only recently in 1947 that it was rediscovered by Mr. Denning, as he then was, in his celebrated judgment in CentralLondon Property Trust Ltd. v. High Trees House Ltd. ([1947] K.B. 130; [1956] 1 All E.R.256) This doctrine has been variously called "promissory estoppel", "equitable estoppel", "quasi estoppel" and "new estoppel". It is a principle evolved by equity to avoid injustice and though commonly named "promissory estoppel", it is, as we shall presently point out, neither in the realm of contract nor in the realm of estoppel. It is interesting to trace the evolution of this doctrine in England and to refer to some of the English decisions in order to appreciate the true scope and ambit of the doctrine particularly because it has been the subject of considerable recent development and is steadily expanding. The basis of this doctrine is the interposition of equity. Equity has always, true to form, stepped in to mitigate the rigours of strict law. The early cases did not speak of this doctrine as estoppel. They spoke of its as "raising an equity". Lord Cairns stated the doctrine in its earliest formit has undergone considerable development since thenin the following words in Hughesv. Metropolitan RailwayCompany ((1877) 2 App. Cas.439) :"It is the first principle upon which all Courts of Equity proceed, that if parties who have entered into definite and distinct terms involving certain legal results .... afterwards by their own act or with their own consent enter upon a course of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will not be enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not be allowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties."