In Brief
Tea product manufacturers challenged the withdrawal of sales tax exemption following a 2001 amendment that excluded "tea blending" from the manufacturing definition in the West Bengal Sales Tax Act. The manufacturers had set up operations in reliance on the government's prior tax holiday scheme. The Supreme Court held, by a majority, that the state's arbitrary withdrawal of the benefit without demonstrating public interest violated the doctrine of legitimate expectation, a facet of Article 14. The Court ruled that while policy changes are permissible, they must be justified by explicit public interest considerations, and directed restoration of the original exemption benefits until their scheduled expiry.
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