1981 (10) TMI 175 - HC - Central Excise

Summary

Issues:
Challenge to refusal of cash assistance and replenishment licenses by Chief Controller of Imports and Exports based on altered import policy; Application of doctrine of promissory estoppel against Government; Claim for relief under Article 226 of the Constitution of India.

Analysis:
The petitioners, engaged in manufacturing electrical contacts, exported goods under specific policy entitling them to cash assistance and replenishment licenses. However, subsequent alteration in policy by excluding silver value from F.O.B. value led to denial of benefits by Chief Controller of Imports and Exports. The petitioners sought relief under Article 226 of the Constitution of India, invoking the doctrine of promissory estoppel, as established by the Supreme Court in the case of M/s. Motilal Padmapat Sugar Mills Co. Ltd. v. The State of Utter Pradesh. The doctrine holds the Government bound by promises made to citizens, enforceable even without formal contracts, unless public interest necessitates a change in policy. The Court emphasized that the Government must justify policy changes with clear reasons to balance public interest against individual rights.

The Deputy Chief Controller of Imports and Exports defended the policy alteration, arguing that excluding silver value was in the public interest as silver content in exported products exceeded 90%. However, the Court found the Government's assertion unsubstantiated, lacking material evidence to prove public interest as the basis for policy change. The Court cited the need for the Government to provide specific justifications and reasons for altering policies affecting individual rights, as per the doctrine of promissory estoppel.

The respondents attempted to challenge the petitioners' claim based on a Supreme Court decision regarding import licenses and the impact on the country's economy. However, the Court dismissed this argument, stating that the case at hand involved different circumstances and the respondents failed to provide valid reasons for the policy change. The Court ruled in favor of the petitioners, granting the requested relief of cash assistance and replenishment licenses within a specified timeframe, with no costs imposed on either party.

In conclusion, the judgment highlights the application of the doctrine of promissory estoppel against the Government, emphasizing the need for clear justifications for policy changes affecting individual rights. The Court's decision underscores the importance of balancing public interest with individual entitlements when altering established policies, ensuring equitable outcomes for all parties involved.