TMI Blog2018 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... and except the proviso below subsection (2) of Section 174 - It is too well settled that right to take advantage of a statutory provision cannot be said to be an accrued right and similarly a right which would, if allowed to be asserted, will affect adversely the larger public interest that cannot be permitted to be enforced. Whether rights are flowing from the Cenvat Credit Rules, 2004 - Held that:- the learned Additional Solicitor General is right in his contention that a CENVAT credit is a mere concession and it cannot be claimed as a matter of right. If the CENVAT Credit Rules under the existing legislation themselves stipulate and provide for conditions for availment of that credit, then, that credit on inputs under the existing law itself is not a absolute but a restricted or conditional right. It is subject to fulfilment or satisfaction of certain requirements and conditions that the right can be availed of. The scheme of the new law that the object and purpose sought to be achieved after its introduction of the new law is of not permitting the existing law arrangement to continue endlessly. Some day or some time has been stipulated as appointed day for the new regime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paid Depot was registered under the Maharashtra Value Added Tax Act prior to 172017, but was not registered under the Central Excise Act, 1944. Upon transitioning to GST, the petitioner's factory and depot obtained registration under GST in the State of Maharashtra. 5. That some of the machines manufactured by the petitioner were used as demo machines which were cleared on payment of excise duty by its factory and were removed on selfinvoicing basis. The petitioner used to keep these demo machines at the depot after removing them from the factory and these machines were removed from the depot on need basis. The demonstration machines were removed from the depot for that purpose and which, after the demonstrations, are sold to dealers/customers. However, these machines are typically sold when they are aged for about 23 years. Under the erstwhile regime, these machines were sold from the depot on payment of VAT/CST. The petitioner had in stock, at the Duty Paid Depot, machines as on 3062017 which are older than twelve months, namely, on 3062016 and duty paid documents are available with respect to the same. In these circumstances, under the erstwhile regime the petitioner was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 172017, occurs and such ineligibility of credit under the GST regime causes discrimination between the petitioner and other manufacturers. It is put to a disadvantageous position as far as the closing stock on 172017 in respect of goods lying in stock prior to 3062016. 7. It is elaborated as to how a person who is not in possession of a duty paying document is also eligible to avail input tax credit on a presumptive basis, but the petitioner who is in possession of all the duty paid documents is barred from availing CENVAT credit where the invoice is issued on or prior to 3062016. It is contended that nonavailment of such credit was not due to the fault of the petitioner but due to unreasonable and arbitrary cutoff date of goods lying in stock for less than one year to transition of such credit. Now, the petitioner will have to bear the burden of double taxation in case it is not allowed to transition the credit of central excise duty paid by it at the time of removal from the factory for demo machines. The petitioner has already paid excise duty on the demo machines at the time of removal prior to 3062016 and will again be compelled to pay GST on supply of such goods to cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s steel seamless pipes and tubes, including precision tubes, hydraulic and fuel injection pipes and tubes, boiler tubes and more. 14. The petitioner is registered under the provisions of Rule 9 of the Central Excise Rules, 2002 as a dealer under Central Excise in Pune. The registration is obtained with effect from 1352008. The petitioner also applied for registration under the GST Act. After referring to Section 6 of the Central Excise Rules, 2002, it is stated that the petitioner can be termed as first stage dealer. It procures various locally manufactured goods, imported goods and these goods were sold to the customers under the prescribed documents. They pass on the incidence of duty to the customers. After inviting our attention to the CENVAT Credit Rules, 2004 and the relevant definitions therein, it is submitted that the President of India assented to the Central Goods and Services Tax Act, 2017, Integrated Goods and Services Tax Act, 2017, Union Territory Goods and Services Tax, 2017 and the Goods and Services Tax (Compensation to States) Act, 2017. The Central Goods and Services Tax Act, 2017 has the transitional provisions, vide Chapter XX, contained in Sections 139 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a conscious policy decision, that is to restrict the transition of credit based on invoices/prescribed documents which are not more than a year old. This has been done to ensure a safeguard against potential misuse of availment of credit during the transition period by placing a restriction on availing credit based on documents which are not very old. There is no question of equity. There are similar restrictions and in place for manufacturers/service providers under the Fifth proviso to subrule (7) of Rule 4 of the erstwhile CENVAT Credit Rules, 2004. It is submitted that the power to restrict the flow of credit exists under Section 16(1) of the CGST Act. The Legislative intent is to grant input tax credit partially. The input tax credit provisions do not provide that all the taxes paid on all inputs should be available as credit. Some credits have been denied in the Act itself and to allow flexibility. The restrictions can be placed on availability of credit, as credit can be availed only as permitted by law. It is stated that the petitioner has erred in stating that the restriction/prohibition on taking of credit of CENVAT by a first stage dealer on the goods lying in stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were cleared from the factory for use as demo machines. At that time, the excise duty was paid by the petitioner. When the goods were removed from the depot, there was no requirement to pay excise duty on the same. Now under the GST regime the petitioner will have to pay GST on the supply of these goods to the customers/dealers. Thus, there will be a burden of double taxation on the same subjectmatter. The GST will be levied by the Central Government as well as the levy would be on the transaction of supply of machines. Since the central excise duty has been subsumed under GST, there ought to have been availability of credit on the tax paid goods which have suffered central excise duty. However, by creating an arbitrary barrier of stock of goods, being less than an year old for claiming of credit, the law has violated the mandates of Articles 14, 19(1)(g) and 265 of the Constitution of India. 20th March, 2018 21. These contentions have been adopted but with several additions by the petitioner in Civil Writ Petition No.12378 of 2017. 22. Mr. Raghuraman, learned Counsel appearing for the petitioner would submit that in the petition which he is arguing, we must note, firstl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules, 2002. In the scheme of the Central Excise Act, 1944 and the Rules framed thereunder, there was no restriction or prohibition on taking or carrying forward the CENVAT credit on the goods purchased by the first stage dealer irrespective of when the goods have been purchased. It is urged that the period of purchase of goods was not relevant as long as the first stage dealer satisfies the conditions under the CENVAT Credit Rules, 2004 such as receipt of goods by the dealer and specified duty paid documents. In the circumstances, to introduce prohibition on taking of credit on the goods lying in stock as on the appointed date of 172017 would seriously prejudice the petitioner. No loss or prejudice would be caused to the respondents if the credit is allowed even for the documents which were issued more than one year back, as the said goods are duty paid. On account of continuing recession in the industry, further made worse by the demonetisation, stocks could not be sold for a considerable length of time. The stipulation would, therefore, render the provision discriminatory, unreasonable and violative of the mandate of Article 14 of the Constitution of India. All the more, when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons, it is submitted that the writ petition be allowed. Mr. Raghuraman has handed over a compilation for our perusal which would include the relevant legal provisions and the case law pointbypoint. 27. Mr. Raghuraman inter alia relied upon the Judgment of the Hon'ble Supreme Court and a very recently delivered and reported in (2017) 9 SCC 1 . This is a Judgment delivered on the point of constitutionality and validity of Triple Talaq { Shayara Bano v. Union of India Others }. It is submitted that in this Judgment the arbitrariness of the legislation is taken to be very much a facet of unreasonableness in terms of Article 19(2) to (6) and there is no reason why arbitrariness cannot be raised to strike down the legislation under Article 14 of the Constitution of India. 28. Prior thereto, in support of the argument that Article 14 is salutary in its application, it is urged that the Judgments in the compilation would throw light on these propositions canvassed. Our attention was specifically invited to a Judgment in the case of Elcher Motors Ltd. v. Union of India , reported in 1999 (106) E.L.T. 3 (SC). That is on the point that rights accrued during the existing law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporates the above condition, as the Legislature deemed it fit and proper to enforce the new regime from 172017. When the new regime replaces a bundle of legislations seeking to tax the activity of manufacturers, sales and extension of service, then, it was deemed fit and proper that the transition to the new regime, from the old one, should be smooth. For it to be smooth and proper, a restriction has been placed on availment of CENVAT credit during the transitional period and by making the above statutory prescription. Mr. Anil Singh would submit that it is entirely for the Legislature to make such a provision and its power in that behalf is not questioned. If there is no challenge to the impugned condition on the ground of competence of the Legislature, then, the competent Legislature could have made a restrictive provision and which is precisely the intent. The transition from the old regime to the new one should be smooth and expedient. Hence, a reasonable period of twelve months has been provided. Why it is only twelve months and why it does not date back to the stage, the petitioners in these petitions would deem it fit and proper, is not the test which can be evolved and app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same has crystallised as a vested right in view of Section 174, subsection (2) Clause (c) of the CGST Act, 2017. Such vested right cannot be taken away by retrospective/retroactive amendment. In that regard, our attention has been invited to the Judgment of the Hon'ble Supreme Court in the case of Jayam Company v. Assistant Commissioner Another , reported in (2016) 15 SCC 125. 33. Finally, it is urged that transitional credit is a credit which has crossed the threshold under the proviso to Rule 4(7) of the CENVAT Credit Rules, 2004. The stage of concession has crossed and it has become a vested right. Hence, Section 140(3) of the CGST Act is not pari materia to Rule 4(7) of the CENVAT Credit Rules, 2004. The Rule 4(7) deals with fresh credits and not transitional credits. Further, in the CENVAT Credit Rules and later in point of time relating to transitional credits, no time restrictions are laid down. Insofar as the CGST Act is concerned, Section 18(2) is in pari materia with Rule 4(7) of the CENVAT Credit Rules, 2004. Both deal with fresh credits. Therefore, the comparison is erroneous. 34. Heavy reliance is placed on the Judgment of Elcher Motors (supra) wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax on goods or services or both passed or made before the commencement of the Act by Parliament or any Authority or person having the power to make such law, notification, order, rule or regulation. The term input service is defined in Section 2, Clause (60) to mean any service used or intended to be used by a supplier in the course or furtherance of business. The term input is defined in Clause (59) of Section 2 to mean any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. The term input tax is defined in Section 2, Clause (62) and the term input tax credit is defined in Clause (63) to mean the credit of input tax. The expressions invoice or tax invoice mean tax invoice referred to in Section 31 {see Section 2, Clause (66)}. The terms job work and manufacture are defined in Section 2, Clause 68 and 72 and the expressions output tax and outward supply are defined in Section 2, Clause 82 and 83. The word recipient is defined in Section 2, Clause (93) as recipient of supply of goods or services or both, to mean the person liable to pay the consideration for the supply of goods or services or both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cil, by notification, specify categories of services the tax on intraState supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. The marginal heading of this provision is levy and collection. By Section 11, there is a power to grant exemption from tax and vesting in Government. Chapter IV is titled as Time and Value of Supply and contains Sections 12 to 15, whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. ( 3) Where the registered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions of the Incometax Act, 1961, the input tax credit on the said tax component shall not be allowed. ( 4) A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for supply of goods or services or both after the due date of furnishing of the return under section 39 for the month of September following the end of financial year to which such invoice or invoice relating to such debit note pertains or furnishing of the relevant annual return, whichever is earlier. 40. A perusal of this Section would enable us to hold that, every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in Section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 21. Chapter VI of the legislation is titled as Registration and persons liable for registration, persons not liable for registration, compulsory registration in certain cases, procedure for registration, deemed registration, special provisions relating to casual taxable person and nonresident taxable person, amendment and cancellation of registration ending up to its revocation. These matters are covered by this Chapter, which contains Sections 22 to 30. 43. Chapter VII is titled as Tax Invoice, Credit and Debit Notes. The Section 31 and the provisions following it would enable the person concerned to place himself in a position so as to avail of the benefits of the legislation, including the input tax credit. A comprehensive chapter titled as Accounts and Records is inserted (Chapter VIII). 44. Chapter IX is titled as Returns and the whole mechanism of filing it is set out therein. Chapter X provides for Payment of Tax and Chapter XI deals with Refunds. Chapter XII titled as Assessment contains the provisions enabling assessment of levy/tax. Chapter XIII is titled as Audit and Chapter XIV is titled as Inspection, Search, Seizure and Arrest. Chapter XV is titled as D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit unless the said credit was admissible as CENVAT credit under the existing law and is also admissible as input tax credit under this Act. Explanation. For the purposes of this subsection, the expression unavailed CENVAT credit means the amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which the said person was entitled in respect of the said capital goods under the existing law. ( 3) A registered person, who was not liable to be registered under the existing law, or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f subsection (3). ( 5) A registered person shall be entitled to take, in his electronic credit ledger, credit of eligible duties and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in respect of which has been paid by the supplier under the existing law, subject to the condition that the invoice or any other duty or tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day: Provided that the period of thirty days may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding thirty days: Provided further that said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this subsection. ( 6) A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semifinished or finished goods held in sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed subject to the condition that the registered person has made the payment of the consideration for that supply of services within a period of three months from the appointed day. ( 10) The amount of credit under subsections (3), (4) and (6) shall be calculated in such manner as may be prescribed. Explanation 1.For the purposes of subsections (3), (4) and (6), the expression eligible duties means ( i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957; ( ii) the additional duty leviable under subsection (1) of section 3 of the Customs Tariff Act, 1975; ( iii) the additional duty leviable under subsection (5) of section 3 of the Customs Tariff Act, 1975; ( iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and Textile Articles) Act, 1978; ( v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985; ( vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985; and ( vii) the National Calamity Contingent Duty levia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transition from one law to another smoothly. During such period, arrangements are made for input tax credit. They seem to be not complaining even when their right, if any, to avail of this credit and which is unavailed of, is restricted and not unconditional. By subsection (3), a case dealt with is of a registered person but who was not liable to be registered under the existing law or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contract service and was availing of the benefit of Notification No.26/2012, dated 2062012 or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, and he shall be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs contained in semifinished or finished goods held in stock on the appointed day, subject to the conditions inserted in Clauses (i) to (v). Out of all those who have been brought within the transitional arrangements for availing input tax credit, it is only some of them particularly the first stage dealer or a depot of a manufacturer who seem to question the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regulation are not outside Article 14 it is well recognised that the State enjoys the widest latitude where measures of economic regulation are concerned. These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria and adjustment and balancing of various conflicting social and economic values and interests. It is for the State to decide what economic and social policy it PG NO 188 should pursue and what discriminations advance those social and economic policies. In view of the inherent complexity of these fiscal adjustments, courts give a larger discretion to the Legislature in the matter of its preferences of economic and social policies and effectuate the chosen system in all possible and reasonable ways. If two or more methods of adjustments of an economic measure are available, the Legislative preference in favour of one of them cannot be questioned on the ground of lack of legislative wisdom or that the method adopted is not the best or that there were better ways of adjusting the competing interests and claims. The Legislature possesses the greatest freedom in such areas. The analogy of principles of the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or ( e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any such investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and other legal proceedings or recovery of arrears or remedy may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine, interest, forfeiture or punishment may be levied or imposed as if these Acts had not been so amended or repealed; ( f) affect any proceedings including that relating to an appeal, review or reference, instituted before on, or after the appointed day under the said amended Act or repealed Acts and such proceedings shall be continued und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case had gone beyond the stage of a mere application under Section 18(1). The Court accordingly held that the death of Teja, the large landholder, during the pendency of the appeal before the Financial Commissioner, on the happening of which event inheritance opened resulting in his legal heirs becoming small landholders, would not nullify or annul the order made by the Prescribed Authority in favour of the tenant who had acquired a vested right to the grant of relief on the day they made their application under Section 18(1) of the Act. The observations made by Krishna lyer, J. that the right of parties are determined by the facts as they exist on the date the action is instituted must be read in the context in which they were made and do not lay down any rule of universal application. The decision in each case must depend on its own facts. In the present case, Harditta Ram, the predecessor-in-title of the appellants, when he made the application for purchase under Section 18(1) of the Act, had a mere hope or expectation of, or liberty to apply for acquiring a right, and not a 'right acquired or accrued' under Section 18(1). It has been held ever since the leading case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , who produces, manufactures, carries on trade, holds private storeroom or warehouse or otherwise uses excisable goods or an importer who issues an invoice on which CENVAT credit can be taken, shall get registered. The Rule 10 obligates maintenance of daily stock account and Rule 11 provides for removal of goods on invoice. Thereafter, there are further provisions enabling filing of return, etc.. 55. The CENVAT Credit Rules, 2004, after the definitions and particularly of the phrases exempted goods , exempted service , final product define first stage dealer to mean a dealer, who purchases the goods directly from the manufacturer under the cover of an invoice issued in terms of the provisions of Central Excise Rules, 2002 or from the depot of the said manufacturer, or from premises of the consignment agent of the said manufacturer or from any other premises from where the goods are sold by or on behalf of the said manufacturer, under cover of an invoice, or an importer or from the depot of an importer or from the premises of the consignment agent of the importer, under cover of an invoice. The expression input is defined in Rule 2, Clause (k) to mean all goods used in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed condition defeats any accrued or vested right. It was never vesting in them in such absolute terms, as is argued before us. If the existing law itself imposes condition for its enjoyment or availment, then, it is not possible to agree with the Counsel that such rights under the existing law could have been enjoyed and availed of irrespective of the period or time provided therein. The period or the outer limit is prescribed in the existing law and the Rules of CENVAT credit enacted thereunder. In the circumstances, it is not possible to agree with the Counsel appearing for the petitioners that imposition of the condition vide Clause (iv) is arbitrary, unreasonable and violative of Articles 14 and 19(1)(g) of the Constitution of India. 57. We would refer to the Judgments which are heavily relied upon in this context. It is stated that the rights and privileges accrued during the existing law have been specifically saved under Section 174 of the CGST Act, 2017. If what are saved are the rights and privileges of the nature noted above, then it cannot be said de hors the conditions or de hors the restriction on availment or enjoyment of that right they have been saved by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods are utilised in the manufacture of further products as inputs thereto, then, the tax on these goods gets adjusted which are finished subsequently. Thus, a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Thus, this is a case where the Rule, as introduced, provided for total lapsing of that credit which was lying unutilised with the manufacturer on 1631995. That was held to be impermissible within the scheme of the law. We are not considering here such a situation. 61. We are not confronted with a situation of the lapsing of the credit though the petitioners may equate the position before us with that of Elcher Motors. We are dealing with the validity and legality of a condition imposed in the transitional arrangement. While moving from one legislation to another comprehensive legislation, in the latter legislation the Legislature deemed it fit and proper to continue the earlier or erstwhile arrangement by terming it as a transition or transitional one. That continuation was with conditions and one of the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 19 and one of the most important condition was that, in order to enable the dealer to claim that credit it has to produce the original tax invoice, complete in all respect, evidencing the amount of input tax. It is in these circumstances that the Hon'ble Supreme Court held that the challenge to the constitutional validity had to fail. It clearly held that when there was a concession given by the statute, the Legislature has to make provision stating the form and manner in which the concession is to be allowed and the subsection (20) seeks to achieve that. There was no right, inherent or otherwise, vested with dealers to claim the benefit of input tax credit but for Section 19 of the VAT Act. We, therefore, do not see how de hors this position a reliance can be placed only on some paras of this Judgment. We cannot ignore what was essentially decided. This is not a matter of retrospective operation of a fiscal statute, as was projected before us in the passing. This is a clear case as operating within the ambit of Jayam Company itself. As is before us, a concession is being provided by the Legislature which but for the provision granting such concession could have not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion having been breached or resiled by the Executive or the State. From inception, the concession or right based on the same was extended but with conditions. Now that the new regime has taken over and which does away with all the existing laws on the subject, then, in the transitional phase and for the transition to be smooth and proper necessary provisions are inserted in the New Law. With these in place, even the conditional arrangement under the existing laws is saved for a particular duration. To our mind, therefore, we do not see how when the imposition of the condition has a clear nexus with the object sought to be achieved, then, that can be termed as violative of the principle of promissory estoppel either. In this behalf a reference can usefully be made to the principles emerging from several Judgments of the Hon'ble Supreme Court, particularly after M.P. Mills Case (supra). In the case of Kasinka Trading and Anr. vs. Union of India and Anr. , reported in AIR 1995 SC 874 the Hon'ble Supreme Court summarised the legal position as under: 12. The doctrine of promissory estoppel or equitable estoppel is well established in the administrative law of the count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Government or the public authority to its promise, assurance or representation. 14. The ambit, scope and amplitude of the doctrine of promissory estoppel has been evolved in this country over the last quarter of a century through successive decision of this Court starting with Union of India v. Anglo Afgan Agencies Pvt. Limited (AIR 1968 SC 718). Reference in this connection may be made with advantage to Century Spinning Manufacturing Co. Ltd. and Anr. v. The Ulhasnagar Municipal Council and Anr. (AIR 1971 SC 1021); Motilal Padampat Sugar Mills Co. (P) Ltd. v. State of UP and Ors. (AIR 1979 SC 621); Jit Ram Shiv Kumar and Ors. etc v. State of Haryana and Anr. (AIR 1980 SC 1285); Union of India v. Godfrey Philips India Ltd. (AIR 1986 SC 806); Indian Express Newspapers (Bom) Pvt. Ltd. and Ors. v. Union of India and Ors. (AIR AIR 1986 SC 515); Pornami Oil Mills and Ors. v. State of Kerala and Anr. [1986] Supp. SCC 728 : Bakul Oil Industries and Anr. v. State of Gujarat and Anr. (AIR 1987 SC 142); Asst. Commissioner of Commercial Taxes Ors v. Dharmendra Trading Co. and Ors. (AIR 1988 SC 1247); Amrit Banaspati Co. Ltd. and Anr. v. State of Punjab and Anr. (1992 AIR SCW 953 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the proposition that the Courts cannot allow the Crown to evade compliance with ostensibly binding obligations whenever it thinks fit: If a public authority lawfully repudiates or departs from the terms of a binding contract in order to have been bound in law by an ostensibly binding contract because the undertakings would improperly fetter its general discretionary powers the other party to the agreement has no right whatsoever to damages or compensation under the general law, no matter how serious the damages that party may have suffered. 15. In Subhash Photographies v. Union of India (1993 AIR SCW 2871 para 14) Jeevan Reddy, J. Speaking for the Bench observed: In Statutes like Customs Act and Customs Tariff Act one has also to keep in mind that such legislation can be properly administered only by constantly adjusting it to the needs of the situation. This calls for a goods amount of discretion to be allowed to the delegate. As is often pointed out 'flexibility is essential (in law-making) and it is one of the advantages of rules and regulations that they can be altered much more quickly and easily than can Acts of Parliament. We have pointed out hereinb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence exchanged between the State and the petitioners therein it was held out to the petitioners that the industry would be exempted from sales tax for a particular number of initial years but when the State sought to levy the sales tax it was held by this Court that it was precluded from doing so because of the categorical representation made by it to the petitioners through letters in writing, who had relied upon the same and set up the industry. 21. The power to grant exemption from payment of duty, additional duty etc. under the Act, as already noticed flows from the provisions of Section 25(1) of the Act. The power to exempt includes the power to modify or withdraw the same. The liability to pay customs duty or additional duty under the Act arises when the taxable event occurs. They are then subject to the payment of duty as prevalent on the date of the entry of the goods. An exemption notification issued under Section 25 of the Act had the effect of suspending the collection of Customs duty. It does not make items which are subject to levy of customs duty etc. as items not leviable to such duty. It only suspends the levy and collection of customs duty etc., wholly or par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Harish Salve, their learned senior advocates, is to the effect that since the Notification 66/79 had itself indicated that it shall be operative till 31st March 1981, the Government could not withdraw the same before the expiry of the date. It was argued that the appellants had placed orders for the import of PVC resin relying upon the exemption Notification on the understanding that it was to remain operative till 31st March 1981 and had made arrangements for importing the goods accordingly and they could not be prejudiced by the withdrawal of that Notification before 31st March 1981. We cannot persuade ourselves to accept this submission of the learned Counsel. Merely by mentioning the date as 31st March 1981, as the date upto which the exemption Notification No. 66/79 was to be operative, no unequivocal representation could be said to have been made that it could not be rescinded or modified before that date even if the Government was satisfied that it was necessary in the public interest to rescind it. Since, the Notification had been issued under Section 25(1) of the Act, the very same power was available to the authority for rescinding or modifying that Notification and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic interest is a matter of policy and the court would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the public interest . The courts, do not interfere with the fiscal policy where the Government acts in public interest and neither any fraud or lack of bonafides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interest while issuing or modifying or withdrawing an exemption Notification under Section 25(1) of the Act. 66. In fact, we have found from the scheme of the new law that the object and purpose sought to be achieved after its introduction of the new law is of not permitting the existing law arrangement to continue endlessly. Some day or some time has been stipulated as appointed day for the new regime to come into force. For it to come into force and function effectively, the transitional arrangements have been made. They have clear nexus, therefore, with the object sought to be achieved. They cannot be struck down as having no such re ..... 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