TMI Blog1981 (6) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... reby exempts polyvinyl chloride resins, falling within Chapter 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India, from the whole of the duty of customs leviable thereon which is specified in the said First Schedule. This notification shall be in force upto and inclusive of the 31st August, 1979." By a subsequent notification the date "31st August, 1979" was substituted by the words "31st March, 1980" and by another notification No. 37/80 dated 25th March, 1980 the words "31st March, 1981" were substituted for the words "31st March, 1980. However on 16th October, 1980 the Central Government issued another notification bearing No. 205/F.No. 355/141/80 Customs 1, impugned herein, modifying the earlier notification. It reads : "In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance, Department of Revenue No. 66-Customs, dated the 15th March, 1979, the Central Government being satisfied that it is necessary in the public interest so to do hereby exempts polyvinyl chloride resins, falling wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners to import the goods, the Central Government is precluded from revoking the exemption, even partially since such a course of conduct if permitted, is likely to cause grave prejudice and loss to the petitioners. Reliance is placed upon the well known decisions of the Supreme Court in Union of India v. Anglo Afghan Agencies - A.I.R. 1968 S.C. 718 M.P. Sugar Mills v. State of U.P - A.I.R. 1979 S.C. 621 and M/s. Jit Ram Shiv Kumar v. State of Haryana A.I.R. - 1980 S.C. 1285. On the other hand it is contended by Shri K. Subrahmanya Reddy, the learned Standing Counsel for the Central Government, that there is no room for applying the rule of promissory estoppel or equitable estoppel in this case. He submits that the exemption notification is one issued by the Central Government in exercise of a statutory power and that the impugned notification is also one issued under the same power. There can be no estoppel against statute or exercise of statutory power. Merely by mentioning the date 31st March, 1981 as the date until which the exemption was operative, no representation is involved that it would not be rescinded or modified before that date. The fact that the exemption notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the promisee should have altered his position in reliance on the promise." It is held that this doctrine is enforceable even against the Government notwithstanding the fact that there is no contract executed in the form required by Article 299 of the Constitution or that there is no consideration for the promise. The statement of law was affirmed by another Bench of the Supreme Court in M/s. Jit Ram Shiv Kwnar v. State of Haryana (supra). However both the decisions have recognised certain exceptions to this rule. Kailasam, J., stated those exceptions in the latter decision, in the following terms :- (1) The plea of promissory estoppel is not available against the exercise of the legislative functions of the State. (2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law. (3) When the officer of the Government acts outside the scope of his authority, the plea of promissory estoppel is not available. The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers. (4) The officer would be justified in charging the terms of the agreement to the prejudice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as a representation, much less a promise, made to them. A reading of section 25 of the Act makes it clear that it is the public interest that is the dominant factor. If the public interest demands, the Central Government shall have to issue a notification exempting the specified goods from whole or part of the Customs duty. Similarly, if the public interest demands, the same can be lifted or modified, as the case may be. The power to exempt though not a delegated power and termed as 'conditional legislation' (see Jalan's Case-A.l.R. 1967, Supreme Court, 691), yet it is a statutory power conferred upon the Government to be exercised in accordance with the demands of public interest. The petitioners do not challenge the impugned notification on the ground that it was not called for in public interest. Though a faint suggestion to this effect is made in some of the writ petitions, no much argument is addressed before me. The petitioners, it must be noticed, did not start the industry because of, or in the light of the said exemption. They are manufacturers of certain products requiring P.V. resins as one of the raw materials. P.V. resins are also manufactured in India, and partly im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. S.T. 1149/X-802 (33)-51 dated April 6, 1959 could not operate as an estoppel against the State Government and preclude it from subjecting the sales to tax if it felt impelled to do so in the interest of the Revenues of the State which are required for execution of the plans designed to meet the ever increasing pressing needs of the developing society. It is now well settled by a catena of decisions that there can be no question of estoppel against the Government in the exercise of its legislative, sovereign or executive powers . . . ." The Supreme Court, therefore, held-disagreeing with the High Court-that "the Government cannot divest itself of the right incidental to its office by conduct which, in the case of a private person, would amount to estoppel and in characterizing the demand for sales tax made by the appellants as illegal......". This decision-it is relevant to note-has been affirmed both in M.P. Sugar Mills v. State of U.P. - A.I.R. 1979 Supreme Court 621, and M/s. Jit Ram Shiv Kumar v. State of Haryana - A.I.R. 1980 Supreme Court, 1285, though the last sentence in the above extract, in so far as it says that there can be no question of estoppel against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced that the exemption notification issued initially was valid only upto 31-3-1979, and the said date was being extended from time to time. Just as the period of operation of the exemption can be extended, it can also be cut down, in public interest. As I have stated earlier, it is not urged before me that the impugned notification is not warranted by public interest, contemplated in Section 25(1) of the Act. The facts of the present cases cannot be held to be analogous to the facts in Union of India v. Anglo Afghan Agencies - A.I.R. 1968 S.C. 718, or M.P. Sugar Mills v. State of U.P. - A.I.R. 1979 S.C. 621. In the first case, the Government had evolved an. export promotion scheme in exercise of its executive power which, inter alia, stated that exporters will be entitled to import raw materials of the total amount equal to 100% of the F.O.B. value of the exports. The petitioners therein acting upon the said scheme, exported goods hoping that they would be entitled to import licences in terms thereof. It was, therefore, held that the Textile Commissioner who enunciated the scheme, was bound by the terms thereof and obliged to carry out the promise made thereunder. In the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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