TMI Blog1994 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... 31-3-1979 but that date was extended in "public interest", we see no reason why it could not be curtailed in public interest. Individual interest must yield in favour of societal interest. In our considered opinion therefore the High Court was perfectly right in holding that the doctrine of promissory estoppel had no application to the impugned notification issued by the Central Government in exercise of its powers under Section 25(1) of the Act in view of the facts and circumstances, as established on the record. Appeals fail and are dismissed - 4336, 5339, 5340-5341, 5593, 5594, 5595 - - - Dated:- 18-10-1994 - C.J.I. and Dr. A.S. Anand, J. [Judgment per : Dr. A.S. Anand, J.]. - Leave granted in (C.A. Nos. 6983, 6984 6985 of 1994) SLP (C) Nos. 7370, 12304/83 and 725/84. 2.These two batches of appeals by special leave are directed against the judgment of the High Court of Delhi dismissing the writ petitions filed by the appellants, challenging the action of the Union of India in withdrawing a time bound exemption Notification No. 66 dated 15-3-1979 for the import of PVC resins. Notification No. 66 dated 15-3-1979 reads as follows : NOTIFICATION PVC resins ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e held bound by the representation it had made in the exemption notification and it was estopped on the basis of the promissory estoppel to go back on its promise. Reliance has been placed on various judgments of this Court in support of the argument that the doctrine of promissory estoppel can be invoked to bind the Government to its promise. We shall refer to the judgments at the appropriate place in this judgment. 5The respondents have supported the judgment of. the High Court and urged that though the doctrine of promissory estoppel can in appropriate cases be invoked against the Government to bind it to its promise, the doctrine, however, has no application to the present appeals because the exemption had been withdrawn in `public interest' and the individual interest must give way to the public interest. It is urged that the doctrine, being a product of equity, must give way when equity so demands. Argued Mr. Ganguli, learned senior counsel appearing for the respondents, that the doctrine of promissory estoppel cannot operate against the State to the detriment of the society at large. If the Government after a review of its policy finds that modification, alteration or supe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (1). 7.The Parliament has designated two authorities i.e. Central Government and the Central Board of Excise and Customs to make rules/regulations to carry out the purposes of the Act generally. The character of rules and the regulations made under Sections 156 and 157 respectively is the same, namely, they constitute delegated legislation. 8.Section 12 of the Customs Act, which is the charging section, provides that duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 or any other law for the time being in force on the goods imported into India. Section 2 of the Customs Tariff Act, 1975 read with the First and Second Schedule thereto lays down the rates at which duties of customs shall be levied under the Customs Act on various goods imported into India. Section 25 of the Act, with which we are primarily concerned in this batch of appeals, confers powers on the Central Government to grant exemptions from levy of duty in "public interest". Sub-sections (1) and (2) of Section 25 which are relevant for our purposes provide as under :- "Power to grant exemption from duty - If the Central Government is satisfied that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n was to do away with the total exemption from the basic customs duty allowed by the said earlier Notification No. 66, dated 15th March 1979, and instead to direct levy of 40% basic customs duty on the imports of PVC resins. The grievance of the appellants is that they had placed orders for the import of PVC resins on the basis of the exemption granted under Notification No. 66, dated 15th March 1979 which was to remain in force till 31st March 1981 and had so adjusted their affairs, that if they are compelled to pay basic customs duty at the rate of 40% ad valorem in respect of their orders for the import of PVC resins they would suffer a great loss since their goods arrived in India before 31-3-1981 but after the date of the withdrawal of the exemption Notification by the Notification dt. 16-10-1980. Aggrieved by the issuance of Notification dated 16th October 1980 superseding the Notification dated 15th March, 1979, the appellants filed a writ petition (C.W.P. No. 1671 of 1980) in the High Court of Delhi invoking the doc- trine of promissory estoppel and praying for a direction to quash the withdra- wal Notification to the extent that it superseded the earlier Notification befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the 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 decisions of this Court starting with Union of India v. Anglo Afgan Agencies Pvt. Limited [1968 (2) SCR 366]. Reference in this connection may be made with advantage to Century Spinning Manufacturing Co. Ltd. Anr. v. The Ulhasnagar Municipal Council Anr. - 1970 (3) SCR 854; M/s. Motilal Padampat Sugar Mills Co. (P) Ltd. v. State of UP Ors. - 1979 (2) SCR 641; Jit Ram Shiv Kumar Ors. etc. v. State of Haryana Anr. - 1980 (3) SCR 689; Union of India v. Godfrey Philips India Ltd. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Covenants entered into by the Crown are not to be construed as being subject to implied terms that would exclude the exercise of general discretionary powers for the public good: On the contrary they are to be construed as incorporating an implied term that such powers remain exercisable. This is broadly true of other public authorities also. But the status and functions of the Crown in this regard are of a higher order. The Crown cannot be allowed to tie its hands completely by prior undertakings is as clear as the proposition that the Courts cannot allow the Crown to evade compliance with ing obligations whenever it thinks fit: If a public authority ostensibly bind- 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 Photographics v. Union of India [1993 (66) E.L.T. 3] Jeevan Reddy, J. speaking for the Bench observed :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturers of certain products, requiring PVC resin as one of the raw material for the manufacturing process. PVC resins, it is not disputed, is manufactured in India and is also imported from abroad. In the counter to the Writ Petition filed by the Union of India in the High Court, the justification for the issuance of the exemption Notification No. 66/79 in the "public interest" was spelt out by the respondents. It was stated that it was with a view to equalising sale prices of the indigenous and the imported material and to make the commodity available to the consumer at a uniform price, keeping in view the trends in the supply of the material, that the Cabinet had decided to issue the exemption Notification No. 66 of 1979 under Section 25(1) of the Act. Subsequently, when it was found and realised that the international prices of the product were falling and consequently the import prices had become lower than the ex-factory prices of the indigenous material, the matter was examined by the Government of India and it was decided in "public interest" to withdraw the exemption Notification. Thus, the Union of India has disclosed the circumstances under which the exemption was init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly different. In the correspondence 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. 20.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 custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Mr. Asoke Desai and 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 that 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 31-3-1981. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption "in public interest" is a matter of policy and the courts 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 bona fides 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. 23.It needs no emphasis that the power of exemption under Section 25(1) of the Act has been granted to the Government by the Legislature with a view to enabling it to regulate, control and promote the industries and industrial productions in the country. Where the Government on the basis of the material available before it, bona fide, is satisfied that the "public interest" would be served by either granting exemption or by withdrawing, modifying or rescinding an exemption already granted, it should be allowed a free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Government exempting the above items from the whole of auxiliary duty as well. The appellants claim that on the basis of the promise and assurance contained in the two exemption Notifications, they commenced negotiations with the manufacturer and suppliers of the above items for the purchase of these items from abroad. In the meantime, the Central Government issued another Notification No. 174-Cus., dated 29-8-1980, withdrawing the earlier Notification No. 79-Cus., dated 18-4-1980 and on the same date i.e. 29-8-1980, yet, another Notification was issued levying auxiliary duty @ 12½ per cent ad valorem. Barely ten days after the rescindment of the earlier Notification, the Central Government issued another Notification No. 186-Cus., dated 9-9-1980 once again exempting wire rods and aluminium ingots from the whole of duty of customs. This Notification was to remain operative till 31st March 1981 and it has remained in force right through. The grievance of the appellants is that the withdrawal of the exemption Notification on 29-8-1980 was not at all justified and support for this argument is sought from the fact that within 10 days of the withdrawal notification, the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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