- (1.) He present appeal impugns the judgment of the High court of Delhi dated 16/3/1983 which dismissed the writ petition filed by the appellants challenging the notification dated 16/10/1980 issued by the government of India, Ministry of Finance, Department of Revenue, being Notification No. 205/f-No. 355/141/80-Cus I. (hereinafter referred to as "notification No. 205"). This notification was issued in supersession of an earlier notification dated 15/3/1979 being Notification No. 66-Cus. dated 15/3/1979 (hereinafter referred to as "notification No. 66"). By the first Notification No. 66, the government gave exemption to imports of polyvinyl chloride resins (PVC) falling within Ch. 39 of the First Schedule to the Customs Tariff Act, 1975 from the duty of customs leviable thereon specified in the First Schedule. The relevant part of the Notification No. 66. "In exercise of the powers conferred by Ss. (1 of Section 25 of the Customs Act, 1962 (52 of 1962, and in supersession of the Notification of government of India in the Ministry of Finance, Department of Revenue, No. 145-Customs, dated the 27/07/1978, 401 the central government, being satisfied that it is necessary in the public interest so to do, hereby exempts polyvinyl chloride resins, falling within Ch. 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. The Notification shall be in force up to and inclusive of the 31/03/1981. " The case of the appellant is that on the faith of the solemn assurance given by the government of India that no duty of customs would be leviable on the importation of PVC resins up to 31/3/1981, they entered into an arrangement for the import of PVC resin as an actual user with the U. P. Export Corporation, Kanpur and opened Letters of Credit against the foreign suppliers on 2/10/1980 and the goods arrived at the Bombay Port on 8/11/19800. However, the notification withdrawing the exemption from payment of customs duty was issued on 16/10/1980. The relevant part of the impugned notification is as under: "In exercise of the powers conferred by Ss. (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 15/03/1979, the central government being satisfied that it is necessary in the public interest so to do, hereby exempts polyvinyl chloride resins, falling within Ch. 39 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975, when imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule as is in excess of forty per cent ad valorem. (K. Chandramouli) Under-Secretary to the Govt. of India. " The appellants alleged that they imported the PVC resin on the assurance that there would be no customs duty imposed upon it and that but for this exemption, they would not have imported the PVC resin as that would have been uneconomical. They, therefore, contend that the government should be estopped from withdrawing the benefit of Notification No. 66.
(2.) The impugned judgment of the High court is quite brief. It relies entirely on a full bench decision of the same High court in the case of Bombay Conductors and Electricals Ltd. v. Govt. of lndia. The primary focus of the judgment in the case of Bombay Conductors' was that imposition of taxes and withdrawal thereof are legislative functions and since there can be no estoppel against the legislature, the withdrawal notification was not hit by the principles of estoppel. The impugned judgment, however, does not dispute that the doctrine of promissory estoppel can be attracted against the State. However, after an analysis of various previous judgments of this court on the question of promissory estoppel against public authorities, the judgment concludes that the question ofpromissory estoppel cannot be invoked when the public interest requires otherwise. The following part of the judgment in Bombay Conductors can be quoted with profit to identify the reasoning of the High court as to why the impugned notification could not be quashed, be it a legislative function or an executive one. "In M. P. Sugar Mills it was recognised that where the government owes a duty to the public to act differently, promissory estoppel cannot be invoked to prevent the government from doing so. The government cannot be prevented from acting in the discharge of its duty under the law. 42. One thing is clear from the authorities. There is not a single case which has gone to the length of saying that estoppel can be pleaded even against public interest. The present is a case essentially of 'public interest'. All the authorities uniformly hold that against 'public interest' the plea of estoppel will not avail a party. Otherwise the government will not be able to assert its power and will be a helpless spectator even if public interest requires it to act differently. It would amount to surrender by the government of its legislative powers which have to be used for the public good. This is why Section 25 confers a statutory power on the central government to act in public interest and to grant. exemption or rescind it. 43. Estoppel cannot be invoked where the result will be to compel the government to continue the exemption which a competent enactment has validly authorised the executive to withdraw in the public interest at any time. In public interest exemption can be granted. In public interest exemption can be rescinded. In other words, the rights of individuals are subordinated to the paramount interest of the public good. Section 25 underlines the importance of the common good. 'public interest' dominates the economic scene. If in public interest the central government finds that it is necessary to protect its own industry by putting up a tariff wall it will be futile to say that it cannot do so because it is bound by its promise to continue the exemption up to a particular time. The traders may feel incensed at the behaviour of the executive at its imposition, exemption, reimposition and re-exemption of taxes and levies. But when to exempt and when to impose duty is left to the executive by the legislature. It will depend on the economic climate. New times require new measures. In a world of growing interdependence the first thing every country wants is protection for its domestic industry. 44. Governed by the market forces and the laws of supply and demand, if the government finds that it must withdraw the exemption notification at once it can do so. What actuated the government to take the step of exemption and reimposition was enlightened self-interest, 403 such self-interest as would subserve the common good. The imposition and exemption of customs duty are the chief vehicles of the government to protect a domestic market and to steady the level of prices. The tariffs are its chosen instruments to shield domestic production from foreign competition. " The same impugned Notification No. 205 came to be challenged in another set of appeals decided by this court in Kasinka Trading v. Union of India. The Notification was upheld by a division bench of this court comprising M. N. Venkatachaliah, C. J. and A. S. Anand, J. It is, however, contended before us that the judgment in Kasinka Trading is not correct.
(3.) It is not necessary for us to go into a historical analysis of the case-law relating to promissory estoppel against the government. Suffice it to say that the principle of promissory estoppel is applicable against the government but in case there is a supervening public equity, the government would be allowed to change its stand; it would then be able to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. However, the court must satisfy itself that such a public interest exists. The law on this aspect has been emphatically laid down in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of U. P. The portion relevant for our purpose is extracted below: "It is only if the court is satisfied, on proper and adequate material placed by the government, that overriding public interest requires that the government should not be held bound by the promise but should be free to act unfettered by it, that the court would refuse to enforce the promise against the government. The court would not act on the mere ipse dixit of the government, for it is the court which has to decide and not the government whether the government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the government to show that the public interest in the government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the government bound by the promise and the court would insist on a highly rigorous standard of proof in the discharge of this burden. But even where there is no such overriding public interest, it may still be competent to the government to resile from the promise 'on giving reasonable notice, which need not be a formal notice, giving the promisee a reasonable opportunity of resuming his position' provided of course it is possible for the promisee to restore status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable. Vide Emmanuel Ayodeji Ajayi v. Briscoe. ";