Important Point
Principle of promissory estoppel is applicable against the Govt. but in case there is a supervening public equity, the Govt. would be allowed to change its stand.

Judgment

A.M. Ahmadi, CJI. - The 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/T. 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 G.S.R. (hereinafter referred to as "Notification No. 66"). By the first Notification No. 66, the Government gave exemption to imports of polyvinyl chlirode resins (PVC) falling within Chapter 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 is as under:

"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 Government of India in the Ministry of Finance, Department of Revenue, No. 145-Customs, dated the 27th July, 1980, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby 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.

The Notification shall be in force upto and inclusive of the 31st March, 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 upto 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Bombay Port on 8.11.1980, However, the impugned Notification withdrawing the exemption from payment of customs duty was withdrawn on 16.10.1980. The relevant part of impugned Notification is as under:-

"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,. 66 Customs, dated 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 within Chapter 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. And Another v. Government of India And Others1. The primary focus of the judgment in the case of Bombay Conductors (supra) 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