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High Court Of Calcutta
Vinod Kumar Gupta, Malay Kumar Basu
UNION OF INDIA - Appellant
Versus
INDIAN RAYON AND INDUSTRIES LTD. - Respondent
Matter 2897 Of 1989
Decided On : 12/21/1999
CUSTOMS ACT - SECTION 25 - NOTIFICATION - PUBLIC INTEREST - DOCTRINE OF PROMISSORY ESTOPPEL - APPLICABILITY: The doctrine of promissory estoppel cannot be invoked against the government to prevent the withdrawal of an exemption notification issued under section 25 of the Customs Act, 1962, where the exemption was granted in public interest and subsequently withdrawn in exercise of the same powers again in public interest.
Fact of the Case:
The appellants, the Central Government, issued a notification withdrawing an exemption from customs duty on the import of "autoconers", a type of textile machinery. The respondents, who were engaged in the textile business, had taken steps to import "autoconers" based on the exemption notification. They filed a writ petition challenging the withdrawal of the exemption, arguing that it violated the doctrine of promissory estoppel.
Finding of the Court:
The court held that the doctrine of promissory estoppel was not applicable in the present case. It observed that the exemption notification did not hold out any unequivocal promise or assurance to the respondents that the exemption would remain operative indefinitely. The court further held that the withdrawal of the exemption was in public interest and that the respondents could not be put in any adverse situation which could not be rectified.
Issues: 1. Whether the doctrine of promissory estoppel can be invoked against the government to prevent the withdrawal of an exemption notification issued under section 25 of the Customs Act, 1962. 2. Whether the withdrawal of the exemption notification in the present case was in public interest.
Ratio Decidendi: 1. The doctrine of promissory estoppel cannot be invoked against the government to prevent the withdrawal of an exemption notification issued under section 25 of the Customs Act, 1962, where the exemption was granted in public interest and subsequently withdrawn in exercise of the same powers again in public interest. 2. The withdrawal of the exemption notification in the present case was in public interest, as it was necessary to regulate, control, and promote the industries and industrial production in the country.
Final Decision: The appeal was allowed, and the judgment of the learned single judge was set aside.
( 1 ) THIS appeal under Clause 15 of the Letters Patent is directed against Judgment dated 27/3/92 passed by the learned single Judge of this Court in Metter No. 2897 of 1989 whereby he has by allowing the writ application filed by the respondents directed the appellants to clear and deliver the goods imported by the respondents without payment of any duly of Customs caused by reason of the withdrawal of the exemption notification Issued in terms of section 25 of the Customs Act and by Issuing certain other consequential and ancillary directions.
( 2 ) BRIEF facts leading to the filing of the present appeal are that the respondents being engaged in the business of textiles took steps for importing from abroad an automatic winding machine used in the textile industry and called by the name of "autoconer".-AUTOCONEK" as a machine item was liable to attract the payment of customs duty under section 25 of the Customs Act at all material times except during the relevant period, which we shall notice hereafter, when exemption was granted to it from payment of customs duty by issuance of a notification by the Government of India. Withdrawal of the exemption, and in the meanwhile as per the respondents writ-petitioners their having taken steps for Importing "autoconer" on the basis of exemption notification, resulted in the respondents filing writ application under Article 226 of the Constitution which, as noticed above, was allowed on the terms indicated hereinabove.
( 3 ) THE Customs Notification No. 71/87 was Issued on 1st March 87 whereby machines specified in the Table annexed with that notification were exempted from payment of Customs duty on the terms Indicated in that notification. "autoconers" were not included in the Table annexed with the aforesaid notification. This notification was to reman in force uptlll 31st March 1988. Notification No. 71/87 dated 1st March 87 however was amended by Customs Notification No. 246 of 88 dated 13th September 88 whereby "autoconers" were included in the Table annexed to Notification No. 71/87. The amending Notification No. 246/88 further provided that Notification No. 71 of 87 was to remain in force uptlll 31st March, 1990.
( 4 ) THE Appellants issued Notification No. 63 of 89 on 1st March 89 whereby. In amendment of Notification No. 71/87 the rate of customs duly was revised from 25% ad valorem to 35% ad valorem.
( 5 ) WE now come to the impugned Notification whereby "autoconers" were altogether taken out from the list of machines which were exempted from payment of customs duty. This was done vide Notification No. 143/ 89-Customs issued on 21st April, 1989. The Notification may be reproduced hereunder for ready reference. It reads thus :"in exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), The Central Government, being satisfied that it is necessary in the public interest so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 71/87-Customs dated 1st March, 1987, namely :--In the Table annexed to the said Notification, SB. No. 8 and the entry relating thereto shall be omitted. "
( 6 ) THE respondents felt aggrieved by the Issuance of this Notification on 21st April, 1989 because their grievance was that acting on the basis of notification No. 246/88 dated 13th September 1988 they took steps for Importing "autoconers" from abroad and entered Into a contract on 23rd February, 1989 with Messrs. Karl Mayer of West Germany. The respondents also say that they opened necessary Letter of Credit on 18th March, 1989 in favour of the aforesaid supplier on United Bank of India. The respondents' further case is that the machinery was shlpted on 30th April 89 and arrived into Indian Ports on 4th July 89, Since in the meanwhile Notification No. 143 of 89 dated 21. 04. 89 had come into operation and therefore the respondents-petitioners
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