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High Court Of Calcutta
Sudhir Ranjan Roy
GENERAL FIBRE DEALERS LTD - Appellant
Versus
UNION OF INDIA - Respondent
G. R. 13154 (W) Of 1982
Decided On : 09/22/1986
CUSTOMS - EXEMPTION FROM DUTY - NOTIFICATION - POWER OF CENTRAL GOVERNMENT TO ISSUE TIME-BOUND NOTIFICATION - APPLICABILITY OF DOCTRINE OF PROMISSORY ESTOPPEL - RETROSPECTIVE EFFECT OF NOTIFICATION - INTERPRETATION OF SECTION 25 (1) OF THE CUSTOMS ACT, 1962.
Fact of the Case:
The petitioners imported Aluminium scrap relying on a notification issued by the Central Government exempting such import from basic Customs duty and additional duty. Subsequently, the Central Government issued another notification rescinding the earlier notification and imposing additional duty on Aluminium scrap. The petitioners challenged the validity of the impugned notification on the grounds that it was issued with retrospective effect, it violated the doctrine of promissory estoppel, and the Central Government did not have the power to issue time-bound notifications under Section 25 (1) of the Customs Act, 1962.
Finding of the Court:
The Court held that the impugned notification was not issued with retrospective effect, it did not violate the doctrine of promissory estoppel, and the Central Government had the power to issue time-bound notifications under Section 25 (1) of the Customs Act, 1962. The Court further held that the Central Government was not required to disclose the exact nature of the public interest which prompted it to issue the impugned notification.
Issues: 1. Whether the Central Government had the power to issue time-bound notifications under Section 25 (1) of the Customs Act, 1962? 2. Whether the doctrine of promissory estoppel was applicable to notifications issued under Section 25 (1) of the Customs Act, 1962? 3. Whether the impugned notification was issued with retrospective effect?
Ratio Decidendi: 1. The Court held that Section 25 (1) of the Customs Act, 1962 confers wide legislative powers upon the executive government as a delegate of the legislature and to argue that the section does not confer powers upon the Government to issue time-bound notifications, would be putting unnecessary restrictions to the Government's power to act in public interest. 2. The Court held that the doctrine of promissory estoppel has no application to statutory notifications issued under Section 25 (1) of the Customs Act, 1962, as such notifications are legislative in character. 3. The Court held that the impugned notification was not issued with retrospective effect, as it was made operative only from the date of its issue and not retrospectively from an earlier date.
Final Decision: The Court dismissed the writ petition and upheld the validity of the impugned notification.
( 1 ) THE petitioner No. 1 is a company carrying on business of, inter alia, importing and manufacturing various goods. The petitioner No. 2 is a share holder of petitioner No. 1.
( 2 ) BY a notification dated April 18, 1980, issued under Section 25 (1) of the Customs Act, 1962, the Central Government exempted Aluminium scrap when imported into India from so much of the Customs duty leviable thereon which is specified in the First Schedule of the Customs Tariff Act as in excess of 35% ad valorem of customs duty leviable thereon.
( 3 ) BY a further notification dated January 1, 1981 the aforesaid exemption from basic Customs duty and additional duty was extended upto and inclusive of the 31st March, 1981.
( 4 ) RELYING on the aforesaid notification the petitioner No. 1 entered inter alia into two separate contracts for purchase of Aluminium scrap from foreign sellers.
( 5 ) THE ship carrying two consignments of Aluminium scrap entered into the territorial waters of India and docked at Calcutta on 5th January, 1981.
( 6 ) ON such arrival of the ship the petitioners filed two separate Bills of Entry for warehousing the said scrap.
( 7 ) THEREAFTER on or about 21st March, 1981, the petitioners filed Bills of Entry for clearance of the goods for home consumption and paid the import duties thereon as assessed. On 30th March, 1981, the petitioners took delivery of the goods from the Bengal Bonded Warehouse after the same were released by the Customs Authorities.
( 8 ) ON or about 25th September, 1981, the petitioners were surprised to receive two show cause notices from the respondent No. 4, the Assistant Collector of Customs, seeking to claim Customs duty at the enhanced rate of 86% ad valorem on the basis of a notification dated 30th March, 1981.
( 9 ) UPON enquiry the petitioners came to learn that on 30th March, 1981, the Central Government in purported exercise of its powers under Section 25 (1) of the Customs Act had made and published two notifications rescinding the earlier notification dated 1st January, 1981, and imposing additional duty at the rate of 24 percent ad valorem on Aluminium scraps.
( 10 ) HAVING tried in vain to obtain any relief from the Customs Authorities the petitioners have come up before this Court for redress under Article 226 of the Constitution.
( 11 ) THE respondents, though contesting the matter, have not filed any affidavit-in-opposition.
( 12 ) APPEARING on behalf of the petitioners, Mr. Bhaskar Gupta, the learned Counsel, challenged the impugned notifications dated 30th March, 1981, on divergent grounds.
( 13 ) HIS first contention was that since at' the time of the entry of the goods in the Indian territorial waters, the notification dated 1st January, 1981, was in force, customs duty on the goods could be levied only at the rate prescribed therein.
( 14 ) IT was next contended by Mr. Gupta that in view of the declaration made by the Central Government that the notification dated 1st January, 1981, would remain in force upto and inclusive of 31st March, 1981, and the petitioners having imported the goods relying upon the said declaration, the customs authorities were estopped by the doctrine of promissory estoppel from enhancing the rate of customs duty or introducing fresh duty before the expiry of 31st March, 1981, in contravention of the notifications dated 1st January, 1981.
( 15 ) MR. Gupta's further contention was that the impugned notifications dated 30th March, 1981, became operative only when the official Gazette in which the said notification was published was made available to the public and not on the date of its publication. And his final contention was that under no circumstances the impugned notifications could be given a retrospective effect.
( 16 ) ALL these contentions raised by Mr. Gupta were seriously controverted by Mr. Roy Choudhury, the learned Counsel representing the respondents.
( 17 ) COMING now to the rival contentions of the part
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