The power to impose a tax being a legislative power, the power to grant exemption from payment of tax is also a legislative function. The Central Government's power to grant exemption under S. 25 of the Customs Act is a legislative power, and a Notification issued by the Government thereunder amounts to a piece of delegated or subordinate legislation.

SUDHIR RANJAN ROY, J.

( 1 ) THESE two matters involving common questions of fact and law have been heard together and are being disposed of by this common judgement.

( 2 ) THE facts of the who cases, which are practically identical, may be summarised as follows :- the petitioners No. 1 in both the cases are manufacturers of Viscose Staple yarn and for that purpose import Viscose staple fibre from time to time.

( 3 ) THE Central Government in exercise of its power under S. 25 (1) of the Customs Act, 1962 issued notifications exempting Viscose staple fibre from the whole of customs duty and whole of additional duty up to December 31, 1979.

( 4 ) SUBSEQUENTLY, two fresh notifications dated January 5, 1979, were issued under S. 25 (1) exempting Viscose Staple fibre from the whole of the basic customs duty as before, but introducing additional duty at the rate of Rs. 1. 32 per kg. Both these notifications were to remain in force up to and inclusive of December 31, 1979.

( 5 ) RELYING upon these notifications dated January 5, 1979, the petitioners entered into contracts with foreign companies for supply of different quantities of Viscose Staple fibre under a bona fide belief that the exemption granted thereunder would remain in force up to December 31, 1979.

( 6 ) THE ships carrying the commodity entered the territorial waters of India long before December 31, 1979, but the bills of entry could not be presented before January, 1980 within the meaning of Section 15 of the Customs Act, 1962.

( 7 ) IN the meantime, on or about December 30, 1979, a fresh notification purported to be one under S. 25 (1) of the Customs Act, 1962, was issued amending the two earlier notifications dated January 5, 1979 by extending the date of expiry of the said notifications till December 31, 1980 instead of December 31, 1979 and simultaneously enhancing the rate of additional duty from Rs. 1. 32 per kg. to Rs. 2,37 per kg.

( 8 ) IT is the validity of this notification dated December 30, 1979 (hereinafter to be referred to as the impugned notification) enhancing the rate of additional duty of Viscose Staple fibre, which is the subject matter of challenge in the present writ petition under Art. 226 of the Constitution.

( 9 ) BOTH these applications were contested by the respondents by filing affidavits-in-opposition to which affidavits-in-reply were filed by the petitioners.

( 10 ) APPEARING on behalf of the petitioners, Mr. Anindya Mitra and Mr. Bageria, the learned counsel, made threefold contentions.

( 11 ) THEIR first contention was that the ships carrying the consignments in question having entered the territorial waters of India when the previous notifications dated January 5, 1979 were in force, the additional duty should have been charged at the rate of Rs. 1. 32 per kg. and not at the enhanced rate of Rs. 2. 37 per kg. as introduced subsequently by the impugned notification.

( 12 ) IT was next contended that the petitioners having imported the goods acting on the basis of a representation of the respondents as contained in the notifications dated January 5, 1979 and in a bona fide belief and impression that the exemption granted by the said notifications would be in force up to and inclusive of December 30, 1979 as had been stated in the said notifications, the respondents were bound by the said representation and promise and were estopped from changing the rate of additional duty by the impugned notification before the expiry of December 31, 1979.

( 13 ) THE last contention was that at any event the retrospective introduction of the impugned notification was bad in law.

( 14 ) IN reply to the aforesaid contentions raised on behalf of the petitioners, it was contended by Mr. Roy Chowdhury, the learned Counsel representing the respondents, that though S. 12 of the Customs Act is the charging Section, it should be read conjointly with S. 15 and so read, the vital dates for determination of the rate of duty would be the dates as specified

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