The principle of promissory estoppel does not apply to statutory enactments and mandatory provisions stipulated in the Statutes.

SANJIV KHANNA, J.

( 1 ) WHETHER Reporters of local papers may be allowed to see the judgment"

( 2 ) THE appellants were earlier Group-B and C employees of Directorate of telecommunication, Ministry of Telecom, Government of India.

( 3 ) IN 2000, the Government of India formed BSNL and the assets and liabilities of the Department of Telecommunication were transferred to the said company. Employees working in various cadres of the Ministry of Telecommunication were put on deemed deputation with BSNL till they exercised their option.

( 4 ) ON 14th January, 2002, BSNL called upon the employees working on deemed deputation to exercise their option/willingness for permanent absorption in bsnl. The appellants opted for BSNL and are now employees of BSNL.

( 5 ) THE appellants were in possession of accommodation allotted to them from the state Pool. The said accommodations had been allotted at the time when they were employees of Ministry of Telecommunication, Government of India.

( 6 ) IN 2003, BSNL started deducting tax at source in terms of Circular No. 9 of 2003 dated 18th November, 2003 issued by the Income Tax Department by adding 10% to the taxable salary of the appellants as 'perquisite' as the appellants were in possession of official accommodation.

( 7 ) THE appellants protested against the said deduction of tax at source and stated that this was illegal and 10% of their salary cannot be deemed to be a 'perquisite'. In the meanwhile, BSNL also introduced IBA scales of pay replacing the existing LDA scales of pay for the executive staff-group B employees absorbed in BSNL w. e. f. 1st October, 2000. In terms of the said pay scales, bsnl executives were entitled to House Rent Allowance on the basis of revised pay scales w. e. f. 1st October, 2000, as per the terms applicable to Central government employees based upon reclassification of the cities as notified by the Government of India.

( 8 ) THE appellants herein filed a Writ Petition (C) No. 9898-9927/2005 against deduction of tax at source on "the perquisite". The said Writ Petition was dismissed by the learned Single Judge vide Order dated 30th May, 2005. Learned single Judge held that tax deducted at source is being made by virtue of the amendment to the Income Tax Rules, 1962 in 2001 and therefore the Writ Petition had no merit.

( 9 ) LEARNED counsel for the appellants submitted that the appellants at the time of absorption in BSNL were given to understand that the existing Government rules and Regulations would apply and therefore deduction of tax at source by virtue of amendment to the Income Tax Rules, 1962 in 2001 is contrary to law and against the principle of promissory estoppel.

( 10 ) LEARNED counsel for the respondents-BSNL and the Income Tax Department, on the other hand, submitted that amendment to the Income Tax Rules is legal and valid and BSNL is liable to deduct tax at source on the salary paid in accordance with law. Principle of promissory estoppel has no application.

( 11 ) WE have examined the contentions raised by the parties and gone through the record. At the time of absorption of the appellants in BSNL, general terms and conditions for absorption were circulated. Clause 10 of the general terms and conditions of absorption reads as under:-

"10. Residential Quarters:-The DOT officers, who are allotees of BSNL quarters, will continue to occupy the same on "as is where is basis" even after permanent absorption in BSNL. However, the officers who opt for BSNL and are occupying quarters from the estate pool would be allowed to retain the same up to 30. 9. 2005 on payment of standard license fee. "

( 12 ) THE aforesaid Clause states that officers who opt for BSNL and were occupying quarters from State Pool would be entitled to retain the accommodation upto 30th September, 2005 on payment of standard licence fee. What was the standard licence fee was not stipulated. Further the appellants are not challenging or questioning or stating the standard lic