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1996 (12) TMI 61 - SC - CustomsNotification dated 16-10-1980 being Notification No. 205/T-No. 355/141/80-Cus. I. (hereinafter referred to as Notification No. 205 ) 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 challenged Held that - The appellants in the present case have not disclosed any facts which could show the existence of better equity in their favour. All that they have alleged is that they would not have imported the PVC resin without the exemption (sic) as that would have been unviable uneconomical and further that many persons took full advantage of the exemption; moreover, the exemption accorded preferential treatment to some persons, but not to the appellants. The facts of the economic situation explained in the judgment of Kasinka 1994 (10) TMI 64 - SUPREME COURT OF INDIA have not been controverted. Nor is it alleged by the appellants that public interest did not call for supersession of the Notification No. 66. Once public interest is accepted as the superior equity which can override individual equity, the principle should be applicable even in cases where a period has been indicated. The Government is competent to resile from a promise even if there is no manifest public interest involved, provided, of course, no one is put in any adverse situation which cannot be rectified. However, in the present case, there is a supervening public interest and hence it shouId not be mandatory for the Government to give a notice before withdrawing the exemption. Appeal dismissed.
Issues Involved:
1. Applicability of promissory estoppel against the Government. 2. Withdrawal of exemption notification in public interest. 3. Impact of specifying a period in the exemption notification. Detailed Analysis: 1. Applicability of Promissory Estoppel Against the Government: The appellants argued that they imported PVC resin based on the Government's assurance that no customs duty would be levied until 31-3-1981, as per Notification No. 66. They contended that the Government should be estopped from withdrawing this exemption. The High Court, relying on the Full Bench decision in the case of *Bombay Conductors and Electricals Ltd.*, concluded that imposition and withdrawal of taxes are legislative functions, and there can be no estoppel against the legislature. The doctrine of promissory estoppel can be invoked against the State, but not when public interest requires otherwise. The judgment in *Bombay Conductors* emphasized that estoppel cannot be pleaded against public interest, as it would hinder the Government's ability to act in the public good. 2. Withdrawal of Exemption Notification in Public Interest: The Supreme Court referred to the case of *Kasinka Trading & Anr. v. Union of India & Anr.*, where the same Notification No. 205 was challenged. The Court upheld the withdrawal of the exemption, noting that the Government justified the exemption initially to equalize prices of indigenous and imported PVC resin. However, when international prices fell, making imports cheaper than domestic products, the Government decided to withdraw the exemption in public interest. The Court reiterated that the principle of promissory estoppel applies against the Government but can be overridden by a supervening public equity. The Government must provide adequate material to show that public interest necessitates withdrawal from the promise. In this case, the Government demonstrated that the changed economic circumstances justified the withdrawal. 3. Impact of Specifying a Period in the Exemption Notification: The appellants argued that since Notification No. 66 specified the exemption period, the Government could not withdraw it before the end date. The Supreme Court disagreed, stating that public interest is a superior equity that can override individual equity, even if a period is specified. The Government can resile from a promise if it gives reasonable notice, allowing the promisee to restore the status quo ante. However, in cases of supervening public interest, the Government need not provide notice before withdrawing the exemption. The Court concluded that the judgment in *Kasinka Trading* correctly analyzed the facts and law, affirming that the Government's action was justified by public interest. Conclusion: The Supreme Court dismissed the appeal, upholding the High Court's decision. The judgment confirmed that the principle of promissory estoppel applies against the Government but can be overridden by public interest. The withdrawal of the exemption notification was justified by the changed economic circumstances, and the Government's action was in the public interest. The specified period in the exemption notification did not prevent the Government from withdrawing it when public interest required.
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