1995 (8) TMI 333 - HC - Customs

Summary

Issues Involved:
1. Validity of the Public Notice dated 17-10-1983.
2. Retrospective application of the Public Notice.
3. Applicability of the doctrine of promissory estoppel.

Issue-wise Detailed Analysis:

1. Validity of the Public Notice dated 17-10-1983:
The petitioner challenged the validity of the Public Notice No. 44-ITC(PN)/83 dated 17-10-1983, which removed Isoborneol from the list of items allowed under Open General Licence (OGL) and required specific licenses for its import. The petitioner argued that this public notice could not amend the statutory provisions issued under Section 3 of the Imports and Exports (Control) Act, 1947. The court analyzed various precedents, including "Union of India v. M/s. Anglo Afghan Agencies" and "The Joint Chief Controller of Imports and Exports v. M/s. Aminchand Mutha," which differentiated between executive orders and legislative orders under Section 3 of the Act. The court concluded that the public notice is an executive action and does not have the statutory force to amend the OGL order, which is a legislative action.

2. Retrospective application of the Public Notice:
The petitioner contended that the Public Notice should not have retrospective effect, impacting their pre-existing contractual arrangements and irrevocable letters of credit. The court referred to rulings such as "Cannanore Spinning and Weaving Mills Limited v. Customs Collector, Cochin" and "M/s. Bharat Barrel and Drum Manufacturing Company (P) Limited v. The Collector of Customs," which established that notifications generally have prospective operation unless explicitly stated otherwise. The court found that the Public Notice dated 17-10-1983 did not provide for retrospective application and thus should not affect the petitioner's pre-existing commitments.

3. Applicability of the doctrine of promissory estoppel:
The petitioner argued that the government was bound by the doctrine of promissory estoppel, as they had acted upon the OGL policy by entering into firm contracts and opening irrevocable letters of credit. The court examined precedents, including "Union of India v. Anglo Afghan Agencies" and "Union of India v. Godfrey Philips India Limited," which affirmed that the doctrine of promissory estoppel applies against the government in its executive functions. The court concluded that the petitioner, having relied on the OGL order and acted to their detriment, was entitled to protection under the doctrine of promissory estoppel.

Conclusion:
The court held that the Public Notice dated 17-10-1983, being an executive action, could not amend the legislative OGL order. The notice did not have retrospective effect and was subject to the doctrine of promissory estoppel. Consequently, the court quashed the show cause notice issued by the Customs Department and directed that the petitioner's import of Isoborneol was valid under the OGL order. The writ petitions were allowed, and there was no order as to costs.