1983 (3) TMI 41 - HC - Income Tax

Summary

Issues Involved:
1. Restrictions on the export of products with more than 50% silver content.
2. Applicability of promissory estoppel against government policy changes.
3. Validity of the Export (Control) 43rd Amendment Order, 1979, and the Public Notice dated August 13, 1979.
4. The distinction between legislative and executive actions.

Detailed Analysis:

1. Restrictions on the Export of Products with More Than 50% Silver Content:
The petitioners challenged the restrictions placed on the export of products with more than 50% silver content, arguing that these restrictions violated their contractual rights under a partially executed contract dated March 25, 1977. The Central Government amended the Export (Control) Order, 1977, on March 30, 1979, moving such items from the open general license category to the "on merits" category, requiring exporters to apply for permission or a license to export.

2. Applicability of Promissory Estoppel Against Government Policy Changes:
The petitioners argued that paragraph 316 of the Hand Book of Import Export Procedures constituted a "statutory promise" and invoked the doctrine of promissory estoppel, claiming they were entitled to export the remaining goods under their contract. However, the court held that the reliance on promissory estoppel was based on a misconception. Government policies framed under the Import and Export (Control) Act, 1947, are subject to change in the public interest. The court found that paragraph 316 did not constitute a "statutory promise" since it explicitly stated that the guidelines did not confer any right to the grant of any export license or permission to export.

3. Validity of the Export (Control) 43rd Amendment Order, 1979, and the Public Notice Dated August 13, 1979:
In C.W.P. No. 1432 of 1979, the petitioners challenged the amendment made to the Export (Control) Order of 1977 by the Export (Control) 43rd Amendment Order, 1979, and the Public Notice dated August 13, 1979. The amendment placed products with 50% or less silver content under the "on merits" category, requiring exporters to meet new guidelines. The court upheld the amendment, emphasizing that the Export Control Orders are legislative in character and can be amended from time to time. The court found that the government had acted in the public interest to conserve the country's silver stocks, which justified the policy change.

4. The Distinction Between Legislative and Executive Actions:
The court distinguished between legislative and executive actions, noting that the Export Control Orders issued under Section 3 of the Import and Export (Control) Act, 1947, are legislative in character. Public Notices, on the other hand, are policy statements made administratively by the government for public information. The court held that promissory estoppel could not be invoked against legislative actions but could be applied against executive actions. However, in this case, the government successfully demonstrated that the policy change was in the public interest, which outweighed any private detriment suffered by the petitioners.

Conclusion:
The court dismissed the writ petitions, holding that the doctrine of promissory estoppel did not apply against the legislative actions of the government. The government was justified in changing its export policy to conserve the country's silver stocks, and the public interest outweighed any private detriment suffered by the petitioners. The court emphasized that promissory estoppel is an equitable doctrine that must yield when public interest demands otherwise.