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Issues:
1. Increase in Customs duty after entering into a contract but before importation. 2. Applicability of equitable estoppel in cases of duty changes post-contract. 3. Validity of judgments from Delhi High Court and Calcutta High Court. 4. Impact of Supreme Court judgment on promissory estoppel. 5. Liability of writ petitioners for duty payment and damages due to interim orders. 6. Calculation and imposition of interest on Bank Guarantees. 7. Obligations of the Bank regarding payment of Bank Guarantees. The judgment dealt with the issue of an increase in Customs duty after entering into a contract but before importation. The petitioner argued against the duty increase post-contract, citing a Delhi High Court judgment emphasizing the government's power to change duty rates during a financial year. The Calcutta High Court concurred with the Delhi High Court's view, rejecting the petitioner's argument. The Division Bench judgment from Calcutta High Court further clarified that the duty rate applicable is the one prevailing at the time of importation, not at the agreement date. Equitable estoppel was deemed inapplicable in such cases, emphasizing the duty on importation and the government's legislative power to change duty rates. The judgment also referenced a Supreme Court ruling stating that promissory estoppel cannot override legal obligations or legislative powers, reinforcing the government's authority to alter duty rates. The Court held that the petitioner was liable for duty payment and compensating revenue losses due to delayed realization caused by interim orders. Interest at 12% per annum was imposed on the Bank Guarantees from the date of the interim order until the judgment date, with a directive for payment within eight weeks. The Bank's obligation to pay the Guarantees was emphasized, regardless of any credits received. The judgment dismissed the writ application, declined the stay, and directed parties to act on the operative portion of the order. Overall, the judgment upheld the government's power to change duty rates, rejected the application of equitable estoppel, and imposed liability on the petitioner for duty payment, damages, and interest. It emphasized the importance of honoring legal obligations and legislative authority in matters of duty rates and importation contracts.
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