1983 (3) TMI 157 - HC - Customs

Summary

Issues Involved:
1. Validity of Notification dated 28th February, 1982.
2. Validity of Time-bound Notification.
3. Applicability of Doctrine of Promissory Estoppel.
4. Infringement of Right to Carry on Trade under Article 19(1)(g).

Summary:

1. Validity of Notification dated 28th February, 1982:
The first set of seven writ petitions challenges the withdrawal of the exemption from Customs duty on melting scrap of stainless steel through Notification No. 35/82-Customs dated 28th February, 1982. The petitioners argue that the original notification of 15th July, 1977, which granted the exemption, was not time-bound, and hence, its withdrawal is unjustified. However, the court upheld the withdrawal, emphasizing the legislative power to impose or withdraw exemptions as necessary.

2. Validity of Time-bound Notification:
The second set of six writ petitions questions the validity of a time-bound exemption notification which was withdrawn before its expiry. The representative case (C.W.P. No. 1295 of 1980) involves the withdrawal of the exemption on aluminium ingots and rods before the stipulated period. The court found that the government acted within its legislative powers, and the withdrawal was justified in public interest due to changing market conditions.

3. Applicability of Doctrine of Promissory Estoppel:
The petitioners invoked the doctrine of promissory estoppel, arguing that the government should be held to its promise of exemption until the specified date. The court, however, ruled that promissory estoppel cannot be applied against legislative actions, especially in tax law. It was noted that the power to grant or withdraw exemptions under Section 25 of the Customs Act is legislative in nature, and public interest can override any promises made.

4. Infringement of Right to Carry on Trade under Article 19(1)(g):
The petitioners contended that the withdrawal of exemptions infringed their right to carry on trade. The court held that the system of tariffs and licensing for imports and exports constitutes a reasonable restriction on this right. It was emphasized that public interest and economic policy considerations justify such restrictions, and the petitioners failed to prove that the restrictions were unreasonable.

Conclusion:
The court dismissed the petitions, upholding the validity of the withdrawal notifications. It concluded that the actions were taken in public interest, and the doctrine of promissory estoppel does not apply to legislative functions or tax laws. The right to carry on trade under Article 19(1)(g) was not found to be infringed by the withdrawal of exemptions.