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TMI Blog2018 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondents to the challenge, with consent of both sides, we dispose of these writ petitions by this common Judgment and Order. 3. The writ petitions filed by MJ Juris and particularly Writ Petition No.3142 of 2017, treated as the lead matter, seeks to question Clause of Section 140(3) of the Central Goods and Services Tax Act, 2017 ("CGST Act" for short). 4. The petitioner in this petition states that it is a company registered under the Companies Act and is engaged in the manufacture of Excavators, Loaders, Compactors, etc., falling under Chapter Heading 8429. The petitioner has its manufacturing facility/place of business at PlotsA & B, Talegaon Floriculture & Industrial Village, Ambi Navlakh - Umbhare, Talegaon, Dabhade, Pune410 507 from where it supplies machines manufactured by it to its dealers located in various parts of the country. The petitioner's manufacturing facility/factory was registered under the erstwhile Central Excise Act and the petitioner paid central excise duty on clearance of such machines from its factory. The petitioner has a Duty Paid Depot in the State of Maharashtra at PlotsA & B of the same village. The Duty Paid Depot was registered under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax credit eligibility in terms of these transitional provisions. Section 140(1) of the CGST Act inter alia provides that a manufacturer will be entitled to carry forward the closing balance of CENVAT credit, subject to certain conditions. Further, Section 140(3) of the CGST Act inter alia allows a registered trader to avail input tax credit of goods held in stock as on 172017, subject to certain conditions. It is submitted that upon a plain reading of the provisions and particularly Clause (iv) of subsection (3) of Section 140, the input tax credit of stock of goods can be availed only when such goods are purchased after 3062016. A trader or a depot of a manufacturer was not entitled to avail credit as the CENVAT Credit Rules, 2004 allows credit availment only by a manufacturer or a service provider. However, there were provisions through which an importer could pass on the credit of duty paid by registration as first stage dealers. By the GST and particularly by virtue of the provisions contained in Section 140(1) and Section 140(3) of the CGST Act, a situation of inequality amongst the manufacturer and the depot/trader as far as the stock on 172017, occurs and such ineligibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oregoing paragraphs is sought to be elaborated in the grounds set out in the Memo of the Petition. 11. Pertinently, there is no affidavit in reply to this petition. 12. The other petition being Writ Petition No.3212 of 2017 is by a petitioner having stock of machines who is further styled as a trader. The said petitioner also raises an identical challenge. Then we have Writ Petition No.3187 of 2017 wherein the petitioner before this Court is a trader. The Writ Petition No.3186 of 2017 is also by a Private Limited Company and carrying on business of trading. This is also an entity registered under the Maharashtra Value Added Tax Act, 2002. 13. The other petition being Civil Writ Petition No.12378 of 2017 is filed by a petitioner who is a Private Limited Company registered under the Companies Act, 1956 in the State of Karnataka. It is also a registered dealer under the Central Excise Rules, 2002 and having its office at Pune. This company carries on business as a dealer. The petitioner says that it is engaged in the business of dealing, stocking, importing and supplying wide and comprehensive range of carbon alloy and stainless steel seamless pipes and tubes, including precision t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and 19(1)(g) of the Constitution of India and unenforceable qua the first stage dealer. 16. To this petition, an affidavit in reply has been filed after notice of the same was served on the Attorney General. The affidavit is filed by the Commissioner of Central Tax (GST), Pune1. 17. It is stated that the petitioner has challenged a policy decision taken by the Parliament which is not subject to judicial scrutiny. It is stated that the challenge is completely misconceived and untenable. It is stated that in the Value Added Tax, there is a restriction on availing of such credit. The same cannot be provided on grounds of hardship or equity. The impugned provisions clearly restrict the CENVAT credit for the stock lying in the warehouse, as on 3062017, only to the extent where the invoices or other prescribed documents issued are not earlier than twelve months preceding the appointed date, namely, 172017. Thus, a reasonable period of twelve months has been provided for availing of credit for such invoices or other prescribed documents. The writ petition is full of erroneous submissions and grounds. The decision taken is a conscious policy decision, that is to restrict the transition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ularly subrule (7) thereof, would indicate that CENVAT credit in respect of input service shall be allowed, on or after the day on which the invoice, bill or, as the case may be, challan referred to in Rule 9 is received. The Fifth proviso to this subrule is being relied upon but without any reasonable basis. It is submitted by the learned Senior Counsel that we should see these provisions in the backdrop of the object and that is to avoid the cascading effect. We must place reliance on the provision consistent with the object and purpose. It is submitted that merely because a new regime has been brought into force does not mean all the existing rights and conferred under the statute prevailing prior to the new law coming into force should be taken away. In other words, such of the restrictions and conditions as are now imposed cannot be said to be achieving the object and purpose or rather they have no nexus with the object sought to be achieved. 20. It is argued before us and with some vehemence that this condition and which is sought to be imposed ought to be viewed with reference to the time when the goods were cleared from the factory for use as demo machines. At that time, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner being the first stage dealer is termed as an assessee within the meaning of Rule 2(c) of the Central Excise Rules, 2002. Thus, a registered person who stores excisable goods is also termed as an assessee. He can pass on the credit to the customers. After inviting our attention to Rule 10 of the Central Excise Rules, 2002, it is urged that the petitioner is required to maintain the inventory of open stock, goods purchased, goods removed and closing stock along with duties payable on the said goods. This was maintained in the format of RG 23D. Further, they were also filing quarterly returns regularly as per Rule 12 of the Central Excise Rules, 2002. Further, it is submitted that the provisions of Rule 11 of the Central Excise Rules, 2002, for removal of goods from a factory or a warehouse under an invoice, shall apply mutatis mutandis to the first stage dealer. It is urged that as a first stage dealer, the petitioner had been purchasing various goods and passing on the credit of duty paid on the said goods to the customers by issuing invoice under the provisions of Rule 12 of the Central Excise Rules, 2002. In the scheme of the Central Excise Act, 1944 and the Rules framed ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Constitution of India. 25. Then it is urged that the first stage dealers were specifically eligible to pass on the CENVAT credit to their customers by issuing invoices with excise duty as per Rule 11 of the Central Excise Rules, 2002. Once they were so entitled, the prohibition on taking the credit for the purchases made prior to one year preceding the appointed day would wipe out the entire CENVAT credit on the goods which had been purchased/imported. Consequently, the petitioner's eligibility to pass on the CENVAT credit of the goods purchased/imported prior to 172016 is effaced. 26. The other argument of Mr. Raghuraman is that the impugned provisions are hit by the doctrine of promissory estoppel. It is claimed that there was an entitlement to transfer the credit of all goods purchased by the petitioner from time to time once they were registered under the Central Excise Law. If that right of the petitioner, as enumerated above, is taken away only on the strength of the transitional provision, then, even the principle of promissory estoppel would come into play. For all these reasons, it is submitted that the writ petition be allowed. Mr. Raghuraman has handed over a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter is of a concession or relaxation. Nobody can claim a vested right in such measures evolved by the Legislature. It is entirely for the Legislature to make a provision and restrict the benefit or concession or relaxation either to a class of persons or even if it extends to all, it can restrict the term or period or limit up to which the concession can be availed of. In the instant case, the period of twelve months is provided as a safeguard against potential misuse of availment of credit during the transition period by placing restriction on availing credit based on documents which are not very old. There is no concept as equality in Tax matters. Apart therefrom, similar restrictions had been in place on the manufacturers/service providers under the Firth proviso to subrule (7) of Rule 4 of the erstwhile CENVAT Credit Rules, 2004. It is also argued by Mr. Anil Singh that when in a Value Added Tax there was a restriction on availing of credit in law, now, there is a substantive provision in the new law. However, it is only the transitional provision which inserts or incorporates the above condition, as the Legislature deemed it fit and proper to enforce the new regime from 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General by urging that the input tax credit under the GST is an integral part of the GST law. It cannot be termed as a concession by the Government. Further, the attempt is to harmonise the indirect tax structure across the country. In the Constitution 122nd Amendment Bill, 2014, the Objects and Reasons clearly set out that it is intended to remove the cascading effect of taxes and to bring out a nation wide taxation system. Therefore, there is a clear intention to have input tax credit as a nationwide objective at the Constitutional level. Hence, all the decisions prior to the CGST would not be applicable to the extent they term this as a concession. In this regard, he would read out certain paragraphs from the Statement of Objects and Reasons and heavily rely upon the principle that assuming, but without admitting, that input tax credit was in the nature of concession granted by the Government, but such concession has already been availed of by the petitioners on all the goods held in stock as on 3062017. The concession of input tax credit has been availed and the same has crystallised as a vested right in view of Section 174, subsection (2) Clause (c) of the CGST Act, 2017. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Act is being discriminated by Section 140(3)(iv) of the CGST Act, 2017. In such circumstances, the plea raised of revenue loss or economic policy does not appear to be consistent. 37. For these reasons, it is submitted by Mr. Raghuraman that the writ petitions be allowed. 38. For properly appreciating the rival contentions, we must refer to the Central Goods and Services Tax Act, 2017. 39. The same is an Act to make a provision for levy and collection of tax of interState supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto. Chapter I contains preliminary provisions. The Section 2 is a definition section and unless the context otherwise requires, the definitions would operate. By Section 2, Clause (21), the term "central tax" is defined to mean central goods and services tax levied under Section 9. The expression "existing law" is defined in Section 2, Clause (48) to mean any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of the Act by Parliament or any Authority or person having the power t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intraState supplies of which shall be paid by the electronic commerce operator if such services are supplied th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of such supply has been actually paid to the Government, either in cash or through utilisation of input tax credit admissible in respect of the said supply; and (d) he has furnished the return under section 39: Provided that where the goods against an invoice are received in lots or instalments, the registered person shall be entitled to take credit upon receipt of the last lot or instalment: Provided further that where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within a period of one hundred and eighty days from the date of issue of invoice by the supplier, an amount equal to the input tax credit availed by the recipient shall be added to his output tax liability, along with interest thereon, in such manner as may be prescribed: Provided also that the recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. (3) Where the registered person has claimed depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not questioned nor the validity and legality of these provisions put in issue. Pertinently, by Section 17 apportionment of credit and blocked credits is dealt with and by Section 18, the availability of credit in special circumstances is provided. There as well as subsection (1) of Section 18 says that it is subject to such conditions and restrictions as may be prescribed. By subsection (2) of Section 18, it is evident that a registered person shall not be entitled to take input tax credit under subsection (1) in respect of any supply of goods or services or both to him after the expiry of one year from the date of issue of tax invoice relating to such supply. By Section 19, taking input tax credit in respect of inputs and capital goods sent for job work is dealt with and by Section 20, the manner of distribution of credit by Input Service Distributor is provided for. The manner of recovery of credit distributed in excess is set out in Section 21. Chapter VI of the legislation is titled as Registration and persons liable for registration, persons not liable for registration, compulsory registration in certain cases, procedure for registration, deemed registration, special provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: "140. (1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law in such manner as may be prescribed: Provided that the registered person shall not be allowed to take credit in the following circumstances, namely: (i) where the said amount of credit is not admissible as input tax credit under this Act; or (ii) where he has not furnished all the returns required under the existing law for the period of six months immediately preceding the appointed date; or (iii) where the said amount of credit relates to goods manufactured and cleared under such exemption notifications as are notified by the Government. (2) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period endi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed. (4) A registered person, who was engaged in the manufacture of taxable as well as exempted goods under the Central Excise Act, 1944 or provision of taxable as well as exempted services under Chapter V of the Finance Act, 1994, but which are liable to tax under this Act, shall be entitled to take, in his electronic credit ledger, (a) the amount of CENVAT credit carried forward in a return furnished under the existing law by him in accordance with the provisions of subsection (1); and (b) the amount of CENVAT credit of eligible duties in respect of inputs held in stock and inputs contained in semifinished or finished goods held in stock on the appointed day, relating to such exempted goods or services, in accordance with the provisions of subsection (3). (5) A registered person shall be entitled to take, in his electronic credit ledger, credit of eligible duties and taxes in respect of inputs or input services received on or after the appointed day but the duty or tax in respect of which has been paid by the supplier under the existing law, subject to the condition tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within three months of the appointed day, such credit shall be allowed subject to the condition that the said return is either an original return or a revised return where the credit has been reduced from that claimed earlier: Provided further that the registered person shall not be allowed to take credit unless the said amount is admissible as input tax credit under this Act: Provided also that such credit may be transferred to any of the registered persons having the same Permanent Account Number for which the centralised registration was obtained under the existing law. (9) Where any CENVAT credit availed for the input services provided under the existing law has been reversed due to nonpayment of the consideration within a period of three months, such credit can be reclaimed subject to the condition that the registered person has made the payment of the consideration for that supply of services within a period of three months from the appointed day. (10) The amount of credit under subsections (3), (4) and (6) shall be calculated in such manner as may be prescribed. Explanation 1.For the purposes of subsections (3), (4) and (6), the expression "eligible duties" m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... day, furnished by him under the existing law in such manner as may be prescribed. The proviso to subsection (1), however, says that the registered person shall not be allowed to take credit in the circumstances set out therein. By subsection (2), a registered person, other than a person opting to pay tax under section 10, his availment of input tax credit of the unavailed CENVAT credit in respect of capital goods is dealt with. Pertinently, there as well, the proviso imposes conditions. 46. None of these subsections are challenged and by the class of persons covered therein. They have understood that the transitional arrangements are in place and by their very nature they enable transition from one law to another smoothly. During such period, arrangements are made for input tax credit. They seem to be not complaining even when their right, if any, to avail of this credit and which is unavailed of, is restricted and not unconditional. By subsection (3), a case dealt with is of a registered person but who was not liable to be registered under the existing law or who was engaged in the manufacture of exempted goods or provision of exempted services, or who was providing works contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions or restrictions all of which are to be found in a Taxing Statute. Secondly, they are inserted in a transitional provisions. Thirdly, while judging their legality and validity we are bound by the settled legal principles. In the case of P. M. Ashwathanarayana Setty and Others vs. State of Karnataka and Others reported in AIR 1989 SC 100 and in the case of Kerala Hotel and Restaurant Association and Ors. vs. State of Kerala and Ors., reported in AIR 1990 SC 913 the principles are summarised as Under: AIR 1989 SC 100 "30. The problem is, indeed, a complex one not free from its own peculiar difficulties. Though other legislative measures dealing with economic regulation are not outside Article 14 it is well recognised that the State enjoys the widest latitude where measures of economic regulation are concerned. These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria and adjustment and balancing of various conflicting social and economic values and interests. It is for the State to decide what economic and social policy it PG NO 188 should pursue and what discriminations advance those social and economic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 shall not (a) revive anything not in force or existing at the time of such amendment or repeal; or (b) affect the previous operation of the amended Act or repealed Acts and orders or anything duly done or suffered thereunder; or (c) affect any right, privilege, obligation, or liability acquired, accrued or incurred under the amended Act or repealed Acts or orders under such repealed or amended Acts: Provided that any tax exemption granted as an incentive against investment through a notification shall not continue as privilege if the said notification is rescinded on or after the appointed day; or (d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may become due or any forfeiture or punishment incurred or inflicted in respect of any offence or violation committed against the provisions of the amended Act or repealed Acts; or (e) affect any investigation, inquiry, verification (including scrutiny and audit), assessment proceedings, adjudication and any other legal proceedings or recovery of arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest, right, privilege, obligation, liability, forfeiture or punishme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distinguishable on facts. There, the Court was dealing with a case where the tenants who had applied for purchase of their holdings under Section 18(1) of the Act had in compliance with the order made by the Prescribed Authority in their favour, made the requisite deposit of the first instalment of the purchase price as required by Section 18(4)(a) and thereupon were deemed to have become owners of the lands by reason of the legal fiction contained in Clause (b) thereof, The Court was therefore dealing with a case where the tenants had acquired a vested right to purchase the lands and the case had gone beyond the stage of a mere application under Section 18(1). The Court accordingly held that the death of Teja, the large landholder, during the pendency of the appeal before the Financial Commissioner, on the happening of which event inheritance opened resulting in his legal heirs becoming small landholders, would not nullify or annul the order made by the Prescribed Authority in favour of the tenant who had acquired a vested right to the grant of relief on the day they made their application under Section 18(1) of the Act. The observations made by Krishna lyer, J. that the right of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Excise Act, 1944. These Rules precede the Central Excise (No.2) Rules, 2001. By these Rules and after the definitions what is contemplated is appointment and jurisdiction of Central Excise Officer, duty payable on removal, date for determination of duty and tariff valuation, and by Rules 6, 7 and 8, assessment of duty, provisional assessment and manner of payment. The further Rule and which is styled as Rule 8A enables payment in respect of specified goods on which excise duty has been imposed with effect from 132002. The Rule 9 deals with registration and every person, who produces, manufactures, carries on trade, holds private storeroom or warehouse or otherwise uses excisable goods or an importer who issues an invoice on which CENVAT credit can be taken, shall get registered. The Rule 10 obligates maintenance of daily stock account and Rule 11 provides for removal of goods on invoice. Thereafter, there are further provisions enabling filing of return, etc.. 55. The CENVAT Credit Rules, 2004, after the definitions and particularly of the phrases "exempted goods", "exempted service", "final product" define "first stage dealer" to mean a dealer, who purchases the goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion that a CENVAT credit is a mere concession and it cannot be claimed as a matter of right. If the CENVAT Credit Rules under the existing legislation themselves stipulate and provide for conditions for availment of that credit, then, that credit on inputs under the existing law itself is not a absolute but a restricted or conditional right. It is subject to fulfilment or satisfaction of certain requirements and conditions that the right can be availed of. It is in these circumstances that we are unable to agree with the Counsel appearing for the petitioners that the impugned condition defeats any accrued or vested right. It was never vesting in them in such absolute terms, as is argued before us. If the existing law itself imposes condition for its enjoyment or availment, then, it is not possible to agree with the Counsel that such rights under the existing law could have been enjoyed and availed of irrespective of the period or time provided therein. The period or the outer limit is prescribed in the existing law and the Rules of CENVAT credit enacted thereunder. In the circumstances, it is not possible to agree with the Counsel appearing for the petitioners that imposition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not enable the Central Government to frame a Rule enabling the lapsing of the balance in MODVAT account and is, therefore, ultra vires the rule making power. The argument of the other side was that the impugned Rule is only a part of the scheme providing for giving concessions under the taxation enactment. That cannot be continued for all times to come and could be put to an end at any time. 60. In para 5 of this Judgment, the introduction was traced and it was held that if on the inputs the assessee had already paid the taxes on the basis that when the goods are utilised in the manufacture of further products as inputs thereto, then, the tax on these goods gets adjusted which are finished subsequently. Thus, a right accrued to the assessee on the date when they paid the tax on the raw materials or the inputs and that right would continue until the facility available thereto gets worked out or until those goods existed. Thus, this is a case where the Rule, as introduced, provided for total lapsing of that credit which was lying unutilised with the manufacturer on 1631995. That was held to be impermissible within the scheme of the law. We are not considering here such a situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to reverse the amount of input tax credit over and above the output tax of those goods. It was such an issue which was considered and in considering that the definitions and substantive provisions of the Tamil Nadu Value Added Tax Act, 2006 were referred. The Supreme Court noted that input tax credit is a form of concession provided by the Legislature. It is not permissible to all kinds of sales and certain specified sales are specifically excluded. The concession of input tax credit is available on certain conditions mentioned in this section, namely, Section 19 and one of the most important condition was that, in order to enable the dealer to claim that credit it has to produce the original tax invoice, complete in all respect, evidencing the amount of input tax. It is in these circumstances that the Hon'ble Supreme Court held that the challenge to the constitutional validity had to fail. It clearly held that when there was a concession given by the statute, the Legislature has to make provision stating the form and manner in which the concession is to be allowed and the subsection (20) seeks to achieve that. There was no right, inherent or otherwise, vested with dealers t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the conditions already imposed under the existing Law for their enjoyment. In these circumstances, we do not see how the principle as enunciated in Shayara Bano will be of any assistance. 65. Equally, we do not think that there is any merit in the argument that the Clause (iv) of SubSection 3 of Section 140 of the GST Act violates the principle of promissory estoppel. As is rightly contended before us, there cannot be a estoppel against a statute. Apart therefrom, we do not find any promise which was absolute and unconditional from inception having been breached or resiled by the Executive or the State. From inception, the concession or right based on the same was extended but with conditions. Now that the new regime has taken over and which does away with all the existing laws on the subject, then, in the transitional phase and for the transition to be smooth and proper necessary provisions are inserted in the New Law. With these in place, even the conditional arrangement under the existing laws is saved for a particular duration. To our mind, therefore, we do not see how when the imposition of the condition has a clear nexus with the object sought to be achieved, then, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the abstract and the courts are bound to consider all aspect including the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government or the public authority to its promise, assurance or representation. 14. The ambit, scope and amplitude of the doctrine of promissory estoppel has been evolved in this country over the last quarter of a century through successive decision of this Court starting with Union of India v. Anglo Afgan Agencies Pvt. Limited (AIR 1968 SC 718). Reference in this connection may be made with advantage to Century Spinning & Manufacturing Co. Ltd. and Anr. v. The Ulhasnagar Municipal Council and Anr. (AIR 1971 SC 1021); Motilal Padampat Sugar Mills Co. (P) Ltd. v. State of UP and Ors. (AIR 1979 SC 621); Jit Ram Shiv Kumar and Ors. etc v. State of Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and Covenants entered into by the Crown are not to be construed as being subject to implied terms that would exclude the exercise of general discretionary powers for the public good: On the contrary they are to be construed as incorporating an implied term that such powers remain exercisable. This is broadly true of other public authorities also. But the status and functions of the Crown in this regard are of a higher order. This Crown cannot be allowed to tie its hands completely by prior undertakings is as clear as the proposition that the Courts cannot allow the Crown to evade compliance with ostensibly binding obligations whenever it thinks fit: If a public authority lawfully repudiates or departs from the terms of a binding contract in order to have been bound in law by an ostensibly binding contract because the undertakings would improperly fetter its general discretionary powers the other party to the agreement has no right whatsoever to damages or compensation under the general law, no matter how serious the damages that party may have suffered." 15. In Subhash Photographies v. Union of India (1993 AIR SCW 2871 para 14) Jeevan Reddy, J. Speaking for the Bench observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who had enunciated the scheme was bound by the assurances thereof and obliged to carry out the promise made thereunder. As already noticed, in the present batch of cases neither the Notification is of an executive character nor does it represents a scheme designed to achieve a particular purpose. It was a Notification issued in public interest and again withdrawn in public interest. So far as the second case (M. P. Sugar Mills case) is concerned the facts were totally different. In the correspondence exchanged between the State and the petitioners therein it was held out to the petitioners that the industry would be exempted from sales tax for a particular number of initial years but when the State sought to levy the sales tax it was held by this Court that it was precluded from doing so because of the categorical representation made by it to the petitioners through letters in writing, who had relied upon the same and set up the industry. 21. The power to grant exemption from payment of duty, additional duty etc. under the Act, as already noticed flows from the provisions of Section 25(1) of the Act. The power to exempt includes the power to modify or withdraw the same. The liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equivocal promise by the Government which was intended to create any legal relationship between the Government and the party drawing benefit flowing from the said Notification. It is, therefore, futile to contend that even if the public interest so demanded and the Central Government was satisfied that the exemption did not require to be extended any further, it could still not withdraw the exemption. 22. The argument on behalf of the appellants, vehemently pressed by Mr.Ashoka Desai and Mr. Harish Salve, their learned senior advocates, is to the effect that since the Notification 66/79 had itself indicated that it shall be operative till 31st March 1981, the Government could not withdraw the same before the expiry of the date. It was argued that the appellants had placed orders for the import of PVC resin relying upon the exemption Notification on the understanding that it was to remain operative till 31st March 1981 and had made arrangements for importing the goods accordingly and they could not be prejudiced by the withdrawal of that Notification before 31st March 1981. We cannot persuade ourselves to accept this submission of the learned Counsel. Merely by mentioning the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... huge loss is not understandable. No injustice has been done much less fraud practised by the Government in withdrawing the exemption. 23. The appellants appear to be under the impression that even if, in the altered market conditions the continuance of the exemption may not have been justified, yet, Government was bound to continue it to give extra profit to them. That certainly was not the object with which the Notification had been issued. The withdrawal of exemption "in public interest" is a matter of policy and the court would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the "public interest". The courts, do not interfere with the fiscal policy where the Government acts in "public interest" and neither any fraud or lack of bonafides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interest while issuing or modifying or withdrawing an exemption Notification under Section 25(1) of the Act." 66. In fact, we have found from the scheme of the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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