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TMI Blog1987 (8) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government amended the first notification. For the words "1.32 p. per kg." therein the words "2.37 p. per kg." were substituted and for the words "31st December 1979" therein the words "31st day of December 1980" were substituted. By reason of the second notification, from and after 30th October 1979 additional duty was payable on viscose staple fibre and viscose tow at the rate of Rs. 2.37 p. per kg. The second notification, thus, ran contrary to the representation made in the first notification that upto 31st December 1979 additional duty on viscose staple fibre and viscose tow would be Rs. 1.32 p. per kilogram. 3. The appellants in these appeals had acted on the first notification and had imported viscose staple fibre. The imported viscose staple fibre reached Bombay subsequent to the date of the second notification and the appellants were called upon to pay additional duty thereon at the rate of Rs. 2.37 p. per kg. Each of the appellants, therefore, filed a writ petition praying for the quashing of the assessment orders by which it was called upon to pay additional duty on the imported viscose staple fibre at the rate of Rs. 2.37 p. per kilogram and the refund of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1986 (26) E.L.T. 703, also upheld the plea of promissory estoppel in similar circumstances. The learned single Judge based his judgment upon the decisions in Godfrey Philips India Ltd. and M.P. Sugar Mills. 8. The decision very strongly relied upon by counsel for the respondents is that of a Full Bench of the Delhi High Court in Bombay Conductors and Electricals Ltd. v. Government of India, 1986 (23) E.L.T. 87. This was a case of a time-bound notification which had been superseded within the stated time and the plea of promissory estoppel was raised by a party who had acted on the representation in regard to time therein and had been prejudiced by its earlier supersession. The Full Bench referred to the judgments of the Supreme Court in Indo-Afghan Agencies and M.P. Sugar Mills and in Jit Ram Shiv Kumar v. State of Haryana, A.I.R. 1980 S.C. 1285, wherein was expressed, as the Full Bench called it, a criticism of the "liberal view" taken in M.P. Sugar Mills' case. In the opinion of the Full Bench, it was unnecessary to explore the parameters of the doctrine of promissory estoppel in the case before it because it would be trespassing on the legislative domain if it admitted the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the operation of the statute there can be no estoppel". Two propositions were established by cases. One was that the power to tax was legislative in character and, two, that in tax law estoppel was unknown. The judgments relied upon by the Full Bench in this context were those in Narinder Chand Hem Raj v. Lt. Governor, Administrator, Union Territory, Himachal Pradesh, A.I.R. 1971 S.C. 2399, and in M.P. Sugar Mills. 9. A single Judge of the Calcutta High Court, in Indian Rayon Corporation v. Collector of Customs, 1987 (27) E.L.T. 626, also took the view that found favour with the Full Bench of the Delhi High Court in the Bombay Conductors' case. 10. We are, with respect, in agreement with the view taken by the Full Bench of the Delhi High Court to a limited extent. In exercising the power conferred upon it by Section 25(1) of the Customs Act the Government does perform a delegated or subordinate legislative function. We so hold because of the judgment of the Supreme Court in Jayantilal Amratlal Shodhan v. F.N. Rana, A.I.R. 1964 S.C. 648, cited by Mr. Bulchandani, learned Counsel for the respondents. The Supreme Court there said that notifications were of two kinds. Most ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of the argument on the Supreme Court judgment in the case of Narinder Chand Hem Raj (relied upon by the Full Bench of the Delhi High Court in the Bombay Conductors' case) where it had been held that the power to impose a tax was a legislative power whether that power was exercised by the legislature or by its delegate; the fact that the power was delegated to the executive did not convert it into an executive or administrative power. In its judgment in the Indian Express case the Supreme Court noted that in Narinder Chand Hem Raj's case it had drawn a distinction between the amendment of the Schedule to the Punjab General Sales Tax Act by the issue of a notification by the Government of Himachal Pradesh in exercise of power delegated by the legislature and the power Government to grant an exemption under a power to grant exemption. It stressed the observation in the Narinder Chand Hem Raj judgment that unless the executive was specifically empowered by law to give an exemption it could not say that it would not enforce the law against a particular person. The Supreme Court pointed out that in the Indian Express Newspapers' case it was concerned with the power to grant an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s obligation under the doctrine of promissory estoppel. He said that the court had carefully considered the decisions in the M.P. Sugar Mills' case and in Jeet Ram's case and was clearly of the view that what had been laid down in the M.P. Sugar Mills' case represented the correct law in regard to the doctrine of promissory estoppel. He expressed the court's disagreement with the observations in Jeet Ram's case to the extent that they conflicted with the statement of the law in Motilal Sugar Mills' case and introduced reservations cutting down the full width and amplitude of the propositions of law laid down in that case. The following passage in the Godfrey Philips' judgment is of great importance to the controversy before us: "Of course we must make it clear, and that is also laid down in Motilal Sugar Mills case (supra), that there can be no promissory estoppel against the legislature in the exercise of its legislative functions nor can the Government or public authority be debarred by promissory estoppel from enforcing a statutory prohibition. It is equally true that promissory estoppel cannot be used to compel the Government or a public authority to carry out a representatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l against Government. The law could be taken as settled as a result of the decision in the Indo-Afghan Agencies' case that where Government made a promise knowing or intending that it would be acted on by the promise and, in fact, the promisee, acting in reliance on it, altered his position, Government would be held bound by the promise and the promise would be enforceable against it at the instance of the promisee, notwithstanding that there was no consideration for the promise and the promise was not recorded in the form of a formal contract as required by Article 299 of the Constitution. It was elementary that in a Republic governed by the rule of law, no one, howsoever high or low, was above the law. Every one was subject to the law as fully and completely as any other and Government was no exception. However, promissory estoppel could not be invoked to compel Government to do an act prohibited by law. There could be no promissory estoppel against the exercise of legislative power. The legislature could not be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel. In this context the court referred its judgment in State of Kerala v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority to carry out a representation or promise which is contrary to law or (iv) which was outside the authority or power of the officer of the Government or of the public authority to make". (Numerals supplied.) The doctrine of promissory estoppel is not available in the four cases so carefully set out. It is not available against the "legislature exercising legislative functions". It is not enough that legislative functions are being carried out; it is only if the legislative functions are being carried out by the legislature that the doctrine is not available. 17. The doctrine is not available against a statute in the sense that if the representation is contrary to the terms of a statute the statute will prevail and the representation will not be enforced. That promissory estoppel is not available against a statute does not mean that promissory estoppel is not available when Government or some public authority does something in the exercise of powers conferred on it by statute. 18. Lastly, the doctrine is not available when the maker of the representation does not have the power to make it good. 19. The cases aforementioned do not cover a situation where Government exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to act contrary to the terms of its representation, upon which citizens had based themselves, only because it was so acting in exercise of powers given under a statute or in exercise of powers of subordinate legislation. As the Supreme Court has pointed out, Government is under no obligation to make a representation. If, then, it does it must be held to it. If the legislature disapproves, it can enact legislation nullifying the representation. If the equities have changed and the public good demands that Government should act contrary to the terms of its representation, the Courts will not require the Government to honour its representation; but, subject to that, it must. 22. At this stage of our cogitations counsel for the appellants found and cited the judgment of the Supreme Court in Pournami Oil Mills v. State of Kerala, A.I.R. 1987 S.C. 590 = 1987 (27) E.L.T. 594 (S.C.). By a notification dated llth April, 1979 small scale industries set up after 1st April, 1979 were exempted by the State Government from the payment of sales tax for a period of five years from the date of production. A second notification dated 29th September, 1980 was issued by the State Government in ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s conferred by statute or of subordinate legislation but there can be no doubt at all, in the context of the facts, that the Supreme Court was very well aware of the nature of the power that the State Government was exercising when it made the representation and when it sought to act contrary to the terms of the representation. This is clearer still from the fact that the State Government had not expressly stated in the first notification that it was issued under the powers conferred by Section 10 of the relevant statute but the Supreme Court considered the point and decided that it had been issued thereunder. 24. The judgment in Pournami Oil Mills' case leaves us in no doubt and we must hold that the plea of promissory estoppel is available to the appellants. 25. The question that we must now consider is whether the plea should be upheld. The observations of the Supreme Court in this context in the M.P. Sugar Mills' case must be adverted to. They read thus: "Since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it can be shown by the Government that having regard to the facts as they have subsequently transpired, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Court would refuse to enforce the promise against the Government. The Court would not act on the mere ipse dixit of the Government, for it is the Court which has to decide and not the Government whether the Government should be held exempt from liability. This is the essence of the rule of law. The burden would be upon the Government to show that the public interest in the Government acting otherwise than in accordance with the promise is so overwhelming that it would be inequitable to hold the Government bound by the promise and the Court would insist on a highly rigorous standard of proof in the discharge of this burden." In the Godfrey Philips' case the Supreme Court said that it found itself "wholly in agreement with what has been said in that decision (M.P. Sugar Mills) on this point." 4th August, 1987 26. An affidavit has been filed by Jagdish Chander, Assistant Collector of Customs, "to set out the nature of public interest involved which made it imperative for the Government in exercise of its duties to amend" the first notification by the second notification. The affidavit states that the excise duty on indigenously manufactured viscose staple fibre was Rs. 4/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, no material is placed on record to show what damage or loss would have resulted if the second notification had been deferred until 1st January 1980. 30. It is too late in the day for Government to plead, as Mr. Bulchandani did, that it cannot be expected to place all this material before the court because it is, in practical terms, not possible to do so. It is not enough, and it has been so held by the Supreme Court, that the Government thinks that the public good requires that it should not act upon its representation. To defeat the plea of promissory estoppel the Government has to satisfy the court, on the strength of germane material, whatever may be its volume, that the public good did so require. The Government has totally failed to place such material before this court and to satisfy the court that, taking the equities into account, the public good required that the Government should not act as it had represented it would in the first notification. Consequently, the plea of promissory estoppel raised by the appellants must be upheld. 31. The respondents have not, we may note, disputed before the learned single Judge or before us that the appellants had acted on the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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