9911796707
TMI Blog1990 (4) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... certain quantities of PVC Resin. The contract between the petitioner and the foreign suppliers specifically provided that the consignment is to be delivered before 31-3-1981. The petitioner opened irrevocable letters of credit in favour of the suppliers. One of the consignments so ordered was expected to arrive at the Madras Port on 5th January, 1981. Before the petitioner could clear the consignment by availing the benefit of Notification 66-Cus.,dated 15-3-1979; it came to know that by a subsequent notification bearing No. 205-Cus., dated 16-10-1980, the earlier Notification 66-Cus., dated 15-3-1979 was superseded and customs duty at 40% ad valorem was imposed. 3. It is at this stage the present writ petition was filed on 5th January, 1981 praying for a writ of mandamus to direct the respondents to withdraw and cancel the Notification No. 205-Cus., dated 16-10-1980 or in the alternative to forbear the respondents from applying the said notification to the petitioner's case and for a further direction to enable the petitioner to clear the consignment by availing the benefit of Notification 60-Cus., dated 15-3-1979. This writ petition was admitted and by an interim order, the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would import polyvinyl chloride Resin on or before 31st March, 1981, then it would not have had to pay duty of customs leviable thereon. It states that but for such representation, it would not have ventured into this task of importing PVC Resins from foreign countries. It is also its case that if customs duty at 40% etc., is levied and collected from it, then it would not be in a position to stand the competition in the trade as its cost of production would increase enormously. Being lulled into such a belief that it would be entitled to clear the consignment if imported before 31st March, 1981 without payment of customs duty, it was shocked and surprised when the respondents invoked the aid of Customs Notification 205, dated 16-10-1980 and refused to allow clearance without payment of customs duty. The petitioner thus invokes the well known doctrine of promissory estoppel. 5 Mr. P. Narasimhan, Senior Central Government Standing Counsel would oppose these contentions. He would submit that there cannot be an estoppel against the statute. It is his case that a Notification issued by exercise of powers under Section 25 of the Customs Act is neither an administrative action, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on; it can only be a shield and not a sword; but the law in India has gone far ahead of the narrow position adopted in England and as a result of the decision of Supreme Court in Motilal Sugar Mills v. State of Uttar Pradesh, it is now well settled that the doctrine of promissory estoppel is not limited in its application only to defence but it can also found a cause of action. The decision of this court in Motilal Sugar Mills case supra (contains an exhaustive discussion of the doctrine of promissory estoppel and we find ourselves wholly in agreement with the various parameters of this doctrine outlined in that decision. The doctrine of promissory estoppel is also applicable against the Government and it cannot be defeated by invoking the defence of the executive necessity because if party who has, acting in reliance on a promise or representation made by the Government, altered his position, is entitled to enforce the promise or the representation against the Government, even though the promise or representation is not in the form of a formal contract as required by Article 299 and that Article does not militate against the applicability of the doctrine of promissory estoppel aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount calculated at the rate of 75% of the rate of duty leviable on such tyres. This Notification specifically stated that the exemption contained in the Notification shall not apply to clearance of tyres effected after the expiry of a period of 7 years from the date of first clearance of tyres from any factory. This notification was understood as promising a concession for a definite period of 7 years from the date of first clearance of tyres from the factory. The petitioner in that case claimed that he acted on the basis of that representation and was manufacturing tyres and tubes for automobiles. However, by a subsequent Notification No. 159/85 dated 15-7-1985, the benefit conferred by Notification No. 268/82 dated 13-11-1982 was rescinded. The Division Bench noticed that the later notification was issued will within the period of 7 years assured under the earlier Notification. It was in such circumstances, when relief by way of writ petition from invoking Notification 159/85 dated 15-7-1985 by the Department against the petitioner therein was sought, it was contended by the Revenue that a Notification issued under Rule 8 is legislative in character and the doctrine of esto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and whether the petitioner had acted on those representations, which would enable the petitioner to plead that the respondents should be prohibited from going back on their representation. The facts have already been stated which would show that by the Notification 66 dated 15-3-1979, the respondents held out a promise. It is also not in dispute that acting on that representation, the petitioner imported the consignment of P.V.C. Resin well before 31-3-1981. Now if the new Notification No. 205-Cus., dated 16-10-1980 is applied, the petitioner would be put to detriment. Hence, the ingredients for the application of the doctrine of promissory estoppel are available on the facts of this case. The conclusion is that the respondents cannot apply Customs Notification 205 dated 16-10-1980 for the consignments imported by the petitioner which arrived at the Madras Port on or before 31-3-1981. 8. The contention of the respondents' counsel that the policy of the Government cannot be questioned though sounds attractive, cannot be upheld because the doctrine of promissory estoppel has became a well recognised and accepted law. Further, under the guise of a policy decision, rights which cam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded duty at the time of clearance of the consignment from the warehouse which duty had not been paid by it voluntarily. Even on 5th January, 1981, it had filed W.P. No. 75 of 1981 questioning duty as per Notification 205-Cus., dated 16-10-1980. The petitioner therefore prays in W.P. No. 12025 of 1983 that the duty which it had been so compelled to pay, should be refunded to it, because such payment not being supported by law, is an illegal extraction, which the respondents have no legal right to retain with them. The petitioner would submit that a tax or duty collected without authority of law should be ordered to be refunded. 10. In answer to the above submissions, Mr. P. Narasimhan would submit that under the provisions of the Customs Act, the petitioner should have filed an application for refund within stipulated period and not having filed such an application, it is not open to the petitioner to ask for refund by filing a writ petition. He would further submit that even assuming that the demand and collection of duty in the instant case were not authorised by law, a writ would not lie, but the remedy should be way of a suit. 11. It is a well recognised position in law that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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