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TMI Blog2000 (3) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout reference to the amending Notification No. 142/89, dated 16-5-1989 issued by the first respondent herein in so far as the petitioners are concerned. 3.For easy reference and for the sake of convenience, W.P. No. 10747 of 1990, W.P. No. 13580 of 1993 and W.P. No. 13581 of 1993 are respectively hereinafter referred to as the first, second and third writ petitions and the petitioners therein as the first petitioner, second petitioner and third petitioner respectively. 4.So far as the first writ petition above is concerned, in the affidavit filed in support of the writ petition, the petitioner would submit that it is a Partnership firm and a licensee under the Central Excise and Salt Act (hereinafter referred to as the 'Act') for the purpose of manufacture of Potassium Chlorate, which is an excisable item under Chapter 28 of the Central Excise Tariff and they obtained Small Scale Industries Certificate from the Department of Industries and Commerce on 8-12-1987; that the plant and machinery of the industry should not exceed Rs. 35,00,000/- for the issue of SSI Certificate; that the Tamil Nadu Small Industries Development Corporation Limited, Madras by its S.O. No. 7350/CS (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in the Annexure to the Notification (specified goods) up to the value of Rs. 20,00,000/- and concessional duty on subsequent clearances in the case of manufacturer having clearances all excisable goods not exceeding two crores of rupees in the preceding year, subject to certain conditions; that under Notification No. 175/86, dated 1-3-1986, the Potassium Chlorate which falls under Chapter 28 of the Central Excise Tariff and classified under the sub-heading 2829.10 was exempt from excise duty subject to the conditions mentioned in the abovesaid Notification for SSI Units; that the first respondent by Notification No. 142/89, dated 16-5-1989 without any reason arbitrarily amended the Notification No. 175/86, dated 1-3-1986 and as per the amendment, the Potassium Chlorate, which falls under sub-heading 2829.10 alone has been denied exemption from payment of excise duty. Hence, contending that the Notification No. 142/89, dated 16-5-1989 amending the Notification No. 175/86 issued for the benefit of Small Scale Industries is bad in law, all the petitioners have come forward to file the above writ petitions seeking the relief extracted supra. 8In the counter affidavit filed on be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prejudice is not correct and it is only to mislead this Court. With such and other averments, the respondents would pray to dismiss the writ petition as devoid of merits. 9.In the common counter affidavit filed on behalf of the respondents in the second and third writ petitions above, besides emphasizing what has been averred in the counter affidavit filed in the first writ petition, it would further be contended that it is well settled that under the General Clauses Act, an authority which has the power to issue Notification has the undoubted power to rescind or modify the said Notification in the like manner, which is ascertained under Section 21 of the General Clauses Act; that it has been held by the Patna High Court in the case of Khas Karanpura Collieries Ltd. v. State of Bihar reported in A.I.R. 1971 Patna 328 that "Inequality even if any, resulting from two different enactments made by two different legislatures is not liable to attack under Article 14 of the Constitution of India"; that the applicability of the Article 14 of the Constitution providing for "equality before Law" to a large extent depends upon the question of fact as to whether the commodities treated d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the petitioners, who established the industries for the production of the said item mainly based on the subsidy announced by the Government of India and would say that the withdrawal of the same all of a sudden is not only arbitrary, discriminatory in nature but also violative of the rules of promissory estoppel; that while all the goods falling under Chapter 28 have been exempted, only the exemption granted to Potassium Chlorate has been withdrawn from the subsidy thereby jeopardising the petitioners and crippling their industrial activity by the introduction of the Amendment under Section 5A of the Act, which empowers the first respondent to grant exemption from duty of excise. At this juncture, the learned counsel would cite a decision of the Division Bench of this Court delivered in Sun Paper Mills Ltd. v. Union of India and Others reported in Reports of Sales Tax Cases Volume 80, 1991 at page 1 while dealing with withdrawal of certain concessions granted under Section 8(2)(b) of the Central Sales Tax Act, it has been held therein : "the proceedings of the Board produced by the department giving reasons for the withdrawal of concessions, referred only to concessions given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome a standard feature in several enactments and in particular, taxing enactments. It is equally well settled by now that the power of taxation can be used not merely for raising revenue but also to regulate the economy, to encourage or discourage as the situation may call for, the import and export of certain goods as also for serving the social objectives of the State [Vide Elel Hotels and Investments Ltd. v. Union of India (1989) 3 SCC 698], Shri Srinivasa Theatre v. Government of T.N. (1992) 2 SCC 643 and Subhash Photographics v. Union of India [(1993) Supple. 3 SCC 323 = JT (1993) 4 SC 116]. Since the Parliament cannot constantly monitor the needs of and the emerging trends in the economy and is in no position to engage itself in day-to-day regulation and adjustment of import-export trade accordingly, power is conferred upon the Central Government to provide for exemption from duty of goods, either wholly or partly, and with or without conditions, as may be called for in public interest. We see no warrant for reading any limitation into this power. If the public interest demands that the exemption should be absolute, the Central Government can do so. Similarly, if the public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeals are, therefore, allowed, the impugned judgments of the High Court are set aside and the Writ Petitions Nos. 14078 of 1989 and 13260 of 1989 filed by the respondents are dismissed. No order as to costs." 13.The learned counsel for the respondents would further argue that admittedly, the petitioners commenced production in 1990 and they say that for preparation like construction, power supply etc., it took three years for them to get ready with; that the Supreme Court confirmed the Notification No. 175/86; that when the petitioners challenged the amended Notification No. 142/89, they were not considered; that it is the Writ of Mandamus directing to comply with Notification No. 175/86 without reference to Notification No. 142/89 relying on the judgment of the Apex Court reported in 1986 SC 515 wherein it is that even though the Notification may be a piece of Subordinate Legislation it is open to the scrutiny of the Court the Legislator must satisfy the Court that it is not unreasonable and arbitrary, which cannot be applied here and would pray to dismiss all the above writ petitions. 14. The short question that falls for consideration in all these writ petitions is, whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents have removed the Potassium Chlorate from the scope of eligibility under the original Notification No. 175/86 granting exemption from excise duty and the decision was a policy decision made by the Government of India on various circumstances and hence there is no arbitrariness or high-handedness involved. 17.It would reasonably be argued on the part of the respondents that in 1989, the budget on reports received from field forms revealed that there had been proliferation of units in the Small Scale Industries Sector for manufacture of Potassium Chlorate and this trend of proliferation started on account of wide duty difference between the organised sector units and the units in the Small Scale Sector, which were availing the exemption under Notification No. 175/86, dated 1-3-1986 and this led to considerable loss of revenue as more and more number of SSI units started manufacturing Potassium Chlorate; that further the Department of Chemicals and Petro-chemicals had recommended that besides the revenue considerations, Potassium Chlorate is an explosive and hazardous chemical whose production should not be encouraged in the SSI Sector and taking into account all these factors, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. There is no doubt that the first respondent Government is within such delegated legislative powers and the notification issued has all statutory force and validity. Even on the part of the petitioners, they do not question the validity or wisdom of the Government of India, so far as it had issued the first Notification in No. 175/86, dated 1-3-1986 but their attack is only the amended Notification No. 142/89, thereby withdrawing the exemption granted under the first notification for Potassium Chlorate. When the petitioners agree that the first notification had been issued validly by the Government, it goes without saying that the same Government have all legislative competence to issue the withdrawal Notification No. 142/89, thereby withdrawing the exemption granted already in favour of the industries of such nature manufacturing Potassium Chlorate. Since valid reasons have been offered on the part of the Government, as it comes to be seen from the arguments advanced on the part of the respondents that on account of proliferation of units of such nature in the Small Scale Industries Sector, since such spiraling of units in causing the production of a single item in abundance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners cannot succeed. 21.The third point alleged on the part of the petitioners is that the amended notification had been introduced by the first respondent in violation of the rules of promissory estoppel. On facts, it is an open case of the petitioners that they have come forward to apply for the L4 licence only after the introduction of the amended Notification No. 142/89, dated 16-5-1989 and in such event, whatever commitments they might have had prior or after such Notification, they would not bind the respondents Government since they were not parties to such of the acts perpetrated on the part of the petitioners at volition and on their own speculation. When the Government changes its industrial policy in the larger interest of the nation as a whole, such hardships by certain individuals, which were the results of their own anticipation, are inevitable. There is no promise made on the part of the first respondent through its Notification No. 175/86 declaring thereby that those concessions for items of goods mentioned therein would exist either for a shorter or a longer period than what it had been allowed to exist and hence when there is no such promise, regarding the time ..... 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