KASINKA TRADING AND ANR. ETC. ETC>versusUNION OF INDIA AND ANR.

A                KASINKA TRADING AND ANR. ETC. ETC.
                                          v.
                         UNION OF INDIA AND ANR.

                                 OCTOBER 18, 1994

B        !M.N. VENKATACHALIAH, CJ AND DR. A.S. ANAND, J.]

          Customs Act, 19.62 :

          Section 25(1}-Notification exempting certain goods from duty-Sub-
C sequent notification withdrawing the exemption-Validity of the withdrawal
    notification-Applicability of the doctrine of Promissory Estoppel.

         Administrative Law :

          Doctrine of Promissory Estoppef-Meaning and applicability of
D
          In the first batch of appeals the respondents issued a notification
    dated 15.3.1979 exempting PVC resins from basic import dnty. The
    notification stated that it would be effective upto and inclusive of31.3.1981.
    However, before the expiry oi the term another notification dated
    16.10.1980 was issned withdrawing the exemption granted earlier.
E
          In the second batch of appeals the respondent issned notifications
    dated 18.4.1980 exempting aluminium wire rods and aluminium ingots
    from the whole of customs duty as well as additional duty Ieviable, as also
    auxiliary duty. By notification dated 29.8.1980, the earlier notification was
F   rescinded. Again on 9.9.80, a notification was issued exempting the
    aluminium wire rods and ingots. During the period of ten days i.e. from          ,
    29.8.80 to 9-9-80, importers were required to pay both the customs duty
    as well as the auxiliary duty, while imports of goods which arrived before
    29.8.80 and after 9.9.80 were not subject to the levy.

G         Appeilants filed writ Petitions before the High Court ch.illenging the
    notification by which the exemption was withdrawn, contending that the
    Central Government must be held bound by the representation it had
    made in the exemption notification and it was estopped from going back
    on its promise. The High Court dismissed the writ petitions. Hence these
H   appeals.
                                         448
                        KASINKA TRDG. v. U.O.I.                        449

      Dismissing the appeals, this Court                                      A

       HELD : 1.1 It has been settled by this Court that the doctrine of
promissory estoppel is applicable against the Government also particular-
ly where it is necessary.to prevent fraud or manifest injustice. The doctrine,
however, cannot be pressed into aid to compel the Government or the
public authority to carry out a representation or promise which is contrary B
to law or which is outside the authority or power of the officer of the
Government or of the public authority to make. There is preponderance
of judicial opinion that to invoke the do~trine of promissory estoppel,
clear, sound and positive foundation must be laid in the petition itself by
the party invoking the doctrine and that bald expressions, without any C
supporting material, to the effect that the doctrine is attracted because the
party invoking the doctrine has altered its position relying on the as-
surance of the Government would not be sufficient to press into aid the
doctrine. (457-G-H, 458-A-B]

      1.2. The doctrine of promissory estoppel cannot be invoked in the       D
abstract and the courts are bound to consider all aspects including the
results sought to be achieved and the public good at large while consider-
ing the applicability of the doctrine, the courts have to do equity and
therefore the fundamental principle of equity must for ever be present to
the mind of the court while considering the applicability of the doctrine.    E
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.
                                                                 (458-B-C]
      Union of India v. Anglo Afgan Agencies Pvt. Ltd., (1968] 2 SCR 366;     F
Century Spi11ning and Mfg. Co. Ltd. and Anr., v. The Ulhasnagar Municipal
Council andAnr., [1970]3 SCR 854; Mis Motilal Padampat Sugar Mills Co.
(P) Ltd. v. f:tate of UP and Ors., (1979] 2 SCR 641; lit Ram Shive Kumar
and Ors. etc. v. State of Haryana andAnr., (1980] 3 SCR 689; Union of India
v. Godfrey Philips India Ltd., [1985] 4 SCC 369; Indian Express Newspapers    G
(Born) Pvt. L_td. and Ors. v. Union of India and Ors., (1985] 1 SCC 641;
Poumami Oil Mills and Ors. v. State of Kera/a and Anr., (1986] Supp. SCC
728; ~I Oil Industries and Anr. v. State of Gujarat and Ant., (1987]_1
SCR 185;Asstt. Commissioner of Commercial Taxes and Ors. v. Dharmendra
Trading Co. and Ors., (1988] 3 SCC 570; Amrit Banaspati C/J. Ltd. and
Anr. v. State of Punjab and Anr., [1992] 2 SCC 411; Union of India and Ors.   H
    450                     SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A v. Hindustan Development Corporation and Ors, (1993) 3 JT SC 15; Excise
    Commissioner, U.P. Allahabad etc. etc. v. Ram Kumar etc. etc., AIR (1976)
    SC 2237 and Subhash Photographic v. Union of India, (1993) 66 ELT 3,
    referred to .
                    .   .
          2.1. With a view to equalising sale prices of the indigenous and the
B imported material and to make the commodity available to the consumer
    at the uniform price, keeping in view the trends in the snpply of the
    material, that the Cabinet had decided to issue the exemption Notification
    under Section 25(1) of the Customs Act, 1962. Subsequently, when it was
    found and realised that the international prices of the product were falling
C   and consequently the import prices had become lower than the ex-factory
    prices of the indigenous material, the case was examined by the Govern-
    ment of India and it was decided in "public interest" to withdraw the
    exemption Notification. The Union of India has disclosed the circumstan-
    ces under which the exemption was initially granted as well as the change
D   of circumstances which warranted the withdrawal of the exemption
    notification. The reasons given by the Union of India justifying withdrawal
    of the exemption notification are not irrelevant to the exercise of the power
    tit withdraw the exemption in 'public interest' nor are the same shown to
    be insufficient to support the exercise of that power. (461-D-G]

E          2.2 From the material on record it is apparent that the exemption
    Notification issued under Section 25(1) of the Act in "public interest" was
    designed to off set the excess price which the local entrepreneurs were
    required to pay for importing the goods at a time when the difference
    between the indigenous product and the imported prodnct was substantial.
F   No importer could be expected to import the goods after paying duty and
    incur losses. The exemption Notification, was therefore, issued with a view
    to off set the losses to the extent possible and not as a potential sonrce of
    extra profit for the importer. Again, at the time when the Notification was
    withdrawn by the Government there was no scope for any loss to be
    suffered by the importers. It is abundantly clear from the records that the
G   necessity for the continuation of the exemption, in view of the changed
    circumstances, was no longer necessary. The exemption Notification did
    not hold out to the appellant any enforceable promise. (461-H, 462-A-B]

          3. Admittedly, the Notification was not even intended to be an incep-
H tive for import. The Notification on the plain langnage of it was conceived
                        KASINKA TRDG. v. U.0.1.                          451

and issued on the Central Government "being satisfied that it is necessary A
in the public interest so to do". Strictly speaking, therefore, the Notification
                                    11              11
cannot be said to have extended any representation much less a "promise"
to a party getting the benefit of it to enable it to invoke the doctrine of
promissory estoppel against the State. [463-D]

    Malhotra and Sons v. Union of India, AIR (1976) J & K 41 and Excise         B
Commissioner v. Ram Kumar, AIR (1976) SC 2237, referred to.

      4. The burden of customs duty etc. is passed on the consumer and
therefore the question of the appellants being put to a huge loss is not
understandable. No injustice has been done much less fraud practised by         C
the Government in withdrawing the exemption. [464-H, 465-A]

       5. The withdrawal of exemption "in public interest" is a matter of
policy and the courts 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    D
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. [465-C-D]                                             E

      6. Since the Government in the instant case was satisfied that the very
"public interest" which had demanded a total exemption from payment of
customs duty now demanded that the exemption should be withdrawn, it
was free to act in the manner it did. If the Notification could be validly
                                                                                F
issued in "public interest" there is no reason why it could not be also
curtailed in "public interest". Individual interest must yield in favour of
societal interest. [465-G-H, 466-A]

      CIVIL APPELLATE JURISDICT.ION : Civil Appeal No. 4336 of
1983 etc. etc.                                                                  G
     From the Judgment and Order dated 16.3.83 of the Delhi High Court
in W.A No. 1671 of 1980.

     Ashok H. Desai, Harish N. Salve, S.K. Dholakia, Ravindra Narain,
Ashok Sagar, Ms. Arnita Mitra, D.N. Mishra for the J.B.D. & Co., Ms. H
    452                  SUPREME COURT REPORTS (1994] SUPP. 4 S.C.R.

A Bina, P.H. Parekh, A.K. Agarwal, M. K. D. Namboodiary, Ms. Yashmin
    Tarapore, Janendra Lal, Ms. Alpana Podar, Kailash Vasdev, Moniak
    Mobil, Ms. Meenakshi, Ms. Mena Gupta, S. Ganesh, Rajiv Garg, N.D.
    Garg, U.A. Rana, Anand Prasad, Rajiv Tyagi for Gagrat & Co., G.L.
    Rawal, Alpana Poddar, Kailash Vasdev, Vimal Roy, Anip Sachthey, Ms.
    Kamini Jaiswal, R.K. Mehta, K.R. Nambiar, A.N. Kirpal, K.K. Gupta,
B
    Kishan Kumar Ms. Poonam Madan for Khaitan & Co. for the appellants.

         D.N. Dwivedi, A.K. Ganguli, A. Subba Rao, Ms. Sushma Suri, Dilip
    Tandon, P. Parmeswaran, C.V.S. Rao and Ms. A. Subhashini for the
    Respondents.
c         The Judgment of the Court was delivered by

          DR. ANAND, J. Leave granted in (C.A.Nos. 6983, 6984 & 6985 of
    1994) SLP (c) Nos. 7370, 12304/83 and 725/84.

          These two batches of appeals by special leave are directed against
D
    the judgment of the High Court of Delhi dismissing the writ petitions filed
    by the appellants, challenging the action of the Union of India in withdraw-
    ing a time bound exemption Notification No. 66 dated 15.3.1979 for the
    import of PVC resins. Notification No. 66 dated 15.3.1979 reads as follows:

E                                    NOTIFICATION

            PVC resins are exempt from basic import duty. 66 - Cus. Dt.
            15.3.1979 as amendment by 1780Cus. Dt. 29.8.79, 37 - Cus. dt.
            253.80.

F              G.S.R. - In exercise of the powers conferred by sub-section (1)
            of Section 25 of the Customs Act, 1962 (52 of 1962). and in
            supersession of the Notification of the Government of India in the
            Ministry of Finance, Department of Revenue, No.145 - Customs
            dated 27th July 1978, the Central Government, being satisfied that
            it is necessary in the public interest so to do, hereby exempts
G
            polyvinyl chloride resins, falling within chapter 39 of the First
            Schedule to the Customs Tariff Act 1975 (51 of 1975) when
            irriported into India, from the whole of the duty of Customs
            LeViable therein which is specified in the said First Schedule.

H               This Notification shall be in force upto and inclusive of 31st
                KASINKA TRDG. v. U.0.1. [DR. ANAND, J.]                  453

        March 1981."                                                            A
      Before the expiry of the time fixed in the Notification i.e. 31.3.1980
the withdrawal notification bearing No. 205 dt. 16.10.80 was issued which
reads as follows :

                                  "New Delhi the 16th Oct. 1980                 B
                                  24th Asvina 1902 (SAKA)

                            NOTIFICATION
                              CUSTOMS

            G.S.R. In exercise of the powers conferred by sub-section (1)       C
        of Section 25 of the Customs Act, 1962(52 of 1962) and in super-
        session of the Notification of the Government of India in the
        Ministry of Finance, Department of Revenue No.66 Customs,
        dated the 15th March 1979, the Central Government, being satis-
        fied that it is necessary in the public interest so to do, hereby       D
        exempts polyvinyl chloride resins, falling within chapter 39 of the
        First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when
        imported into India, from so much of the duty of customs leviable
        thereon which is specified in the said First Schedule as is in excess
        four percent ad-volorem.
                                                                                E
                                           Sci/- (K. Chandramouli)
                                     Under Secretary to the Govt. of India

        No. 205/F. No.355/141/89/Cus. 1.

                                               Attested                         F
                                             (V.K. Mulick)
                                       Asstt. Collector of Customs,
                                       Correspondence Deptt."

      The appellants, in these appeals, invoking the doctrine of promissory G
estoppel have urged that the Central Government could not have
withdrawn the exemption before 31.3.1981, because relying on the exemp-
tion Notification, the appellants had placed orders for the import of PVC
resin on the understanding that the PVC resin was totally exempt from.
customs duty. It is argued that the Government must be held bound by the
representation it had made in the exemption Notification and it was H
    454                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R,

A   estopped on the basis of the promissory estoppel to go back on its promise.
    Reliance has been placed on various judgments of this Court in support of
    the argument that the doctrine of promissory estoppel can be invoked to
    bind the Government to its promise. We shall refer to the judgments at the
    appropriate place in this Judgment.

B          The respondents have supported the judgment of the High Court and
    urged that though the doctrine of promissory estoppel can in appropriate
    cases be invoked against the Government to bind it to its promise, the
    doctrine, however, has no application to the present appeals because to the
    exemption had been withdrawn in 'public interest' and the individual
C   interest must give way to the public interest. It is urged that the doctrine,
    being a product of equity, most give way when equity so demands. Argued
    Mr. Ganguli, learned senior counsel appearing for the respondents, that
    the doctrine of promissory estoppel cannot operate against the State to the
    detriment of the society at large. If the Government after a review of its
D   policy finds that modification, alteration or ~upersession is required, in its
    earlier policy, in the larger public interest, the courts cannot debar it from
    reviewing its policy, except in cases, where the subsequent act of the
    Government can be shown not to be in public interest. The Government,
    it is urged, must be given a free hand to determine the priorities and unless
    it can be established that while functioning in its sovereign, government or
E   public capacity, as distinct from its executive or commercial capacity, its
    action is not bonafide or is actuated extraneous consideration, the courts
    will not allow a party to invoke the doctrine of promissory estoppel against
    the Government. It is submitted that the Notification No. 66 of 1979 had
    been superseded in the public interest for good and valid reasons and the
F   judgment of the High Court did not call for any interference.

          The Customs Act 1962 consolidates and amends the law relating to
    customs spread over in the Sea Customs Act 1878, the Land Customs Act
    1924 and the Indian Aircraft Act 1934. The Act with came into force on
    February 1, 1963 seeks to codify the entire law relating to sea, land, and
G   air customs into a single comprehensive measure. Customs duties or tariffs
    are legal duties levied on the transit of goods from one country to another.
    They are both the source of revenue to the State as well as regulatory
    measures to protect and prmnote indigenous industries and trade. The
    Customs Tariff Act 1975, was enacted by the Parliament, with a view to
H   consolidating and amending the law relating to customs duties as com-
               KASINKA TRDG. v. U.O.l. [DR. ANAND, J.]                  455

plimentary to the Act. Section 57 of the Customs Act confers upon the A
Central Board of Excise and Customs the power to make regulations
consistent with, and the rules to generally to carry out the purposes of, the
Act. Sub-section (2) thereof particularises certain matters with respect to
which regulations can be made. The specification of certain matters in
sub-section (2) is of course without prejudice to the generality of the power B
conferred by sub-section (1). Section 156 of the Act confers upon the
Central Government the power to make rules consistent with the Act
generally to carry out the purposes of the Act and sub-section (2) of
Section 156 specifies the matters with respect to which rules can be made.
The specification in sub-section (2) is also without prejudice to the
generality of the power conferred by sub-section (1).                         C

       The Parliament has designated two authorities i.e. Central Govern-
ment and the Central Board of Excise and Customs to make rules/regula-
tions to carry out the purposes of the Act generally. The character of rules
and the regulations made under Sections 156 and 157 respectively is the D
same, namely, they constitute delegated legislation.

       Section 12 of the Customs Act, which is the charging section,
provides that duties of customs shall be levied at such rates as may be
specified under the Customs Tariff Act 1975 or any other law for the time
being in force on the goods imported into India. Section 2 of the Customs      E
Tariff Act 1975 read with the First and Second Schedule thereto lays down
the rates at which duties of customs shall be levied under the Customs Act
on various goods imported into India. Section 25 of the Act, with which we
are primarily concerned in this batch of appeals, confers powers on the
Central Government to grant exemptions from levy of duty in "public            F
interest". Sub-sections (1) and (2) of Section 25 which are relevant for our
purposes provide as under :

        "Power to grant exemption from duty -

        (1) If the Central Government is satisfied that it is necessary in G
        the public interest so to do it may, by notification in the Official
        Gazette, exempt generally either absolutely or subject to such
        conditions (to be fulfilled before or after clearance) as may be
        specified in the notification goods of any specified description from
        the whole or any part of duty of customs leviable therein.            H
    456                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A           (2) If the Central Government is satisfied that it is necessary in
            the public interest so to do, it may, b:• special order in each case,
            exempt from the payment of duty, under circumstances of an
            exceptional natural to be stated in such order, any good on which
            duty is leviable."

B
          The power to grant exemption from duty, wholly or in part, on the
    plain language of Section 25(supra) is contingent upon the satisfaction of
    the Government that it would be in "public interest' to do so. Thus, "public
    interest" is the guiding criteria for exercising the power under Section 25
    (Supra).
c
          Having noticed the background and the relevant provisions as also
    two Notifications, it shall now be appropriate to refer in brief to the facts
    of the cases before us. For the sake of convenience, we shall refer to the
    facts of the case as appearing in the Paper Book of Kasinak Trading & Ors.
D   v. Union of India & Ors., C.A. No. 4336/93. The appellants are importers
    of P.V.C. resins which at the relevant time were chargeable to basic
    customs duty under Tariff Entry No. 39. 01/06 of the Customs Tariff Act
    Act 1975 read with Customs Act 1962. In addition to it, the import of PVC
    resins is also chargeable to auxilliary duty, additional duty and special duty
    of customs. Respondent No. 1 issued Notification No. 66 dated 15.3.1979
E   under Section 25 of the Customs Act 1962, exempting PVC resins from the
    whole of the basic customs duty payable on the import of PVC resins till
    31st March 1981. The appellants say that they had placed indents with their
    indenting agents for the import of PVC resins on the basis of the repre-
    sentation that the exemption as granted by the Notification dated 15th
F   March 1979 would continue to remain effective till 31st March 1981, but
    Respondent Nos. 2 issued another Notification bearing No. 205 dated 16th
    October 1980 (supra) (hereinafter withdrawal Notification) purporting to
    supersede Notification No. 66 dated 15th March 1979, before its expiry
    date i.e. before 31st March 1981. The effect of the withdrawal Notification
    was to do away the total exemption from the basic customs duty allowed
G   by the said earlier Notification No. 66 dated 15th March 1979, and instead
    to direct levy of 40% basic customs duty on the imports of PVC resins. The
    grievance of the appellants is that they had placed orders for the import
     of PVC resins on the basis of the exemption granted under Notification
     No. 66 dated 15th March 1979 which was to remain in force till 31st March
H   1981 and had so adjusted their affairs, that if they are compelled to pay
                    KASJNKA TRDG. v. U.0.1. [DR. ANAND, J.]                  457

    basic customs duty at the rate of 40% ad valorem in respect of their orders A
    for the impcirt of PVC resins they would suffer a great loss since their
    goods arrived in India before 31st March 1981 but after the date of
    withdrawal of the exemption Notification by the Notification dated
    16.10.1980. Aggrieved by the issuance of notification dated 16th October
    1980 superseding the Notification dated 15th March 1979, the appellants B
    filed a writ petition (CWP No. 1671 of 1980) in the High Court of Delhi
    invoking the doctrine of promissory estoppel and praying for a direction
    to quash the withdrawal Notification to the extent that it superseded the
    earlier Notification before, the expiry of the date i.e. 31st March 1981 and
    a Division Bench of the Delhi High Court vide its judgment and order
    dated 16th March 1983 dismissed the same.                                    C

          Can the appellants invoke the doctrine of promissory estoppel in the
    facts and circumstances of these cases, is therefore, the pivotal question
    requiring our consideration?
                                                                                   D
            The doctrine of promissory estoppel or equitable estoppel is well
    established in the administrative law of the country. To put it simply, the
    doctrine represents a principle evolved by equity to avoid injustice. The
    basis of the doctrine is that where any party has by his word or conduct
    made to the other party an unequivocal promise or representation by word
    or conduct, which intended to create legal relations or effect a legal         E
    relationship to arise in the future, knowing as well as intending that the
    representation, assurance of the promise would be acted upon by the other
    party to whom it has been made and has in fact been so acted cpon by the
    other party, the promise, assurance or representation should be binding on
    the party malting it and that party should not be permitted to go back upon    F
    it, if it would be inequitable to allow him to do so, having regard to the
    dealing, which have taken place or are intended to take between the
    parties.

         It has been settled by the Court that the doctrine of promissory
    estoppel is applicable against the Government also particularly where it is    G
    necessary to prevent fraud or manifest injustice. The doctrine, however,
'
    cannot be pressed into aid to compel the Government or the public
    authority "to carry out a representation or promise which is contrary to law
    or which was outside the authority or power of the officer of the Govern-
    ment or of the public authority to make." There is preponderance of            H
    458                   SUPREME COURT REPORTS [1994) SUPP. 4 S.C.R.

A judicial opinion that to invoke the doctrine of promissory estoppel clear
  sound and positive foundation must be laid in the petition itself by the party
  invoking the doctrine and that bald expressions, without any supporting
  material, to the effect that the doctrine is attracted because the party
  invoking the doctrine has altered its position relying on the assurance of
  the Government would not be sufficient to press into aid the doctrine. In
B
  our opinion, the doctrine of promissory estoppel cannot be invoked 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
C 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 inequi-
  table to hold the Government or the public authority to its promise,
  assurance or representation.
D
           The ambit, scope and amplitude of the doctrine of promissory estop-
    pel 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, [1968) 2 SCR 366. Reference in this
    connection may be made with advantage to Century Spinning & Manufac-
E   turing Co. Ltd. & Anr. v. The U/hasnagar Municipal Council & Anr., [1970)
    3 SCR 854; Mis Moti/a/ Padampat Sugar Mills Co. (P) Ltd. v. State of UP
    & Ors., (1979] 2 SCR 641; lit Ram Shiv Kumar & Ors. etc v. State of
    Haryana & Anr., [1980] 3 SCR 689; Union of India v. Godfrey Philips India
    Ltd., [1985] 4 SCC 369; Indian Express News papers (Born) Pvt. Ltd. & Ors.,
    v. Union of India & Ors., [1985] 1 SCC 641; Pomami Oil Mills & Ors. v.
F
    State of Kera/a & Anr., [1986] Supp. SCC 728; Baku/ Oil Industries & Anr.
    v. State of Gujarat & Anr., [1987] 1 SCR 185; Asst. Commissioner of
    Commercial Taxes & Ors v. Dharmendra Trading Co. & Ors., [1988] 3 SCC
    570; Amrit Banaspati Co. Ltd. & Anr. v. State of Punjab &Anr., [1992] 2
    SCC 411 and Union of India & Ors. v. Hindustan Development Corporation
G   & Ors., [1993] 3 JT SC 15. In Godfrey Philips India Limited (supra) this of
     Court opined:                                                                 ·-
             'We may also point out that the doctrine of promissory estoppel
             being an equitable doctrine, it must yield when the equity so
H            requires, if it can be shown by the Government or public authority
               KASINKA TRDG. v. U.0.l. [DR. ANAND, J.]               459

        that having regard to the facts as they have they have transpired, A
        it would be inequitable to hold the Government or Public authority
        to the promise of representation made by it, the Court would not
        raise an equity in favonr of the person to whom the promise or
        representation is made and enforce the promise or representation
        against the Government or Public authority. The doctrine of B
        promissory estoppel would be displaced in such a case, because
        on the facts, equity would not require that the Government or
        Public authority should be bound by the promise or representation
        made by it."

In Excise Commissioner U.P. Allahabad etc. etc. v. Ram Kumar etc. etc.,    C
AIR (1976) SC 2237 fonr learned Judges of this Conrt observed :

        "The fact that sales of country liquor had been exempted from.
        sales tax vide Notification No. ST 1149/x-802 (33)- 51 dated April
        6, 1959 could not operate as an estoppel against the State Govern- D
        ment and preclude it from subjecting the sales to tax if it felt
        impelled to do so in the interest of the Revenues of the State which
        are required for execution of the plans designed to meet the ever
        increasing pressing needs of the developing society. It is now well
        settfod by catena of decisions that there can be no question of
        estoppel against the Government in the exercise of its legislative, E.
        sovereign or executive powers11 •

            Prof. S.A. De Smith in his celebrated treatise "Judicial Review
        of Administrative Action", 3rd Edn. at p.279 sums up the position
        thus : "Contracts and Covenants entered into by the Crown are not F
        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 G
        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 H
    460                  SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A           to have been bound in law by an ostensibly binding contract
            because the undertakings would improperly fetter its general dis-
            cretionary 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 part may have suffered. "

B        In Subhash Photographies v. Union of India, (1993) 66 ELT 3 Jeevan
    Reddy, J. Speaking for the Bench observed :

            "In Statutes like Customs Act and Customs Tariff Act one has also
            to keep in mind that such legislation can be properly administered
c           only by constantly adjusting it to the needs of the situation. This
            calls for a goods amount of discretion to be allowed to the delegate.
            As is often pointed out 'flexibility is essential (in law-making) and
            it is one of the advantages of rules and regulations that they can
            be altered much more quickly and easily than can Acts of Parlia-
            ment." We have pointed out hereinbefore the necessity of constant
D
            and continuous monitoring of the nation's economy by the
            Government (and its various institutions) and the relevance of
            these enactments as a means of ensuring a proper and healthy
            growth".

E           The learned Judge went on to opine :

            "The Parliament has appointed two authorities i.e., Central
            Government and the Board to make rules/regulations to carry out
            the purposes of the Act generally. The character of Rules and of
F           the Regulations made under Sections 156 and 157 respectively is
            the same - both constitute delegated legislation. The Regulations
            are subject to an additional limitation viz., they should not be
            contrary to the Rules made under Section 156. The purpose of
            sub-section (2) in both the sections is illter a/ia to allocate certain
            matters to each of them exclusively; subject to these sub-sections,
G           both the delegatees can exercise the power vested in them for
            carrying out the purposes of the Act. No established legislative
            practice of any consideration duration has been brought to our
            notice to read any further limitation into the regulation-making
            power under Section 157, assuming that a legislative practice can
H           be read as a limitation."
                KASINKA TRDG. v. U.O.I. [DR. ANAND, J.]                  461

        In M.P. Sugar Mills case (supra) it was observed that tlie doctrine of A
promissory estoppel would not apply in the teeth of an obligation or
liability imposed by law and that there can be no promissory estoppel
against the exercise of legislative power.                      ·


      Coming now to the facts of the cases before us, we "shall first take up   B
for consideration whether any enforceable promise had been held out to
the appellants, through Notification No. 66 dated 15.3.1979, and whether
the Union of India can be estopped from superseding that Notification by
Notification No. 205 dated 16.10.1980, withdrawing the exemption granted
by the 1979 Notification.
                                                                                c
        The appellants in this batch of cases are manufacturers of certain
products, requiring PVC resin as one of the raw material for the manufac-
turing process. PVC resin, it is not disputed, is manufactured in India and
is also imported from abroad. In the counter to the Writ Petition filed by
the Union of India in the High Court, the justification for the issuance of D
the exemption Notification No. 66/79 in the "public interest" was spelt out
by the respondents. It was stated that it was with a view to equalising sale
prices of the indigenous and the imported material and to make the
commodity available to the consumer at a uniform price, keeping in view
the trends in the supply of the material, that the Cabinet had decided to
issue the exemption Notification No. 66 of 1979 under Section 25(1) of the E
Act. Subsequently, when it was found and realised that the international
prices of the product were falling and consequently the import prices had
become lower than the ex-factory prices of the indigenous material, the
matter was examined by the Government of India and it was decided in
1
 'public interest 11 to withdraw the. .exemption Notification. Thus, the Union
of India has disclosed the circumstances under which the exemption was F
initially granted as well as the change of circumstances which warranted
the withdrawal of the exemption notification. The reasons given by the
Union of India justifying withdrawal of the exemption notification, in our
opinion, are not irrelevant to the exercise of the power in 'public interest',
nor are the same shown to be insufficient to support the exercise of that G
power. From the material on the record it is apparent that the exemption
Notification issued under Section 25(1) of the Act, in "public interest", was
designed to off set the excess price which the local entrepreneurs were
required to pay for importing PVC resin at a time when the difference
between the indigenous product and the imported product was substantial.
No importer could be expected to import PVC resins after paying duty and H
     462                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A incur losses. The exemption Notification, was therefore, issued with a view
     to off set losses to the extent possible. The exemption Notification was not
     issued as a potential source of extra profit for the importer. Again, at the
     time when the Notification was withdrawn by the Government there was
     no scope for any loss to be suffered by the importers as was clearly stated
     in the counter filed by the Union of India and which contention has
B    remained unrebutted. From the counter filed by the Union of India in the
     High Court it is abundantly clear that the necessity for the continuation of
     the exemption, in view of the changed circumstances, was no longer neces-
     sary. The exemption Notification did not hold out to the appellants any
     enforceable promise.
c          The facts of the appeals before us are not analogous to the facts in
     Anglo Afgan Agencies (supra) or M.P. Sugar Mills (supra). In the first case
     the petitioner therein had acted upon the unequivocal promises held out
     to it and exported goods on the specific assurance given to it and it was in
     that fact situation that it was held that Textile Commissioner who had
D    enuciated the scheme was bound by the assurance 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 represent a scheme designed to achieve a particular purpose. It was a
     Notification issued in public interest and again withdrawn in public inter-
     est. So far as the second case (MP Sugar Mills case) is concerned the facts
,E   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
F    representation made by it to the petitioners through letters in writing, who
     had relied upon the same and set up the industry.


           The power to grant exemption from payment of duty, additional duty
     etc. under the Act, as already noticed flows from the provisions of Section
G    25(1) of the Act. The power to exempt includes the power to modify or
     withdraw the same. The liability to pay customs duty or additional duty
     under the Act arises when the taxable event occurs. They are then subject
     to the payment of duty as prevalent on the date of the entry of the goods.
     An exemption notification issued under Section 25 of the Act had the effect
     of suspending the collection of Customs duty. It does not make items which
H    are subject to levy of customs duty etc. as items not leviable to such duty.
                 KASINKA TRDG. v. U.0.1. [DR. ANAND, J.]                   463

  It only suspends the levy and collection of customs duty etc., wholly or A
  partially and subject to such conditions as may be laid down in the
  Notification by the Government in "public interest". Such an exemption by
  its very nature is susceptible of being revoked or modified or subjected to
  other conditions. The supersession or revokation of an exemption notifica-
 .tion, in the "public interest", is an exercise of the statutory power of the B
  State under the law itself as is obvious from the language of Section 25 of
  the Act. Under the General Clauses Act an authority which has the power
  to issue a notification has the undoubted power to rescind or modify the
  notification in a like manner. From the very nature of power of exemption
  granted to the Government under Section 25 of the Act, it follows that the
. same is with a view to enabling the Government to regulate, control and C
 promote the industries and industrial production in the country. Notification
  No. 66 of 1979 in our opinion, was not designed or issued to induce the
  appellants to import PVC resin. Admittedly, the said Notification was not
  even intended as an incentive for import. The Notification on the plain
  language of it was conceived and issued on the Central Government "being
  satisfied that it is necessary in the public interest so to do." Strictly speak- D
  ing, therefore, the Notification cannot be said to have extended any "ri:p-
  resentation" much less a "promise" to a party getting the benefit of it 'to
  enable it to invoke the doctrine of promissory estoppel against the State.
  It would bear repetition that in order to invoke the doctrine of promissory
  estoppel, it is necessary that the promise which is sought to be enforced E
  must be shown to be an unequivocal promise to the other party intended
  to create a legal relationship and that it was acted upon as such by the
  party to whom the same was made. A Notification issued under Section 25
  of the Act cannot be said to be holding out of any such unequivocal
  promise by the Government which was intended to create any legal
  relationship between the Government and the party drawing benefit flow- F
  ing from of 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.
                                                                                 G
      The argument on behalf of the appellants, vehemently pressed by Mr.
Ashoke Desai and Mr. Harish Salve, their learned senior advocates, is to
the effect that since the Notification 6fJn9 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 H
    464                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A Notificatiori on the understanding that it was to remain operative till 31st
    March 1981 and had made arrangements for importing the goods accord-
    ingly and they could not be prejudiced by the withdrawal of that Notifica-
    tion before 31st March 1981. We cannot persuade ourselves to accept this
    submission of the learned counsel. Merely by mentioning the date as 31st
    March 1981, as the date upto which the exemption Notification No. 66/79
B   was to be operative, no unequivocal representation could be said to have
    been made that it could not be rescinded or modified before that date even
    if the Govemment was satisfied that it was necessary in the public interest to
    rescind it. Since, the Notification had been issued under Section 25(1) of
    the Act, the very same power was available to the authority for rescinding
C   or modifying that Notification and the appellant ought to have know that
    the said notification was capable of or liable to be revoked, modified or
    rescinded at any time even before the expiry of 31st March 1981 if the
    'public interest' so demanded. To hold that after the Government had
    issued the notification 66179 indicating that it was to remain operative till
    31st March 1981, it could not be rescinded or modified before the expiry
D   of that date would amount to prohibiting the Government from discharg-
    ing its statutory obligation under Section 25(1) of the Act, if it was satisfied
    that it was in the "public interest" to withdraw, modify or rescind the earlier
    Notification. The plain language of Section 25 of the Act is indicative of.,
    the position that it is the public interest and public interest alone which is
    the dominant factor. It is not the case of the appellants that the withdrawal
E   of Notification 66/79 by the impugned Notification was not 'public interest'. ·
    Their case, however, is that relying upon the earlier Notifications they had
    acted and the Government should not be permitted to go back on its
    assurance as otherwise they would be put to huge loss. The courts have to
    balance the equities between the parties and indeed the courts would bind
F   the Government by its promise "to prevent manifest injustice or fraud." The
    following observations from Malhotra & Sons v. Union of India, AIR (1976)
    J & K 41 have been noticed with approval by this Court in Excise Com-
    missioner v. Ram Kumar, AIR (1976) SC 2237 and in M.P. Sugar Mills case
     (supra) :

G            "The courts will only bind the Government by its promises to
             prevent manifest injustice or fraud and will not make the Govern-
             ment a slave of its policy for all times to come when the Govern-
             ment acts in i~s governmental, public or sovereigil capacity."


H         The burden of customs duty etc. is passed on to the consumer and
                KASINKA lRDG. v. U.0.1. [DR.ANAND,J.]                    465

therefore the question of the appellants being put to a huge loss is not A
understandable. No injustice has been done much less fraud practised by
the Government in withdrawing the exemption.

      The appellants appear to be under the impression that even if, in the
altered market conditions the continuance of the exemption may not have         B
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             C
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.                          D

        It needs no emphasis that the power of exemption under Section
25(1) of the Act has been granted to the Government by the Legislature
which a view to enabling it to regulate, control and promote the industries
and industrial productions in the country. Where the Government on the E
basis of the· material available before it, bonafide, is satisfied that the
"public interest" would be served by either granting exemption or by
withdrawing, modifying or rescinding an exemption already granted, it
should be allowed a free hand to do sci. We are unable to agree with the
learned counsel for the appellants that Notification 66n9 could not be
withdrawn before 31.3.1981. First, because the exemption Notification F
having been issued under Section 25(1) of the Act, it was implicit in it that
it could be rescinded or modified at any time if the public interest so
demands and secondly it is not permissible to postpone the compulsions
of 'public interest" till after 31st March 1981 if the Government is satisfied
as to the change in the circumstances before that date. Since, the Govern- G
ment in the instant case was satisfied that the very public interest which
had demanded a total exemption from payment of customs duty now
demanded that the exemption should be withdrawn it was free to act in the
manner it did. It would bear a notice that though Notification 66n9 was
initially valid only upto 31st March 1979 but that date was extended in
 public interest", we see no reason why it could not be cunailed in public H
11
    466                   SUPREME COURT REPORTS [1994] SUPP. 4 S.C.R.

A   interest. Individnal interest must yield in favour of societal interest.

           In our considered opinion therefore, the High Court· was perfectly
    right in holding that the doctrine of promissory estoppel had no application
    to the impugned notification issued by the Central Government in exercise
    of its powers under Section 25(1) of the Act in view of the facts and
B   circumstances, as established on the record.


        So far as the second batch of cases is concerned the facts of C.A
  Nos. 4333-34/83 need be noticed. These two appeals have been filed against
  the judgment and order dated 3rc! March 1983 of the High Court of Delhi.
C The appellants in these two appeals are engaged in the manufacture of
  aluminium conductors and aluminum conductors steel reinforced which
  are supplied to the various State Electricity Boards. Aluminum ingots and
  rods are the basic raw materials used in the production of such conductors.
  In order to meet the domestic requirements, it became necessary to import
D the aluminum ingots and aluminum rods. The Central Government there-
  fore issued Notification No. 79-Cus. dated 18.4.1980 exempting aluminum
  wire rods and aluminum ingots from the whole of customs duty as well as
  the additional duty leviable on it. The notification contained the clause that
  the notification shall remain in force till 30.9.1980. Simultaneously, another
  Notification No. 80-Cus. was issued by the Central Government exempting
E the above items from the whole of auxiliary duty as well. The appellants
  claim that on the basis of the promises and assurance contained in the two
  exemption Notifications, they commenced negotiations with the manufac-
  turer and suppliers of the above items for the purchase of these items from
  aboard. In the meantime, the Central Government issued another Notifica-
  tion No. 174-Cus. dated 29.8.1980, withdrawing the earlier Notification No.
F 79-Cus. dated 18.4.1980 and on the same date i.e. 29.8.1980 yet, another
  Notification was issued levying auxiliary duty @ 12 1/2 per cent ad valorem.
  Barely ten days after the rescindment of the earlier Notification, the
  Central Government issued another Notification No. 186-Cus. dated
  9.9.1980 once again exempting wire rods and aluminum ingots from the
G whole of duty of customs. This notification was to remain operative till 31st
  March 1981 and it has remained in force right through. The grievance of
  the appellants is that the withdrawal of the exemption Notification on
  29.8.1980 was not at all justified and support for this argument is sought
  from the fact that within 10 days of the withdrawal notification, the Govern-
  ment had itself once again issued a Notification on 9.9.1980, reviving the
H exemption of customs duty. Learned counsel submitted that during the
                                                                       '
                KASINKA TRDG. v. U.0.1. (DR. ANAND, J.]                467

period of 10 days, the importers whose goods arrived in India, were made A
liable to pay both the customs duty as well as the auxiliary duty, while those
whose goods arrived either after 9.9.1980 or before 29.8.1980 were not
required to pay the same.

        Indeed, the submission on the fact situation is not controvertible but
in the absence of any material placed before, the High Court or even in B
this appeal to establish that the notification dated 29.8.1980 was issued for
any oblique or extraneous consideration and was not 11 in public interest1\ it
is not possible to find fault with that notification for the reasons we have
already given while dealing with the first batch of cases. The appellants,
who are in business, have to be prepared for tides in the business. In C
Poomami Oil Mills (supra), it was the incentive to set up new industry in
the State with a view to boost the industrialisation that exemption had been
granted and it was in that fact situation that the doctrine of promissory
estoppel was held available to the appellant therein. Again in Baku/ Oil.
Industries (supra) it was the incentive to set up industries in a conforming
area that the exemption had been granted and the Court held that the D
Government could withdrawn an exemption granted by it earlier only if
such withdrawal could be made without offending the rule of promissory
estoppel and without depriving an industry entitled to claim examination
for the entire specified period for which exemption had been promised to
it at the time.to giving incentive. Both these cases therefore cannot advance
the case of the appellant and are distinguishable on facts because the E
exemption notification under Sectfon 25 of the Act which was issued in this
case did not hold out any incentive for setting up of any industry to use
PVC resins and on the other hand has been issued in exercise of the
statutory powers, in public interest and subsequently withdrawn in exercise
of the same powers again in public interest. In our opinion, no justifiable
prejudice was cause to the appellants in the absence of any unequivocal
                                                                               F
promise by the Government not to act and review its policy even if the
necessity warranted and the "public interest" so demanded. Thus, in the
facts and circumstances of these cases, the appellants cannot invoke the
doctrine of promissory estoppel to question the withdrawal notification
issued under Section 25 of the and Act.                                        G
      As a result of the above discussion, all the appeals fail and are
dismissed. No costs.

G.N.                                                    Appeal dismissed.