Reflex International (P) Ltd., ... vs Union Of India (Uoi) And Ors.
2002 Latest Caselaw 466 Del

JUDGMENT

Dalveer Bhandari, J.

1. In these aforesaid petitions, common questions of law arise and we deem it appropriate to dispose of these petitions by a common judgment.

2. The petitioners have challenged the legality and constitutionality of Notification No. 205 dated 16.10.1980 issued by the respondents purporting to nullify or supersede the earlier notification dated 15.3.1979 by virtue of which Polyvinyl Chloride resin (PMC) was exempted from the whole of the customs duty leviable on imports into India and the said notification was in force till 31.8.1979. The said exemption was extended from 31.8.1979 to 31.8.1980 and thereafter again extended up to 31.3.1981 by another Notification No. 37 of 25.3.1980.

3. In the writ petitions it is prayed that imposition of the said duty is without the authority of law and such levy is violative of the petitioners' rights as conferred under Articles 19(1)(g), 301 and 301A of the Constitution. It is mentioned in these petitions that imposition of the Customs Duty is violative of the petitioners' rights under Article 19(1)(g) of the Constitution. It is also mentioned that the public interest which had prompted the respondents to pass an exemption cannot acquire an altogether contrary dimension in the absence of any new, compelling and/or supervening circumstances.

4. The petitioners also submitted that the respondents have given assurances and promises to the petitioners and they had acted upon the same. The respondents cannot be permitted to take a total somersault. It is also submitted that the respondents are estopped under the principles of promissory estoppel. It is prayed that the respondents be directed to withdraw the notification imposing the customs duty.

5. The question regarding the levy of customs duty on PVC resin was examined with minute details and depth by a Division Bench judgment of this Court reported as Jain Shudh Vanaspati Ltd. and Anr. v. Union of India and Ors. . The Division Bench observed that the PVC resin is classified under Chapter 39 of the 1st Schedule to Customs Tariff Act, 1975. It falls under heading No. 39.01/0.6 and the rate of duty indicated therein is 100%. However, in exercise of powers under Section 25(1) of the Customs Act, Central Government had issued a notification dated 15.3.1979 exempting the PVC resin when imported into India, from the whole of the duty of customs leviable thereon which is specified in the First Schedule. The notification was stated to remain in force up to and inclusive of 31.3.1981. On 16.10.1980 another notification was issued under Sub-section (1) of Section 25 of the Customs Act in supersession of the earlier notification of 15.3.1979 which exempted PVC resin from the customs duty. The Division Bench while deciding the writ petition filed by Jain Shudh Vanaspati examined the plea of promissory estoppel. The plea of promissory estoppel was earlier examined by the Division Bench of our Court in Super Traders v. Union of India . In Super Traders (supra) this Court observed as under:

In the matter of import and export no party can claim any vested right to compel the Government or the Legislature to refrain from making any changes during the financial year. This is because the position of foreign exchange varies so much and the requirement and the considerations of national economy are so urgent that it would be trespassing on the legislative and administrative field if courts were to hold that a rate of duty or tax was immutable for any particular period.

6. The question of public interest in issuing the same notification was also examined in the case of Jain Shudh Vanaspati (supra). The Court observed that an order under Section 25(1) of the Customs Act is legislative in character and there can be no estoppel against the statute. If that be so, how can the Court be asked to examine the question of public interest. The argument of lack of public interest is really an argument that there is an improper motive in this legislative order. This scrutiny is not for the Court. The Court observed that it is very important to notice that if the Legislature is competent to pass the particular law, the motives which impel it to pass the law are really irrelevant. Malice or motive is beside the point, and it is not permissible to suggest Parliamentary incompetence on the score of mala fides. The judgment of the Supreme Court in R.S. Joshi v. Ajit Mills was referred to.

7. In a leading American case Patton v. Brady 184 U.S. 608 it was observed as under:--

It is not the province of the judiciary to inquire whether the excise is reasonable in amount or in respect to the property to which it is applied. Those are matters in respect to which the legislative determination is final.

8. In another Supreme Court judgment Rai Ram Kishan v. State of Bihar the Court observed as under:--

The quantum of tax levied by the taxing statute, the conditions subject to which it is levied, the manner in which it is sought to be recovered, are all matters within the competence of the Legislature, and in dealing with the contention raised by a citizen that the taxing statute contravenes Article 19 Courts would naturally be circumspect and cautious.

9. In Daruka & Co. v. Union of India the Supreme Court while examining the question of public interest in a case of similar nature observed that "If the Government decides an economic policy that import or export should be by a selected channel or through selected agencies the Court would proceed on the assumption that the decision is in the interest of the general public unless the contrary is shown."

10. The Division Bench of this Court in Jain Shudh Vanaspati (supra) examined a large number of decided cases and after hearing counsel for the parties at length came to the following conclusions:

(a) that for the purpose of calculating the rate of duty leviable on the goods imported, the rate of duty applicable to such imported goods shall be the rate on the dates mentioned in Section 15;

(b) the date for calculating on the rate of duty is not the date when the ship carrying the goods enters the territorial waters but is the date in the context of the various circumstances mentioned and specified in Section 15 of the Act; and

(c) that the modification of the earlier total exemption notification dated 15.3.1979 by the later partial exemption Notification of 16.10.1980 was in public interest and to subserve public good and is not liable to any constitutional or legal challenge.

11. The writ petitions were dismissed with costs. Exactly similar issues and questions of law have been raised by the petitioners in these petitions. The petitioners' cases are squarely covered by the aforementioned Division Bench judgment of this Court in Jain Shudh Vanapasti's case (supra). We are in respectful agreement with the findings arrived at by the Division Bench in the said case. These petitions are devoid of any merit and are accordingly dismissed. The prayers in these petitions are different. To avoid confusion, we deem it appropriate to set out the prayer clause of each petition in the succeeding paragraphs and indicate our operative orders.

C.W. No. 1124 Of 1982

Jain Shudh Vanaspati Ltd. v. Union of India and Ors. is dismissed with costs. Interim order passed by this Court on 19.4.1982 is vacated.

C.W. No. 2652 Of 1981

Jindal Paper Mills Ltd and Ors. v. Union of India and Ors. is dismissed with costs. Interim order passed by this Court on 25.11.1981 is vacated.

C.W. No. 401 Of 1981

Reflex International (P) Ltd. v. Union of India and Anr. is dismissed with costs. The petitioners are not entitled to any refund of the amount as prayed.

C.W. No. 402 of 1981

Reflex International (P) Ltd. v. Union of India and Anr. is dismissed with costs. The petitioners are not entitled to any refund of the amount as prayed.

12. The respondents would be at liberty to pass any order or direction which may be imperative or necessary looking to the facts and circumstances of each petition in view of our dismissal of these petitions with costs. All these petitions are accordingly disposed of.