M.S. Liberhan, J.
1. This order of ours shall dispose of Civil Writ petitions Nos. 11654, 11655, 11656, 11657, 12309, 12310, 12579, 12664 and 13056 of 1989. Since the material facts are common and so are questions of law raised in these petitions, it can be fairly recorded that the petitions raise common questions of law.
2. It is expedient to collate the facts leading up to these Writ petitions. The facts have been taken from Civil Writ petition No. 11654 of 1989. Vanaspati is an excisable item. The petitioners are its manufacturers. It can be manufactured by hydrogenation of vegetable oils and subjecting them to various other processes like neutralising, bleaching and deodorisation etc, The oils used in this process are known as traditional oils in the trade and it is so understood by the persons in the trade. The manufacturer of Vanaspati can also use for its manufacture the minor oils like Rice Bran Oil, Mahua oil, Water-melon seed Oil, Solvent extracted cottonseed Oil etc. They are known as non-traditional oils in the trade amongst the manufacturers and the persons dealing with Vanaspati. Utilising the non traditional oils for the manufacture of Vanaspati is a time consuming and costlier process, than its manufacture by hydrogenation of traditional oils.
3. The Union of India with an object to cut the import of excisable oils, to save foreign exchange, to encourage the utilisation, or consumption of indigenoulsy available non-traditional oils and to make it feasible as well as financially viable for the manufacture of Vanaspati and further to allure the manufacturers of Vanaspati to utilise the same for its manufacture, and with a further object of granting incentive for the greater production of non-traditional oils in the country, granted various concessions from excise duty and also in other excisable goods. The Central Government introduced a scheme granting concession from excise duty on the use of the non-traditional oils in the manufacture of Vanaspati and other excisable articles. The scheme proposing the excise concession on the Vanaspati and other articles for the use of various non-traditional oils, was issued on March 1, 1987 and the items were specified.
4. The Notification was issued under Rule 57-K of the Central Excise Rules, 1944 (hereinafter referred to as the Rules). The vegetable oils listed in the Notification, for the production of the Vanaspati, conferring a right to concession from excise were defined as inputs. Under the Scheme the manufacturer of the final product of Vanaspati earned credit of money at the rates specified, for concession in the excise duty, for the use of input, The manufacturers were entitled to the stipulated credit subject to the conditions (i) that the credit was to be taken only in respect of the quantity of oil subjected to hydrogenation on or after March 1, 1987 for the manufacture of final product, (ii) the credit was to be taken only on the date on which the specified oils entitled to concession were so hydrogenated; and (iii) the accounting period for such credit was a month. Further under the Scheme, the manufacturer could utilise the credit earned in any calender month in the next succeeding month. The credit could be utilised by adjustment against the payment of excise duty on the final product and that too at a specified rate. A ceiling was put on the amount of credit to be utilised for payment of excise duty on any individual clearance of the final products it was not to exceed Rs. 1,000/- per metric tonne of vegetable products cleared. It was provided that the manufacturer shall not be entitled to the refund or adjustment against payment of excise duty on any item other than the final product nor it could be utilised for payment of excise duty on any other excisable goods under any circumstances. It was made incumbent for the manufacturer to produce a certificate within five months from the taking of credit or such extended period from Deputy Director in the Directorate of Vanaspati, Vegetable oils and Facts in the Ministry of Food and Civil Supplies of the Government of India to the effect that oil had been manufactured by the solvent extracted method. The Notification further defines 'Vegetable product'. Use of various oils entitling the manufacturers the requisite concession to the excise duty by taking credit were added in the list from time to time.
5. The Central Excise Ist Amendment Rules, 1987 (hereinafter referred to as the 1987 Rules) were promulgated. The Notification was issued specifying the rates of concession in conformity with the amended Rules of 1987.
6. Speeches of the Finance Minister, Prime Minister and Ors. in the Parliament were referred to in order to contend that it amounted to making the offer of the credit on the use of indigonous vegetable oils (non-traditional oils) for the manufacture of Vanaspati prior to or after the issue of the Notification, dated March 1, 1987. The petitioners keeping in view the Notifcation, datfd March 1, 1987 as well as the speeches made in the Parliament and implied assurances given by the Central Government, used the specified oils which were entitled to the concession in the excise duty for the manufacture of Vanasnati. They earned the credit to the extent of the utilisation of the non-traditional oils in terms of the Notification and bad earned credit of the amount of excise permissible under notification, by utilising the oils notified.
7. Before the petitioners could utilise the credit earned by them in terms of Notification issued by the respondents and the implied and express assurances made, the respondents rescinded the Notification dated March 1, 1987 vide notification dated 25-8-1989. The notification rescinding the earlier notification reads under :--
'In exercise of powers conferred by Rule 57 K of the Central Excise Rules, 1944 the Central Government hereby rescinds the Notification of the Government of India. Ministry of Finance, Department of Revenue, namely, Notification No. 27/87, dated March 1, 1987.
EXPLANATORY NOTE:--This notification withdraws the schemes providing credit of money in respect of minor oils used in the manufacture of Vanaspati and soap '
8. In order to implement the Notification rescinding the earlier Notification, the authorities addressed letters to the manufacturers as well as other authorities not to allow the manufacturers the utilisation of credit standing in their account for payment of duty on the final product.
9. Through this writ petition, the petitioners have sought a declaration that the Notification of rescission does not take away the right of the petitioners to utilise the credit earned by them prior to August 25, 1989 towards the payment of duty on Vanaspati in terms of Notification, dated March 1, 1987. A further direction was sought directing the respondents to permit the manufacturers to utilise the credit on the same terms and conditions as embodied in Notification, dated March 1, 1987. Relief was sought only with respect to the un-utilised credit standing in their account on the date of issuance of subsequent Notification, dated August 25, 1989.
10. In the course of arguments, the learned counsel for the petitioners brought to our notice that the concession granted by Notification, dated March 1, 1987. Annexure P3 has been restored by Notification, dated, October 11, 1989, just after a lapse of about a month from the date of rescinding the earlier Notification.
11. The learned counsel for the petitioners set up the plea of promissory or equitable estoppel. The petitioners claimed that the respondents are estopped from denying the petitioners the utilisation of the credit earned by them and cannot refuse to deduct from the excise duty payable by the petitioners on the final product of Vanaspati to the extent they earned the credit in terms of the Notification and the assurances given prior to the date of issuance of the Notification rescinding the scheme entitling the manufacturers for the credit. The respondents cannot deny the utilisation of credit in terms of the scheme as the petitioners have irreversibly changed their position aversely to them by acting in good faith on the promise as well as the Notification. The credit earned for the payment of excise duty on the final product is the property of the petitioners which can be taken away by the respondents by simpliciter rescinding he earlier Notification. The rescinding of the earlier Notification by subsequent Notification is prospective and cannot take away the rights of the petitioners already vested in them. The Government cannot approbate and reprobate. The Legislature alone could have taken away the rights vested in the petitioners. The delegated authority of the Central Government cannot deprive the petitioners of their vested rights and the property. The petitioners have changed their position to their detriment on an active representation of the respondents. The petitioners cannot be put back in the same position. It was pointed out that there was no public interest or grounds for rescinding the scheme making the concession available to the petitioners. The rescinding Notification cannot in its sweep take away the vested rights of the credit already earned which the petitioners were entitled to adjust against the excise duty payable by the petitioners to the respondents on the finished goods. The rescinding of the Notification for a short period of about a month is arbitrary, unconscientiousable against the principles of equity, justice and fairplay and is against all the morales and descency and not in accordance with law. The approach of the Central Government is fraudulent. A citizen cannot be deprived of his rights in such an arbitrary manner, particularly in the absence of any public interest. The State owes a duty for justice and fairplay towards its citizens.
12. It has been asserted that the Central Government being a delegatee of the Union of India cannot issue Notification imposing excise duty with retrospective effect. The Central Government has no jurisdiction of imposing the impost by way of excise duty either expressly or impliedly with retrospective effect. The rescinding of the Notification tant amounts to imposing an impost by way of excise duty.
13 The respondents controverted the assertions made in the Writ Petition. It has been asserted that excise duty and taxation are not vested rights created either in favour of Revenue or the Assessee. Since the Notification granting the concession and utilisation of the said concession came to an end on the issuance of Notification dated August 25, 1989 rescinding the earlier Notification, the petitioners are not entitled to the utilisation of the money on account of the credit already earned by them. Since the finished/end product i.e. the Vanaspati became liable for the excise duty, the petitioners cannot be permitted to debit the money on account of the credit earned towards the payment of excise duty or pay excise duty less than they ate enjoined upon to pay. The doctrine of promissory or equitable esstoppel does not apply to the Government actions in matters of taxation.
14. It averred that non-traditional oils were available in sufficient quantity and their use in the manufacture of Vanaspati does not involve any time-consuming process or extra labour, nor does it involve any extra cost. Various considerations were taken note of while framing this tariff structure and framing the scheme and enforcing it at a given time. Motives, such less conjectural motives behind the enactments of the schemes or making of rules and laws as well as issuance of Notification thereunder cannot be taken note of. In a taxating statute its plain language is to be interpreted. The speeches made in the Parliament are immaterial and cannot be taken note of It is averred that taxatiotin is not a contract, it is a unilateral will of the Legislature and is an exaction by the State in exercise of its sovereign power and as such there can neither be any promissory estoppel nor any contractual obligation which can be enforced in a. Court of law The very concept of taxation is repugnant to the concept of contract and both are ante thesis of each other. Thus, the question of representations or assurances are irrelevant in case of taxation, nor can be given effect to. The petitioners hydrogenated the oils in their own interest. Profit and loss are the ordinary concomitants of business. Once an item becomes excisable or the excise duty is increased on it, it being earlier exempted from the excise duty, is of no consequence. The date of manufacture or it being not earlier excisable or the intention of the manufacture having manufactured the same being not excisable in view of some earlier scheme or policy, is of no consequence and the State cannot be deprived of its right to impose the excise. A plain reading of the Notification rescinding the earlier Notification of exemption is that the petitioners are no more entitled to the benefit of concession granted Resultantly, the effect of the Notification is that the end product became liable for the excise duty. The petitioners were not entitled to utilisation of the alleged credit after the Notification rescinding the scheme for utilisation of the credit. The principle of estoppel, or the concept of equity justice has no relevance to the law of taxation. In fact, it is a manifest of sovereignty of Parliament which is concerned with the public interest as a paramount and over-riding consideration over a private interest. It was specifically stated that Notification rescinding the earlier Notification granting concession is not retrospective in its operation.
15. The learned counsel for the petitioners was sanguine in his submission that the respondents are estopped from refusing the petitioners the utilisation of the credit money standing to their account solely on the ground of rescinding of the Notification. The doctrine of promissory estoppel or the equitable estoppel was pressed. It was only the point of promissory estoppel which was emphatically urged in the course of arguments in this petition. Though various other points were taken as noted above in the Writ Petition, yet the arguments addressed by both the sides were to the effect that in view of the admitted fact, that the Notification of rescission being not retrospective, the respondent are bound by the principles of promissory estoppel and cannot refuse the benefit of the exepmtion earned by the petitioners.
16. It was contended that the cumulative effect of the Amended 1987 Rules read with the Notification, dated March 1, 1987 granting an incentive by way of concession on excise duty for the use of non-traditional oils in the manufacture of Vanaspati, would amount to a definite assurance from the respondent to the effect, that utilisation of the non-traditional oils in the manufacture of final product, would entitle the manufacturer to the specified concession by way of exemption in excise duty though the made of utilising the concession was hedged. It was provided that the credit of money earned by way of concession for the use of non-traditional oils could only be utilised by way of adjustment to a limited extent of Rs. 1,000/- per metric tonne out of the total excise duty payable on the finished goods. The credit was earned on the date of hydrogeration of the non-traditional oils, though it could have been used in the payment of the excise duty on the final product in the next month. Un utilised credit could be carried forward.
17. The petitioners on the said assurance, express and implied, believed the same and acted on it in good faith. The act on the part of the petitioners was complete on the day they hydrogenated the non-traditional oils. It was an irreversible act. The parties acted in the belief that they had and would be given such right, i.e. the credit earned and right to utilise the same in terms of the assurances. The petitioners had acted in a particular fashion and had changed their position to their detriment and could not be placed in the same position in which they were before acting on the assurance. The respondents withdrew their assurance and refused to comply with their part of the promise The respondents could not be allowed to act inconsistently with their implied and express conduct on which the petitioners had acted The Notification, dated March 1, 1987, granting the petitioners permission to earn credit to be adjusted in the payment of excise duty on the finished goods at the specified rates conferred a legal right on the petitioners to the knowledge of the respondents and the petitioners did act on the said promise. It would be inequitable to permit the respondents to withdraw from their promise, rather it would perpetuate injustice and fraud attempted to have been committed by the respondents. It was further contended that issuing of Notification either granting concession or rescinding the same are not the legislative functions.
18. The learned counsel for the petitioners relied on A.I.R. 1968 S.C. 718, A.I.R. 1979 S.C. 62I, A.I. R. 1980 S. C. 1285, A.I.R. 1981 S.C. I922, 1981 E. L.T. 274, 1983(32) E.L.T. 40, 1986 E.L.T. 703, 1987(31) E.L.T.332, 1988(36) E.L.T. 225 and 1989 (43) E.L.T. 47, and 628.
19. The learned counsel for the respondents controverted the contentions raised by the counsel for the petitioners and contended that the question of promissory estoppel does not arise in the facts and circumstances of the present case. It was urged that Vanaspati was an excisable item and the concession was granted on the final product. The petitioners could have utilised the concession as long as the respondents permitted or the Notification granting the concession was in operation. It became excisable the moment Notification granting the concession was rescinded. The petitioners had no right, legal or otherwise, for the concession in excise Levying or exempting the excise is a legislative function. There could not be any estoppel against the Legislature. Duty is levied as soon as it is imposed and collected when the goods are removed from the factory premises. The rights to concessions were the existing rights and not the vested rights. The existing rights, the State was at liberty to take away at any time. Effective duty became payable right on the rescinding of the Notification High incidence of payment of duty is a taxation which is an incidence of business. They are very necessary concomitants of the business. Effective duty became payable in the absence of any Exception to it provided by the duly authorised person. In a walfare State, revenue is to be collected for the public good and it is for the respondents to withdraw the concession in the public interest and to grant it keeping the facts and circumstances in view and the public interest at a particular moment. Numerous matters are taken into consideration while granting exemption or levying the excise duty. The said circumstances are not open to judicial review. The Central Government was satisfied that it was necessary in public interest to withdraw the exemption from duty under the circumstances prevailing. It being the prerogative of legislation, its implementation is the only objective function.
20. The learned counsel for the respondents relied on A.I.R. 1973 S. C. 2641, A. I. R. 1976 S.C. 2231, A. I. R. 1983 S.C. 937, A.I.R. 1985 S.C. 537, 1986(23) E.L.T. 87 (F.B,) and A.I.R. 1987 S.C. 142.
21. In Pournami Oil Mills etc. v. State of Kerala,16 their Lord-ships of the Supreme Court were of the view that if in order to boost the industrialisation in the State a concession in sales tax was given by the Government in exercise of its power to exempt the tax under Kerala General Sales Tax Act for establishing new small scale industries a person establishes an industry in view of the concession, the Government cannot subsequently curtail the concession granted. The industry would be entitled to plead the principle of estoppel and get the concession once granted. Their Lordships further relied on M. P. Sugar Mills case (supra).
22. In M/s Motilal Padampat Sugar Mills Co. Ltd. v. The State of Uttar Pradesh,2 the Mill was installed on an assurance from the State that it would be exempt from sales tax for a period of three years. Subsequently, the exemption was withdrawn. A little later the parties agreed for the payment of sales tax at the reduced rates, The State did not stick to that even and subsequently withdrew the entire concession of sales tax in its totality. The producers brought an action invoking the principles of promissory estoppel The State resisted the action on the ground that there could be no promissory estoppel against the State Government so as to inhibit it from formulating and implementing its policies in public interest. There cannot be any estoppel against the State in exercise of its legislative functions. Their Lordships of the Supreme Court after taking note of the case law till then, recognised the principle of estoppel to the effect that where one party has by his words or conduct made to the other a clear and unequivocal promise which is intended to create legal relations or affect a legal relationship to arise in future, knowing or intending that it would be acted upon by the other party to whom the promise is made and it is in fact, so acted upon by the other party, the promise would be binding on the party making it and he would not be entitled to go back upon it, if it would be inequitable to allow him to do so having regard to the dealings which have taken place between the parties '
23. It was observed that it is the first principle on which all Courts of equity proceed that it will prevent a person from insisting on his strict legal rights whether arising under a contract or by a statute or on his title deeds when it would be inequitable for him to do so having regard to the dealings which have taken place between the parties. It is the equity which is a paramount consideration; it is the equity which one his to keep in view ensuring its approximation with justice, an ideal for which the law has been constantly striving The principle of promissory estoppel has been invoked and established itself in law essentially to end the injustice with the changing social concepts and values and in conformity with the legal science, it was further observed that the principle has been applied against the Government where the interest of justice, morality and common fairness clearly dictated such a course and to the extent to which it can be applied has to be determined taking into consideration the peculiar facts and circumstances of each case. It was clearly observed that the Government ought to set a high standard of dealings and relationship with the citizens and the words of the duly authorised Government Agent acting within the scope of his authority ought to be as good as Government bond.
24. While dealing with the facts and circumstances of the case, their Lordships of the Supreme Court laid down 'If, we do so, would it not amount to our countenancing the perpetration of what can be compendiously described as legal traud which a Court of equity must prevent being committed ?' 'Courts must do justice by the promotion of honesty and good faith, as far as it lies in their power.', In our Constitutional set up, no person can be deprived of his right or liberty except in due course of law and by authority of law; if a member of the executive seeks to deprive a citizen of his right or liberty otherwise than in exercise of powers derived from the law the Court would be bound to protect the rights of the aggrieved citizen ' Resultantly, it was accepted as well settled law that exercise of executive authority of the State does not release the Government from its obligation to honour the promise made by it, if the citizen, acting in reliance on the promise, altered his position. In fact, a party who has, in reliance on a promise made by the Government altered his position, is entitled to enforce the promise against the Government, even though the promise is not in the form of a formal contract as required by Article 299 of the Constitution of India and that Article does not militate against the applicability of the doctrine of promissory estoppel against the Government. In Republic of India, no one, however, high or low, is above the law. Every one is subject to the law as fully and completely as any other and the Government is no exception. It is indeed the pride of a constitutional democracy and rule of law that the Government stands on the same footing as a private individual so far as the obligation of the law is concerned the former is equally bound as the latter. It is indeed difficult to see on what principle can a Government, committed to the rule of law, claim immunity from the doctrine of promissory estoppel. Can the Government say that it is under no obligation to act in a manner that is fair and just or that it is not bound by consideration of 'honesty and good faith ?' The doctrine of executive necessity was clearly negatived in The Union of India and Ors. v. M/s Anglo Afghan Agencies etc,1 and the theory of 'fetter its future executive action' was not accepted. The said principle was affimed. It was observed in the course of the judgment that the Government could relieve itself from its promise when it was able to show on the facts of a case that on account of something which had transpired since the making of the promise the public interest would be prejudiced if the Government were required to carry out the promise. The Government cannot be relieved to perform its part of the promise solely on the ground of some undefined and undisclosed necessity or expediency, nor the Government can claim to be the judge of their own obligation and decide the same in their own favour. The reasons are justiciable in a Court of law and the Government is to satisfy the Court's conscience that it would not be in the interest or justice or the public interest to keep the promise bound by its promise. Then and then alone the Court would refuse to enforce the promise extended by the Government.
25. In the course of judgment, it was accepted that the Government or Crown cannot be estopped from enforcing the statutory prohibition, nor can it be asked and compelled to act in a manner which has been prohibited by law. There cannot be any promissory estoppel against the exercise of legislative power, there cannot be any promissory estoppel where the Government owes a duty to the public, i.e. a course of conduct enjoined by law to be performed by the Government, the Government cannot be estopped from acting in discharge of its duties under the law. The doctrine cannot be applied to an obligation or liability imposed by law. It was further accepted that there is no principle of estoppel against the Government in exercise of its legislative, sovereign or executive powers.
26. It was further accepted that, 'It is true that taxation is a sovereign in Government function but by reason of power of exemption, no distinction can be made between the exercise of sovereign governmental function and a trading business activity, so far as this doctrine was concerned It was made clear that it was not necessary that a promisee should suffer any detriment. What is necessary is only that the promisee should have altered his position in reliance on the promise. The position of alteration must be such that a person cannot be placed on footing on which he was before acting or altering his position on the assurance or promise made. It is only to be seen how the promisee has conducted his affairs on the basis of promise and would it be equitable to deprive him of the benefits under the promise. It is sufficient for the promisee to show that the promisee acting in reliance of the promise had altered his position. It is not necessary for him to further show that the had acted to his detirment. The detriment was said to be an injustice to a promisee which would result if the person making the promise was permitted to go back from his promise.
27. So far as M/s Jit Ram Shiv Kumar and Ors. case,8 (suppra) is concerned, their Lordships of the Supreme Courtiwere dealing with the rights of plot holders who had purchased the plots in auction from the Municipal Committee when the Committee had promised exemption of duty in favour of the purchasers of the plots. Considering that principle of estoppel is not available against the Government in exercise of legisiative, sovereign or executive function, it was observed that, 'the Courts accepted the view that reduction in the amount of import certificate may be justified on the ground of misconduct of the exporters in relation to goods exported or on such considerations as the difficult foreign exchange 'position or other matters which have a bearing on the general interest of the State. Relief can be granted in appropriate cases, if, contrary to the Scheme. However if the authority acted arbitrarily, the Union of India and its officers are not entitled at their mere whim to ignore the promises made by the Government.' The Scheme can be enforced with an exception of executive necessity. The Government cannot be permitted to go back upon their promises made in exercise of their discretionary powers as mentioned in the scheme merely on whim. It was further laid down 'Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot be some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to the citizen on an ex parte appraisment of the circumstances in which the obligation has arisen.'
28. The principle of estoppel was not applied against the Government when the Government acted in its Governmental functions, public or sovereign capacity, though an exception is carved out to the effect that the doctrine of promissory estoppel would be acted upon where it is necessary to prevent fraud or manifest injustice.
29. It was observed that 'the Court is entitled to require the Officer to act according to the Scheme or representation He cannot act arbitrarily on his whim and his promise and some undefined and undisclosed grounds of necessity or charged, the conditions would prejudice the person and put him in a disadvantageous position.
30. In London Star Diamond Co. (India) Private Ltd's case,8 (supra), the Central Government issued a Notification under Section 75 of the Customs Act that in respect of any goods manufactured in India and exported, drawback should be allowed in custom duty on any imported material The Scheme was published, goods were imported and deductions made upon the bills of entry that the same would be exported after finish within six months. They became entitled to receive the drawbacks The Notification was rescinded. While reading the Notification, the contention that the only way in which the notice can be read is in the manner that would seem to take away the right, was declined and it was found that only manner in which it can be read is that it is prospective in nature.
31. In Ceat Tyres of India Ltd's case,7 (supra), the Central Government issued a Notification that a person clearing goods was entitled to rebate of 25% on the excess period and Scheme was to remain in force till March 31, 1979 Further provisions were made with respect to mode of claiming the benefit It was observed that power to tax is legislative in character and in tax law, there is no question of estoppel.
32. The thrust of the arguments of the learned counsel for the respondents is that the granting of exemption as well as rescinding the said exemption is the legislative act of the delegatee. There cannot be any premissory estoppel in taxation and the delegatee in exercise of delegated legislation can impose a tax and grant exemption at any point of time There is no vested right in the petitioners. The principles of estoppel cannot be invoked in taxation.
33. The rules and the provisions of the Act were referred to. At the very outset, the learned counsel for the respondents conceded that the operation of the Notification rescinding the Notification, dated March 1, 1987 is not retrospective in any manner. In our considered opinion, there is no dispute that there cannot be any estoppel against the Government in exercise of its statutory function or in exercise of its executive power keeping the facts and circumstances of a particular case in view.
34. Their lordships of the Supreme Court while dealing with Ram Kumar's case (supra) in M/s Jit Ram Shiv Kumar and Ors. case,9 observed that 'the result is that so far as the recommendation of the Municipal Committee to the Government to levy octroi is concerned, though it is contrary to rules, the Municipal Committee is not estopped at the representation made by it was beyond the scope of its authority'. It was in those peculiar facts and circumstances that it was observed that the principle of estoppel is not available.
35. While dealing with Ram Kumar's case,11 (supra) in M/s Motilal Padampat Sugar Mills Co. Ltd. case,2 (supra) it was observed. 'It will, thus, be seen from the decision relied upon in the judgment that the Court could not possibly have intended to lay down an absolute proposition that there can be no promissory estoppel against the Government in the exercise of its governmental, public or executive powers. That would have been in complete contradiction of the decision of this Court in the Indo Afghan Agencies case, Century Spinning and Manufacturing Company's case and we find it difficult to believe that the Court could have ever intended to lay down any such proposition without expressly referring to these earlier decisions and overruling them. We are, therefore of the opinion that the observation made by the Court in Ram Kumar's case does not militate against the view we are taking on the basis of the decisions in the Indo-Afghan Agencies' ease, Century Spinning and Manufacturing Co's case and Truner Morrison's case in regard to the applicability of the doctrine of promissory estoppel against the Government.'
36. In Bombay Conductors and Electrical Ltd. and another's case,14 (supra), it was observed that it is unnecessary to explore the excise term on the doctrine of promissory estoppel in this case. It was further observed that the question of estoppel does not arise on the facts and circumstances of this case. The case was dealt by the Full Bench keeping in view the facts and circumstances which were relevant. Otherwise also, in view of the categoric law laid down by the Supreme Court, observations made in the judgment of Full Bench cannot be taken note of.
37. The conspectus that emerges from the various judgments cited by the respondents is that there is no estoppel against the legislative function of the State and the Courts can refuse to invoke the principle of promissory estoppel/equitable estoppel wherein keeping the public interest in view it will be in-equitable to compel the Government or its agent to perform his part of the promise.
38. There is no dispute that the Central Government is the delegatee of the Union of India and has been conferred with a power to grant exemption from payment of excise or grant the concession in payment of excise duty. The Central Government is further authorised to form rules under the Central Salt and Excise Act, 1944 (hereinafter referred to as the Act). It authorises the Central Government to collect the excise as well as to prescribe the manner in which it is to be collected. Under the rule, duty is leviable as soon as the excisable goods are produced but it can be collected only when the goods are removed from the factory premises. In the Finance Act of 1987, the Central Government was authorised to provide for giving credit of sums of money with respect to the raw material used for the manufacture of excisable product. As a consequence of the said provision, the rules were amended and amended rules were promulgated in 1987. Reference may be made to Rule 57-K of the Central Excise Rules.
39. There is no dispute that vide Notification, dated March 1, 1987, concession in excise for use of the inputs was granted. The petitioners could have enjoyed the concession in the form of taking credit to the extent concession has been provided and to utilise the said credit in payment of excise duty on the finished goods Detailed facts have been referred to in the earlier part of the judgment while reproducing the facts Again it cannot be disputed that the petitioner did use the inputs carrying the concession from payment of excise duty on their use and used the same in terms of the said Scheme. The respondents granted the concession on March 1, 1987, it continued upto August 25, 1989 and was re-granted on October 11,1989. Nothing has been placed on the record to show that it was either in the public interesest or it was necessary to rescind the Notification between August 25, 1989 and October 11, 1989 nor any explanation has been put forth in the written statement or during the course of arguments. No expediency for the State or the Executive was pointed out, to justify the withdrawal of concessions for one month only, much less declining the utilization after credit already earned.
40. There is no gainsaying that the executive had to act in a just manner. It cannot be permitted to act whimsically. Before granting concession or withdrawing same, the executive or its delegatee has to apply his mind objectively. It is not the personal satisfaction of the authority, nor it is the subjective satisfaction of the authority rather the authority has to keep in mind objectively the conditions necessary for granting the exemption or withdrawing the sane. Some standards have to be adopted. The material on which the rescinding of the Notification was based is subject to the judicial review when it had adversely affected the interest of a party who depending on the Notification and the background of the facts, speeches and circumstances had already acted adversely to his interest and changed his position treating them to be the assurances of the authority. Delegatee has to act with responsibility, honestly and reasonably. It cannot be permitted to play truant on a citizen in exercise of its powers taking shelter that while doing so, it is exercising the legislative powers or the executive powers in the public interest. Once a person has been able to show prima facie that the power has been exercised by the executive authority or delegated authority in an unreasonable way and contrary to the promise either expressly or impliedly made when a person honestly believing had acted on it, it is for the State to show that it would be inequitable to force the State to fulfil its promise or doing so would be against the public interest and the exercise of executive power is bona fide and is in the public interest. The, respondents have further to show that there is no abuse of the authority and the policy ' has not been changed for extraneous or irrelevant considerations Effacement of the subsisting rights of a parson cannot be effected on unreasonable basis particulary with retrospective effect (sic) is of reasonableness. There must be nexus between the public interest and interest of a person whose rights being effected. It is the interest of the public which has to be kept in view and it is desirable that the power must be exercised fairly and reasonably and the Government must deal with the citizen honestly. Though the Court cannot substitute its own reasons under what set of circumstances the executive can exercise its powers in discharge of its legislative function or delegated function, yet whenever it is established prima facie that the power has been exercised without any reasonable basis, the onus is on the State to show that the power has been exercised in public interest and was exercised in exercise of objective satisfaction and not the subjective satisfaction, Wherever the power is abused, the Courts will grant necessary relief to the aggrieved persons.
41. Summing up the facts as emerged in course of arguments, pleading of the parties and various Notifications read in Court, we are of the opinion that the Notification granting the concession from payment of excise duty by taking a credit on the use of the input of non-traditional oils, the petitioner did act bonafide and on the belief that they would be entitled to the concession enumerated in the Notification and further they will have a right to utilise the credit earned in terms of the said Notification. The petitioners did act and earned credit. Keeping in view the Parliamentary speeches and the subsequent amendment of rules and the conduct of the respondents, the petitioner further bona fide believed in it by taking the entire conduct of Government from its entire perspective as a normal ordinary prudent person would have believed and on such a belief acted. In our view the respondents lucidly rescinded the Notification without proper application of mind and then again reissued it. There is nothing on the record to show that at any point of time the circumstance had changed and it was either necessary or otherwise in the public interest to rescind the Notification granting the concession even if such circumstances were there for rescinding the Notification granting the cot cession nothing worth the name was pointed out in the course of arguments or in the pleadings or from the record as to what necessitated to efface the rights of the petitioners earned in the form of credit for utilisation of the input i.e. non-traditional oils in manufacture of the' finished goods. In the absence of such material depriving the petitioners from utilising the credit earned in terms of the scheme, would amount to perpetuate a fraud on a citizen. Issuance of the subsequent Notification granting the concession again unrevels that there was no public interest involved in rescinding the promise of concession, nor was there any material on record to objectively satisfy the authorities to efface the credit already earned, which is an undisputable property as understood by an ordinary prudent person ft would be unconscionable and unjust not to allow the petitioners to utilise the credit already earned towards the payment of the excise duty in terms of the Scheme as prevalent when the credit was earned. The facts reproduced above speak for themselves. The equity in favour of the petitioners is fully established.
42. We do not think it necessary to go in this case whether the powers exercised were legislative, executive or otherwise, nor do we need determine in this case whether the principle of promissory estoppel shall or shall not apply to the executive actions wherein it tends to fester the executive decision in public interest.
43. In view of the observations made above, the respondents are directed to permit the petitioners to utilise the credit already earned by them in terms of the Notifications dated March(sic), 1987. If any excise duty has been recovered in excess, than the one payable by the petitioners in terms of the Notification, dated March 1, 1987 the same shall be refunded to the petitioners. It is made clear that the petitioners shall not be entitled to any concession or exemption nor they will be able to take any credit for the utilisation of non-traditional oils during the period from August 25, 1989 to October 11, 1989.
44. In view of the above observations, the writ petition is allowed, with no order as to costs.