AVADH BEHARI ROHATGI J.

(1) THESE are 13 writ petitions. They can be divided into two sets. The first sei of 7 writ petitions (C. W. P. Nos. 3416 of 1982, 3464 of 1982,3465 of 1982, 3700 of 1982, 3701 of 1982, 3820 of 1982and 3648 of 1982) raises the question of the validity of thenotification dated 28-2-1982. By virtue of the notificationno. 15177-Cus. dated 15-7-1977 there was no duty ofcustoms on the melting scrap. By notification No. 35j82-Cus. F. No. BLD (Cus) 82 dated 28-2-1982 the exemption waswithdrawn with respect to the melting scrap of stainless steel. The effect of withdrawal of exemption was that the petitionersin these seven cases became liable to pay duty at the rateof 40 per cent ad valorem on the melting scrap of stainlesssteel. The petitioners impugn the notification dated 28-2-82by which the exemption granted in 1977 was withdrawn. Ithas to be noticed here that the notificatoin of 15-7-1977 wasnot a time-bound notification because it did not specify anytime limit during which the exemption granted by it wouldbe available to the importers.

(2) THE other set of six writ petitions (C. W. P. Nos. 129511980, 1289 of 1980, 123211980, 1233 of 1980, 1234 of1980 and 1235 of 1980) raises the question of the validityof the time-bound notification. The exemption from customsduty was granted for a fixed time and before the expiry ofthe time it was withdrawn.

(3) THE arguments addressed to us on both these setswere the same. It is not disputed that if the challenge to thewithdrawal of time-bound notification fails, the petitioners incases in which there was no time-bound notification cannotsucceed. To test the validity of the arguments it will beconvenient to take a case of a time-bound exemption notification.

(4) THE petitioners in C. W. P. No. 1295 of 1980, whichwe take as a representative case, are engaged in the production of aluminium conductors and aluminium conductorssteel reinforced. They have been supplying conductors manufactured by them to various public sector undertakings. Aluminium ingots and rods are basic raw materials for the production of these conductors. This raw material, for sometimepast, was in acute short supply. The indigenous supply wasinsufficient to meet the domestic requirements. So the Government of India decided to import aluminium. To ensureparity of prices between the indigenous product and importedaluminium the Central Government decided to exempt theimported aluminium from payment of customs duty andadditoinal duty.

(5) BY a notification dated 18-4-1980 the Central Government exempted in public interest aluminium ingots and aluminium rods from payment of any duty of customs andadditional duty with effect from 18-4-1980 to 30-9-1980. This was a time-bound exemption notification. This notification read as follows :"government OF INDIAMINISTRY OF FINANCEDEPARTMENT OF REVENUENew Delhi, the 18/04/1980notificationcustomsg. S. R. 213 (E) in exercise of the powers conferred bysub-section (1) of Section 25 of the Customs Act. 1962 (52 of 1962), the Central Government, being satisfied thatit is necessary in the public interest so to do, hereby exemptsaluminium wire rods or aluminium ingots falling withinchapter 76 of the First Schedule to the Customs Tariff Act,1975 (51 of 1975), when imported into India, from (i) the whole of the duty of customs leviable thereonunder the First Schedule to the said Customs Tariffact; and (ii) the whole of the additional duty leviable thereonunder section 3 of the said Customs Tariff Act. 2. This notification shall be in force upto and inclusiveof the 30/09/1980. Sdk. CHANDRAMOULI, Under Secy. to the Govt. of India. "

(6) SIMULTANEOUSLY by another notification dated 18-4-80the Central Government in public interest notified that importof aluminium rods and aluminium ingots will also not beliable for payment of any auxiliary duty thereon.

(7) THE petitioners say that relying on these exemptionnotification they entered into contracts for the purchase ofaluminium ingots from abroad so that they may beable toimport without payment of. duty the item required by themwithin the period from 18-4-1980 to 30-9-1980.

(8) BY a notification dated 29-8-1980 issued in exerciseof its powers under sub-sec: (1) ofsection 25 of the Customsact,. 1962 ( the) the Central Government rescinded theexemption notification as follows :"government OF INDIAMINISTRY OF--FINANCEDEPARTMENT OF REVENUENew Delhi, the 29/08/1980notificationcustoms .-G. S. R. Inexercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of1962), the Central Government) being satisfied that it isnecessary in the public interest so to do, hereby rescinds thenotification of the Government of India in the Ministry offinance, Department of Revenue No. 79-Customs. dated the 18/04/1980. Sdf-K. CHANDRAMOULI, Under Secy. to the Govt. of India. "

(9) BY another notification dated 29-8-1980 the Centralgovernment further notified that additional duty which washitherto not payable at all under the exemption notificationwill now be payable at the rate of 12 per cent advalorem.

(10) THE petitioners complain against this sudden changein the policy which meant that aluminium ingots and rodswhich were hitherto wholly exempt from payment of dutywere again subjected to customs duty and additional duty. They contend that this reimposition of customs duty is contrary to the solemn assurances given in the exemption notification, which exemption was to last from 18-4-1980 to30-9-1980.

(11) BY a notification dated 9-9-1980 the Central Government again exempted aluminium ingots and aluminiumrods from payment of customs duty until 31-3-1981. Thistime the Government did not grant any exemption m respectadditional duty.

(12) THE petitioners case is two fold. Firstly that thetime-bound exemption notification which was to ensure forthe benefit of the importers from 18-4-1980 to 30-9-1980could not be rescinded on 29-8-1980, as was actually done,having regard to the representations, assurances and promisesmade by the Government. They invoke the doctrine of promissory estoppel against the Government. This is the maincomplaint. The second is that by the withdrawal of exemption notification during the brief period irom 29-8-1980 to9-9-1980 the petitioners suffered a huge loss because theywere required to pay customs duty and even after 9-9-1980till 31-3-1981 they were required to pay additional duty. Thewithdrawal of exemption is also challenged on the groundthat it infringes the petitioners right to carry on trade underarticle 19 (l) (g) of the Constitution of India.

(13) THE respondent. Union of India, defends its actionon the sole ground of public interest. It says that in order toequalise the sale price of indigenous and imported metal itwas necessary in public interest to waive customs duty andadditional duty so that aluminium, imported or indigenous,is available to the consumers at a uniform price. This iswhy the Cabinet decided to issue the exemption notificationsunder sec. 25 (1) of the on 18-4-1980 for the periodupto 30-9-1980 by which time the Government thoughtthere would be clear indication of the likely trends in thesupply of power and production of aluminium in the country and of the behaviour of monsoon on which so muchdepends. Suddenly it found that the international prices ofaluminium were falling steeply. Consequently import pricesbecame lower than the ex-factory prices of the indigenousmetal. In the last week of July 1980, the affidavit of thegovernment affirms, the Ministry of Steel and Mines requested for immediate withdrawal of exemption notification. After examining the matter thoroughly the Governmentissued the notification dated 29-8-1980 withdrawing theexemption notification in public interest. It is pleaded thatthe withdrawal of the exemption notification was done inpublic interest.

(14) SECTION 25 of the reads as under :

"power to grant exemption from duty ; (1) If the Central Government is satisfied that itis necessary in 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 bespecified in the notification goods of any specifieddescription from the whole or any part of duty ofcustoms leviable thereon. (2) If the Central Government is satisfied thatit is necessary in the public interest so to do, it may,by special order in each case, exempt from the payment of duty, under circumstances of an excepttional nature to be stated in such order, any. goodson which duty is leviable. "

(15) THE petitioners invoke the doctrine of promissoryestoppel and say that the Government ought to be held toits word and the exemption granted by the notification of 18/04/1980 ought to be made available to them till30-9-1980. Promissory Estoppel

(16) THE question is whether the doctrine of promissoryestoppel can be invoked in this case. Counsel for the petitioners has taken us through the modern cases on the doctrine of promissory estoppel. We were referred to Collectorof Bombay v. Municipal Corporation of the City of Bombay,1952 S. C. R. 43 (1), Seth Sat Narain v. Dominion of India, (1968) II S. C. W. R. 335 (2), Union of India v. Indoafghan Agencies (1968) 2 S. C. R. 366 (3), Century Spg. andmfg. Co. v. Ulhasnagar Municipal Council, AIR 1971 S. C. 1021 (4), Ms Narinder Chand Hem Raj v. Lt. Governoradministrator Union Territory, Himachal Pradesh, AIR1971 S. C. 2399 (5), Turner Morrison and Co. Ltd. v. Hungerfort Investment Trust Ltd. , AIR 1972 S. C. 1311 (6),n. Ramanatha v. State of Kerala, AIR 1973 S. C. 2641 (7),state of Kerala v. The Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. , AIR 1973 S. C. 2734 (8). Assistant Custodian E. P. v. B. K. Agarwala, AIR 1974 S. C. 2325 (9), Excise Commissioner U. P. v. Ram Kumar. AIR 1976 S. C. 2237 (10),m. P. Sugar Mills v. State of U. P. , AIR 1979 S. C. 621 (11)and Jit Ram Shiv Kumar v. State of Haryana, AIR 1980s. C. 1285 (12).

(17) NEARLY all these cases have been noticed in thelandmark decision of M. P. Sugar Mills and subsequentlyin Jit Ram.

(18) AFTER the Second World War a series of cases, stemming from the decision of the Denning J, (as he then was)in High Trees Case 1947 K. B. 130 (13) began to developa new doctrine of promissory estoppel. Although this atfirst was treated as a revolutionary decision, and many lawyers thought it was inconsistent with the true doctrine ofconsideration, it now seems to have established itself thoroughly as a part of the modern law. Till recently it has continued to be proclaimed that the promissory estoppel cannotgive rise to a cause of action but is only available by way ofdefence, but there are now signs that even this bastion isabout to crumble : See Re Wvyern Developments (1974)I W. L. R. 1097 (14); Crabb v. Arun D. C. (1975) 3 Alle. R. 865 (15).

(19) THE doctrine has been applied in a large number ofcases in India and England. The solutions are varied butthe principle on which these are reached is not in doubt :"the Court must look at all the circumstances in each caseto decide in what way the equity can be satisfied" (Flimmerv. Wellington Corporation, (1884) 9 App. Cases 699 (714) (16). Denning J. himself discovered this doctrine enunciated by Lord Cairns in Hughes v. Metropolitan Rly. Co. , (1877) 2 App. Cases 439 (17). The courts were hungry forthis additional jurisdiction, and adopted it rapidly. It wasa plant of early and rapid growth. This was all in thecourse of the advancement of justice. The doctrine brust outin sudden blaze in 1946 when Denning J. sitting in thecourt of Kings Bench delivered the judgment in Centrallondon Property Trust Ltd. v. High Trees House Ltd. , (1947) K. B. 130. Lord Denning brought it into being. We in India have nourished it.

(20) M. P. Sugar Mills is the high water mark of promissoryestoppel so far as this. country is concerned. There is anotherdecision of the Supreme Court which has of late attractedmuch attention. It is Jit Ram Shiv Kumar v. State of Haryanaair 1980 S. C. 1285. Jit Ram is in fact a criticismof the liberal view taken in M. P. Sugar Mills. If M. P. Sugar Mills is the apogee of promissory estoppel, Jit Rammay be said to serve as a sounding board of warning againstthe danger of wider extension of this new doctrine by judicial activists. This full bench was asked to decide whetherthis court ought to follow M. P. Sugar Mills or Jit Ram orfor that matter Indo-Afghan Agencies, a decision of threejudges, in preference to the two cases decided by bench oftwo judges. The Nature of Tax Law

(21) IN our opinion it is unnecessary to explore the precise parameters of the doctrine of promissory estoppel in thiscase because we are convinced that we will be trespassing onthe legislative domain if we admit the doctrine in the fiscalfields. In truth, the question of estoppel does not arise onthe facts and circumstances of this case. This is a case oftax law. In tax law there is hardly any room for the applicability of promissory estoppel.

(22) IN a general sense, tax is any contribution imposedby Government upon individual, for the use and service of thestate, whether under the name of toll, tribute, tallage, gabel,impost, duty, custom, excise, subsidy, aid, supply, or othername (Story). The Oxford English Dictionary defines a taxas "a compulsory contribution to the support of governmentlevied on psrsons, property, income, commodities, transactions etc. , now at a fixed rate, mostly proportionate to anamount on which the contribution is levied. " This definitionlays an undue stress on proportionate as opposed to progressive taxation. But it emphasises the fact that taxes arecompulsory. Taxes are imposed under the authority of thelegislature. They are levied by a public body. They are intended for public purposes. (See Lawson v. Interior Tree,a Fruit and Vegetable Committee of Direction, 1931 S. C. R. 357 (Canada) (18) Duff, J.)

(23) TAX law falls within the domain of public law i. e. therules that determine and limit the activities and reciprocalinterests of the political community and the members comprising is, as distinguished from relationships between individuals (the sphere of private law). The specific purpose ofthe relationship between the individuals and the communityregulated by tax is the imposition on individuals and corporations of a contribution to cover public expenditure. The Taxing Power : Predominance of the Legislature

(24) THE limits to the right of the public authority toimpose taxes are set by the power that is qualified to do sounder the constitutional law. In a democratic system thispower is with the legislature, not the executive or the judiciary. Taxation is a prerogative of the legislature. The historical origins of this principle are identical with those ofpolitical liberty and representative government the rights ofcitizens. to take cognizance, either personally or through theirrepresentatives, of the need for the public contribution, to agree to it freely, to follow its use;and to determine its proportion, basis, collectionand durationin the words of the Declaration of the Rights of Man andthe Citizen proclaimed in the first days of French Revolution, August 1789. Other precedents may be found in theenglish Bill of Rights of 1689 and the rule "no taxationwithout consent" laid down in the Declaration of Independence of the United States. In India the doctrine is embo-died in Article 265 of the Constitution. Subject to the provisions of the Constitution, the legislature is omnipoent inthe exercise of the taxing prerogative. Whereas the rightto impose taxes and to determine the circumstances underwhich they will be done is a privilege of the legislative power,administration of the tax law is the responsibility of theexecutive power. Certain limitations on the taxing powerof the legislature are self-evident. Since the power to raisetaxes is a prerogative of the public authority, a governmentonly has the right to impose a levy in so far as it is competent to do so.

(25) UNDER this principle all that is necessary is that therights of the tax administration and the corresponding obligations of the taxpayers be specified in the law; that is in thetext adopted by the peoples representatives. The implementation of the tax laws is generally regulated by the executivepower (the Government or the tax department).

(26) THERE hava been many encroachments on the principle of the legality of taxation : sometimes the base or therate of taxation is determined by government decree ratherthan by law. The encroachment of the executive power onthe territory reserved to the legislature in matters of taxationis generally explained by the need to make tax policy moreflexible; urgent amendments may be required by the suddenchanges in the economic situation, changes so sudden thatrecourse to relatively slow parliamentary procedure wouldtake too long. A compromise has been reached between theorthodox doctrine of legality of taxes and the need, underspecial circumstances, to amend texts on the taxation almostimmediately, by modifying the text through a decree or anorder of the executive and ratifying by the legislative poweras soon as possible thereafter. This is how the legislaturereposes sovereign trust in the executive. This is how discretion is confided in the executive. But for all practicalpurposes it is the legislature which is speaking through themouth of the executive. Only the organ changes. Delegation of Powers

(27) SECTION 25 of the is based on this theory oftaxation. It delegates power to the Central Government,that is, the executive branch to grant exemption generallyfrom duty whenever it finds it necessary so to do in the public interest, either absolutely or subject to such conditions asmay be specified in the notification, or by a special order ineach case under circumstances of an exceptional ture.

(28) AT the same time section 159 of thesays thatthese exemption notifications issued under sec. 25 shall belaid before Parliament as soon as may be after their issue andthe Parliament may amend or reject them. This shows thatthe ultimate law-making power is retained by the legislaturein its hands. It does not surrender it to the executive. Thismakes it perfectly clear that Parliament has in no way abdicated the authority, but is keeping strict vigilance and control over its delegate. (D. S. Grewal v. State of Punjabair 1959 S. C. 512 (19). That the legislature keeps controlover the delegate is an indicia that it is a legislative power.

(29) EXEMPTION notifications, therefore, have been issuedunder a general grant of authority by the representativeswho are elected by the people to make the laws. The legislature is not always in session. It has been found both convenient and necessary for Parliament to delegate the actualexercise of certain law-making powers to the executive. Noone doubts that delegation of power in this fashion is apractical necessity. Even if Parliament had the time, itwould not have the skill, to frame all of the multifarious rulesof a statutory nature which good administration requires.

(30) THE question arises : What is the true character andnature of this power delegated by the legislature to the executive in the field of taxation Is it legislative in characteror executive in nature If the power is executive the doctrine of promissory estoppel Can be called in aid. But if itis truly legislative in character, the short answer to the petitioners case is that here can be no estoppel against the legislature. Nature of Power

(31) THE distinction between "legislative" and "executive"is very difficult to draw. But in these cases it is riot difficultto answer this question. There are two sure indications. One is sec. 159 of the which requires that the notification under sec. 25 shall be laid before Parliament. Thosewho criticise the delegation of the power to legislate saythat in this practice "there is u danger that the servant maybe transformed into the master. " The counteract this tendency sec. 125 provides for laying before Parliament to thatthere is a parliamentary supervision over the statutory ordersissued under sec. 25. In this way the master keeps controlover the servant. This is a real indicia of legislation.

(32) THE second indication is that under sec. 25 (1) theexemption notifications are to be published in the officialgazette. Sir Cecil Carr, the leading authority on Delegatedlegislation, has suggested that if the statutory instrumentis subject to the requirement for publication the answer isthat the document is legislative. That the document has tobe published is a mandatory requirement under sec. 25 (1). It is a fundamental principle that the public must have access to the law. This delegated legislation does not comeinto force until it is published in the official Gazette, So thatthe people know what the law is.

(33) THE subordinate legisktions under the parent Actare like the children of the. Where subordinate legislation made immediately under the parent Act conferspowers to make laws they are in the form of grandchildren of the. It is called sub-delegated legislation. But herewe are concerned with the children of the. Publicationis a sure index of their legislative character.

(34) THIS is so far as section 25 (1) is concerned. Whether sub-sec. (2) which provides for the making of a specialorder of exemption "under circumstances of an exceptionalnature to be stated in the order" is a legislative order it isnot necessary for us to decide. Because no special ordersunder sub-sec. (2) are in question in any of these cases. These are all cases of general orders under sec. 24 (1). Perhaps a special order under sub-sec. (2) is an "executive"order. The test suggested is that the meaning of "legislative"and "executive" may be determined by reference to the natureof the action. By this test, a power to make rules of generalapplication is a legislative power and the rule is a legislativerule. A power to give orders on specific "cases", is by thesame test an executive power and the order is an executiveorder. Similarly, a power to take specific action is an executive power and the action is an executive action. Whatis "general" and what is "specific" may be difficult to distinguish. (Griffith and Street Principles of Administrativelaw 5th ed. p. 48-49). By this test a special order undersub-sec. (2) would seem to be an executive order. Becauseit is not required to be published. Because it grants exemption in a specific case and not "generally". It is skin to thepower of the State Government under sec. 4a of the UPSales Tax Act in MP Sugar Mills to grant exemption inwhich promissory estoppel was successfully invoked. But anotification under sub-sec. (1) is a legislative order. Againstthe statutory notifications issued from time to time undersec. 25 (1) estoppel cannot be pleaded because the theoryis that against the operation of the statute there can be noestoppel.

(35) IN Kailash Nath v. State of UP. , AIR 1957 SC790 (20) (791) a constitution bench of five judges held thatwhere a notification is issued by the Government under thesales Tax Act, the character of that notification is the sameas that of the under which it is issued. It has the force ofstatute. The court said:

"this notification having been made in accordancewith the power conferred by the statute has astatutory force and validity and, therefore, theexemption is as if it is contained in the parentact itself. "

(36) IF the character of the notification is legislative, as wehold it to be, it must inevitably follow that there can be noestoppel against the acts of the legislature. So two proposition can be said to be established by cases. One, that thepower to tax is legislative in character. Second, that in taxlaw estoppel is unknown. In Narinder Chand Hem Raj v. Lt. Governor Administrator, Union Territory, Himachalpradesh (supra) the Supreme Court said:

"the power to impose a tax in undoubtedly a legislative power. That power can be exercised bythe legislature directly or subject to certainconditions, the legislature may delegate thatpower to some other authority. But the exerciseof that power, whether by the legislature or byits delegate is an exercise of a legislative power. The fact that the power was delegated to theexecutive does not convert that power into anexecutive or administrative power. No courtcan issue a mandate to a legislature to enact aparticular law. Similarly no court can direct asubordinate legislative body to enact or notto enact a law which it may be competent toenact. "

In MP Sugar Mills the Supreme Court said:"there can be promissory estoppel againstthe exercise of legislative power. The legislaturecan never be precluded from exercising its legislative function by resort to the doctrine of promissory estoppel. Vide State of Kerala v. Gwalior Rayon Silkmfg. Co. Ltd. , (1974) I SCR671. "

(p. 647). Again:"there can also be no promissory estoppel againstthe legislature in the exercise of its legislativefunction. "

(p. 648). Public interest and Estoppel.

(37) ARTICLE 265 of the Constitution lays down that notax can be levied or collected except by the authority oflaw. Hence the levy of a tax can. only be done by the authority of law and not by an executive order. "no taxationwithout representation. " Representative Government owesits origin to financial necessities. Medieval kings summonedthe people to parliaments because they needed money. Andpublic finance is still the chief business of legislatures. Taxation is their prerogative. Even in the hands of the executivethe power retains its true character of a legislative power. Now if the Central Government in public interest decidesto grant exemption at one moment and decides to withdrawit at another the court cannot compel it to continue theexemption beyond the time it (the Government) thinksnecessary in public interest to do. This applies to the powerto issue notifications whether they are time-bound or not.

(38) IMPOSITION of tax and exemption from tax are acts ofa positive kind. These cannot be created by estoppel. Ina domestic system, a tax can only be imposed by law. Thus thecourts or the administration do not have a "creative power"to make things or transactions taxable where it is notproved that the legislature wished them to be taxable. Likewise exemption from tax cannot be claimed by pressingagainst the legislative power the doctrine of promissory estoppel. If the principle of estoppel is applied it will resultin the nullification of the statuory power such as is contained in sec. 25 of the. in other words, there can beno estoppel against the statute.

(39) IF the power of exemption conferred on the Centralgovernment under sec. 25 is to be exercised in the publicinterest, for the benefit of the public, and the statute imposes a duty of a positive kind, it is not open to the petitioners to set up an estoppel to prevent the exercise of thatpower. (Maritime Electric Co. v. General Dairies Ltd. , (1937) A. C. (610) (21). "the obligation to obey a positivelaw is more compelling than a duty not to cause injury toanother by in advertance" (p. 621). The admission of anestoppel would nullify the statutory provision contained insection 25. In other words, we will be repealing the notification withdrawing the exemption dated 29/08/1980. If we turn to the authorities we find that there is not asingle case in which estoppel has been allowed to defeat astatutory power of sufficient width and amplitude meant tobe exercised for the public good.

(40) COUNSEL for the petitioner heavily relied on Centuryspg. and Mfg. Co. v. Ulhasnagar Municipality (supra). Inthat case the company expanded its activities on the assurance of the municipal authority that factories in a specifiedarea within the municipality will be exempted from paymentof octroi for seven years. It was held that the authority maybe guilty of breach of contract if octroi is levied withinthis period of seven years. The question in that case was notof taxation but of fixing the local limits of the municipality. It was observed that an equity was raised in favour of thecompany and the court would compel the performance ofthe obligation arising out of the representation of the municipality. Representation, it was held, amounted to a contract. The object of promissory estoppel is to enforcecontractual obligations. But taxation is not contract. It isan expression of unilateral will of the legislature. Tax isan exaction by the State in the exercise of its sovereignpowers. There are no promises. There are no contractualobligations. If there are any promises they are subject to theoverriding public interest. There is plain repugnance between contract and taxation. Taxation is the very antithesis ofcontract.

(41) INDO-AFGHAN Agencies was followed in Ulhasnagar. Inindo-Afghan Agencies an executive scheme of incentiveswas in question. The Court held that merely on their whimthe Government cannot go back upon the promises made byit and embodied in the scheme. The Government cannotact arbitrarily on some "undefined and undisclosed ground". Indo-Afghan and MP Sugar Mills which follows Indo-Afghanwere cases of executive action, where the executive, to usethe words of Shah J. in Indo-Afghan, "on some undefinedand undisclosed ground of necessity or expediency failed tocarry out the promise solemnly made by it. " Ours is a caseof legislative power. No court can restrain the exercise oflegislative power which is to be exercised for the publicgood. This was firmly established in Narinder Chand andgwalior Rayon (supra).

(42) HERE public interest is the ground disclosed anddefined by the empowering enactment itself. In public interest the notification was rescinded. Public interest cannotbe defined. But it is more than the sum of competing interests. Public good is the "greatest happiness of the greatestnumber", in Benthams phrase, which by common consentis the object of the society. The concept of public interestserves to remind the parties immediately concerned thatthere are considerations extending beyond their own goalsor their individual selfish interest. The Government cannotafford to sit by while the disputants bring economic pressureto bear on one another. In public interest it must devisewhatever measures are expedient for the general welfare. Neither the legislature nor the executive therefore can fetteritself for all times to come.

(43) ANTONIO Buttigieo v. Captain Stephen H. Cross. AIR1947 P. C. 29 (22) illustrates the point. In that case theclub was opened on 3-9-1941 and on 31-5-1942 it wasplaced out of bounds for service members by order of HO. This was done inspite of the assurance to the appellant thatthe club will endure till such time as the State of hostalitiesexisted. The order of closure of the club was made in theinterest of military discipline because the club was beingmismanaged by the sale of liquor long after permitted hoursand by the admission of undesirable women to the premises. So the club was ordered to be wound up. The appellantsued the Crown. The Privy Council held that it was notopen to the Crown to bind itself not to close the club if thatcourse became necessary in the public interest.

(44) THIS principle has been reiterated in Jit Rams casefollowing Excise Commissioner, UP N. Ramanatha, andgwalior Rayon (supra) the Court held that the principle ofestoppel is not available against the Government in theexercise of legislative, sovereign or executive power. Thecourt quoted with approval the following observation:

"it is now settled by a catena of decisions that therecan be no question of estoppel against thegovernment in the exercise of its legislative,sovereign or executive powers. "

(Excise Commissioner UP v. Ram Kumar (supra) p. 2241).

(45) IT is here that Jit Ram differs from M. P. Sugarmills. We are not, as at present advised, prepared to commit ourselves to the view that the doctrine can never beapplied against the executive in all the circumstances inall cases, whether involving public interest or not. But onthe authorities it is incontestable that against the Government in the exercise of its legislative power estoppel cannotbe invoked. In MP Sugar Mills it was recognised that wherethe Government owes a duty to the public to act differently,promissory estoppel cannot be invoked to prevent thegovernment from doing so. The Government cannot be prevented from acting in the discharge of its duty under thelaw. (p. 646).

(46) ONE thing is clear from the authorities. There is nota single case which has gone to the length of saying thatestoppel can be pleaded even against public interest. Thepresent is a case essentially of public interest. All the authorities uniformly hold that against public interest the pleaof estoppel will not avail a party. Otherwise the Governmentwill not be able to assert its power and will be a helplessspectator even if public interest requires it to act differently. It would amount to surrender by the Government of itslegislative powers which have to be used for the public good. This is why section 25 confers a statutory power on thecentral Government to act in public interest and to grantexemption or rescind it.

(47) ESTOPPEL cannot be invoked where the result willbe to compel the Government to continue the exemptionwhich a competent enactment has validly authorised theexecutive to withdraw in the public interest at any time. Inpublic interest exemption can be granted. In public interestexemption can be rescinded. In other words, the rights ofindividuals are subordinated to the paramount interest "ofthe public good. Section 25 underlines the importance of thecommon good. "public interest" dominates the economicscene. If in public interest the Central Government finds thatit is necessary to protect its own industry by putting up atariff wall it will be futile to say that it cannot do so becauseit is bound by its promise to continue the exemption upto aparticular time. The traders may feel incensed at the behaviour of the executive at its imposition, exemption, reimposition and reexemption of taxes and levies. But when toexempt and when to impose duty is left to the executiveby the legislature. It will depend on the economic climate. New times require new measures. In a world of growinginterdependence the first thing country wants is protection for its domestic industry.

(48) GOVERNED by the market forces and the laws ofsupply and demand if the Government finds that it mustwithdraw the exemption notification at once it can do so. What actuated the Government to take the step of exemptionand reimposition was enlightened self-interest, such self interest as would subserve the common good. The imposition andexemption of customs duty are the chief vehicles of the Government to protect a domestic market and to steady the levelof prices. The tariffs are its chosen instruments to shielddomestic production from foreign competition.

(49) THE legislature is in effect saying to the importer,

"we give you exemption in public interest. But if publicinterest demands otherwise we will withdraw the exemption. "

This is implied in the promise. This, to our minds, is thetrue construction of the statutory notification promulgatedunder sec. 25 of the.

(50) IT was pressed upon us that we should do equity tothe petitioners who, it was said, in reliance on the representation made in the notification dated I S-4-1980,altered their position and acted to their deteriment,in our opinion this argument has no merit. The truth is that the doctrine of promissory estoppel has noplace in tax law. Promissory estoppel is "a child of equity"and "a juristic device for preventing injustice" (MP Sugarmills p. 635). But we are told that "in the law of taxationjustice has no place at all. " (David M. Walker Oxford Companon to Law (1980) p. 1208). Nor equity. "there is noequity about a tax" (per Rowlatt J. in Cape Brandy Syndicate v. IRC (1921) I K. B. 64 (23) at p. 71). The powerto levy taxes is but one manifestation of the sovereignty ofparliament. Parliament is concerned only with the commonweal. This is why the dominant note of sec. 25 is "publicinterest". Public interest is overriding. It can override private interest. It can override promises.

(51) THE legislature or the sovereign authority cannotfetter its freedom of action for ever. That public interest issupreme is recognised even in MP Sugar Mills which markedthe high noon of this doctrine. The Court said: "when thegovernment is able to show that in view of the facts whichhave transpired since the making of the promise, public interest would be prejudiced if the Government Were requiredto carry out the promise, the court would have to balancethe public interest in the Government carrying out a promisemade to a citizen which has induced the citizen to act uponit and alter his position and the public interest likely tosuffer if the promise were required to be carried out bythe Government. " "it is only if the court is satisfied on proper and adequate material placed by the Government thatoverriding public interest requires that the Governmentshould not be held bound by the promise but should befree to act unfettered by it, that the court would refuse toenforce the promise against the Government. " (MP Sugarmills (supra) p. 644).

(52) IN our opinion the present is precisely a case wherethe Government ought not to be held bound by its promise. Public interest required it to act differently. On these twopropositions, namely, (1) that the plea of promissory estoppel is not avail-513able against the exercise of the legislative functions of the State, and (2) No public authority entrusted with discretionarypower to be exercised for the public can binditself by a contract not to exercise that discretion when the public good demands its exercise. We find that Jit Ram (supra) does not take a view differentfrom MP Sugar Mills. Freedom to carry on Trade or business [art. l (19) (g)]

(53) THE courts have decided that imposing restrictionsupon business such as import or export of goods will bein the interests of the general public. The system of tariffsand licensing for imports and exports is a reasonable restriction on the right to carry on trade. The Supreme Courthas said: "in modern times the export and import policy ofany democratic government is bound to be flexible. Theneeds of the country, the position of foreign exchange, theneed to protect national industries and all other relevantconsiderations have to be examined by the Central Government from time to time and rules in regard to export andimport suitably adjusted. It would be, therefore, idle tosuggest that there should be unfettered and unrestrictedfreedom of export and import". (Bhatnagars and Co. v. Union of India, AIR 1957 SC 478 [LQ/SC/1957/22] ) (24). The import andexport trade thus involves foreign exchange. It involvesour relations with foreign powers. It involves raising tariffwalls on the ground of reciprocity and protectionism. Thepetitioners have not placed any material to persuade us tohold that the restrictions imposed by the Government areunreasonable. On the facts of these cases we are unable tohold that their right under Article 19 (l) (g) has been infringed.

(54) THE mere ground that the incidence of taxation isheavy or it will diminish the profits of a party are not interferences with his right to carry on business. That the profitswould be diminished or greatly reduced cannot be a groundfor holding that there is an infringement of Article 19 (l) (g). (Nazeeria Motor Service v. State of A. P. , AIR 1970 SC1864) (25). A challenge to tax law on the mere ground thatthe tariff imposed by the tax law is heavy cannot be entertained. (Jagan Nath v. Union of India, AIR 1962 SC 148 [LQ/SC/1961/198 ;] ">AIR 1962 SC 148 [LQ/SC/1961/198 ;] [LQ/SC/1961/198 ;] ) (26).

(55) TAXATION is shaped by ideology and by economicpolicy. The amount of taxation may be excessive: only thelegislature can decide that point, by rejecting or amendingthe duty notification. Once enacted by the legislature or byits delegate the executive, a tax cannot be judicially restrained. There is no way of mounting a legal attack upon a taxlaw on the ground that it is arbitrary or unjust. But theapplication of the law must be correct, it is amatter ofpublic interest that tax payers be protected against unlawfuldecisions and actions by the authorities administering thetax laws.

(56) IN the present case it is not the executive actionwhich is in question but the legislative action. The tax claim isa claim under public law. Its cause lies not in a contractualobligation but in an expression of unilateral will, a decision bythe public authority. The notion of taxes, is incompatiblewith the principles of the law of contracts: such principlesapply only to relationships under private law and thereforecannot be invoked to restrain taxes. (See the illuminatingart. on Tax Law in Ency. Brittanica 15th ed. vol. 17 p. 1083)

(57) IF the public interest demands the right to trade canbe regulated and the withdrawal of the exemption grantedby the executive can be said to be a reasonable restriction,if it can be shown that public interest demanded the withdrawal of the exemption. Global Markets

(58) ON the material placed before us by the Government in this case we are not persuaded to hold that thewithdrawal of the exemption was anything except in thepublic interest. The international market was falling injuly 1980. It was decided at that time to withdraw the notification of exemption. On 29-8-1980 the exemption notification was withdrawn. By that time the market had startedshowing signs of recovery. That there was some delay. Inrescinding the notification no one will dispute. This ismerely an example of red tapism and bureaucratic delays inthe corridors of power. It takes time to comprehend howclose one is to ruin. But that alone will not entitle us tostrike down the rescinding notification. This does not, inour opinion, afford a ground for judicial review.

(59) A public authority exists primarily to regulatesocial and economic life. So the executive itself issued theexemption notification again on 9-9-1980 as a sort of corrective action. In the international arena the Government isconcerned more with the happenings of the future than withthe promises of the past. The crux of the problem is thatif the international trade calls for greater freedom and enterprise it will be against the public interest to curb and confine that freedom byapplying the doctrine of estoppel. Theimposition, exemption, re-imposition and re-exemption oflevies are like launching life-boats to save a sinking ship ininternational market when faced with foreign competition. "like the ocean, these markets are never at rest", a Britishbanker has said, "and like the weather never entirely predictable. " The rises and falls, the ups and downs, in the international trade are difficult to comprehend at once. Becausethe changes are so sudden in this cosmopolitan and competitive world. To reconcile the numerous differences whichexist between the pressure groups and the commercial lobbythe Government has to survey carefully the economic scenehere at home and in international arena before making thefinal adjustments. Under this system every tariff, as finallyadopted, is bound to be a. mosaic of compromises, with noone directly responsible for it and nobody satisfied. Indigenous commercial commodities require protection. The legislature as the guardian and protector of the public interestgives the protection by putting tariff barriers.

(60) TO sum up The power to fix the rate of a tax isa legislative power. (Sitaram Bishamber Dayal v. State ofup AIR 1972 SC 1168 [LQ/SC/1971/557] ,) (27). The statutory notificationsissued under sec. 25 (1) are from first to last legislative incharacter. The author of the notifications is the Centralgovernment, no doubt, but the power that it wields is legis, lative in character. Notifications issued under sec. 25 (1)are an exercise of "sovereignty", that is of authority tolegislate. The customs duties are compulsory contributionsimposed by the soverign authority. The error resides in theassertion that it is an executive action. On this assumptionwe were invited to review and restrain the taxes. The judiciary cannot restrain the taxes, however great the hardshipmay appear to the judicial mind to be. (per Lord Cairns inpartington v. A. G. (1869) LR4 H. L. 100 (122) (28). Allthat it can enquire into in the legislative competence ina federal written constitution.

(61) WE have, therefore, no hesitation in holding thatto the notifications issued under sec. 25 (1) of the thedoctrine of promissory estoppel has no application. Nor arewe prepared to hold that the withdrawal of exemption issuch. action as interferes with the petitioners right to carryon business or trade. The Government, in our opinion, wascompetent to withdraw the exemptions once granted,whether the notification granting the exemption was timebound or not. We have reached the conclusion that the exemption was withdrawn in public interest and the withdrawal notifications are valid. For these reasons these petitions are dismissed withcosts.