Lazor Colour Prints Pvt. Ltd. vs Union of India

K. Sukumaran J.

The petitioners deal in photographic and other processes. They entered into a contract for the import of QSS 703V-2 with accessories. The goods were actually imported only subsequent to 3-4-1986. That date is crucial as regards the levy of duty. A notification issued on that day, No. 230 of 1986, superseded the earlier notification, and higher rates were provided for thereunder. The petitioners have a contention that the making of the contract, and invoicing, were all done prior to 3-4-1986 and consequently, the Project Imports and duty concession as provided under Regulations of 1965 were available in respect of the goods. The respondents did not accept the above stand. The petitioners thereupon approached this Court for reliefs.

In its return, the respondents have stressed the coming into force the Customs Tariff Act, 1975 and the replacement of Heading No. 72(A) by Heading No. 84.66 Section 15 of the Customs Act, 1962 provides the crucial dates with reference to which the rate of duty is to be determined. The rate and valuation to be adopted are those in force, with reference to the three categories as enumerated therein. The date on which the Bill of Entry is presented is relevant in respect of goods imported for home consumption. The goods cleared from the warehouse u/s 68 attract duty on the date on which such removal takes place. In the case of the remaining types of goods, the date of payment of duty is the appropriate date. In the present case, the goods have been cleared for home consumption. That was subsequent to 3-4-1986. In view of the above, on a proper application of the legal provisions, the petitioners would be subjected to the new and higher rates applicable with effect from 3-4-1986.

It is unnecessary to go into the reasons which prompted the Government to issue the notification dated 3-4-1986. It was open to the Government, in the light of the experience of the working of the earlier notification, to challenge the policy and to alter the rates.

The petitioners have a larger contention that they had acted on the Notification in force prior to 3-4-1986 and consequently they should not be burdened with the higher rate on the basis of the new policy and the new notification dated 3-4-1986. We are unable to accept the above contention. It is well settled that the Legislature is entitled to formulate the policy, and give effect to such policies so long as it is acting within the constitutional frame-work. There is no contest that the levy in this case is beyond the legislative competence; nor is there any plea that the levy discriminatory. As a matter of fact, is was by way of concession, that a lesser duty was imposed on the import of the types of goods.

4A. In the fiscal area, the Government of the day is entitled to operate in a fairly free manner, flexibility at the join has been conceded to it. The presumption of constitutionality of the enactment gets am added support in the field of fiscal legislation. Very many factors enter in the formulation of the fiscal policy. It may require sudden changes and drastic ones too. The Government is the best Judge of such situations. The policy gets reflected in provisions of the Act, Levy of duty could be only by authority of law. That is why Article 265 of the Constitution insists. When, therefore, a matter is governed by law, the only further query is about particular rules which are applicable to a particular transaction. There cannot be any estoppel against any statute. Those who plunge in the waters of the trade, should be aware about the possible aftereffects. The drying up process or swelling in the flow, or a change of course, are all to be expected, anticipated and guarded against. There is no scope for importing notions of great expectations as against the legislative exercises. The plea of a promissory estoppel has to fail in the above circumstances.

The Full Bench of this Court had occasion to consider very many facets of the principles of promissory estoppel in decision in Ashwin Prafulla Pimpalwar and etc. Vs. State of Maharashtra and Others, . It is unnecessary to further strengthen the statement of Law therein with recapitulations of the legal developments or reiteration of principles. We are clearly of the view that the principles of promissory estoppel would not be applicable to the present situation.

Thep1 petitioner cannot legitimately seek a declaration that their import is covered by the provisions of the earlier notification, nor is there any merit in the contention that the new notification is beyond the scope and ambit of Section 157 of the Customs Act or inconsistent with the provisions of Customs Tariff Act, 1975. A scrutiny of the two enactments, would indicate the complimentary and supplementary character of those enactments. There was a contention that the Central Board of Excise and Customs could not frame regulations with regard to import of goods under Project Import. We do not agree. Section 157 of the Customs Act confers power to frame regulations. Regulations have been so framed in exercise of the above power. Section 157(2) furnishes illustrations of the general powers conferred u/s 157(1). In the present case, the rate at which the duties of customs are to be levied are those provided under the 1st Schedule. That is the declaration of Section 2 of Customs Tariff Act. The 1st Schedule contains 21 Sections consisting of 99 Chapters. General Rules for the interpretation of the 1st Schedule are set out. The following provision is particularly relevant :

"1. The titles of sections, chapters and sub-chapters are provided for case reference only, for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or Notes do not otherwise require..."

Project imports are covered by Chapter 98 of the 1st Schedule. Note No. 2 stipulates that Heading No. 98.01 had to be applied to the imported goods. The effect of this is that the term "Industrial Plant" occurring in Heading 98.01 is to be understood as those industrial plants which are set out in the Regulations of 1986. Project Import Regulations, 1986 could therefore be traced to specific and live sources of legislative power. The mere fact that another power of granting exemption is vested in the authority u/s 25 of the Customs Act, 1962, would not, in any way, impair the efficacy or validity of the Regulations framed by the competent authorities.

We are not satisfied that the Regulations are bad for excessive delegation. The enactments in question and the subsidiary and delegated legislations, and the exercises of such powers by the various enumerated authorities, are to be understood as partaking a comprehensive scheme of fiscal administration. A dissection and disintegration, and examination in exclusion and without the larger background of enactments, is not a proper approach for a Constitutional Court to be adopted in such circumstances.

In the light of the discussion, we hold that there is no merit in the contention urged on behalf of the petitioners. Consequently, the Writ Petition is dismissed.