Doctrines – Doctrine of Promissory Estoppel – When cannot be invoked – Appellant vide notification dated 09.09.2003, exempted certain goods from the payment of excise duty – By notification dated. 25.04.2007, earlier notifications issued were amended with the result that pan masala, tobacco, manufactured tobacco substitutes and plastic carry bags of less than 20 microns were no longer entitled for exemption from the excise duty– Respondent in the Civil Appeal arising out of SLP (C) No.36926 of 2012, approached the High Court of Sikkim by way of Writ Petition – Allowed – Respondent in the Civil Appeal Nos.2345 and 2346 of 2017, approached the High Court of Gauhati – Writ Petition dismissed by Single Judge vide order dated. 10.12.2010 – Writ appeals allowed – Held: Exemption granted, even when the notification granting exemption prescribes a particular period till which it is available, can be withdrawn by the State, if it is found that such withdrawal is in the public interest– Larger public interest would outweigh the individual interest, if any – In such case, even the doctrine of promissory estoppel would not come to the rescue of the persons claiming exemptions and compel the State not to resile from its promise, if the act of the State is found to be in public interest – Scientific research conducted by Experts in the field has found that the consumption of pan masala with tobacco as well as pan masala sans tobacco is hazardous to health – It was further found that the percentage of teenagers consuming the hazardous product was very high and as such exposing large chunk of young population of the country to the risk of oral cancer – Taking into consideration this aspect, if the State has decided to withdraw the exemption granted for manufacture of such products, it is not understood as to how it can be said to be not in the public interest – Withdrawal of the exemption to the pan masala with tobacco and pan masala sans tobacco is in the larger public interest – Doctrine of promissory estoppel could not have been invoked in the present matter – Judgments passed by the High Court of Sikkim and Appellate Bench of the Gauhati High Court set aside – Order passed by Single Judge dated. 10.12.2010 upheld – Central Excise Act, 1944 – s.5A – Additional Duties of Excise (Goods of Special Importance) Act, 1957 – s.3 – Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 – s.3(3) – Central Excise Tariff Act, 1985 – CENVAT Credit Rules, 2002 – Finance Act, 2003 – s.154 – Excise Duty.
Allowing the appeals, the Court
HELD: 1.1 The issue raised in these appeals is no more res integra. The exemption granted, even when the notification granting exemption prescribes a particular period till which it is available, can be withdrawn by the State, if it is found that such a withdrawal is in the public interest. In such a case, the larger public interest would outweigh the individual interest, if any. In such a case, even the doctrine of promissory estoppel would not come to the rescue of the persons claiming exemptions and compel the State not to resile from its promise, if the act of the State is found to be in public interest. [Paras 12, 19 and 25][279F; 283-E; 285-G-H]
1.2 A judicial notice can be taken of the fact that by various scientific studies on betel quid and substitutes, tobacco and their substitutes, i.e., pan masala with tobacco and without tobacco, these products have been found to be one of the main causes for oral cancer. By a scientific research conducted by Experts in the field, it has been found that the consumption of pan masala with tobacco as well as pan masala sans tobacco is hazardous to health. It has further been found that, the percentage of teenagers consuming the hazardous product was very high and as such exposing a large chunk of young population of this Country to the risk of oral cancer. Taking into consideration this aspect, if the State has decided to withdraw the exemption granted for manufacture of such products, it cannot be understood as to how it can be said to be not in the public interest. [Paras 26, 31] [285-A; 290-D-E]
1.3 The legislative policy as reflected in Section 154 of the Finance Act, 2003 was to withdraw the exemption granted to the manufacturers of cigarettes as well as pan masala with tobacco and that too with retrospective effect. Apart from the fact that, it is a common knowledge that tobacco is highly hazardous, the legislative intent was also unambiguous. In these circumstances, the finding of the High Court that the withdrawal of exemption for tobacco products was not in the public interest, to say the least is shocking. The approach of the Appellate Bench of the High Court was totally unsustainable. The withdrawal of the exemption to the pan masala with tobacco and pan masala sans tobacco is in the larger public interest. As such, the doctrine of promissory estoppel could not have been invoked in the present matter. The State could not be compelled to continue the exemption, though it was satisfied that it was not in the public interest to do so. The larger public interest would outweigh an individual loss, if any. The appeals are allowed. The judgments and orders passed by the Appellate Bench of the Gauhati High Court dated 20.04.2016 and 25.05.2016 are quashed and set aside. The Order passed by the Single Judge dated 10.12.2010 dismissing the writ petitions is upheld. [Paras 35, 36 and 39][292A-D, F] Kasinka Trading v. Union of India (1995) 1 SCC 274 : [1994] 4 Suppl. SCR 448; STO v. Shree Durga Oil Mills (1998) 1 SCC 572 : [1997] 6 Suppl. SCR 488; Shrijee Sales Corpn. v. Union of India (1997) 3 SCC 398 : [1996] 10 Suppl. SCR 888; State of Rajasthan v. Mahaveer Oil Industries (1999) 4 SCC 357 : [1999] 2 SCR 798; Shree Sidhbali Steels Ltd. v. State of U.P. (2011) 3 SCC 193 : [2011] 3 SCR 134; DG of Foreign Trade v. Kanak Exports (2016) 2 SCC 226 : [2015] 15 SCR 287 – relied on.
Darshan Oils (P) Ltd. v. Union of India (1995) 1 SCC
345 : [1994] 5 Suppl. SCR 278; Pappu Sweets and Biscuits v. Commr. Of Trade Tax, U.P. (1998) 7 SCC
228 : [1998] 2 Suppl. SCR 119; Commr. of Customs v. Dilip Kumar & Co. (2018) 9 SCC 1 : [2018] 7 SCR 1191; M/s Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh and Ors. (1979) 2 SCC 409 : [1979] 2 SCR 641; Union of India & Ors. v. Godfrey Philips India Ltd. & Ors. (1985) 4 SCC 369 : [1985] 3 Suppl. SCR 123; Pawan Alloys & Casting Pvt. Ltd. v. U.P. State Electricity Board & Ors. (1997) 7 SCC 251 : [1997] 3 Suppl. SCR 266 – referred to.
Research Paper titled “Alert for an epidemic of oral cancer due to use of the betel quid substitutes gutkha and pan masala: A review of agents and causative mechanisms”- Mutagenesis Vol. 19 No. 4; Study Paper titled “Smokeless Tobacco and Its Adverse Effects on Hematological Parameters: A Cross-Sectional Study”Advances in Preventive Medicine 2019; Study Report titled “A review on Harmful Effects of Pan Masala”Indian Journal of Cancer (October-December 2015) Volume 52, Issue 4 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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