Supreme Court: The 3-judge bench of Arun Mishra, MR Shah and BR Gavai, JJ has held that by invoking the doctrine of promissory estoppel, the Union of India cannot be estopped from withdrawing the exemption from payment of Excise Duty in respect of certain products, which exemption is granted by an earlier notification; when the Union of India finds that such a withdrawal is necessary in the public interest. The bench said that the larger public interest would outweigh an individual loss, if any.
In the present case the withdrawal of the exemption to the pan masala with tobacco and pan masala sans tobacco in the State of Assam was under challenge before the Court. The Court, however, said that it had no hesitation to hold that 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.
Noticing that 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 and 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, the Court said,
“if the State has decided to withdraw the exemption granted for manufacture of such products, we fail to understand as to how it can be said to be not in the public interest.”
The Sikkim High Court had observed that the appellant herein has been unable to establish any overriding public interest, which would make the doctrine of promissory estoppel inapplicable. It has further observed that, the pan masala has not been declared as hazardous to health by any notification or order of the Government of India or the State Government. It found that, no material or scientific report had been placed on record to demonstrate that the pan masala is a health hazard. The Supreme Court, however, held that the reasoning arrived at by the Sikkim High Court was totally erroneous.
The Court said that the legislative policy as reflected in Section 154 of the Finance Act 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. It, hence, said,
“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.”
[Union of India v. Unicorn Industries, 2019 SCC OnLine SC 1231, decided on 19.09.2019]