Court upholds Khadi Act, rejects discrimination claims. No costs awarded.

The court dismissed the writ petition challenging the validity of the Khadi and Other Handloom Industries Development (Additional Excise Duty on Cloth) Act, 1953. It held that the 1972 Amending Act was valid, allowing for the retrospective application of the Act and rejecting claims of discrimination and promissory estoppel. The court did not award costs to the petitioner.

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Issues Involved:

1. Validity of the Khadi and Other Handloom Industries Development (Additional Excise Duty on Cloth) Act, 1953.
2. Exemption from Additional Excise Duty under the 1953 Act.
3. Retrospective application of the 1972 Amending Act.
4. Discrimination under Article 14 of the Constitution.
5. Application of the principle of promissory estoppel.

Detailed Analysis:

1. Validity of the Khadi and Other Handloom Industries Development (Additional Excise Duty on Cloth) Act, 1953:

The petitioner challenged the validity of the 1953 Act, which imposed an additional excise duty on cloth. The petitioner argued that the 1972 Amending Act nullified the effect of an earlier exemption from excise duty. The court held that as long as the Parliament has legislative competence to enact an Act and such an Act is not violative of any provision of the Constitution, it cannot be challenged merely on the ground that it nullifies an exemption.

2. Exemption from Additional Excise Duty under the 1953 Act:

The petitioner contended that by virtue of the 1953 notification and the notification dated 1st March 1969, it was exempted from paying additional excise duty. The Assistant Collector dismissed the applications for a refund, interpreting that the exemption applied only if such an exemption was available on 25th July 1953. The court noted that the 1972 Act, through Section 4, provided that any additional excise duty levied or collected under the 1953 Act would be deemed valid, effectively overriding the earlier exemption.

3. Retrospective application of the 1972 Amending Act:

The petitioner argued that the retrospective nature of the 1972 Act imposed an unreasonable restriction. The court cited precedent, stating that the Parliament can enact laws with retrospective effect, including validating or levying taxes and duties. The court referenced the decision in J.K. Cotton and Weaving Mills and Another v. Union of India and Others, which upheld the validity of retrospective tax laws, thus rejecting the petitioner's contention.

4. Discrimination under Article 14 of the Constitution:

The petitioner claimed that the 1972 Act was discriminatory. The court held that to plead discrimination, the petitioner must provide specific instances of discrimination. The petitioner failed to provide any instances of other manufacturers who were exempt from the additional excise duty during the relevant period. The court concluded that without such particulars, the claim of discrimination could not be sustained.

5. Application of the principle of promissory estoppel:

The petitioner argued that the principle of promissory estoppel should apply, as a promise was made through the 1953 notification that if cloth was exempt from excise duty under the Excise Act, it would also be exempt from additional excise duty. The court rejected this argument, stating that the petitioner did not alter its position based on any promise. Moreover, it is well-settled that promissory estoppel cannot be pleaded against a statute, referencing Khandelval Metal and Engineering v. Union of India and Others. The enactment of the 1972 Act precluded the petitioner from raising this contention.

Conclusion:

The writ petition was dismissed, and the court held that the 1972 Amending Act was valid. The retrospective application of the Act was upheld, and the claims of discrimination and promissory estoppel were rejected. The court did not award costs.

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