Fiscal concession withdrawal upheld: no promissory estoppel, no Article 14 or 19(1)(g) breach, and no prior hearing required.

A fiscal notification withdrawing MODVAT benefit was upheld as a valid exercise of statutory and delegated power. The Court held that the Budget Speech and earlier notifications did not amount to a clear and unambiguous promise, so promissory estoppel could not prevent withdrawal of the concession. It further found no violation of Article 14 because the challenger did not show that aerated waters were similarly situated to the commodities retained in the scheme or that the classification lacked rational basis. The withdrawal was also not an unreasonable restriction under Article 19(1)(g), and no prior hearing was required because issuance or revocation of a statutory notification is a legislative act, not an adjudicatory one.

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Issues: (i) Whether withdrawal of MODVAT benefit by the impugned notification was barred by promissory estoppel on the basis of the Budget Speech and earlier notifications; (ii) Whether the withdrawal of the benefit for aerated waters alone offended Article 14 of the Constitution of India; (iii) Whether the withdrawal imposed an unreasonable restriction on the right to carry on business under Article 19(1)(g) of the Constitution of India; (iv) Whether the notification was invalid for breach of natural justice.

Issue (i): Whether withdrawal of MODVAT benefit by the impugned notification was barred by promissory estoppel on the basis of the Budget Speech and earlier notifications.

Analysis: The Budget Speech was treated as a statement of fiscal policy for the relevant financial year and not as an enforceable promise to keep a tax concession unchanged for any fixed period. The Court held that no clear and unambiguous assurance was shown, and no alteration of position to the petitioners' detriment was established merely because prices had been adjusted after the concession was introduced. It also held that there can be no estoppel against the exercise of statutory and delegated power in fiscal matters, including withdrawal of an exemption or concession.

Conclusion: The plea of promissory estoppel failed and the withdrawal of the MODVAT benefit was valid.

Issue (ii): Whether the withdrawal of the benefit for aerated waters alone offended Article 14 of the Constitution of India.

Analysis: The petitioners did not establish that aerated waters and the other commodities retained in the scheme were similarly situated so as to make the classification arbitrary. The Court applied the principle that tax legislation and fiscal notifications are protected by a presumption of constitutionality and that the burden lies on the challenger to show hostile discrimination. On the materials before it, the exclusion of aerated waters from the scheme was held not to be shown as unreasonable or lacking rational basis.

Conclusion: No violation of Article 14 was made out against the Revenue.

Issue (iii): Whether the withdrawal imposed an unreasonable restriction on the right to carry on business under Article 19(1)(g) of the Constitution of India.

Analysis: The Court held that a change in duty incidence or withdrawal of a tax concession, by itself, does not amount to an unreasonable restriction on trade or business. Mere reduction of profit or increase in tax burden was held insufficient to convert a fiscal measure into a confiscatory or unconstitutional restriction, and no material was placed to show that the impugned action destroyed the freedom to carry on business.

Conclusion: No infringement of Article 19(1)(g) was established.

Issue (iv): Whether the notification was invalid for breach of natural justice.

Analysis: The Court held that issuance, amendment, withdrawal, or revocation of a statutory notification in exercise of delegated legislative power does not require a prior hearing to affected persons unless the statute so provides. The impugned withdrawal was treated as a policy act in the exercise of statutory power and not as an adjudicatory order determining individual rights after a lis.

Conclusion: The rule of natural justice was not attracted and the challenge failed.

Final Conclusion: The impugned withdrawal of the MODVAT concession was sustained on all grounds, and the writ petition failed in its entirety.

Ratio Decidendi: A fiscal concession granted or withdrawn by notification in exercise of statutory or delegated power does not create an enforceable promise or vested right, and it cannot be challenged successfully on promissory estoppel, Article 14, Article 19(1)(g), or natural justice grounds unless clear arbitrariness, prejudice, or statutory violation is established.

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