1

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION  

CIVIL APPEAL No. 7432 OF 2019 (Arising out of S.L.P.(C) No. 36926 of 2012)

UNION OF INDIA & ORS.                  .... APPELLANT(S)                             

VERSUS

M/s UNICORN INDUSTRIES             .... RESPONDENT(S)

WITH

CIVIL APPEAL No. 2345 OF 2017 and CIVIL APPEAL No. 2346 OF 2017

J U D G M E N T   

B.R. GAVAI, J.

   Leave granted in S.L.P.(C) No. 36926 of 2012.

2. The question of law that arises for consideration

in these appeals is, ‘as to whether, by invoking the

doctrine of promissory estoppel, can the Union of India

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

2

Union of India finds that such a withdrawal is necessary

in the public interest.

3.       Since the factual position as well as the

question of law arising in the present three appeals are

common, they are heard together and disposed of by this

common  judgment.  The  appellant,  Union  of  India,  in

exercise  of  powers  conferred  by  sub-section  (1)  of

Section 5A of the Central Excise Act, 1944 (1 of 1994)

(hereinafter referred to as the “Central Excise Act”)

read with sub-section (3) of Section 3 of the Additional

Duties of Excise (Goods of Special Importance) Act, 1957

(58 of 1957) and sub-section (3) of Section 3 of the

Additional  Duties  of  Excise  (Textiles  and  Textile

Articles) Act, 1978 (40 of 1978), being satisfied that it

is necessary in the public interest, by Notification No.

71 of 2003 dated 09.09.2003, exempted the goods specified

in the First Schedule and the Second Schedule to the

Central Excise Tariff Act, 1985 (5 of 1986) other than

the  goods  specified  in  Annexure-I  to  the  said

Notification, from the payment of duties under the said

statutes. The notification provided that so much of the

duty of excise or additional duty of excise, as the case

may be, leviable thereon under any of the said Acts as

was  equivalent  to  the  amount  of  duty  paid  by  the

3

manufacturer of the said goods, other than the amount of

duty  paid  by  utilisation  of  CENVAT  credit  under  the

CENVAT Credit Rules, 2002, was exempted. This exemption

was available to the units located in Industrial Growth

Centre or Industrial Infrastructure Development Centre or

Export Promotion Industrial Park or Industrial Estate or

Industrial Area or Commercial Estate or Scheme Area, as

the case may be, in the State of Sikkim, as specified in

Annexure-II  appended  to  the  said  notification.  A

procedure was also prescribed under the said notification

for availing the benefit of exemption. Annexure-I thereto

provides the list of the products which were not entitled

for exemption. Clause 1 of the said Annexure reads thus:

“1. Tobacco  and  Tobacco  products  including Cigarettes/ Cigars/ Gutkha”

Similar notifications were issued by the Union of

India being Notification Nos. 32 of 1999-CE and 33 of

1999-CE dated 08.07.1999 insofar as the State of Assam is

concerned.  

4. By  Notification  No.  21  of  2007-CE  dated

25.04.2007, the earlier notifications issued by it were

amended. The effect of the amendment was that the product

‘pan  masala’  falling  under  Chapter  21  of  the  First

4

Schedule  of  the  Central  Excise  Tariff  Act,  1985,  the

goods falling under Chapter 24 of said First Schedule,

i.e., tobacco and manufactured tobacco substitutes and

plastic carry bags of less than 20 microns were included

in the negative list and as such were no longer entitled

for exemption from the excise duty. Being aggrieved by

the said notification, the respondent, namely, Unicorn

Industries in the Civil Appeal arising out of Special

Leave Petition (C) No. 36926 of 2012, approached the High

Court of Sikkim by way of Writ Petition (C) No. 22 of

2007. The High Court of Sikkim vide its judgment and

order dated 11.05.2012 allowed the writ petition and held

that the petitioner therein was entitled to exemption

from payment of excise duty on the manufacture of pan

masala from its unit situated in the State of Sikkim for

a period of 10 years from the date of commencement of the

commercial production, i.e., 27.06.2006.

5. Similarly,  the  respondent  in  Civil  Appeal  No.

2346 of 2017, namely, M/s Dharampal Satyapal Ltd., which

was a manufacturer of pan masala with tobacco and other

tobacco products, approached the Gauhati High Court by

way of a petition bearing No. PW(C) 749 of 2010. The said

petition was with regard to withdrawal of exemption in

respect of pan masala with tobacco. The Single Judge of

5

the  Gauhati  High  Court  vide judgment  and  order  dated

10.12.2010 found no substance in the petition and as such

dismissed the petition. Being aggrieved thereby, the said

respondent filed Writ Appeal No. 81 of 2011 before the

Appellate Bench of Gauhati High Court. Vide the judgment

and order dated 20.04.2016, the Appellate Bench of the

High Court allowed the appeal; set aside the judgment and

order passed by the Single Judge dated 10.12.2010 and

quashed Notification No. 11 of 2007-CE dated 01.03.2007.

It further directed the Investment Appraisal Committee to

give an opportunity of hearing to the appellant before it

(respondent herein) so that it can prove the amount it

had actually invested in the specified items for availing

the benefits under the earlier notifications and further

directed  that  if  the  appellant  proves  that  it  had

actually invested the amount, the respondent authorities

shall refund to the appellant so much of the excise duty

to which the appellant therein would be entitled as per

the earlier notifications.

6. The respondent in Civil Appeal No. 2345 of 2017,

namely,  M/s  Dharampal  Satyapal  Ltd.,  had  also  filed

another petition being Writ Petition (C) No. 749 of 2010

insofar as its product ‘pan masala without tobacco’, is

concerned. The same was also dismissed by the learned

6

Single Judge of the Gauhati High Court  vide the common

judgment and order dated 10.12.2010. It appears that the

appeal arising from the said petition being Writ Appeal

No. 223 of 2011 was separately heard by another Appellate

Bench of the Gauhati High Court. However, noticing that

the writ appeal arising out of the order of the Single

Judge regarding the product of the appellant therein,

i.e., ‘pan masala containing tobacco’ was already allowed

by the Appellate Bench of the High Court by Order dated

20.04.2016, the said writ appeal was also allowed, by the

judgment and order dated 25.05.2016 thereby setting aside

the Order passed by the learned Single Judge in Writ

Petition (C) No. 749 of 2010 so also the Notification

dated 25.04.2007. The respondent therein was directed to

refund the excise duty component to the appellant as is

admissible under the law.

7. Being aggrieved by the aforesaid judgments and

orders, one passed by the Sikkim High Court in the writ

petition and the other two passed by the Gauhati High

Court in the writ appeals, the Union of India is before

this Court.

8. Mr.  Dhruv  Agrawal,  learned  senior  counsel

appearing on behalf of the appellants, submits that both,

7

the Sikkim High Court as well as the Appellate Benches of

the Gauhati High Court have grossly erred in allowing the

writ petition and the writ appeals of the assessees. It

is  submitted  that,  though  the  Union  of  India  had

specifically contended before both the High Courts that

the  2007  Notifications  were  issued  in  the  public

interest,  the  same  has  not  been  considered.  It  is

submitted that the Union of India, in exercise of its

delegated  powers,  is  always  empowered  to  modify  and

withdraw the exemptions granted by it under the earlier

notification(s). It is submitted that the Union of India,

taking into consideration the public interest, that the

consumption  of  pan  masala  with  tobacco  or  pan  masala

without tobacco is hazardous to the human health and,

therefore, for curbing its consumption, had issued the

2007  Notifications  thereby  including  pan  masala  in

Chapter  21  and  all  products  contained  in  Chapter  24,

i.e., tobacco and manufactured tobacco substitutes, in

the negative list. It is submitted that, after taking

into consideration that the 2007 Notification was issued

in public interest, the Sikkim High Court ought not to

have interfered with it. He further submitted that the

reasoning given by the Sikkim High Court that pan masala

is not hazardous and, therefore, the 2007 Notification

cannot be said to be in the public interest is totally

8

erroneous. It is further submitted that while doing so,

the Sikkim High Court has assumed the role of an expert

in  the  field  and,  therefore,  travelled  beyond  its

jurisdiction.

9.  Insofar as the Gauhati High Court is concerned,

the learned senior counsel submitted that the learned

Single  Judge  of  the  Gauhati  High  Court  had  rightly

dismissed  the  writ  petitions,  finding  that  in  the

conflict between the interest of an individual and the

public interest, individual interest should give way to

the larger public interest. It is submitted that, the

Appellate Bench of the Gauhati High Court in its judgment

dated 20.04.2016 has grossly erred in interfering with

the reasoned order passed by the learned Single Judge. It

is submitted that, in the said appeal, the product that

fell for consideration before the Appellate Bench of the

High  Court  was  Zarda  scented  tobacco  and  pan  masala

containing tobacco. It is submitted that, the products

containing tobacco are indisputably hazardous to health

and,  therefore,  the  Notification  which  withdraws

exemption  granted  for  the  manufacture  of  the  said

products is undoubtedly in the larger public interest.

However, overlooking this aspect, the appeals have been

allowed. It is submitted that insofar as the other appeal

9

is concerned, the another Appellate Bench has only relied

upon the judgment by the earlier Appellate Bench and has

observed that the only distinction in both the matters

was that in the earlier matter, the issue was with regard

to pan masala containing tobacco and in the matter before

them, the issue was with regard to pan masala without

tobacco and with these observation allowed the appeal.

10.  The  learned  senior  counsel  relied  on  the

following judgments of this Court in the cases of Kasinka

Trading vs. Union of India1, Darshan Oils (P) Ltd. vs.

Union of India2, STO vs. Shree Durga Oil Mills3, Shrijee

Sales Corpn. vs. Union of India4, State of Rajasthan vs.

Mahaveer Oil Industries5, Shree Sidhbali Steels Ltd. vs.

State of U.P.6, DG of Foreign Trade vs. Kanak Exports7,

Pappu Sweets and Biscuits vs. Commr. Of Trade Tax, U.P.8

and Commr. of Customs vs. Dilip Kumar & Co.9,.

11. Shri Balbir Singh and Shri Nakul Dewan, learned

senior counsel appearing on behalf of the respondents,

have supported the impugned judgments and orders. It is

1  (1995) 1 SCC 274 2  (1995) 1 SCC 345 3  (1998) 1 SCC 572 4  (1997) 3 SCC 398 5  (1999) 4 SCC 357 6  (2011) 3 SCC 193 7  (2016) 2 SCC 226 8  (1998) 7 SCC 228 9  (2018) 9 SCC 1

10

submitted that, the Sikkim High Court as well as the

Appellate Benches of the Gauhati High Court have rightly

relied  upon  the  doctrine  of  promissory  estoppel  and

allowed the appeals. It is submitted that, it is only on

account of the representation given by the Union of India

and the State Governments that the industries established

in the notified areas of Sikkim as well as Assam would be

entitled for 100% exemption from central excise, the writ

petitioners before the High Court had established the

industries in such remote areas. It is submitted that,

the exemption notifications were issued in view of the

industrial policy of the Union of India as well as the

State  Governments  that  on  account  of  backwardness  in

these areas, the industrialisation in these areas should

be promoted so that the economic development takes place.

It  is  submitted  that,  only  on  the  assurance  of  the

Central  as  well  as  the  State  Governments,  the  writ

petitioners have invested huge amount and, as such, now

the  Union of  India could  not be  permitted in  law to

resile  from  the  assurance  given  by  them  to  the  writ

petitioners.  It  is  submitted  that,  considering  these

principles, the Sikkim High Court and the Appellate Bench

of the Gauhati High Court have granted relief to the writ

petitioners.  It  is  submitted  that,  this  Court  has

consistently held that, if a party changes its position

11

to its detriment, on account of a promise given by the

other  party,  the  other  party  cannot  be  permitted  to

resile from such a promise. It is submitted that the

doctrine of promissory estoppel is equally applicable to

the State and its functionaries. Reliance in this respect

is placed on the following judgments of this Court. M/s

Motilal Padampat Sugar Mills Co. Ltd.  vs. State of Uttar

Pradesh and Ors.10,  Union of India & Ors.  Vs.  Godfrey

Philips India Ltd. & Ors.11 and Pawan Alloys & Casting

Pvt. Ltd.  vs.  U.P. State Electricity Board & Ors.12.

12. The issue raised in these appeals is no more res

integra.  This  Court  in  a  catena  of  decisions  has

considered the issue with regard to inapplicability of

the  doctrine  of  promissory  estoppel,  when  the  larger

public interest demands so. We will refer, in brief, to

the earlier judgments of this Court.

13. In  the  case  of  Kasinka  Trading  (supra),  this

Court was considering the case of the appellant, who were

manufacturing certain products, requiring PVC resin as

one of the raw materials for its manufacturing process.

By  Notification  No.  66  dated  15.03.1979  issued  under

Section 25 of the Customs Act, 1962 which is pari materia

10  (1979) 2 SCC 409 11  (1985) 4 SCC 369 12  (1997) 7 SCC 251

12

with Section 5A of the Central Excise Act, the PVC resin

was exempted from basic import duty. The exemption was to

be effective till 31.03.1981. However, by Notification

No. 205 dated 16.10.1980 issued under Section 25 of the

Customs Act, the exemption granted earlier came to be

withdrawn. A challenge similar to the one which is raised

herein was raised before this Court. This Court observed

thus:

“12. It has been settled by this Court that the  doctrine  of  promissory  estoppel  is applicable  against  the  Government  also particularly where it is necessary to prevent fraud  or  manifest  injustice.  The  doctrine, however, cannot be pressed into aid to compel the  Government  or  the  public  authority  “to carry out a representation or promise which is contrary  to  law  or  which  was  outside  the authority  or  power  of  the  officer  of  the Government or of the public authority to make”. There is preponderance of judicial opinion that to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid  in  the  petition  itself  by  the  party invoking  the  doctrine  and  that  bald expressions, without any supporting material, to the effect that the doctrine is attracted because  the  party  invoking  the  doctrine  has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine.  In our opinion, the doctrine of promissory estoppel cannot be invoked  in  the  abstract  and  the  courts  are bound  to  consider  all  aspects  including  the results sought to be achieved and the public good at large, because while considering the applicability of the doctrine, the courts have to do equity and the fundamental principles of equity must for ever be present to the mind of the court, while considering the applicability of the doctrine. The doctrine must yield when

13

the equity so demands if it can be shown having regard to the facts and circumstances of the case that it would be inequitable to hold the Government  or  the  public  authority  to  its promise, assurance or representation.”

(emphasis supplied)

14. It  could  thus  be  seen  that,  this  Court  has

clearly held that the doctrine of promissory estoppel

cannot be invoked in the abstract and the courts are

bound to see all aspects including the objective to be

achieved and the public good at large. It has been held

that while considering the applicability of the doctrine,

the  courts  have  to  do  equity  and  the  fundamental

principle of equity must forever be present in the mind

of the Court while considering the applicability of the

doctrine.  It  has  been  held  that  the  doctrine  of

promissory estoppel must yield when the equity so demands

and when it can be shown having regard to the facts and

circumstances of the case, that it would be inequitable

to hold the Government or the public authority to its

promise, assurance or representation. After considering

the  earlier  judgments  on  the  issue,  which  have  been

heavily  relied  upon  by  the  assesses,  this  Court  has

observed thus:

“21. The  power  to  grant  exemption  from payment of duty, additional duty etc. under the Act,  as  already  noticed,  flows  from  the

14

provisions of Section 25(1) of the Act. The power to  exempt  includes  the  power  to  modify  or withdraw the same. The liability to pay customs duty or additional duty under the Act arises when the taxable event occurs. They are then subject to the payment of duty as prevalent on the date of  the  entry  of  the  goods.  An  exemption notification issued under Section 25 of the Act had the effect of suspending the collection of customs duty.  It does not make items which are subject to levy of customs duty etc. as items not leviable to such duty. It only suspends the levy and collection of customs duty, etc., wholly or partially and subject to such conditions as may be  laid  down  in  the  notification  by  the Government  in  “public  interest”.  Such  an exemption by its very nature is susceptible of being revoked or modified or subjected to other conditions. The supersession or revocation of an exemption notification in the “public interest” is  an  exercise  of  the  statutory  power  of  the State under the law itself as is obvious from the language  of  Section  25  of  the  Act.  Under  the General Clauses Act an authority which has the power to issue a notification has the undoubted power to rescind or modify the notification in a like manner.”

(emphasis supplied)

15. It could thus be seen that, it has been held by

this Court that an exemption notification does not make

the items which are subject to levy of customs duty etc.

as items not leviable to such duty. It only suspends the

levy and collection of customs duty etc. subject to such

conditions as may be laid down in the “public interest”.

It has further been held that, such an exemption by its

very nature is susceptible of being revoked or modified

or subjected to other conditions. It has been held that

the  supersession  or  revocation  of  an  exemption

15

notification in the public interest is an exercise of the

statutory power by the State under the law itself. It has

further been held that under the General Clauses Act an

authority which has the power to issue a notification has

the undoubted power to rescind or modify the notification

in a like manner.  

16. This Court, after considering the objections that

the exemption could not be withdrawn prior to the date

prescribed  in  the  notification  granting  exemption  has

observed thus:

“23. The appellants appear to be under the impression that even if, in the altered market conditions the continuance of the exemption may not  have  been  justified,  yet,  Government  was bound  to  continue  it  to  give  extra  profit  to them.  That  certainly  was  not  the  object  with which  the  notification  had  been  issued.  The withdrawal of exemption “in public interest” is a matter of policy and the courts would not bind the Government to its policy decisions for all times to come, irrespective of the satisfaction of the Government that a change in the policy was necessary in the “public interest”. The courts, do not interfere with the fiscal policy where the Government acts in “public interest” and neither any fraud or lack of bona fides is alleged much less established. The Government has to be left free to determine the priorities in the matter of utilisation of finances and to act in the public interest  while  issuing  or  modifying  or withdrawing  an  exemption  notification  under Section 25(1) of the Act.”

(emphasis supplied)

16

17. It  has  been  observed,  that  the  withdrawal  of

exemption in public interest is a matter of policy and

the courts would not bind the Government to its policy

decisions  for  all  times  to  come,  irrespective  of  the

satisfaction  of  the  Government  that  a  change  in  the

policy was necessary in the public interest. It has been

held that, where the Government acts in public interest

and neither any fraud or lack of bona fides is alleged

much less established, it would not be appropriate for

this Court to interfere with the same. Ultimately, this

Court came to the conclusion that the withdrawal of the

exemption  was  in  the  public  interest  and,  therefore,

refused to interfere with the order of the Delhi High

Court dismissing the petitions.

18. In the case of Shree Durga Oil Mills (supra), the

Government  of  Orissa  had  withdrawn  the  sales  tax

exemption  which  was  granted  earlier  under  the  Orissa

Sales Tax Act, 1947. Considering a similar challenge,

while reversing the judgment and order of the High Court,

this Court observed thus:  

“21. Moreover withdrawal of notification was done  in  public  interest.  The  Court  will  not interfere with any action taken by the Government in public interest. Public interest must override any consideration of private loss or gain.

17

23. In the instant case, it has been stated on behalf of the State that various notifications granting  sales  tax  exemptions  to  the  dealers resulted  in  severe  resource  crunch.  On reconsideration of the financial position, it was decided  to  limit  the  scope  of  the  earlier exemption notifications issued under Section 6 of the Orissa Sales Tax Act. Because of this new perception of the economic scenario of the State, the scope of the earlier notifications had to be restricted. They were first abrogated altogether on 20-5-1977. Thereafter, it was decided to grant exemption at a limited scale.

24. In our opinion, the plea of change of policy  trade  on  the  basis  of  resource  crunch should have been sufficient for dismissing the respondent's  case  based  on  the  doctrine  of promissory  estoppel.  Public  interest  demanded modification of the earlier IPR.”

19. It could thus be seen that, it has been held that

when withdrawal of the exemption is in public interest,

the public interest must override any consideration of

private loss or gain. In the said case, the change in

policy and withdrawal of the exemption on the ground of

severe resource crunch have been found to be a valid

ground and to be in public interest.

20. A similar issue came up for consideration before

the Bench consisting three Judges of this Court in the

case  of  Shrijee  Sales  Corporation  (supra).  The

notification which came up for consideration was similar

with the notifications that fell for consideration in the

case of Kasinka Trading (supra). While considering the

18

argument that when the notification prescribes a period

during which the exemption would be available, such an

exemption cannot be withdrawn till the end of the period

prescribed, this Court observed thus:

“7. The next question is whether the fact that the Notification No. 66 mentioned the period during which it was to remain in force, would make any difference to the situation. In other words,  could  it  be  said  that  an  exemption notified  without  specifying  the  period  within which the exemption would remain in force, would be withdrawn in public interest but not the one in which a period has been so specified?  Once public  interest  is  accepted  as  the  superior equity which can override individual equity, the principle  should  be  applicable  even  in  cases where a period has been indicated. The Government is competent to resile from a promise even if there is no manifest public interest involved, provided, of course, no one is put in any adverse situation which cannot be rectified. To adopt the line  of  reasoning  in Emmanuel  Ayodeji Ajayi v. Briscoe,  (1964)  3  All  ER  556,  quoted in M.P. Sugar Mills [Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P., (1979) 2 SCC 409, even where  there  is  no  such  overriding  public interest, it may still be within the competence of the Government to resile from the promise on giving  reasonable  notice  which  need  not  be  a formal notice, giving the promisee a reasonable opportunity of resuming his position, provided, of course, it is possible for the promisee to restore the status quo ante. If, however, the promisee cannot resume his position, the promise would become final and irrevocable.”

(emphasis supplied)

21. It could thus be seen that this Court observed

that  once  public  interest  is  accepted  as  a  superior

equity which can override an individual equity, the same

principle should be applicable in such cases where the

period is prescribed.

19

22. The another three Judges Bench of this Court in

the case of Mahavir Oil Industries (supra) has taken a

similar view. In the case of Shree Sidhbali Steels Ltd.

(supra), this Court was considering the question with

regard to validity of the notification which withdrew

33.33%  of  the  hill  development  rebate,  on  the  total

amount of electricity bill, granted under the earlier

notification. This Court while considering the similar

challenge observed thus:

“33. Normally,  the  doctrine  of  promissory estoppel is being applied against the Government and defence based on executive necessity would not be accepted by the court. However, if it can be shown by the Government that having regard to the facts as they have subsequently transpired, it would be inequitable to hold the Government to the promise made by it, the court would not raise an equity in favour of the promisee and enforce the promise against the Government. Where public interest warrants, the principles of promissory estoppel cannot be invoked. The Government can change the policy in public interest. However, it is  well  settled  that  taking  cue  from  this doctrine, the authority cannot be compelled to do something  which  is  not  allowed  by  law  or prohibited  by  law.  There  is  no  promissory estoppel against the settled proposition of law. Doctrine of promissory estoppel cannot be invoked for enforcement of a promise made contrary to law, because none can be compelled to act against the  statute.  Thus,  the  Government  or  public authority cannot be compelled to make a provision which is contrary to law.”  

(emphasis supplied)

20

23. It  could  thus  be  seen  that,  this  Court  again

reiterated  the  position  that  where  public  interest

warrants, the principle of promissory estoppel cannot be

invoked. Observing the aforesaid, the said challenge, as

raised by the petitioner, came to be rejected.

24. In the case of Kanak Exports (supra), this Court

again while considering the challenge for withdrawal of

incentives to the exporters of some specified items held

that, the incentive scheme in question was in the nature

of concession or incentive which was a privilege of the

Central Government. It was for the Government to take a

decision  to  grant  such  a  privilege  or  not.  Grant  of

exemption,  concession  or  incentive  and  modification

thereof are the matters in the domain of public decisions

of the Government. It further reiterated that when the

withdrawal of such incentives was shown to have been done

in public interest, the courts would not tinker with the

policy  decisions.  This  Court,  after  considering  the

materials  on  record  as  a  matter  of  fact,  held  that

withdrawal of exemption was in the public interest.

25. It could thus be seen that, it is more than well

settled  that  the  exemption  granted,  even  when  the

notification granting exemption prescribes a particular

21

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 to do so.

26. 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. A detailed study has been considered by three

Experts,  namely,  Urmila  Nair,  Helmut  Bartsch  and

Jagadeesan Nair in the Division of Toxicology and Cancer

Risk  Factors,  German  Cancer  Research  Centre  (DKFZ),

Heidelberg,  Germany.  The  research  paper  is  titled  as

“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 mechanisms13”. After considering the

entire material in detail and considering the various

earlier studies, the paper observes thus:

13  Mutagenesis Vol. 19 No. 4

22

“Perspectives

Banning of gutkha and pan masala has been strongly advocated by oncologists as a preventive measure to reduce oral cavity cancers. Recently, a  number  of  States  in  India  have  banned  the manufacture and sale of both products and this should  reduce  the  incidence  rate.  Similar regulations  regarding  other  health-impairing tobacco products which have been on the market for centuries, together with cigarettes and bidis (an indigenous smoking product), should also be reinforced.

However, for those who are addicted to these products or are already affected by premalignant lesions, educational interventions to encourage stopping the habit are essential. Additionally, chemopreventive interventions are being explored. Retinoids, NSAIDS and green tea are among the promising agents (Garewal, 1994; IUSHNCC, 1997; Papadimitrakopoulou and Hong, 1997; Lin et al., 2002a). Although a large percentage of lesions did  respond  to  treatment,  recurrence  after terminating the chemopreventive regime was also observed (Sankaranarayanan et al., 1997), perhaps due  in  part  to  continuation  of  the  addictive habit.

As  with  all  cancers,  early  diagnosis  is important  for  successful  treatment  of  oral cancer,  as  its  prognosis  is  still  very  poor. There  is,  nowadays,  a  strong  drive  to  apply proteomics technology to molecular diagnosis of cancer. Expression profiling of tumour tissues, molecular  classification  of  tumours  and identification  of  markers  to  allow  early detection,  sensitive  diagnosis  and  effective treatment  are  now  being  explored  for  oral cancers.  Genes  with  significant  differences  in expression levels between normal, dysplastic and tumour samples have been reported and this should help in better understanding the progression of oral squamous cell carcinoma (Kuo et al., 2002; Leethanakul et al., 2003).  

DNA  aneuploidy  in  oral  leukoplakia  in Caucasian tobacco users has been found to signal a very high risk for subsequent development of oral  squamous  cell  carcinomas  and  associated

23

mortality (Sudbo and Reith, 2003; Sudbo et al., 2004).  A  risk  assessment  model  to  predict progression of premalignant lesions that includes histology  and  a  score  combining  chromosomal polysomy, expression and loss of heterozygosity on 3p or 9p has also been described (Lee et al., 2000; Rosin et al., 2002). Once diagnosed, these premalignant lesions could be treated at a much earlier  stage  by  chemo  preventive  agents, surgery, chemotherapy and/or intense radiotherapy to prevent new lesions and premalignant lesions from progressing to invasive cancer.

Conclusions

Gutkha and pan masala have flooded the Indian market as cheap and convenient BQ substitutes and become  popular  across  all  age  groups  wherever this  habit  is  practised.  There  is  sufficient evidence that chewing of tobacco with lime, BQ with tobacco, BQ without tobacco and areca nut are carcinogenic in humans (IARC, 1985, 2004). These  evaluations  in  conjunction  with  the available evidence on the BQ substitutes gutkha and  pan  masala  implicates  them  as  potent carcinogenic mixtures that can cause oral cancer. Additionally,  these  products  are  addictive  and enhance the early appearance of OSF, especially so in young users who could be more susceptible to the disease. Although recently some curbs have been put on the manufacture and sale of these products,  urgent  action  needs  be  taken  to permanently ban gutkha and pan masala, together with  the  other  well-established  oral  cancer- causing  tobacco  products.  Finally,  as  the consequences of these habits are significant and likely to intensify in the future, an emphasis on education aimed at reducing or eliminating the use  of  these  products  as  well  as  home-made preparations should be accelerated.”

27. Recently, the Department of Oral Medicines and

Radiology,  Dental  Institute,  Rajendra  Institute  of

Medical Sciences, Ranchi has through its experts, namely,

Anjani Kumar Shukla, Tanya Khaitan, Prashant Gupta and

24

Shantala  R.  Naik  conducted  a  study  on  the  subject

“Smokeless  Tobacco  and  Its  Adverse  Effects  on

Hematological Parameters: A Cross-Sectional Study14”. The

study  paper  considered  the  consumption  of  smokeless

tobacco  (SLT)  in  various  forms  in  India  such  as  pan

(betel quid) with tobacco, zarda, pan masala, khaini,

areca nut. After conducting an in-depth analysis, the

paper concludes and recommends as under”

“Conclusion and Recommendation

SLT  use  has  severe  adverse  effects  on hematological parameters. The present study might serve as an early diagnostic tool in any systemic diseases and be helpful in spreading awareness on the deleterious effect in the populace consuming SLT.  Timely  intervention  among  students  can prevent the initial experimentations with tobacco from  developing  into  addiction  in  adulthood. People should be counselled to avoid all habits of  tobacco  and  undergo  nicotine  replacement therapy  along  with  antioxidants.  Knowledge  and awareness about systemic and oral ill effects of tobacco should be spread through tobacco control programs  in  the  pursuit  for  a  tobacco-free world.”

28. It  was  sought  to  be  argued  on  behalf  of  the

manufacturers of pan masala without tobacco, that the pan

masala without tobacco stands on a different pedestal

than the pan masala with tobacco. It was sought to be

argued  that,  pan  masala  without  tobacco  cannot  be

considered to be hazardous to health. The Department of

Head and Neck Surgery, Tata Memorial Hospital, Mumbai

14  Advances in Preventive Medicine 2019

25

through its experts Garg A, Chaturvedi P. Mishra A. and

Datta S. had conducted a study on “A review on Harmful

Effects of Pan Masala15”.  It is to be noted that this

study is of ‘pan masala without tobacco’. It will be

apposite to refer to the following observations of the

said report:

“Policy Issues Concerning Pan Masala  

Pan masala use is rampant in India by all the sections and age groups of the society. It has emerged as a major cause of oral cancer in India. National Family Health Survey-2 showed that 21% of people over 15 years of age consumed PM or tobacco. Study in the state of Tamil Nadu showed that  the  age  at  which  people  start  consuming areca nut products ranges from 12 to 70 years. 58% of the subjects chewed the products more than twice  a  day.  Advertising  tobacco  products including  PM  containing  tobacco  is  banned  in India  since  May  1,  2004.  To  bypass  this  ban tobacco companies are advertising PM ostensibly without tobacco, heavily in all forms of media. PM is surrogate for tobacco products as the money spent on marketing, and advertising is many times of the revenue generated from the sale of PM. In Mumbai after the ban on PM and gutka the sale has come down and the percentage of users quitting and  reducing  the  habit  was  23.53%  and  55.88% respectively.  The  main  reason  of  quitting  and reduction in consumption was non availability of these products. In spite of the ban gutka was still  available  but  in  different  forms  or  at increased  cost.  Strict  law  in  the  form  of Cigarettes and other Tobacco Products Act 2003 has been made in India, but the enforcement and compliance is lax. There is a need for strong enforcement and compliance of laws throughout the country. The genotoxic, carcinogenic properties and numerous other harmful effects of PM need immediate and strict action by the government on PM  without  tobacco  as  it  has  banned  PM  with tobacco. The consumers should also be made aware

15  Indian Journal of Cancer (October-December 2015) Volume 52,  Issue 4

26

of the harmful effects of PM as they are under a false impression that it is not harmful.

“Conclusion

Pan masala is widely used across all the strata of society and is freely available in many parts of the country. It is carcinogenic, genotoxic, and  has  harmful  effects  on  the  oral  cavity, liver,  kidneys  and  reproductive  organs. Government  action  is  immediately  required  to restrict the consumption and to make the people aware about its harmful effects.”

29. The study which has been conducted in 2004, found

that gutkha and pan masala have been one of the major

causes of oral cancer. The Oncologists as early as in

2004 had strongly advocated banning of gutkha and pan

masala. They further find that banning the manufacture

and  sale  of  these  products  would  reduce  oral  cancer

incidence rates. It is found that gutkha and pan masala

have  flooded  the  Indian  markets  and  become  popular

amongst all age groups. It is observed that pan masala

with tobacco as well as without tobacco have been found

to  be  having  a  potent  carcinogenic  mixtures  that  can

cause oral cancer. It further found that, these products

are an addictive and enhance the early appearance of oral

sub-mucous fibrosis (OSMF). It is especially so in the

young users who could be more susceptible to the disease.

30. The report further finds that, in the National

Family Health Survey-2, it has been found that 21% of

27

people  over  15  years  of  age  consumed  pan  masala  or

tobacco.  The  report  finds  that,  though  advertising

tobacco products including pan masala containing tobacco

is banned in India since 01.05.2004, to bypass this ban,

tobacco companies are advertising pan masala ostensibly

without tobacco, heavily in all forms of media. It has

been found that, after the ban on pan masala and gutkha,

the sale has come down. The 2016 report finds that, in

Mumbai, after the ban on pan masala and gutkha, the sale

has come down and the percentage of users quitting and

reducing the habit was 23.53% and 55.88% respectively.

31. It  could  thus  be  seen  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.

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, we fail to understand as to how it can be said

to be not in the public interest.

28

32. The  Sikkim  High  Court  has  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. We  find  that  the  reasoning  arrived  at  by  the

Sikkim High Court is totally erroneous.

33. Insofar as the Gauhati High Court is concerned,

the learned Single Judge by an elaborate reasoning had

found that the notifications impugned before it was in

the public interest and further observed that in view of

the  overriding  public  interest,  the  doctrine  of

promissory estoppel could not be invoked. Not only that,

but  the  learned  Single  Judge  in  the  judgment  has

specifically observed thus:

“Having  regard  to  the  background  that  had preceded the Policy 2007 and the curtailment of the benefits of exemption earlier granted by the Policy 1997 through various instruments of law in the form of Section 154 of the Finance Act 2003 read  with  Schedule  9  thereto  as  well  as  the notifications  under  Section  5A  of  the  Central Excise  Act  and  other  related  legislations  it

29

would be in defiance of logic to conclude that all  these  notwithstanding,  with  the  specific intention of excluding the industries engaged in the manufacture of goods under Chapter 24 and pan masala under Chapter 21 of the First Schedule to the Tariff Act, 1985, these would still continue to avail the benefits/incentives under the Policy 1997  only  because  the  units  concerned  had commenced  commercial  production  on  and  from 31/3/2007.”  

34. The learned Single Judge has also specifically

observed in his judgment that the vires of Section 154 of

the Finance Act, 2003 vide which the exemption granted to

the  manufacturers  of  cigarette  was  rescinded  with

retrospective effect, has been upheld by this Court in

the case of R.C. Tobacco (P) Ltd. and Another Vs. Union

of India and Another, reported in 2005(7)SCC 725. We are

surprised at the approach of the Appellate Bench of the

Gauhati High Court. It is pertinent to note that the

contention of the learned A.S.G. appearing on behalf of

the Union of India to the following effect have been

specifically  recorded  by  the  Judges  of  the  Appellate

Bench of the High Court in paragraph 14 of the judgment,

which reads thus:

“that the legality of the withdrawal of the benefit  granted  to  the  tobacco  manufacturing units  such  as  the  appellant  under  the  1997 Industrial Policy by Section 154 of the Finance Act, 2003 was already upheld the Apex Court in R. C. Tobacco (P) Ltd. vs. Union of India, (2005)7 SCC 725.”

30

35. The Appellate Bench of the High Court observed

that some of the notifications providing modalities for

exemption  were  issued  subsequent  to  the  enactment  of

Section  154  of  the  Finance  Act,  2003  and,  therefore,

Section 154 of the Finance Act, 2003 has no relevance in

the  said  case.  However,  the  Appellate  Bench  does  not

find  it  necessary  to  even  make  a  reference  to  the

judgment of this Court which was relied on by the learned

Single  Judge  while  dismissing  the  writ  petitions  and

which is specifically put in service by the Union of

India.  We  are  unable  to  appreciate  as  to  how  the

Appellate  Bench  of  the  Gauhati  High  Court  finds  that

withdrawal of exemption in respect of ‘pan masala with

tobacco’ is not in the public interest. 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.

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.

We find that the approach of the Appellate Bench of the

High Court was totally unsustainable.

31

36. As  already  discussed  hereinabove,  we  have  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. 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. In that view of the matter we

find that the appeals deserve to be allowed.

Civil Appeal arising out of S.L.P.(C) No. 36926 of 2012:

37. The appeal is allowed. The judgment and order

passed by the High Court of Sikkim dated 11.05.2012 is

quashed and set aside.

38. No order as to costs.

Civil Appeal Nos. 2345 of 2017 and 2346 of 2017:

39. 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 learned Single Judge dated

10.12.2010 dismissing the writ petitions is upheld.

32

40. No order as to costs.

...................J.                              [ARUN MISHRA]

...................J.                              [M. R. SHAH]

...................J. [B.R. GAVAI]

NEW DELHI; SEPTEMBER 19, 2019.