JUDGMENT
A. Lakshmana Rao, J.
1. The Petitioners are engaged in the manufacture and sale of vegetable oils. By virtue of Section 3 of the Vegetable Oils Cess Act, 1983 (Act No. 30 of 1983), cess is leviable on vegetable oils produced in any mill in the country. This Act came into force with effect from January 1, 1984 whereas the assent of the President was received on September 7, 1983. Parliament also enacted the National Oil Seeds and Vegetable Oils Development Board Act, 1983 (Act No. 29 of 1983) to provide for the development of the oil seeds and vegetable oils industry under the control of the Union and for matters connected therewith. This Act received the assent of the President on September 8, 1983. Under this Act, the Central Government is conferred power to constitute the National Oil seeds and Vegetable Oils Development Board (for short the Board). In exercise of that power, a Board has been established “In order to ensure that the said Board has the necessary resources to discharge its functions”, as is mentioned in the Statement of Objects and Reasons, “the Vegetable Oils Cess Bill seeks to provide for the imposition of a cess in the nature of a duty of excise on vegetable oils”. Prior to 1984, cess on vegetable oils was being levied under the Produce Cess Act, 1966.
2. The constitutional validity of Act No. 30 of 1983 was questioned by the petitioners and others. The Supreme Court upheld the validity of the Act. While so, in his Budget speech on February 28, 1986, the Union Minister for Finance announced, while presenting the Budget for the Financial Year 1986-87 that the Central Government had taken a decision to dispense with the cess on cotton, copra and vegetable oils as part of the long term fiscal policy. The relevant portion of the budget speech is as follows:
“The long term fiscal policy recognises that cesses levied as excise duties contribute to the multiplicity of taxes. As an endeavour to reduce the number of these cesses, it has been decided to dispense with the cess on cotton, copra and vegetable oils. The Ministry of Agriculture will take appropriate action in the matter. The loss to the exchequer on this account will be Rs. 5.90 crores.”
It is the case of the petitioner that it was mentioned in the memorandum in which the provisions of the Finance Bill 1986 were explained, that it had been decided to dispense with the levy and collection of cess on vegetable oils and that the Ministry of Agriculture will take appropriate action in this regard. According to them, the Ministry of Food & Civil Supplies, Government of India, through its letter dated August 11, 1986, requested the Commissioner (Tax Research), Department of Revenue, to urgently issue necessary instructions to all concerned that the cess on vegetable oils had been dispensed with as such no cess on that account shall be collected.
3. On December 8,1986 the Cotton, Copra and Vegetable Oils Cess (Abolition) Bill was introduced in Parliament proposing to amend the Produce Cess Act, 1966 and to repeal the Copra Cess Act, 1979 and the Vegetable Oils Cess Act, 1983. The Bill contained the following clause:
13. “Notwithstanding anything contained in the amendments made to the Produce Cess Act, 1966 or the repeal of the Copra Cess Act, 1979 or the Vegetable Oils Cess Act, 1983 by this Act any duty of excise, levied under any of the said Acts immediately before the commencement of this Act, but has not been collected before such commencement shall be liable to be collected after such commencement in accordance with the provisions of the said Act for being paid into the Consolidated Fund of India as if this Act had not been enacted.”
The bill was passed by Parliament and it received the assent of the President on March, 21, 1987. Clause 13 of the Bill referred to above is Section 13 of the Cotton, Copra and Vegetable Oils Cess (Abolition) Act, 1987 (hereinafter referred to as the Act).
4. It is submitted by Mr. Vedula Jagannadha Rao, learned counsel for the petitioners, that Clause 13 inserted in the Cotton, Copra and Vegetable Oils Cess (Abolition) Bill, 1986 being contrary to the Statement of Policy made during the budget speech by the Minister for Finance on February, 28,1986 that it has been decided to dispense with levy and collection of cess on vegetable oils, good administration requires that the Union of India should act by implementing the promise made by the Minister for Finance on the floor of the House and that Section 13 of the Act is unreasonable on that ground. In our view, the contention is devoid of any substance. Duty of excise by way of cess is leviable on vegetable oils produced in any mill in the country under Section 3 of Act No. 30 of 1983. Such levy imposed under an Act of Parliament can be done away with only by an Act of Parliament or by an ordinance promulgated by the president of India. The Statement made by the Minister for Finance in the budget speech is only an indication of the policy of the Government and it does not operate as an estoppel against the parliament to make law contrary to the statement made by the Minister. After the Minister made the statement on February 28,1986 that the Government had taken a decision to dispense with the levy and collection of cess on vegetable oils a Bill was introduced in Parliament on December 8,1986 proposing to repeal Act No. 30 of 1983. The Bill was passed by Parliament and it received the assent of the President on March 21, 1987. By virtue of Act, Act No. 30 of 1983 had been repealed. The Act contained a specific provision that notwithstanding the repeal of Act No. 30 of 1983 or anything contained in the amendments made to the Produce Cess Act, 1966, any duty of excise levied under the Vegetable Oils Cess Act, 1983 immediately before its repeal, but had not been collected before such repeal, shall be liable to be collected as if the Cotton, Copra and Vegetable Oils Cess (Abolition) Act had not been enacted. Notwithstanding the promise made by the Minister on the floor of the House, if the Parliament makes a law which may not have given full effect to the promise made by the Minister in his budget speech, on no valid ground can the law made by the Parliament be held to be either unreasonable or otherwise invalid.
5. It is submitted by the learned counsel for the petitioners that from March 1,1986 the petitioners were permitted to clear the finished products without payment of cess and that they had not collected any cess from the purchasers till Act No. 30 of 1983 was repealed, in view of the statement made by the Minister for Finance on February 28,1986. It is however, admitted that some of the petitioners had paid some amount towards cess under threat for the period from March 1, 1986 to March 21, 1987. It is contended that the “prospects held out, representations made, the conduct of the Government and equities arising therefrom” can be taken into consideration for judging whether Section 13 of the Act is reasonable or not. In support of this contention, the learned Counsel has placed strong reliance on the view expressed by the Chief Justice M.H. Beg in Madan Mohan Pathak v. Union of India, . In that case, the Central Government issued an order under Section 11(1) of the Life Insurance Corporation Act, 1956 prescribing the pay-scales, dearness allowance and conditions of service applicable to Class III and IV employees of the Corporation. It was mentioned therein that no bonus would be paid. However, the Central Government issued orders on June 26, 1959, under Section 11(2) of the Act amending para 9 of the 1957 Order thereby providing that bonus other than profit sharing bonus would be paid to the employees drawing the salary not exceeding Rs. 500/- per month. Thereafter, there was a settlement in July 1959 between the employees and the Corporation providing for payment of cash bonus. In July, 1960 regulations were framed under Section 49 of the Life Insurance Corporation Act regulating the conditions of service of employees. Regulation 58 provided for payment of non-profit sharing bonus to the employees. Thereafter, settlements were entered into between the employees and the Corporation from time to time. On May 29, 1976 the Life Insurance Corporation (Modification of Settlement) Act, 1976 was enacted by Parliament during the period of emergency denying to the employees the right to bonus which they were entitled to under the settlements. The employees questioned the validity of this Act on the ground that it violated their fundamental right to property under Article 19(1)(f) and that the Act was not saved by the provisions of Article 19(6) of the Constitution of India. In considering this question, Chief Justice Beg referred to the following observations made by the Supreme Court in Union of India v. Anglo Afghan Agencies Limited, AIR 1958 S.C. 718.
“Under our jurisprudence the Government is not exempt from liability to carry out the representation made by it as to its future conduct and it cannot on some undefined and undisclosed ground of necessity or expediency fail to carry out the promise solemnly made by it, nor claim to be the judge of its own obligation to citizen on an ex parte appraisement of the circumstances in which the obligation has arisen.”
The learned Chief Justice pointed out that the above principle can be taken into account in judging the reasonableness of the provision of law also. Finding that the Life Insurance Corporation (Modification of Settlement) Act, 1976 was the result of a proposal made by the Government which “instead of proceeding under Section 11(2) of the Life Insurance Corporation Act, chose to make an Act of Parliament protected by emergency provisions,” the learned Chief Justice held:
“that the prospects held out, the representation made, the conduct of the Government and the equities arising therefrom may all be taken into consideration for judging whether a particular piece of legislation initiated by the Government and enacted by the parliament is reasonable.”
6. In our view, the decision referred to above, has no application to the facts of the present cases. First of all, we are not sure whether any equities could be raised in favour of the petitioner as we do not have any material to show that cess was not collected relying upon the statement of the Finance Minister. The petitioners have no doubt a fundamental right to carry on trade or business in vegetable oils. However, they are liable to pay cess on vegetable oils produced by them under Act No. 30 of 1983. This Act was held to be constitutionally valid by the Supreme Court. So long this law continues to be in force, the petitioners are liable to pay the cess. Their liability is dependent only on the provisions of the Act and not on any other consideration including the statement made by the Minister on the floor of the Parliament. What Section 13 of the Act provides for is merely that the petitioners are liable to pay the cess till the repeal of Act No. 30 of 1983 under which the levy is made. The liability created under law can be either abolished or altered or modified only by a suitable provision of law validly made and in no other way. If a liability to pay cess had been created under a valid law, such law cannot be said to interfere with the fundamental right of a citizen to carry on trade or business. Therefore, question of judging the reasonableness of such a provision on the ground that it is contrary to the statement made by the Minister for Finance on the floor of the House does not arise.
7. The two decisions (i) of the Judicial Committee of the Privy Council in Attorney General of Hong Kong v. Ng Yuen Shiu, 1983 (II) Appeal Cases 629; and (ii) of the House of Lordship Re Preston, (1985) Appeal Cases 835 cited by the learned counsel for the petitioner will not be of any help to the petitioners. In the first case referred to above, the principle laid down by the Judicial Committee of the Privy Council was that:
“Where a public authority charged with the duty of making a decision promised to follow a certain procedure before reaching that decision, good administration required that it should act by implementing the promise provided the implementation did not conflict with the authority’s statutory duty”.
In the other case the principle enunciated by the House of Lords was:
“that unfairness in the purported exercise of a power could amount to an abuse or excess of power if it could be shown that the commissioner had been quilty of conduct equivalent to a breach of contract or breach of representation.”
Both these decisions pertain to a representation or a Statement made by a public authority in performing the statutory functions conferred under law and they have no application in judging the validity of a provision of law.
8. The passage dealing with “inconsistency, unfairness and breach of undertakings” in “Administrative Law” by H.W.R. Wade, referred to by the learned counsel for the petitioners, also does not render any assistance.
9. Yet another contention advanced on behalf of the petitioners that Section 13 of the Cotton, Copra and Vegetable Oils Cess (Abolition) Act, 1987 is violative of Articles 14 and 21 of the Constitution of India is liable to be rejected in view of the provisions of law referred to above and the facts and circumstances of the case. Section 13 of the Act provides that any duty of excise levied under Act No. 30 of 1983 immediately before its repeal, but has not been collected, shall be liable to be collected. It is urged by the learned counsel for the petitioners that only such cess which was already levied but not collected under Act No. 30 of 1983 alone can be collected, and where no cess was levied and it was merely leviable, then it cannot be collected. It is contended that Section 13 of the Act makes a discrimination between those on whom a levy was made before the repeal of Act No. 30 of the 1983 and those on whom no levy was made though the cess was leviable and therefore it is violative of Article 14 of the Constitution of India. This contention cannot be accepted in view of the decision of the Supreme Court in Dhanpat Oil & General Mills v. Union of India, . Dealing with an identical provision as that of Section 3 of Act No. 30 of 1983, the Supreme Court has held that the levy is imposed by the provisions of the Act and comes into existence immediately on the taxable even attracting excise duty. It was emphasised that the accrual of obligation to suffer the duty of does not depend upon any other circumstance. Under Section 3(1) of Act No. 30 of 1983 cess is levied on the production of vegetable oils in the mill. There is no dispute that the petitioners produced vegetable oils in their mills during the relevant period. Taxable event is the production of oil. Therefore, production of oil in the petitioners’ mills attracts excise duty. The levy is imposed by Section 3(1) of Act No. 30 of 1983 and it does not require any other step to be taken for completing the process of levy. It is stated in the counter affidavit that the petitioners are governed by self-removal procedure, according to which the petitioners themselves have to assess and pay the duty of excise at the time of clearance of the goods from the mill premises. If the petitioners have cleared the goods without payment of cess, it amounts to default on their part. In either case, it cannot be said that there was no ‘levy’ in law. Therefore, whatever vegetable oils were produced by the petitioners in their mills prior to March 21,1987 i.e., the date of repeal of Act No. 30 of 1983, such production will attract the levy automatically under Section 3(1) and such amount can be collected under Section 13(1) of the Cotton, Copra and Vegetable Oils Cess (Abolition) Act, 1987. The liability to pay the cess under Act No. 30 of 1983 is not dependent upon the collection of that amount by the petitioners from the purchasers of the oil, even assuming that the petitioner had not collected the cess from the buyers. The decision of the Supreme Court in Ajay Hasia v. Khalid Mujub, cited by the learned Counsel for the petitioners has no application to the facts of these cases. Therefore, we do not find force in the contention that Section 13 of the Act is violative of Articles 14, 19(1)(g) and 21 of the Constitution of India.
10. For the reasons stated above, the writ petitions fail and they are accordingly dismissed. There shall be no order as to costs.