Page 215 - GSTL_2nd April 2020_Vol 35_Part 1

2020 ] HERO MOTOCORP. LTD. v. UNION OF INDIA 117
representation, the Government must be held to be bound by such repre-
sentation and that any defect in procedure or irregularity can be waived so
as to render valid which would otherwise be invalid. The counsel further
submitted that allowing the Government to go back upon its promise con-
tained in GOMs No. 201 would virtually amount to allowing it to commit a
legal fraud. For a proper appreciation of this contention, it is necessary to
keep in mind the distinction between an administrative act and an act done under a
statute. If the statute requires that a particular act should be done in a par-
ticular manner and if it is found, as we have found hereinbefore, that the
act done by the Government is invalid and ineffective for non-compliance
with the mandatory requirements of law, it would be rather curious if it is
held that notwithstanding such non-compliance, it yet constitutes a ‘prom-
ise’ or a ‘representation ‘ for the purpose of invoking the rule of promisso-
ry/equitable estoppel. Accepting such a plea would amount to nullifying
the mandatory requirements of law besides providing a licence to the Gov-
ernment or other body to act ignoring the binding provisions of law. Such a
course would render the mandatory provisions of the enactment meaning-
less and superfluous. Where the field is occupied by an enactment, the executive
has to act in accordance therewith, particularly where the provisions are mandatory
in nature. There is no room for any administrative action or for doing the thing or-
dained by the statute otherwise than in accordance therewith. Where, of course,
the matter is not governed by a law made by a competent legislature, the
executive can act in its executive capacity since the executive power of the
State extends to matters with respect to which the legislature of a State has
the power to make laws (Article 162 of the Constitution). The proposition
urged by the Learned Counsel for the appellant falls foul of our constitu-
tional scheme and public interest. It would virtually mean that the rule of
promissory estoppel can be pleaded to defeat the provisions of law whereas the said
rule, it is well settled, is not available against a statutory provision. The sanctity of
law and the sanctity of the mandatory requirement of the law cannot be allowed to
be defeated by resort to rules of estoppel. None of the decisions cited by the
Learned Counsel say that where an act is done in violation of a mandatory
provision of a statute, such act can still be made a foundation for invoking
the rule of promissory/equitable estoppel. Moreover, when the Govern-
ment acts outside its authority, as in this case, it is difficult to say that it is
acting within its ostensible authority.“
(emphasis supplied)
35. Thus, what clearly emerges from the decisions taken note of here-
inabove is that the plea of promissory estoppel cannot be enforced against an act
done in accordance with the statutory provisions of law. Under Section 174(2)(c)
of the CGST Act, express provision has been made by the Parliament to provide
that any tax exemption granted as an incentive against investment through a no-
tification under, inter alia, the erstwhile Central Excise Act, shall not continue as a
privilege if the said notification is rescinded, and in the present case, the notifica-
tion which granted 100% excise duty exemption was, in fact, rescinded. Thus, in
the absence of any challenge by the Petitioner to the rescission of the said notifi-
cation which granted exemption or to the vires of the proviso to Section 174(2)(c)
of the CGST Act, no plea of promissory estoppel is maintainable. The language
used in the proviso to Section 174(2)(c) is clear and unequivocal, and leaves no
room for a different interpretation.

GST LAW TIMES  2nd April 2020  279