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Report No. 108

2.18. Jit Ram v. State of Haryana.-

On the establishing of a mandi the concerned Municipal Committee decided that purchasers of the plots for sale in the mandi would not be required to pay octroi 'duty on goods imported within the mandi. This was in 1918 and the state of affairs continued till 1965. During that time though the Municipal Committee had changed its mind the Government approved the Committee's original action of exempting the purchasers of plots from octroi duty. In 1965, on the request of the Municipal Committee, the Government withdrew its approval of the earlier action and the Municipal Committee started levying octroi duty. A challenge to this action of the Municipal Committee and the Government failed in the High Court. Dismissing the appeal, the Supreme Court held:1

"So far as the recommendation of the Municipal Committee to the Government to levy octroi duty is concerned, though it is contrary to the representation it made to the buyers of the sites in the mandi, the Municipality is not estopped as the representation made by it was beyond the scope of its authority. The levy of tax being for a public purpose i.e. for augmenting the revenues of the Municipality as laid down in Ramkumar case, (AIR 1976 SC 2237) the plea of estoppel is not available. The order of the Government directing the levy of octroi in pursuance of the resolutions of the Municipality cannot also be challenged as it is in the exercise of its statutory duty."

In the course of the judgment the learned Judges laid down the following propositions regarding promissory estoppel:

"(1) The plea of promissory estoppel is not available against the exercise the legislative functions of the State.

(2) The doctrine cannot be invoked for preventing the Government from discharging its functions under the law.

(3) When the officer of the Government acts outside the scope of his authority, the plea of promissory estoppel is not available. The doctrine of ultra vires will come into operation and the Government cannot be held bound by the unauthorised acts of its officers.

(4) When the officer acts within the scope of his authority under a scheme and enters an agreement and makes a representation and a person acting on the representation puts himself in a disadvantageous position, the Court is entitled to require the officer to act according to the scheme and the agreement or representation. The officer cannot arbitrarily act on his mere whim and ignore his promise on some undefined and undisclosed grounds of necessity or change the conditions to the prejudice of the person who had acted upon such representation and put himself in a disadvantageous position. The Court can enforce compliance by a public authority or the obligation laid on him if he arbitrarily or on his mere whim ignores the promises made by him on behalf of the Government.

(5) The officer would be justified in changing the terms of the agreement to the prejudice of the other party on special considerations such as difficult foreign exchange or other matters which have a bearing on the general interest of the State."

1. AIR 1980 SC 1285.



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