Tariff clarification on port dues upheld, while short-levy demand was curtailed by strict statutory limitation.

The tariff clarification confined the reduced gross tonnage basis to port dues, because Chapter VI of the Major Port Trusts Act treated port dues separately from pilotage and berth hire charges; the clarification was therefore valid and not arbitrary. The limitation for short-levied charges under Section 56 had to be strictly applied within two years from payment, and earlier writ proceedings did not extend that period. Amounts outside the limitation period were not recoverable, so the demand had to be recomputed by excluding time-barred items, with only the balance remaining payable.

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Issues: (i) Whether the reduced gross tonnage basis applied to pilotage and berth hire charges, or only to port dues under the tariff regime; (ii) whether the demand for short-levied charges was barred by limitation under Section 56 of the Major Port Trusts Act, 1963.

Issue (i): Whether the reduced gross tonnage basis applied to pilotage and berth hire charges, or only to port dues under the tariff regime.

Analysis: The charging provisions under Chapter VI of the Major Port Trusts Act, 1963 distinguished port dues from other vessel-related services. Port dues were dealt with separately from pilotage and berth hire charges, and the tariff authority's clarification of 5-10-2002 explained that the reduced gross tonnage basis was confined to port dues. The tariff authority acted within its statutory power and there was no arbitrariness warranting interference under Article 226 of the Constitution of India.

Conclusion: The reduced gross tonnage basis applied only to port dues and not to pilotage or berth hire charges.

Issue (ii): Whether the demand for short-levied charges was barred by limitation under Section 56 of the Major Port Trusts Act, 1963.

Analysis: Section 56 permitted a notice for short-levied charges only within two years from the date of payment. The earlier writ petitions only permitted fresh proceedings in accordance with law and did not suspend or extend the statutory limitation for all bills. Accordingly, any item outside the two-year period on the date of the show-cause notice could not be recovered, and the demand had to be recomputed by excluding such barred amounts.

Conclusion: The demand was barred to the extent it covered charges short-levied beyond the two-year limitation period.

Final Conclusion: The petitions succeeded only in part: the tariff clarification was upheld, but the demand had to be revised by excluding time-barred items, after which the petitioners were to pay the balance amount with liberty to seek remission from the Central Government.

Ratio Decidendi: Where the statute creates separate categories of port charges, a tariff clarification limiting a concession to one category alone is valid; and a statutory notice for short levy must strictly comply with the prescribed limitation period, which cannot be enlarged by implication from earlier writ proceedings.

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