2008 (2) TMI 643 - HC - Indian Laws

Court directs revision of demands, excludes time-barred amounts, grants liberty for remission.

The court allowed the writ petitions in part, directing the first respondent to issue revised demands excluding time-barred amounts. The petitioners were ... Sub-sec (3) to Section 49A - Though the petitioners also contend that they would have to bear the burden at this stage since it would be difficult to recover from the vessel owners, no relief could be granted to the petitioners in so far as that aspect as against the first respondent in this petition - As already noticed, the tariff is fixed by the TAMP and the first respondent is only enforcing and recovering the same - However, all that can be noticed is that as per sub-sec (3) to Section 49A the Central Government has the authority in special cases to remit in whole or portion of any amount that is payable in respect of pilotage and other services - Hence alter paying the amount due to the first respondent, the petitioner may make an appropriate representation to the Central Government who shall consider the same in accordance with law and take an appropriate decision on its merits if such special circumstance is made out. Issues Involved:1. Applicability of Reduced Gross Tonnage (RGT) vs. Gross Registered Tonnage (GRT) for levying port dues, pilotage, and berth hire charges.2. Validity of the clarificatory order dated 5-10-2002 by the Tariff Authority for Major Ports (TAMP).3. Competence and procedural correctness of the show cause notice issued under Section 56 of the Major Port Trusts Act, 1963 (MPT Act).4. Limitation period for issuing show cause notices for short-levied charges under Section 56 of the MPT Act.Detailed Analysis:1. Applicability of RGT vs. GRT for Levies:The primary contention was whether all tariff charges should be based on Reduced Gross Tonnage (RGT) instead of Gross Registered Tonnage (GRT). The petitioners argued that the order dated 15-3-2000 by TAMP, which referred to 'Port dues,' should apply to all types of levies, including pilotage and berth hire charges. However, the court clarified that the term 'Port dues' as used in the order dated 15-3-2000 only pertains to the fee for vessels entering the port, as indicated in Sections 49B and 50A of the MPT Act. Pilotage and berth hire charges, governed by Section 49A, are separate classes of levies and should be based on GRT, not RGT. Thus, the court held that the levy on RGT basis is limited only to port dues.2. Validity of the Clarificatory Order dated 5-10-2002 by TAMP:The petitioners challenged the clarificatory order dated 5-10-2002, which stated that RGT applies only to port dues. The court upheld the validity of this order, noting that TAMP, being the statutory authority under Section 47A of the MPT Act, had the power to issue such clarifications. The court found no arbitrariness or perversity in TAMP's decision, which was made after consulting major port trusts and other stakeholders. The clarificatory order was thus deemed lawful and did not call for interference.3. Competence and Procedural Correctness of the Show Cause Notice:The petitioners argued that the show cause notice issued under Section 56 of the MPT Act was not competent as it was issued by the Financial Adviser and Chief Accounts Officer instead of the Board. The court examined the resolution passed by the Board, which authorized the Chairman to take further action, and found that the notice was issued with the approval of the Board of Trustees. Therefore, the court held that the process of issuing the show cause notice was procedurally correct and in compliance with the MPT Act.4. Limitation Period for Issuing Show Cause Notices:The petitioners contended that certain short-levied bills were time-barred under the proviso to Section 56 of the MPT Act, which prohibits issuing notices after two years from the date of payment of the charge. The court noted that the first respondent attempted to justify the timing of the notices by citing the interim orders issued during the earlier round of litigation. However, the court ruled that the interim orders did not extend the limitation period and that the first respondent should have issued the notices within the statutory two-year period. Consequently, the court directed the first respondent to exclude amounts demanded in bills that were beyond the two-year limitation period as on the date of the respective show cause notices.Conclusion:The court allowed the writ petitions in part, directing the first respondent to issue revised demands excluding time-barred amounts. The petitioners were instructed to pay the revised amounts after appropriate adjustments. Additionally, the petitioners were granted liberty to make representations to the Central Government for remission of the amount, which the government should consider based on the merits within two months.Order:1. Writ Petitions in W.P. No. 46244/04 and 27522/04 are allowed in part; W.P. No. 27521/04 stands disposed of.2. The first respondent is directed to issue revised demands excluding time-barred amounts.3. Petitioners shall pay the revised amounts after adjustments.4. Petitioners may represent to the Central Government for remission, which shall be considered within two months.5. No order as to costs.