Customs notification publication and resolution plan treatment of statutory dues determined the dispute under customs and insolvency law.

The Madras HC discussed two connected issues in customs and insolvency law. It held that an amended customs notification enhancing basic customs duty operated from 17.09.2015, when it was published in the Official Gazette and on the departmental website; later physical sale of printed copies did not delay its effect. On insolvency, it noted that statutory customs dues are sovereign in nature, but applied the Supreme Court's ruling in Ghanashyam Mishra to recognise that approved resolution plans can extinguish claims not included in the plan. The customs claim was therefore left for clarification on whether it had been covered by the resolution plan.

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Issues: (i) Whether the amended customs notification enhancing basic customs duty took effect on the date of its publication in the Official Gazette and website, despite the physical sale of the Gazette taking place later; (ii) Whether customs duty dues of the petitioner were wiped out or otherwise affected by the approved corporate resolution plan under the Insolvency and Bankruptcy Code, 2016.

Issue (i): Whether the amended customs notification enhancing basic customs duty took effect on the date of its publication in the Official Gazette and website, despite the physical sale of the Gazette taking place later.

Analysis: The dispute concerned the operation of Section 25(4) of the Customs Act, 1962 as it stood before the 2016 amendment. The notification enhancing duty had been published in the Official Gazette and also hosted on the departmental website on 17.09.2015. The Court held that, in the contemporary context of electronic dissemination of statutory information, publication on the official website and in the Gazette sufficiently notified the public. The later physical sale of printed copies did not postpone the operation of the notification. The subsequent legislative amendment deleting the sale requirement was treated as consistent with this changed mode of publication.

Conclusion: The challenge to the enhanced rate of duty failed. The amended notification was held to have come into force on 17.09.2015, not on the later date when printed copies were made available for sale.

Issue (ii): Whether customs duty dues of the petitioner were wiped out or otherwise affected by the approved corporate resolution plan under the Insolvency and Bankruptcy Code, 2016.

Analysis: The Court examined whether customs duty could be treated as operational debt and whether the Customs Department was an operational creditor within the framework of the Insolvency and Bankruptcy Code, 2016. It observed that tax and duty are in the nature of sovereign dues and, in principle, do not arise from a claim for goods, services, or employment. However, the Court found itself bound by the later Supreme Court ruling in Ghanashyam Mishra and Sons, which held that once a resolution plan is approved, all claims not forming part of the plan stand extinguished and statutory dues of governmental authorities are also bound by the plan. Applying that ruling, the Court accepted the petitioner's contention only to the limited extent that the resolution plan could affect the department's claim, but required clarification from the National Company Law Board on whether the customs duty in question had in fact been included in the plan.

Conclusion: The petitioner succeeded only in part on the insolvency issue. The customs claim was not finally rejected, but the matter was sent back for clarification from the National Company Law Board regarding inclusion of the duty in the resolution plan.

Final Conclusion: The writ petition failed on the customs-notification issue, while the insolvency-related objection was entertained only to the extent of seeking clarification under the resolution process. The parties were directed to maintain status quo for a limited period and the respondents were permitted to proceed in accordance with law depending on the clarification obtained.

Ratio Decidendi: A customs notification published in the Official Gazette and made available on the departmental website can operate from the date of such publication, and statutory dues may be bound by an approved resolution plan only to the extent recognised within the insolvency framework and the controlling Supreme Court precedent.

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