Warehousing deposit condition upheld as a valid revenue safeguard under customs law, despite pre-existing contracts.

Section 59A of the Customs Act, 1962 was upheld as a valid condition for warehousing, requiring deposit of 50% of the assessed duty to prevent misuse of the facility and secure prompt revenue realisation. Warehousing was treated as a statutory concession to defer payment, not a vested right to postpone duty at the importer's convenience, and the provision applied by reference to the warehousing order rather than the date of the underlying contract. The absence of interest on any eventual refund did not undermine validity, and Article 265 was held inapplicable because the measure concerned a deposit, not a tax levy. The challenge failed and the petition was dismissed.

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Issues: Whether Section 59A of the Customs Act, 1962, requiring deposit of 50% of the assessed duty for warehousing, was unconstitutional or inapplicable to goods covered by contracts entered into before its commencement.

Analysis: Warehousing is only a statutory for deferring payment of customs duty, not a vested right to postpone payment at the importer's convenience. Section 59A did not abolish warehousing but imposed a condition on its use, justified by the legislative policy of preventing misuse of the facility and securing prompt realisation of revenue. The operative event for application of the provision was the order of warehousing, not the earlier contract date. The challenge based on absence of interest on eventual refund did not affect validity, and Article 265 was held inapplicable because the provision concerned a deposit, not a levy or collection of tax. The cited Calcutta decision on rate of duty at the time of removal from warehouse was held irrelevant on the facts.

Conclusion: The challenge to Section 59A failed. The provision was held valid and applicable, and the petition was dismissed.

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