2025 (7) TMI 733 - HC - Customs

Legislative changes don't presume errors in original law; courts can't direct retrospective effect to prospective amendments

Aarti Drugs Limited Versus Union of India, The Chairman Central Board of Indirect Taxes & Customs, New Delhi, Joint Secretary Tax Research Unit, Central Board of Indirect Tax & Customs, Ministry of Revenue, New Delhi, Additional Director General Directorate of Revenue Intelligence Visakhapatnam Regional Unit, Senior Intelligence Officer Directorate of Revenue Intelligence Visakhapatnam Regional Unit.

Bombay HC disposed of a writ petition seeking correction of alleged clerical errors in customs tariff. The court held that legislative intervention with ... Seeking writ from this Court for correction of error in the customs tariff - clerical errors or not - HELD THAT:- The circumstance that the legislature has intervened prospectively and brought about changes in the legislation is also no ground to presume that the legislature has accepted the position that there were errors in the unamended legislation. In any event, the changes have been given a prospective effect, and it is ordinarily not for this Court to direct that such changes must be given a retrospective effect. This is not to preclude any argument before a competent forum that the changes being clarificatory should be regarded as retrospective. However, this Petition is not the occasion for dealing with such issues and therefore, we refrain from making any observations in this regard. The Petitioner cannot, as a matter of right, seek a mandamus upon the 1st and 2nd Respondents to decide its representation dated 23 March 2024. However, at the same time, if the Petitioner has raised the grievance, there is no harm in looking into the Petitioner’s representation and disposing of this representation within a reasonable period. The 1st and 2nd Respondents is requested to dispose of the Petitioner’s representation within a reasonable period. However, we clarify that we are not issuing a writ of mandamus in this regard, as these matters ultimately fall within the purview of the 1st and 2nd Respondents to investigate and decide upon thereafter. Petition disposed off. The core legal questions considered by the Court in this matter are:1. Whether the Court can issue a writ of certiorari or mandamus to correct alleged 'obvious errors' or 'clerical errors' in the Customs Tariff under sub-heading 293359 of Chapter 29, as incorporated in the Third Schedule of the Finance Act, 2022.2. Whether the Court can direct the revision of the Basic Customs Duty (BCD) rate from 10% to 7.5% retrospectively with effect from 1 May 2022.3. Whether the Court can issue a writ of mandamus or any other appropriate writ to compel Respondents 1 and 2 to decide upon the Petitioner's representation dated 23 March 2024 requesting revision of the BCD rate.Issue-wise Detailed AnalysisIssue 1: Authority of the Court to Correct Alleged Clerical or Obvious Errors in the Customs TariffRelevant Legal Framework and Precedents: The Customs Tariff, as prescribed under the Finance Act, is a legislative instrument reflecting the Parliament's will. The Court's jurisdiction to interfere with such legislative enactments is limited to instances where the law is ultra vires the Constitution or beyond legislative competence. The Supreme Court's decision in Amin Merchant Vs Chairman, Central Board of Excise & Revenue (2016) is authoritative, affirming that once the Finance Act prescribes a tariff rate, it represents the definitive legislative intent.Court's Interpretation and Reasoning: The Court emphasized that it is not within the judicial domain to correct what the Petitioner alleges to be 'obvious errors' or 'clerical errors' in a legislative instrument. The Court's role is to interpret laws, not to direct the Legislature to amend or correct them. The Petitioner's contention that the omission or error in the tariff schedule should be corrected retrospectively was rejected on the ground that such correction would amount to judicial encroachment on the legislative domain.Key Evidence and Findings: The Petitioner admitted that the so-called errors were rectified prospectively by legislative amendments effective from 1 February or 1 May 2025. The Petitioner's grievance was that such rectification should have been retrospective from 1 May 2022.Application of Law to Facts: Since the amendments were prospective, the Court held that it cannot direct retrospective effect. The legislative amendments do not imply acceptance of error in the original enactment. The Court distinguished between judicial review of legislative competence and judicial direction to amend laws.Treatment of Competing Arguments: The Petitioner argued for correction of errors and retrospective effect to benefit from the corrected tariff. The Respondents relied on the principle that tariff enactments are expressions of legislative will and judicial review does not extend to correcting such errors. The Court sided with the Respondents, relying on the Supreme Court precedent.Conclusion: The Court held that reliefs in the nature of writs of certiorari or mandamus to correct or revise the tariff rates retrospectively cannot be granted. Such reliefs would infringe upon the Legislature's exclusive domain.Issue 2: Direction to Revise the Basic Customs Duty Rate RetrospectivelyRelevant Legal Framework and Precedents: Legislative amendments are generally prospective unless expressly made retrospective. Courts do not ordinarily direct retrospective application of legislative changes unless the amendments are clarificatory and the matter is before a competent forum.Court's Interpretation and Reasoning: The Court noted that the Legislature's intervention to rectify the tariff rates was prospective and that the Court cannot direct retrospective effect. It acknowledged that arguments regarding retrospective application could be raised before appropriate forums but declined to entertain such issues in the present writ petition.Key Evidence and Findings: The legislative amendments effective from February or May 2025 were not made retrospective. The Petitioner sought retrospective effect from May 2022 to benefit from the lower tariff rate.Application of Law to Facts: The Court applied the principle that retrospective effect of legislative amendments is not presumed and cannot be judicially imposed absent express legislative intent.Treatment of Competing Arguments: The Petitioner urged retrospective correction; the Respondents opposed. The Court refrained from deciding on retrospective application as it was beyond the scope of the petition.Conclusion: The Court declined to grant relief for retrospective revision of the tariff rate.Issue 3: Mandamus to Decide Petitioner's RepresentationRelevant Legal Framework and Precedents: Mandamus is an extraordinary remedy to compel public authorities to perform a public or statutory duty. However, there is no absolute right to mandamus to compel decision on representations, especially where discretion is involved.Court's Interpretation and Reasoning: The Court held that the Petitioner cannot claim a mandamus as a matter of right to compel Respondents 1 and 2 to decide the representation. Nonetheless, the Court found no harm in directing the Respondents to consider and dispose of the representation within a reasonable time.Key Evidence and Findings: The Petitioner filed a representation dated 23 March 2024 requesting revision of the BCD rate. The Petitioner also undertook to file a supplementary representation incorporating subsequent developments.Application of Law to Facts: The Court balanced the absence of a right to mandamus with the administrative fairness principle that representations should be disposed of expeditiously.Treatment of Competing Arguments: The Petitioner sought a writ of mandamus; the Respondents opposed. The Court declined to issue a writ mandating decision but requested prompt disposal.Conclusion: The Court directed Respondents 1 and 2 to dispose of the original and supplementary representations within a reasonable time but did not issue a writ of mandamus.Significant Holdings'Normally, it is not for this Court to rule on what the Petitioner describes as errors, obvious errors or clerical errors in a legislative instrument. In any event, it is not for this Court to issue directions for corrections of the so-called errors. The Courts interpret the laws enacted by the Legislature. They may, if a case is made out, strike down a law if it is ultra vires the Constitution. But they do not encroach upon the domain of the Legislature by directing it to enact a law or to correct what they believe may be errors in such enacted law.''Once the Finance Act enacts a law, and the rate of duty is prescribed in relation to a specific tariff, that represents the definitive expression of the legislative intent of the parliament.''Grant of such reliefs would virtually amount to directing the legislature to modify the law by accepting the Petitioner's contention that there was some error, an obvious error, or a clerical error in the customs tariff. Similarly, no relief can be ordinarily granted by the Court to direct the legislature to give retrospective effect to a legislative measure. All this would amount to encroaching on the domain primarily reserved for the Legislature by our Constitution.''The Petitioner cannot, as a matter of right, seek a mandamus upon the 1st and 2nd Respondents to decide its representation dated 23 March 2024. However, at the same time, if the Petitioner has raised the grievance, there is no harm in looking into the Petitioner's representation and disposing of this representation within a reasonable period.'The Court's final determinations were:- Reliefs in prayer clauses (a) and (b), seeking correction of alleged clerical errors and retrospective revision of tariff rates, are not maintainable and are refused.- Relief in prayer clause (c), seeking mandamus to decide the Petitioner's representation, is not granted as a writ but the Respondents are directed to dispose of the representation and any supplementary representation within a reasonable time.