TaxTMI 
TaxTMI 
2020 (9) TMI 422
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....ues, the same were heard analogously and are being disposed of by this common order. 3. For the sake of convenience, Special Civil Application no.11063 of 2018 is treated as lead matter. However, facts for each of the petitions are also stated separately because they are different with regard to the same issue arising for declaring Section 25(4) of the Customs Act, 1962 as amended Finance Act, 2016 as unconstitutional and quashing and setting aside the Notification no.29 dated 1st March 2018 or In alternative to direct that the Notification no.29 dated 1st March 2018 is effective and operational from 6th March 2018 only and not prior thereto. Facts of SCA No.11063 of 2018. 4. The petitioner is a limited company incorporated under the provisions of Companies Act, 1956 and is engaged in the business of solvent extraction, refining of edible oils, manufacture of soya foods products, import, export and trading of agri commodities (for short 'the subject goods'). The petitioner purchased Crude Palm Oil of edible grade in bulk on high seas sales basis from M/s. S. N. Overseas, Bathinda, Punjab vide High Seas Sale Agreements dated 8th February 2018. M/s. S. N. Overseas, imported ....
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....as not required to pay the same as according to the petitioner such increased duty would come into force from the date of uploading the notification on the website. According to the petitioner as the impugned notification no.29 of 2018­Cus was published electronically on 6th March 2018, the same would not be applicable for the clearance of the subject goods for which the bills of entry were filed on 1st March 2018 and the respondent authorities could not have reassessed the bills of entries demanding enhanced duty and differential IGST relying upon the provisions of Section 25(4) of the Customs Act as amended in the year 2016, which provides that every notification issued under sub­section 1 or sub­section 2A of Section 25 shall unless and otherwise provided would come into force on the date of its issue by the Central Government for publication in the official gazette. 4.8 The petitioner has therefore, filed this petition with the following prayers. (A) The Hon'ble Court be pleased to declare and hold that Section 25(4) of the Customs Act, 1962 as amended by the Finance Act, 2016 is arbitrary, illegal, ultravirus and unconstitutional and strike down the....
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....7th November 2017 as per the proviso to Section 15 of Customs Act, 1962. 5.2 That further on 17th November 2017, at 12:45 hours. The Risk Management System (RMS) assessed the said Bill of Entry @ 17.5% which was the applicable rate in the system as well. 5.3 That subsequently, vide notice dated 23rd November 2017, the Deputy Commissioner of Customs (Gr.VII), Kandla informed that such Bill of Entry needs to be reassessed on the ground of issuance of Notification No.87/2017Cus dated 17th November 2017. 5.4 That the new Notification No.87/2017Cus dated 17th November 2017 was neither in existence nor released till 20th November 2017. The Copy of the Notification digitally signed to be published in official Gazette is enclosed herewith the Note. 5.5 That the Notification No.87/2017Cus dated 17th November 2017 was digitally signed for being published in Official Gazette only on 20th November 2017. 5.6 That this was the reason that the effect of notification was also not given in RMS and EDI Bill of Entry at the time of assessment of the Bills of Entry no.4014924, 4015086 and 4032071. 5.7 That therefore, the petitioner vide letter dated 21st November 2017 and 27th Nov....
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....eputy Commissioner and requested the Bill of entry not be recalled and reassessed as per the higher Customs duty of 30%. Facts of SCA No.23356 of 2017 7. That in the present case, the Petitioner had imported goods being edible oil on 17th November 2017 and had filed Bills of Entry no.4014311, 4016027 and 4014597, all dated 15th November 2017 and Bill of Entry No.4031148 and 4031633 dated 16th November 2017 for home consumption. 7.1 That for Bills of Entry no.4014311, 4016027 and 4014597 all dated 15th November 2017, and for Bills of Entry no.4031148 dated 16th November 2017, the petitioner had made the duty payment @ 17.5% by MEIS licenses/scripts vide Notification no. 50/2017Customs dated 30th June 2017. 7.2 That on 17th November 2017, the vessel was granted an entry inward and at 12:11 hrs. therefore, the date of Bills of Entry would be 17th November 2017 as per the proviso to Section 15 of Customs Act, 1962. 7.3 That further on 17th November 2017, at 12:11 hrs. the Risk Management System (RMS) assessed the said Bill of Entry @ 17.5% which was the applicable rate in the system as well. 7.4 That subsequently, vide notice dated 23rd November 2017 & 24th November 2....
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....d Integrated Goods and Service Tax (IGST) to the tune of Rs. 16,63,409/payable on importation of the subject goods under the subject Bill of Entry on 16th November 2017. 8.3 Vessel carrying the subject goods had arrived at Kandla Port on 12th November 2017. Further, it would be relevant to mention here that the Entry Inward was granted to the said Vessel carrying the subject goods on 17th November 2017. 8.4 As per revenue, clearance of the subject goods was held up on the ground that duty on the subject goods (basic customs duty) had increased from 17.50% to 30% in terms of Notification No.87/2017Cus (purportedly dated 17th November 2017) issued under Section 25(1) of the Customs Act, 1962. To the best of the petitioner's information, the said Notification was uploaded on the website of Central Board of Excise and Customs i.e. www.cbec.gov.in only on 18th November 2017 around 01:30 hours and was published in the Official Gazette on 20th November 2017 at 11:56 hours. It is pertinent to mention here that the said Notification which was uploaded on website of Central Board of Excise and Customs as stated above had remarks "TO BE PUBLISHED IN THE GAZETTE OF INDIA". Further, th....
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.... of Crude Degummed Soyabean Oil of Edible Grade in bulk (referred to herein after as subject goods). 9.1 In pursuance to and in terms of the aforesaid contracts, the foreign supplier of the Petitioner shipped 3060 Mts of the subject goods vide Bills of Lading Nos. ED1 to ED9 all dated 30th September 2017 and Bills of Lading Nos. ED10 to ED 14 all dated 2nd October 2017 as per vessel "MT LACERTA" from the port of Paranagua, Brazil with port of discharge being Kandla, Gujarat, India. Further it is submitted that the foreign supplier had raised Commercial Invoice dated 1.11.2017 (pg 42) in favour of the Petitioner in regard to the subject imported goods. 9.2 Out of the aforesaid imported quantity of 3060 Mts of the subject goods, Petitioner sold 1750 Mts of the subject goods on High Seas Sale basis covered by Bills of Lading Nos. ED1 to ED7 all dated 30th September 2017. Thereafter Petitioner, being owner of balance 1310 Mts of the subject goods, as per aforesaid Bills of Lading Nos. ED8 & ED9 both dated 30th September 2017 and aforesaid Bills of Lading Nos. ED10 to ED14 all dated 21st February 2017, filed Bill of Entry No. 4014015 dated 15th November 2017 under Section 46 of th....
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....:56:05 +05'30' Therefore, it is evident that the subject notification has no application in the facts of the instant case. 9.6 Petitioner pursued the matter with the revenue for clearance of the subject goods. However instead of doing the needful a Letter dated 23rd November 2017 (pgs 6162) was issued by the revenue wherein, interalia, it was stated that the rate of basic customs duty payable on importation of the subject goods had increased in view of the aforesaid Notification No.87/2017Cus and that the subject Bill of Entry was required to be reassessed accordingly. 9.7 It would be pertinent to mention here that revenue was not permitting clearance of the subject goods as requested by the Petitioner. However the subject goods were urgently needed by the Petitioner, amongst others, on account of its business commitments. Further on account of non clearance of the subject goods by revenue, Petitioner was incurring lot of expenses every day on various counts and the subject goods were losing utility and life by each passing day. In view of the aforesaid compelling circumstances, without prejudice to all its rights and contentions in law especially the right to cont....
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.... case of the petitioner, that the petitioner is not liable to pay increased rate of duty by virtue of the said notification as the same would not be applicable to the bills of entry filed by the clearing house agent on 15th November 2017 and the petitioner has already paid the duty on IGST on 17th November 2017 on the subject goods. SUBMISSIONS ON BEHALF OF THE PETITIONERS 11. Learned advocates appearing for the petitioners in the above petitions heavily placed reliance upon the judgment and order dated 28th September 2019 passed by the Andhra Pradesh High Court at Amaravati in case of the petitioner in SCA no.11063 of 2018 for the same issue whereby the Court allowed the writ petitions and ordered to strikedown and declare amended Section 25(4) of Customs Act as arbitrary and contrary to Section 25(1) of the Customs Act and directed the revenue to repay the access amount paid by the petitioner therein with interest from the date of deposit till its date of repayment. 12. It was submitted that provisions of amended Section25( 4) of the Customs Act are also considered by the Delhi High Court in case of M. D. Overseas Ltd., and others vs. Union of India & others in judgment ....
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....fuses to allow benefit of exemption to manufacturers located in that Commissionerate or State but other manufacturers located elsewhere are allowed such exemption, then the same would be in violation of Article 14 of the Constitution of India and also of Article 19(1)(g) of the Constitution of India. We to may, at this stage, profitably quote judgment delivered by this High Court in the case of Ralli Engine Ltd. (supra), reported in 2004 (62) RLT 607 (Guj). "The petition contains challenge to the discriminatory treatment being given by the Commissionerates in three different States, i.e., Gujarat, Maharashtra and Tamil Nadu in respect of the same product. The petitionerCompany is a manufacturer of agricultural knapsack sprayer engine which is used as a pure/component in mechanical appliances for spraying pesticides in fields and farms. The product is being classified under Heading No.84.24 in Maharashtra (manufacturerHigh Power Engineering Company Private Limited, Satara) and in Tamil Nadu (manufacturerGreaves Limited, Chennai) whereas in Gujarat it is classified under Heading No.84,07 in the petitioners' case by the Assistant Commissioner of Central Excise at Valsad u....
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....es can take one stand in one State and another stand in another State. The trade notice issued by one Customs House must bind all Customs Authorities and, if it is erroneous, it should be withdrawn or amended, which in the instant case, admittedly, has not been done. 4. The civil appeal is allowed. The order under appeal is set aside." 14. Learned advocates for the petitioners also relied upon the following decisions in support of their contention that for a law to be made binding on the public, it must be published as under: (a) In the case of Harla v. State of Rajasthan, AIR 1951 SC 467, the Supreme Court held: "8. ...In the absence of any special law or custom, we are of opinion that it would be against the principles of natural justice to permit the subjects of a State to be punished or penalised by laws of which they had no knowledge and of which they could not even with the exercise of reasonable diligence have acquired any knowledge. Natural justice requires that before a law can become operative it must be promulgated or published. It must be broadcast in some recognisable way so that all men may know what it is, or at the very least, there must be s....
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....t must be so made that it can be known. We know that delegated or subordinate legislation is all pervasive and that there is hardly any field of activity where governance by delegated or subordinate legislative powers is not as important if not more important, than governance by Parliamentry legislation. But unlike Parliamentary Legislation which is publicly made, delegated or subordinate legislation is often made, unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary. It is, therefore, necessary that subordinate legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not. It will then take effect from the date of such publication or promulgation. Where the parent statute prescribes the mode of publication or promulgation that mode must be followed. Where the parent statute is silent, but the subordinate legislation itself prescribes the manner of publication, such a mode of publication may be sufficient, if reasonable. If the subordinate legislation does not prescribe the mode of publication or if the subordinate l....
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....and publication in their cases. The mode of publication can vary; what is a good method in one country may not necessarily be the best in another. But reasonable publication of some sort there must be.' These appeals therefore, are liable to fail only on the aforesaid ground and are dismissed accordingly." (d) In the case of M. D. Overseas v. Union of India (which arose in the context of Section 25 of the Customs Act as it stood prior to 14.5.2016), the Gujarat High Court held: "17. What follows from the bare reading of the provisions of subsections (4)(a) and 4(b) is that the same are intrinsically connected to each other and cannot be read in isolation. On plain reading of subsection (4)(a), it can be inferred that the notification comes into force from the date it is issued by the Central Government for publication in the Official Gazette; but it is equally obligatory that the same shall also be published and offered for sale on the date of issue by the Directorate of Publicity and Public Relations of the Board. Thus, the legislature had envisaged a common date of coming into force the notification and date of publication and sale, and hence, the expression ....
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....tion in the official gazette, and not the date on which it is published in the official gazette. 14. Regarding the determination in time, the same would be determined by a combined reading of Sections 5(3) and 3(13) of the General Clauses Act, alongwith the stipulations laid down in Section 25(4) of the Customs Act. Section 5(3) of the General Clauses Act reads as under: 5. Coming into operation of enactments. (1) Where any Central Act is not expressed to come into operation on a particular day, then it shall come into operation on the day on which it receives the assent, (a) in the case of a Central Act made before the commencement of the Constitution of the GovernorGeneral, and (b) in the case of an Act of Parliament, of the President (3) Unless the contrary is expressed, a [Central Act] or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement 15. The term of commencement used in last line of Section 5(3) requires further clarification. The same is defined in Section 3(13) of the General Clauses Act thusly: "Commencement" used with reference to an Act or regu....
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....Courts in the past. 20. In case of Kerala Colour Lab Association 2003156 ELT 17 it has been held by the Hon'ble High Court that while dealing with the challenge to the constitutional validity of an economic legislation, it would be useful to recapitulate the note of caution expressed by Hon'ble Supreme Court in R.K.Garg V. UOI AIR 1981 SC 2138 which has been abstracted as below: "...laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc... that the legislature should be allowed some play in the joints because it has to deal with complex problems which do not admit of solution through any doctrine... There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid...." GROUNDS AVAILABLE TO CHALLENGE STATUTE: 21. A law made by the parliament or the legislature can be struck down by the courts on two grounds alone viz. (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part II of the constitution or of any other constit....
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....e eminent domain but has many shades and colours. Violation of principle of natural justice may undermine the rule of law resulting in arbitrariness, unreasonableness, etc., but such violations may not undermine the rule of law so as to invalidate a statute. Violation must be of such a serious nature which undermines the very basic structure of our Constitution and our democratic principles. But once the court finds, a statute undermines the rule of law which has the status of a constitutional principle like the basic structure, the above grounds are also available and not vice versa. Any law which, in the opinion of the court, is not just, fair and reasonable, is not a ground to strike down a statute because such an approach would always be subjective, not the will of the people, because there is always a presumption of constitutionality for a statute." 23. LEGISLATIVE COMPETENCE: It is submitted that the legislative competence of Union of India for enacting any taxing statute cannot be doubted in view of the provisions of Article 246 and 248 read with schedule VII, List I, Entry No.97. ARTICLE 246: Subject matter of laws made by Parliament and by the Le....
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....ute to be unconstitutional, it should exercise great judicial restraint in this connection. This requires clarification, since, sometimes courts are perplexed as to whether they should declare a statute to be constitutional or unconstitutional... ...48. The court certainly has the power to decide about the constitutional validity of a statute. However, as observed by Frankfurter, J. in West Virginia v. Barnette 16, since this power prevents the full play of the democratic process it is vital that it should be exercised with rigorous selfrestraint..." 25. I respectfully say and submit that legislature enjoys greater latitude for classification in the matter of taxation and no legislation can be declared to be unconstitutional on the ground of it being harsh or unreasonable. It is a settled principle that in the matters of taxation, the legislature is allowed to pick & choose geographical areas, objects, persons, methods of tax and rates of tax. 26. It is further submitted that the Hon'ble Supreme Court has in its judgment reported in 1993 (3) SCC 677 in case of Venkateshwara Theatre V State of A.P. observed as under:... 20. Article 14 enjoins ....
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....bear in mind certain well established principles which have been evolved by the courts as rules of guidance in discharge of its constitutional function of judicial review. The first rule is that there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles. This rule is based on the assumption, judicially recognised and accepted, that the legislature understands and correctly appreciates the needs of its own people, its laws are directed to problems made manifest by experience and its discrimination are based on adequate grounds. The presumption of constitutionality is indeed so strong that in order to sustain it, the Court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation..." 28. It is further submitted that judgments relied upon by the petitioner in the petition are not in respect of constitutional validity of section 25(4) of Customs Act, 1962. Furthermore those judgments were deli....
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.... Directorate of Publicity and Public Relation by the Board on the date of its Issue by the Central Government is a follow up action. But nonetheless that follow up action has to be performed on the date of issue of the notification by the Central Government. A question was raised whether this follow up action was taken? The answer to that would appear from the affidavit affirmed by Sri Souvik Sinha on 28 January, 2016 which is as follows: "I state that the Notification being No. 4546/ 2015Customs dated 17.09.2015 was forwarded by the Under Secretary Government of India to Directorate of Publicity and Public Relations, herein after referred to as DPPR on the same date. The copy of Notifications are regularly received/obtained/collected by officials/staff of DPPR from Board's Office and the same is offered by way of sale to public by photocopying the same on the same date, in this case 17.09.2015 across the sale counter of DPPR located at Room G44, Ground Floor, C.R. Building, I.P. Estate, New Delhi110 109. I state that the above Notification was received by DPPR on 17.09.2015. Photocopy of the said Notification is annexed hereto and marked as annexure "R1. ....
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....at it has no cash memo to show since no one purchased the notification on September 17, 2015. There is no reason to disbelieve the Union, nor has anything been shown by the petitioners to detract therefrom." 28. A distinction between publication in the official gazette appearing in Clause (a) of subsection 4 and the mandate appearing in Clause (b) of Subsection 4 for publication and offer for sale by the Directorate of Publicity and Public Relation of the Board is discernable upon comparison of the two clauses namely clause (a) and Clause (b). The Directorate of Publicity and Public Relation is a limb of the board itself. Board has been defined under Section 2 of the Customs Act as the Central Board of Excise and Customs constituted under the Central Board of Revenue Act, 1963. Therefore, issuance of a notification by the Central Government for publication in the official gazette is enough for the notification to come into force but the follow up action is equally necessary which is to be done by Directorate of Publicity and Public Relations which is a wing of the Central Board of Excise constituted under the Central Board of Revenue Act, 1963. 29. Mr. Rawal was a....
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....vided for In Subsection 1 is subject to tariff value to be fixed by the Board under Subsection 2. Such a notification under Section 14(2) was Issued on 3rd August, 2001 which was a Friday. The following Saturday and Sunday were holidays. The notification was issued on 3rd August, 2001 at 11.44 P.M. 33. Mr. Saraf, contends that in the case of Param Industries Ltd. (supra) the Hon'ble High Court of Karnataka erred in taking the view as follows: " The learned Central Government Standing Counsel has not been able to show that it was published on 3.8.2001 and they also offered this notification for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi as per the Amendment. For our satisfaction, we granted time to the Central Government Standing Counsel to place the records. It is true that Gazette notification is admissible being the official record evidencing public affairs and the Court is required to presume its contents as genuine under Sections 35 and 38 read with Section 81 of the evidence Act unless contrary is proved. Despite directions the respondents have not chosen to produce the records to show that a....
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....that the notification was sent for publication after the normal office hours, i.e. much after 5 p.m. on 382001. It was almost at the midnight, may be few minutes before 12 in the night. Even if it is to be treated as notification having been published on 382001 itself, i.e., just before the midnight, an issue has arisen as to whether it could be made effective qua the goods which were already cleared during the day time on the basis of earlier notification. However it is not necessary to go into this issue at all." 38. Paragraph 3 of the aforesaid judgment reads as follows: 39. Even conceding that the Apex Court in the case of Union of India v. Param Industries Ltd. (supra) upheld the judgment of High Court and laid down the requirement in paragraph 3 of the Judgment, the writ petitioner cannot succeed because there is evidence which has remained uncontroverted to show that the notification was duly published in the official gazette on 17th September, 2015 and the notification was also offered for sale on 17th September, 2015 by the Directorate for Publicity and Public Relation of the board. 40. Even if the two conditions are deemed to be mandatory there ....
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.... (1), whenever, a notification is to be issued by the Central Government in the public interest, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions to be fulfilled before or after clearance as may be specified in the notification, goods of any specified description from the whole or any part of duty of customs leviable thereon. The notification enhanced the rate of duty from 30% to 44% by Amendment Act 28 of 2018 to be notified in the Gazette, it must be only in the public interest in general. But, according to subsection (4) of Section 25, introduced by Amendment Act 28 of 2018, substituted subsection says that every notification issued under subsections (1) & (2A) of Section 25 of the Act shall be, unless otherwise provided came into force by the date of issue by the Central Government for publication in the Gazette. The purport of subsections (1), (2A) and (4) of Section 25 are inconsistent with one another. In those circumstances, in view of the inconsistency between subsections (1), (2A) and (4), introduced by Notification 28 of 2018, has to be struck down. Scope of interpretation of charging or exempting ....
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....mes, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the noncompliance of which would not affect the essence or substance of the notification granting exemption. In the present case, it is not the case of granting exemption, but it is the case as to what is the relevant date for application of notification to grant exemption. Section 25(1) authorised the Central Government to issue notification granting exemptions from duty and such exemption shall generally either be absolutely or subject to such conditions, but it has to be notified. In Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise & Customs, Surat & Two Ors11, the Apex Court held that such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption. Some of the provisions of an exemption....
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.... in subsection (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Thus, when the tariff value is changed, it must be published in the official gazette. In view subsection (2) of Section 14, whenever there is a change in the tariff valuation for any class of imported goods or export goods, it must be by way of notification in the official gazette. But, Section 25(4) conveys totally a different meaning and such notifications changing the rate of customs duty leviable on import goods is deemed to have come into force from the date of issue of notification by Central Government for publication in the Gazette. Vires of a provision in the statute can be challenged on limited grounds only when the amended provision is totally inconsistent to the other provisions in the Act or if the amended provision nullifies other provision in the Act or whether the amended provision is cont....
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..... The word 'notification' means a notification in the gazette unless the Act otherwise provides. The word 'notification' is not defined in the General Clauses Act, but the word "Official Gazette" or "Gazette" is defined under Section 3(39) of General Clauses Act, 1897, which defined that the word 'Gazette' or 'Official Gazette' shall mean the Gazette of India or the Official Gazette of a State. Section 21 of General Clauses Act deals with Power to issue, to include power to add to, amend, vary or rescind notifications, orders, rules or byelaws, it is also relevant to the present case and it reads as follows: "Where, by any 13[Central Act] or Regulation, a power to 27[issue notifications], orders, rules or byelaws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add to, amend, vary or rescind any 26[notifications], orders, rules or byelaws so 28[issued]." When the rule prescribed specific procedure to be followed, the Central Government has to follow such rules and issue notifications. In the instant case, Section 25(1), (2A) of the Act mandates issue of notification....
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...., observed that the Calcutta High Court in its impugned order had held that primarily, exemption notification comes into force when it is issued for publication in official gazette and its publication and offer for sale by Directorate of Publicity and Public Relation though mandatory, is only a follow up action to be undertaken immediately. It is not necessary that copy of official gazette has also to be made available on the same day. In the above case pleading of Revenue was that a copy of notification alerting rate of duty on crude Soyabean Oil issued on 17th September, 2015 was offered for sale on DPPR counter on same day has neither controverted nor opposed by petitioner. Since ample evidence of complying with both conditions of Section 25 of Customs Act has been adduced by Revenue, said notification is effective from 17th September, 2015. Thus, in view of the observations of the Apex Court, the judgment of Calcutta High Court cannot be applied to the present facts of the case, consequently, the contention of the learned counsel for the respondents is hereby rejected. Another identical question came up for consideration before Gujarat High Court in Union of India v. M/s M.D. O....
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....been came into force only on the day of its publication in the official gazette, though Section 25(4) says that it is deemed to have been came into force only on the date when the notification was issued for publication in the gazette, which is totally contrary to subsection (1), (2A) of Section 25 of the Customs Act. In those circumstances, it is difficult to harmonise both the subsections. At the cost of repetition, vires of the provisions enacted by the State Government or Central Government can normally be challenged on various grounds, only when it is arbitrary, unreasonable or violative of the constitutional provisions. In view of inconsistency between subsections (1), (2A) and (4) of Section 25 of Customs Act, the preamended and postamended provisions of Section 25(4) as to power to grant exemption from duty are extracted hereunder for better appreciation of the case. Preamended Postamended by Notification 29 of 2018 Section 25(4) Every notification issued under subsection (1) or subsection (2A) shall,_ (a) unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette; (b) ....
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....c interest becomes redundant or otiose and issuance of notification for publication in the gazette is sufficient. Therefore, there is any amount of inconsistency between Subsections (1), (2A) and (4) of Section 25 of the Act. Scope of interpretation A provision in the statute on the ground of inconvenience, absurdity and contradiction: When an amendment creates absurdity, friction, making the other provisions redundant in the statute and unable to reconcile the provisions, the method to be adopted was discussed in various judgments. In fact, it is the duty of the Court to read entire Act to come to any conclusion. If two sections of an Act cannot be reconciled, as there may be absolute contradiction, it is often said that the last must prevail (vide Wood v. Riley17 and K.M. Nanavati v. State of Bombay18). But, this should be accepted only in the last resort. As observed by LORD EVERSHED, M.R: "It is no doubt true that if two sections of an Act of Parliament are in truth irreconcilable, then prima facie the later will be preferred. But these are arguments of the last resort. The first duty of the Court must be, if the result is fairly possible, to give effect to th....
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.... Section 2(c) of the Suppression of Immoral Traffic in Women and Girls Act, 1956, which defines a Magistrate to mean 'a District Magistrate, a SubDivisional Magistrate of the First Class specially empowered by the State Government' in State of Gujarat v. Chaturbhuj Maganlal 28, wherein, the Apex Court held that the empowering does not require the process of selection or discrimination as regards an individual on whom the special power is conferred and the adverb 'specially' refers to the special purpose of empowerment. One of the reasons given was that a contrary conclusion would impede the efficacy of the provision and introduce inconvenience, friction, confusion and artificiality in the working of the provision. Similar principle was applied by the Supreme Court in construing the fundamental right under Articles 22(1) and (2) of the Constitution; and it was held that the said Article applied to give protection against such arrests as are effected otherwise than under a warrant issued by a Court on the allegation or accusation that the arrested person has committed some criminal or quasicriminal act and that the physical restraint put upon an abducted person in process of recoveri....
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.... Following the principles laid down in the above judgments, the basic purpose construction or interpretation of statute is to avoid inconvenience, friction, confusion in the working of the provision. Such interpretation is permissible when there is ambiguity in the two provisions of same section or two sections of the same enactment. The power of the Court is to achieve the real object to serve the purpose of enactment introducing any amendment. Moreover, if two constructions are possible then the court must adopt that which will ensure smooth and harmonious working of the enactment and eschew the other which will lead to absurdity or give rise to practical inconvenience or make wellestablished provision of existing law nugatory. Keeping in view the principles, we would like to examine the inconsistency which may result in absurdity, confusion or friction, contradiction and conflict between two provisions of the section i.e. subsections (1), (2A) and (4) of Section 25 of the Act. We have extracted the preamended and postamended provisions of Section 25(4) and even Section 14(2) also made it mandatory for the purpose of Customs Act, 1975 or any other law for the time b....
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.... conflict between various provisions. In those circumstances, by applying the principles laid down in the above judgments, interpreting the section to achieve the object and to avoid resulting serious inconvenience, serious absurdity, confusion or friction, contradiction and conflict between its various provisions to the public is essential. On cojoint reading of subsections (1), (2A) and (4) of Section 25, there is any amount of inconsistency leading to serious absurdity, confusion or friction, contradiction and conflict between its subsection of same provision. When subsection (1) made it clear that in the public interest, a notification shall be published in the official gazette granting exemption, only to impute or attribute knowledge to the public about such exemptions. But, whereas, subsection (4) runs contra to subsection (1), since the amended provisions are deemed to have been came into force when it was issued for publication. Thus, it creates any amount of inconvenience to the public. Therefore, to avoid such serious absurdity, confusion or friction, contradiction and conflict between two subsections of Section 25, we find that it is a fit case to declare Notification No....
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.... of duty of imported goods is specific, more particularly, in case of home consumption of such goods. The word 'notification' is defined under Section 2(30) (AA) of the Act, "notification" means notification published in the Official Gazette and the expression "notify" with its cognate meaning and grammatical variation shall be construed accordingly. As per the definition of "notification", it is only the notification in the Gazette. When Subsection (1) & (2A) of Section 25 made it mandatory; that grant of exemption from duty in the public interest, it may by notification in the Official Gazette, exempting generally or absolutely, a notification in the gazette is mandatory. Unless, there is a notification in the official gazette, exempting such imported goods either absolutely or conditionally, or subject to conditions, it is not known to the public whether such imported goods are exempted or not. Hence, issue of notification in the official gazette is mandatory to grant exemption from payment of duty. According to Section 25(2A) of the Act, the Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicabili....
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....has freed man from he unlimited discretion of some ruler........ Where discretion; absolute, man has always suffered". It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield stated it in classic terms in the case of John Wilkes (2), "means sound discretion guided by law. It must be governed by rule, not by humour: it must not be arbitrary, vague and fanciful." In view of the observations of the Larger Bench of the Apex Court, it is clear that the decision of Government should be predictable and the citizen should know where he is, giving effect on the date of its issue of notification before its publication, such notification is not known to any citizen as to the rate of duty on imported goods, amendment of subsection (4) of Section 25 of the Act is not only arbitrary exercise of power by Central Government, but also created friction and contradiction between two subsections of same section. Learned counsel for the petitioners placed reliance on several judgments of the Apex Court as to the interpretation of statutory provision, so also, the mandatory requirement of notification. The Division Bench of t....
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....islation which is concerned with a few individuals or is confined to small local areas. In such cases publication or promulgation by other means may be sufficient." If the principle laid down in the above judgment is applied to the present facts of the case, when the statute prescribed to grant exemption from payment of customs duty or rate of duty on imported goods, it must be published in the gazette notification or any amendment thereto shall also be published in the official gazette vide subsection (1) and subsection (2A) of Section 25 of the Customs Act. But, subsection (4) of Section 25 as amended by Notification No.29 of 2018, almost dispensed with the notification indirectly and frustrating the very intention of Legislature to notify the exemptions in the official gazette. When the law provides issue of notification granting exemptions, or customs duty payable on the imported goods or the tariff rates (vide Section 14(2) and Section 15 of the Act), such notification is deemed to have come into force on the date of publication for the purpose of attributing knowledge to the public, including the subject goods or assesse under the Customs Act. Learn....
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....d that a law cannot come into being in this way. Promulgation or publication of some reasonable sort is essential. In England the rule is that Acts of Parliament become law from the first moment of the day on which they receive the Royal assent, but Royal Proclamations only when actually published in the official Gazette. See footnote (a) to paragraph 776. page 601, of Halsbury's Laws of England (Hailsham edition), Volume VI and 32 Halsbury's Laws of England (Hailsham edition), page 150 note (r). But even there it was necessary to enact a special Act of Parliament to enable such proclamations to become law by publication in the Gazette though a Royal Proclamation is the highest kind of law, other than an Act of Parliament, known to the British Constitution; and even the publication in the London Gazette will not make the proclamation valid in Scotland nor will publication in the Edinburgh Gazette make it valid for England. It is clear therefore that the mere enacting or signing of a Royal Proclamation is not enough. There must be publication before it can become law, and in England the nature of the publication has to be prescribed by an Act of Parliament." Even ac....
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....eferred supra). Section 25 of the Customs Act came up for consideration in the above judgment and the majority was of the view that Section 25 of the Customs Act empowers the Central Government to exempt either absolutely or subject to such conditions, from the whole or any part of the duty of customs leviable thereon by a notification in Official Gazette. The said notification can be modified or cancelled. The method and mode provided for grant of exemption or withdrawal of exemption is by way of issuance of notification in the Official Gazette. For bringing Notification into operation, the only requirement of the section is its publication in the Official Gazette and no further publication is contemplated. Apart from prescribed requirement under Section 25, usual mode of bringing into operation such notification followed since years in this country is its publication in the Official Gazette and there is no reason to depart from the same by laying down additional requirement. It is further observed that, it is established practice that the publication in the official gazette, that is, Gazette of India is ordinary method of bringing a rule or subordinate legislation to the notice o....
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....ows: "The case at hand is one where through the writ petition filed by the respondent before the High Court the liability to pay customs duty at the rate of 25 per cent of the value of the goods was sought to be avoided and goods were sought to be released from detention of the customs authorities. In such a case the publication of notification in the Government Gazette in the manner contemplated by Section 25(1) of the Customs Act would be enough to import the liability to pay customs duty without regard to the enquiry into the fact whether the notification had actually come to the knowledge of the importer or not. It is not the respondent's case that the relevant Gazette has been published antedated. What will be the impact of publication in the Government Gazette though the Gazette in spite of having been published was not available to be seen by the persons affected when criminal consequences are sought to be inflicted is a question which should in my opinion be left open to be gone into in an appropriate case. Nonavailability of Gazette carrying the notification may provide foundation for a defence plea of innocence where mens rea is an ingredient of offence commi....
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.... In Lala Hari Chand Sarda v. Mizo District Council and another (referred supra), the dispute was with regard to permitting nontribals to carry on certain business by issuing notification in Mizoram granting license. The principle laid down in the above judgment has no relevance at all to the present facts of the case, since it is not relating to interpretation of any provision, which is not consistent with the principle provision of the same section. Learned counsel for the respondents has also drawn attention of this Court to the judgment of the Supreme Court in State of Rajasthan v. Nath Mal and Mitha Mal (referred supra), so also in B.B. Rajwanshi v. State of U.P36. But, the principle laid down in the above judgments has no direct application as to the interpretation of taxing statue on account of inconsistency between two subsections of same section which deals with the exemption. In view of the law declared by the Courts with regard to interpretation of taxing statutes, it is clear that when the amended provision or any provision of the statute creates serious inconvenience, serious absurdity, confusion or friction, contradiction and conflict between its var....
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....he customs duty initially @ 30%, but later by the time of release, customs duty was enhanced @ 44% and demanded the variation of 14%. As discussed above, subsection (4) of Section 25 created absurdity, confusion and friction. The very collection of customs duty @ 44% on the imported goods belonging to these petitioners prior to the publication of notification in electronic mode is an illegality. Therefore, the petitioners are entitled to claim refund of the amount paid in excess of 30% of the original rate of customs duty as on the date of presentation of ex bond bills of entry for clearance of import goods for human consumption. Therefore, the respondents are liable to repay the excess amount which they collected from the petitioners beyond 30% of customs duty. One of the contentions raised by the learned counsel for the respondents, when a remedy by way of appeal under Section 128 and 129(A) of the Customs Act is available, the petitioner is disentitled to claim relief under Article 226 of the Constitution of India. But, the said contention cannot be accepted for the simple reason that the appellate authority or tribunal cannot declare any provision in the statu....