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2026 (2) TMI 793
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....question puts in place a revised procedure for expeditious disposal of unclaimed/uncleared cargo, lying with custodians, under Section 48^1 of the Customs Act, 1962 ["the Act",]. Para 2 of the Circular notes the fact that, despite several earlier Circulars holding the field, satisfactory disposal of unclaimed/uncleared cargo at customs locations was not forthcoming. In these circumstances, the Central Vigilance Commission ["CVC",] appointed a Committee of Chief Vigilance Officers to examine the reasons for delay in disposal of unclaimed/uncleared cargo. The Committee observed that owing to the said delay, there had been complete breakdown of the system resulting in substantial loss to government revenue. It was in these circumstances, that the CBIC reviewed the procedure for disposal of uncleared/unclaimed cargo in consultation with the Container Corporation of India Ltd. ["CONCOR",]. 2.2 The procedure put in place by the Circular dated 3 December 2018 required, (i) the custodian of the customs station to prepare a list of unclaimed/uncleared cargo lying in the bonded area of the customs station for more than 30 days from the date of its arrival and to send the list to ....
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....e concerned custodian shall attempt to hold at least one auction each month. In case the list is incomplete and does not have the complete details for Customs to clearly pinpoint the regulatory requirements, Customs shall indicate the deficiencies in the list, within this period of 15 days." (Emphasis supplied) 2.4 Following the procedure envisaged in para 3(viii), the Circular primarily required- (i) the value of the shipment/lot included in the auction list to be fixed in the next seven days by a panel of government approved valuers appointed by the custodian, which would form the reserve price for the auction, (ii) fixation of a date immediately thereafter by the custodian for holding the auction/tender and communication of the said date to the jurisdictional customs authorities and (iii) taking up of the shipments/lots in respect of which NOC have been received by the customs for auction. 2.5 The circular required all bids, of a value upto or above 5% less than the reserve price to be treated as successful bids for sale of the goods and re-auction of the remaining shipments/lots. The auction was required to be repeated till a successful....
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....nments or (b) consignments required to be retained for any investigation adjudication/court proceedings, (c) motor vehicles or (d) negative list items. If no such intimation is received from the Customs within 15 days, the custodian shall go ahead with the disposal of the goods." 3.4 The appellant contended that the exclusion of private auctioneers, by the circular dated 3 December 2018, was illegal and entrenched on the fundamental right of such private auctioneers under Article 19(1)(g) of the Constitution of India. 4. Stand of Union of India [UOI] in counter-affidavit 4.1 Consequent on issuance of notice in the writ petition, the UOI filed a counter affidavit in which it was stated that, owing to the unsatisfactory situation which was prevailing as a result of long delayed disposal of unclaimed/uncleared cargo unloaded at customs stations, it was felt necessary to have, in place, a transparent process for auction of such goods, which was what prompted the issuance of the circular dated 3 December 2018. With respect to the procedure of e-auction through MSTC, the counter affidavit averred thus: "iv. With regard to Paragraph 12 (IV) of ....
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....e Principal/seller (like Customs/ CGST) should send the Disposal List/ Terms to them necessarily through e-mail (hard copies can be sent only as post confirmation copy, if felt necessary). M/s MSTC Ltd. shall publicize the sale on the website, along with details of Material List, e-auction Schedule (i.e., Opening & Closing Date & Time), Inspection Schedule, Terms & Conditions of Sale, etc. Actual display of Auction Notice on the website will commence under the heading "View Forthcoming Auctions", only after activation by MSTC. Once the e-auction starts, the Registered Customer may log on to the same and choose a particular lot/item for bidding. Once the bidding starts, the highest bid (hereinafter, referred to as H-1 bid) at any given point of time will always be displayed on the screen, without showing the name of the H-1 bidder. Any bidder, including the H-1 bidder, can go on revising his bid so as to improve upon the same. There will be no restriction on the number of such bids/revisions, till the e-auction closes. No downward revision or cancellation of bid can be done by any bidder. The bidder shall have the option to make each bid/ bid-improvement manually, or he can choose t....
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....eamlining of the procedure for disposal of goods. These factors were repeatedly emphasised in the counter affidavit, inter alia in para 4 (xv) which read thus: "xv. The contents of Para 12 (XI & XII) are denied. It is denied that the Impugned Circular is in violations of Articles 14,19 and 21. It is re-iterated that the decision to create a central portal for Customs, E-auction facility for disposal of seized/confiscated/time-expired bonded goods was taken by the Board based on the recommendation of task force especially set up to examine the various issues arising out of the audit review and to suggest effective measures to put in place a permanent mechanism for expeditious disposal of cargo including confiscated/seized goods. It was also highlighted in the meeting of the board held on 18.10.2007 that M/s MSTC Ltd. is a PSU under the administrative control of Ministry of Steel and that they were engaged in e-auction of goods of more than Rs.1000 crore per year with over 3000 registered bidders. It was also mentioned that MSTC would be offering service at a commission of 1.75% of sale value plus service tax which is the same rate they offer presently to Ministry of Defence....
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.... goods and the decision to canalize the auctions through MSTC constituted reasonable restrictions on the right to trade within the meaning of Article 19 (6) of the Constitution of India and were, therefore, legally sustainable. The learned Single Judge concludes his judgment thus: "12. In light of the aforesaid legal position, this Court is of the considered opinion that the petitioner can claim no fundamental right which may compel the respondents to necessarily enlist the petitioner for the purposes of auctioning of uncleared or unclaimed goods. All that Articles 14 and 19 of the Constitution mandate is to place the respondents under an obligation to ensure that as and when they do decide to invite tenders or bids or invite persons to enter into a contract with an organ of the State, it adopts a fair and non-arbitrary criterion for award of contract. The Court thus finds that the challenge as raised in the instant writ petition is misconceived and consequently must fail. 13. Accordingly, and for all the aforesaid reasons, the writ petition shall stand dismissed." 6. Aggrieved by the decision of the learned Single Judge, the appellant has filed the present app....
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....rect. 8.3 In this context, Dr. Bajpai also relies on the principle enunciated in Mohinder Singh Gill v Chief Election Commissioner (1978) 1 SCC 405, following the earlier judgment of the Supreme Court in Commissioner of Police v. Gordhandas Bhanji AIR 1952 SC 16, that an order has to stand or fall on the basis of the reasons contained in the order and cannot be sought to be justified by assertions in the affidavits before the Court when the order is under challenge. The justification provided by the UOI in its counter affidavit to the writ petition, he submits, finds no place in the Circular dated 3 December 2018 and could not, therefore, be cited as a justification for its issuance. 8.4 Dr. Bajpai has also drawn our attention to the representations made by various custodians to the Custom Authorities, complaining that e-auction through MSTC has various disadvantages. Thus, he submits that the decision to canalize all auctions of unclaimed/uncleared goods through MSTC was not taken with appropriate application of mind. 8.5 Dr. Bajpai has also placed reliance on Circular No.06/07/18 dated 11 July 2018 issued by the CVC, which reads thus: "Circular No. 06/07/18 ....
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....ction of unclaimed/uncleared goods through any particular entity or entities. 8.8 For all these reasons, Dr. Bajpai submits that the impugned judgment of the learned Single Judge deserves to be set aside and the prayers in the writ petition granted. 9. Submissions of Mr. Gibran Naushad for the UOI 9.1 Responding to Dr. Bajpai's submissions, Mr. Naushad, submits that the decision to canalize auctions of unclaimed/uncleared goods lying at Custom Stations through MSTC was, as para 3(viii) of the impugned Circular itself states, to ensure that the auction was conducted electronically and that there was maximum outreach and participation. He submits that no individual could claim a right to empanelment as an agency through whom unclaimed/uncleared goods could be auctioned. The reasons adduced by the learned Single Judge in para 5 of the impugned order, he submits, are unexceptionable and do not call for any interference in appeal. He further places reliance on paras 4 to 6, 9 and 12 of the judgment of a Division Bench of this Court in Nex Tenders (India) Pvt. Ltd. v. Ministry of Communication and Information Technology 188 (2012) DLT 522 (DB), paras 2 and 43 of the judgment of ....
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....mbular goals. While interference by one, with the functions of the other, is not entirely proscribed, it has to be limited to well-delineated parameters. The following passages from the recent decision in State of West Bengal v. Confederation of State Government Employees 2026 SCC OnLine SC 155 contain an authoritative exposition of the law on the issue: "53. The judicial review of a fiscal policy is a limited but important domain. The various facets of fiscal policy such as taxation, subsidies, public expenditure etc., are primarily concerns of the Executive and Legislature, but are not beyond the pale of judicial scrutiny. The brief that is entrusted to the Judiciary is to ascertain that such a policy flows from the Constitution, is procedurally lawful and non-arbitrary. Article 265, for example mandates that no tax shall be levied in the absence of the authority of law. Here, it would be the domain of the Courts to examine that fiscal measures are not imposed by executive fiat. Discipline in matters of fiscal policy is not only judicially enforced but provided for in the Constitution itself by virtue of Article(s) such as 266 and 283 by regulating the custody, appropria....
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....n examination of this issue must begin with the primary question of the meaning of the phrase "policy". A policy is the reasoning and object that guides the decision of the authority, which in our case is the State of Tamil Nadu. Statutes, notifications, Ordinances, or government orders are means for the implementation of the policy of the State. Therefore, it is not possible to completely appreciate the law without reference to the policy behind the law. The judicially evolved two-pronged test to determine the validity of the law vis-à-vis Article 14 of the Indian Constitution, refers to the objective of the law because the "policy" behind the law is never completely insulated from judicial attention. 11. However, it is settled law that the Court cannot interfere with the soundness and wisdom of a policy. A policy is subject to judicial review on the limited grounds of compliance with the fundamental rights and other provisions of the Constitution. ...It is also settled that the Courts would show a higher degree of deference to matters concerning economic policy, compared to other matters of civil and political rights. In R.K. Garg v. Union of India ... "8....
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....ither. The court does not supplant the "feel of the expert" by its own views. When the legislature acts within the sphere of its authority and delegates power to an agent, it may empower the agent to make findings of fact which are conclusive provided such findings satisfy the test of reasonableness. In all such cases, judicial inquiry is confined to the question whether the findings of fact are reasonably based on evidence and whether such findings are consistent with the laws of the land. As stated by Jagannatha Shetty, J. in Gupta Sugar Works Gupta Sugar Works v. State of U.P., 1987 Supp SCC 476: "... the court does not act like a chartered accountant nor acts like an income tax officer. The court is not concerned with any individual case or any particular problem. The court only examines whether the price determined was with due regard to considerations provided by the statute. And whether extraneous matters have been excluded from determination." 58. Price fixation is not within the province of the courts. Judicial function in respect of such matters is exhausted when there is found to be a rational basis for the conclusions reached by the concerned authority....
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.... cases is primarily to determine whether the policy falls within the scope of the authority granted to the relevant body. If the policy decision is within the executive's legal authority and has been made following proper procedures, the courts should defer to the expertise and discretion of the policy-makers, even if the policy appears unwise or imprudent. This restraint ensures that the courts do not impose its own perspective on policy matters that are rightly the responsibility of other branches. 58. Economic and social policies often involve significant redistribution of resources, prioritization of interests, and balancing of public needs, which requires careful consideration by those with specialized knowledge and broad perspectives. In the realm of economic policy, for instance, questions regarding the allocation of subsidies, fiscal deficits, or budget allocations are best managed by the executive, which has access to economic data and is accountable to the public for its financial management. Judicial interference in such areas risks creating disruptions in the economic balance that policymakers are trying to achieve. 59. Courts should assume that po....
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....ecember 2018, has to be merely stated to be rejected. That proposition applies to cases in which the order in question is required to contain reasons, generally in the case of orders which partake of an element of decision-making, though the order be quasi-judicial or administrative. The principle is that reasons for the decision must be contained in the order itself, which must, therefore, stand, or fall, on the basis of the reasons that it contains. The order or decision cannot be sought to be justified on the basis of reasons which find no place therein. This is essentially because such orders, or decisions, have to be examined in the light of the considerations which prompted their taking, and, as it is not possible to psychoanalyze the authors of such orders or decisions, they must speak for themselves. We may reproduce, for ready reference, the relevant passage from Mohinder Singh Gill which, in turn, places reliance on Gordhandas Bhanji, thus: "8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the sh....
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....ound in Section 143-AA, the fact that Section 143-AA does not find especial mention in the Circular cannot invalidate it. 14.2 Dr. Bajpai contends, however, that the power vested in the CBIC by Section 143-AA cannot extend to directing that all auction of unclaimed/uncleared cargo must be through one agency or entity alone. 14.3 We do not see why not. 14.4 Court cannot, by executive fiat, ordinarily reduce the amplitude of power statutorily conferred on an authority, unless conferment of the power in the terms in which it is conferred by statute is pregnant with the possibility of misuse. The power that Section 143-AA confers is on the CBIC, the highest authority in the indirect tax hierarchy, and there is no reason for us to expect that it would be misused. Of course, in a given case, if the Court finds misuse to have occurred, it would unquestionably step in and put corrective measures in place. 14.5 We, however, do not see any reason for narrowing the scope of Section 143-AA or of limiting its applicability. Section 143-AA empowers the CBIC to take such measures or prescribe separate procedures for, inter alia, any categories of goods, in order to expedite clearance ....
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....dated 20 February 2006, to our mind, is misplaced. That Circular merely identifies factors which were resulting in delay in clearance of unclaimed cargo, 12 years prior to the issuance of the Circular dated 3 December 2018. They are, to our mind, totally extraneous to the issue in controversy. 15.2 CVC Circular No. 06/07/18, dated 11 July 2018 is, again, equally extraneous to the controversy at hand. The CVC has, by the said Circular, disapproved award of contracts on nomination basis without adequate justification. The Circular dated 3 December 2018 does not award any contract on nomination basis. Besides, we have already held the measures, that the Circular puts in place, including the requirement of e-auction of uncleared goods through the MSTC, to be adequately justified. 15.3 We also agree with the learned Single Judge that the appellant was effectively aggrieved, not by any detriment to public interest caused by the Circular dated 3 December 2018, but by the fact that private auctioneers lost the opportunity of auctioning uncleared and unclaimed goods within a year of their importation. Clearly, the writ petition was not prompted by any desire to safeguard public intere....
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....manner. (2) The proceeds of any such sale shall be applied- (a) firstly to the payment of the expenses of the sale, (b) next to the payment of the freight and other charges, if any, payable in respect of the goods sold, to the carrier, if notice of such charges has been given to the person having custody of the goods, (c) next to the payment of the duty, if any, on the goods sold, (d) next to the payment of the charges in respect of the goods sold due to the person having the custody of the goods, (e) next to the payment of any amount due from the owner of the goods to the Central Government under the provisions of this Act or any other law relating to customs, and the balance, if any, shall be paid to the owner of the goods: Provided that where it is not possible to pay the balance of sale proceeds, if any, to the owner of the goods within a period of six months from the date of sale of such goods or such further period as the [Principal Commissioner of Customs or Commissioner of Customs] may allow, such balance of sale proceeds shall be paid to the Central Government. 3. 143-AA. Power to simplify or provide different ....