TaxTMI 
TaxTMI 
2026 (5) TMI 1690
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....pportunity to apply for waiver of the condition to pre-deposit 7.5% of the disputed demand of Custom duty/penalty, in terms of Section 129E of the Act. They have been prevented from filing such appeals, ostensibly on the objection raised that they have not pre-deposited or appended proof of deposit of 7.5% of the disputed demand of customs duty/penalty, imposed under the Order-in-Original (proposed to be assailed by them), before the appellate forum. 3. For ready reference, the facts giving rise to the issue in Writ-Tax No. 2238 of 2026 (M/S Runway Impex and another vs. Union of India and others), may be noted, in brief. 4. The petitioner is engaged in the business of import and export of betel nuts. It had entered into an agreement with one M/s Margo Impex Private Limited-for storage and warehousing of those goods, in a Free Trade Warehousing Zone. On 29.10.2024, a Show Cause Notice (in short 'SCN') was issued to the petitioner, proposing to confiscate the goods imported by it. The petitioner participated in the proceedings and submitted its reply. However, by order dated 28.11.2025, the objections raised have been rejected, and a disputed demand of penalty of Rs. 3,....
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....duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of customs lower in rank than the Commissioner of Customs or Commissioner of Customs; (ii) against the decision or order referred to in clause (a) of sub-section (1) of section 129A, unless the appellant has deposited seven and a half per cent. of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against; (iii) against the decision or order referred to in clause (b) of sub-section (1) of section 129A, unless the appellant has deposited ten per cent. of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against: Provided that the amount required to be deposited under this section shall not exceed rupees ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Fi....
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....t is important to note that the power under Section 26 has not been, as it cannot be, abridged." (emphasis supplied) 12. Therefore, it cannot be successfully claimed by the revenue that there does not exist any power to grant the relief prayed. Howsoever restricted it may be, such power, referable to the extraordinary jurisdiction of this Court under Article 226 of the Constitution, does exist. Whether this power is to be exercised, in the present fact, may remain to be considered at the appropriate stage, in the individual/peculiar facts of each case. 13. However, before such consideration may ever arise, there must exist a proceeding with respect to which that power may be exercised, by this Court. At present, owing to the refusal on part of the Commissioner (Appeals) and for reason of insistence by the revenue authorities that pre-deposit at the rate 7.5% of the disputed demand be first made and/or its proof be shown to exist, at the time of filing of the appeal, no proceeding has been registered. Consequently the stage to consider the grant of waiver has not arrived. 14. In Dhoom Chand Jain vs. Chaman Lal Gupta and another AIR 1962 All 543, a coordinate bench ....
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....ch amount not exceeding twelve and a half per cent of the sum realised by the sale or furnishes such security as the Court may demand but the Court may, for reasons to be recorded, dispense with his requirement. 36. It is not in dispute that no deposit was made by the objectors, or any security furnished by them, in application was moved for exemption being granted for the operation of Cl. (b) of the proviso to R. 90 aforesaid on 13th February, 1960, and was allowed on 29th February, 1960. The ale, it may be recalled, took place on 6th October, 1959, and the objection under R. 90 was filed on 24th November, 1959. The question is whether the objector should have made the deposit or furnished security under Cl. (b) of he proviso or applied for exemption thereunder within the period of limitation prescribed for filing an objection under R. 90, and if, in the absence of compliance with the provisions of Cl. (b) within the aforesaid period of limitation the objection could be 'entertained' or if it was liable to be thrown out. Reliance was placed by the learned Counsel for the respondents on Bawan Ram v. Kunj Behari Lal, 1960 A.L.J. 578, in which V. Bhargava, J. has held that u....
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.... Nath Sharma, 1962 A.W.R. 500 : 1962 A.L.J. 574, in which Bawan Ram v. Kunj Behari Lal, 1960 A.L.J. 578, has been overruled, and it has been held that the expression "entertain" does not mean the same thing as the filing of the application or the admission of the application by the Court and that the true intention of the proviso is to allow the judgment debtor to prosecute his application for the setting aside of the sale, if he complies with the conditions contained in the proviso to R. 90 before the application is finally heard and disposed of by the Court. 40. The meaning of the word "entertain" was also understood in the same sense in another recent decision, Dhoom Chand v. Chaman Lal, 1962 A.L.J. 729, to which one of us was a party, and it was pointed out: "The dictionary meaning of the word 'entertain' is: to deal with; to admit to consideration. In its application to Cl. (a) the word bears the meaning of admitting to consideration. That clause enjoins the Court from considering the application on any ground which could have been taken on or before the drawing up of the sale proclamation. In its application to Cl. (b) the word should bear the same sense. Ac....
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....roviso merely requires that the appeal shall not be entertained unless it is accompanied by satisfactory proof of the payment of the amount of tax admitted by the appellant to be due. A question thus arises what is the meaning of the word "entertained" in this context? Does it mean that no appeal shall be received or filed or does it mean that no appeal shall be admitted or heard and disposed of unless satisfactory proof is available? The dictionary meaning of the word "entertain" was brought to our notice by the parties, and both sides agreed that it means either "to deal with or admit to consideration". We are also of the same opinion. The question, therefore, is at what stage can the appeal be said to be entertained for the purpose of the application of the proviso? Is it "entertained" when it is filed or is it "entertain" when it is admitted and the date is fixed for hearing or is it finally "entertained" when it is heard and disposed of? Numerous cases exist in the law reports in which the word "entertained" or similar cognate expressions have been interpreted by the courts. Some of them from the Allahabad High Court itself have been brought to our notice and we shall deal wit....
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....the word "entertain" in its application bears the meaning "admitting to consideration" and therefore when the court cannot refuse to take an application which is backed by deposit or security, it cannot refuse judicially to consider it. In a single Bench decision of the same court reported in Bawan Ram and Another v. Kunj Beharilal and Another (A.I.R. 1962 All. 42.), one of us (Bhargava, J.) had to consider the same rule. There the deposit had not been made within the period of limitation and the question had arisen whether the court could entertain the application or not. It was decided that the application could not be entertained because proviso (b) debarred the court from entertaining an objection unless the requirement of depositing the amount or furnishing security was complied with within the time prescribed. In that case the word "entertain" is not interpreted but it is held that the court cannot proceed to consider the application in the absence of deposit made within the time allowed by law. This case turned on the fact that the deposit was made out of time. In yet another case of the Allahabad High Court reported in Haji Rahim Bux & Sons and Others v. Firm Samiullah & So....
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.... opinion the Assistant Commissioner was wrong in declining to consider the appeal in the presence of such uncontestable proof." (emphasis supplied) 20. The view taken by this Court has been consistent. It affirms that 'entertainment' of an appeal, cannot be equated with its mere filing or registration. At that stage, the act performed may be ministerial but not quasi-judicial. A proceeding, howsoever defective, may be registered by a quasi-judicial authority. Subject to removal/curing of those defects, it may be registered as a regular proceeding. 21. At that stage, either the defects may stand cured, or the objection to the defect may be considered by the quasi-judicial authority. It may either be sustained, or time may be granted to cure the defect, (or the proceeding may fail for the reason that it is a hopelessly defective proceeding), or such other order may be passed, as may be deemed fit in the peculiar facts of a case. That would fall within the domain of exercise of quasi-judicial power/function. At that stage, the quasi-judicial authority may first exercise and apply its judicial mind-whether such proceeding (brought before it), is worthy of being &....