HC explains relevant date for application of notification

Ruchi Soya Industries Ltd Vs. Union of India (Gujarat High Court)

1. Rule returnable forthwith. Mr.Nirzar Desai, learned Standing Counsel waives service of notice of rule on behalf of the respondent no.1. Mr.Parth Bhatt, learned advocate waives service of notice of rule on behalf of the respondent nos.2 and 3. Mr.Kartik Pandya, learned advocate waives service of notice of rule on behalf of the respondent no.1.

2. Since all these petitions are involving common issues, the same were heard analogously and are being disposed of by this common order.

3. For the sake of convenience, Special Civil Application 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 1^st March 2018 or In alternative to direct that the Notification no.29 dated 1st March 2018 is effective and operational from 6^th 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 8^th February 2018. M/s. S. N. Overseas, imported said goods no.8 “MT BRILLANTE VOY. NO. 1801” vide 5 bills of Lading dated 7^th February 2018. M/s. S. N. Overseas raised 3 invoices dated 23^rd February 2018 upon the petitioner pertaining to the aforesaid imported goods.

4.1 The petitioner filed three bills of entry dated 1^st March 2018 under Section 46 of the Customs Act, 1962 (for short “the Customs Act) seeking clearance of the said imported goods for home consumption so as to pay the custom duty as per Section 15(1)(a) of the Customs Act, which provides date for determination of rate of duty and tariff valuation of imported goods.

4.2 According to the petitioner, the bills of entry filed by the petitioner would not be governed by the provisions of Section 15(1)(a) of the Customs Act as aforesaid bills of entry was filed under the provisions of Section 46 of the Customs Act seeking clearance of goods for home consumption and for the purpose of determination of duty and tariff valuation if applicable shall be the date when such bills of entry were presented on 1^st March 2018.

4.3 According to the petitioner, the crude palm oil and edible grade falls under the classification under custom tariff heading 15111000 of the Customs Tariff Act and the subject goods were covered by Entry 57 II (A) in the Notification no.50/2017­Cus dated 30^th June 2017 and the petitioner was required to pay basic custom duty @ 30%.

4.4 Thereafter, the Custom Authorities assessed the subject goods on 1^st March 2018 and the basic custom duty was assessed @ 30% plus 10% social welfare surcharge, which was discharged by the petitioner along with the payment of Integrated Goods And Service Tax (for short ‘IGST’).

4.5 It appears that the custom department issued a Notification no.29 of 2018 – Cus dated 1^st March 2018 under Section 25(1) of the upon the petitioner to pay enhanced difference and accordingly calculated IGST for clearance of the subject goods.

4.6 It is the case of the petitioner that the Notification no.29 of 2018 – Cus dated 1^st March 2018  was published in official gazette electronically on 6^th March 2018 at 19:15 hours and was signed by one Rakesh Sukul digitally.

4.7 The petitioner was therefore, required to pay the increased basic custom duty and IGST to get release of the subject goods though the petitioner was 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 6^th March 2018, the same would not be applicable for the clearance of the subject goods for which the bills of entry were filed on 1^st 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 sub­ section 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 same accordingly.

(B) The Hon’ble Court be pleased to issue a writ of certiorari or any other appropriate writ, direction or order while quashing and setting aside the Notification no.29 of 2018 – Cus dated 1^st March 2018 being illegal, arbitrary, ultravires and infringing the fundamental rights of the Petitioner to trade and otherwise bad in law

(C) In alternate subject to what is stated above, this Hon’ble Court may be pleased to issue writ of mandamus or any other appropriate writ, direction or order that the Notification no.29 of 2018 – Cus dated 1^st March 2018 is effective and operational from 6.3.2018 only and not prior thereto and that the same is not applicable in the facts of the instant case.

(D) The Hon’ble Court be pleased to issue a writ of certiorari or any other appropriate writ, order or direction while quashing the   respondent­ assessment of the subject three Bills of Entry viz. Bill of Entry No. 5410142 Bill of Entry No.5415313 and Bill of Entry No.5409458 all dated 1.3.2018 done by the Respondents on 9.3.2018 while asking the Petitioner to pay  higher rate of duty for clearance of the subject goods.

(E) The Hon’ble Court be pleased to issue a writ of mandamus or any other appropriate writ, order or direction while directing the  Respondents, its officials, agents, servants etc. to pay and place at the disposal of the Petitioner an amount of Rs. Rs.90,05,067/­ with interest paid by the petitioner from the date of deposit till the date of payment as consequence of grant of aforesaid prayers by this Hon. Court.

(F) Pending final hearing and disposal of the instant petition, this Hon. Court may be pleased to direct the respondent authorities to refund and place at the disposal of the Petitioner an amount of Rs.Rs.90,05,067/­with interest accrued there upon.

(G) Pass any other appropriate Order(s) as this Hon. Court may deem fit and proper in the facts and circumstances of the instant.”

Facts of SCA No.23341 of 2017

5. In the present case, the petitioner had imported goods being edible oil on 17^th November 2017 and had filed Bills of Entry no.4014924 and 4015086 dated 15^th November 2017 and Bills of Entry no.4032071 dated 16^th November 2017 for home consumption.

5.1 That on 17^th November 2017, the vessel was granted an entry inward at 12:45 hrs. therefore, the date of Bills of Entry would be 17^th November 2017 as per the proviso to Section 15 of Customs Act, 1962.

5.2 That further on 17^th 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 23^rd 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 17^th November 2017.

5.4 That the new Notification No.87/2017­Cus dated 17^th November 2017 was neither in existence nor released till 20^th 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 17^th November 2017 was digitally signed for being published in Official Gazette only on 20^th 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 21^st November 2017 and 27^th November 2017 explained the issue to the Deputy Commissioner and requested the Bill of entry not be recalled and reassessed as per the higher Customs duty of 30%.

Facts of SCA No.1919 of 2018

6. That the Petitioner had imported goods being edible oil on 17^th November 2017 and had filed Bills of Entry no. 4032303, 4032304, 4032289, 4032290, 4031615, 4031635, 4031616 and 4031637 dated 16^th November 2017 for home consumption.

6.1 That for Bills of Entry no. 4032303, 4032304, 4032289 and 4032290 dated 16^th November 2017, the Petitioner had to make the duty payment @ 17.5% and for Bills of Entry no. 4031615, 4031635, 4031616 and 4031637 dated 16^th November 2017 @ 15% by vide Notification no.50/2017­Cus dated 30^th June 2017.

6.2 That on 17^th November 2017, the vessel was granted an entry inward and therefore, the date of Bills of Entry would be 17^th November 2017 as per the proviso to Section 15 of Customs Act, 1962.

6.3 That further on 17^th November 2017, RMS assessed the said Bill of Entry @ 17.5% which was the applicable rate in the system as well and communicated to the Petitioner that in spite of the Bills of Entry having inward on 17^th November 2017, the Bills of Entry were kept pending for assessment and therefore, they would be assessed at the higher rate of 30% under Notification No.87/2017­Cus dated 17^th November 2017

6.4 That subsequently, vide notice dated 24^th November 2017, the Deputy Commissioner of Customs (Grade. 1), Kandla informed that such Bills of Entry no. 4032303, 4032304, 4032289 and 4032290 dated 16^th November 2017 needs to be re­assessed on the ground of issuance of Notification No.87/2017­Cus dated 17^th November 2017

6.5 That the new Notification No.87/2017­Cus dated 17^th November 2017 was neither in existence nor released till 20^th November 2017. The Copy of the Notification digitally signed to be published in official Gazette is enclosed herewith the Note.

6.6 That the Notification No.87/2017­Cus dated 17^th November 2017 was digitally signed for being published in Official Gazette only on 20^th November 2017.

6.7 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. 4032303, 4032304, 4032289 and 4032290.

6.8 That therefore, the Petitioner vide letter dated 24^th November 2017 and 27^th November 2017 explained the issue to the Deputy 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 17^th November 2017 and had filed Bills of Entry no.4014311, 4016027 and 4014597, all dated 15^th November 2017 and Bill of Entry No.4031148 and 4031633 dated 16^th November 2017 for home consumption.

7.1 That for Bills of Entry no.4014311, 4016027 and 4014597 all dated 15^th November 2017, and for Bills of Entry no.4031148 dated 16^th November 2017, the petitioner had made the duty payment @ 17.5% by MEIS licenses/scripts vide Notification no.50/2017­Cus dated 30^th June 2017.

7.2 That on 17^th November 2017, the vessel was granted an entry inward and at 12:11 hrs. therefore, the date of Bills of Entry would be 17^th November 2017 as per the proviso to Section 15 of Customs Act, 1962.

7.3 That further on 17^th 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 23^rd November 2017 & 24^th November 2017, the Deputy Commissioner of Customs (Grade. VII), Kandla informed that such Bills of Entry needs to be re­assessed on the ground of issuance ofNotification No.87/2017­Cus dated 17^th November 2017.

7.5 That the new Notification No.87/2017­Cus dated 17^th November 2017 was neither in existence nor released till 20^th November 2017. The Copy of the Notification digitally signed to be published in official Gazette is enclosed herewith the Note.

7.6 That the Notification No.87/2017­Cus dated 17^th November 2017 was digitally signed for being published in Official Gazette only on 20^th November 2017.

7.7 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. 4014311, 4016027, and 4014597.

7.8 That therefore, the Petitioner vide letter dated 24.11.2017 and 27.11.2017 explained the issue to the Deputy Commissioner and requested the Bill of entry not be recalled and reassessed as per the higher Customs duty of 30%.

Facts of SCA No.732 of 2018

8. Vide High Seas Sale Agreement dated 2^nd November 2017, Petitioner had purchased 500 MTs of Crude Degummed Soyabean Oil of Edible Grade in bulk (referred to herein after as subject goods) from M/s. Kanpur Edibles Pvt. Ltd., Kanpur, Uttar Pradesh. M/s. Kanpur Edibles Pvt. Ltd. had imported the subject goods per vessel “MT LACERTA” vide Bills of Lading No.KE5 and KE6 both dated 2^nd October 2017 (for 250 MTs each).

8.1 Thereafter petitioner, being owner of the subject goods as stated above, filed Bill of Entry No.4016010 dated 15^th November 2017 under Section 46 of the Customs Act, 1962 seeking clearance of the subject goods for home consumption. The subject goods merit classification under Customs Tariff Heading 15071000 of the Customs Tariff Act and petitioner was required to pay duty @ 17.50% (basic customs duty). Accordingly petitioner had filed the aforesaid Bill of Entry claiming classification and rate of duty as stated above.

8.2 The subject goods were assessed accordingly on 15^th November 2017 and duty was assessed @ 17.50%. Duty structure in regard to the subject goods is 17.50% (basic customs duty) plus 3% (education cess). Accordingly duty was assessed to the tune of Rs.50,80,779/­, which was discharged by the petitioner by MEIS Licences/scripts on 15^th November 2017. Thereafter, petitioner paid 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 16^th November 2017.

8.3 Vessel carrying the subject goods had arrived at Kandla Port on 12^th 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 17^th 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 dated 17^th November 2017 (purportedly dated 17^th 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 18^th November 2017 around 01:30 hours and was published in the Official Gazette on 20^th 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, the said Notification was published electronically in the Official Gazette of India only on 20^th November 2017 at 11:56 hours as is evident from the digital signature thereon and petitioner has placed on record at pages 46­48 an electronic copy of the Gazette where at the end of the subject Notification the following endorsement appears:

“ALOK KUMAR	Digitally signed by ALOK KUMAR
Date: 2017:11:20	11:56:05 + 05’30”

Therefore, it is evident that the subject notification has no application in the facts of the instant case.

8.5 Petitioner pursued the matter with the revenue for clearance of the subject goods. However instead of doing the needful a Letter dated 23^rd November 2017 was issued by the revenue wherein, inter alia, 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 dated 17^th November 2017 and that the subject Bill of Entry was required to be re­assessed accordingly.

8.6 In response to above, petitioner vide its letter dated 6th December 2017, while reiterating the aforesaid facts and circumstances, in nutshell stated that the aforesaid Notification No.87/2017­Cus dated 17^th November 2017 was published in the Official Gazette only on 20^th November 2017 and that the same was made available to public only on 20^th November 2017, hence the same was not applicable to the issue at hand and that the petitioner was not liable to pay enhanced rate of duty. Accordingly, it was requested that the subject goods may kindly be cleared at the earliest on the duty already paid and assessed @ 17.50% as stated above.

8.7 However instead of doing the needful revenue re-assessed the subject Bill of Entry on 7^th December 2017 while demanding further amount of Rs.38,10,584/­ (sum total of differential duty of Rs.36,29,128/­ and differential IGST of Rs.1,81,456/­). However, copy of reassessed subject bill of entry was not made available to the petitioner and petitioner has placed on record copy of status of reassessed subject bill of entry as printed from revenue’s icegate website at pages 56­58.

Facts of SCA No.958 of 2018

9. Petitioner Company is engaged, amongst others, in the business of import and trading of various edible oils. Petitioner entered into three Contracts all dated 5^th April 2017 for import of 3000 Mts (2% more or less at seller’s option and at contract rate) 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 30^th 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 30^th 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 30^th September 2017 and aforesaid Bills of Lading Nos. ED10 to ED14 all dated 21^st February 2017, filed Bill of Entry No. 4014015 dated 15^th November 2017 under Section 46 of the Customs Act, 1962 seeking clearance of the subject goods for home consumption.

9.3 Subject goods merit classification under Customs Tariff Heading 15071000 of the Customs Tariff Act and Petitioner was required to pay duty @ 17.50% (basic customs duty). Accordingly Petitioner filed aforesaid Bill of Entry claiming classification and rate of duty as stated above. The subject goods were assessed accordingly on 15^th November 2017 and duty was assessed @ 17.50. Duty structure in regard to the subject goods is 17.50% (basic customs duty) plus 3% (education cess).

Accordingly duty was assessed to the tune of Rs.1,33,11,640.20/­, which duty was discharged by the Petitioner by MEIS Licences / scrips on 15^th November 2017. Thereafter Petitioner paid Integrated Goods and Service Tax (IGST) to the tune of Rs.43,58,131/­ payable on importation of the subject goods under the subject Bill of Entry on 17^th November 2017 (pg 55).

9.4 Vessel carrying the subject goods arrived at Kandla Port on 12^th November 2017. Further, Entry Inward was granted to the said Vessel carrying the subject goods on 17^th November 2017 at 13:45 hours (pg 56).

9.5 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 dated 17^th November 2017(purportedly dated 17^th 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 18^th November 2017 around 01:30 hours and was published in the Official Gazette on 20^th 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” (pg 57). Further, the said Notification was published electronically in the Official Gazette of India only on 20^th November 2017 at 11:56 hours as is evident from the digital signature thereon and Petitioner has placed on record at pages 58­60 an electronic copy of the Gazette where at the end of the subject Notification (page 60 bottom right hand side) the following endorsement appears:

“ALOK KUMAR	Digitally signed by ALOK KUMAR
Date: 2017:11:20	11:56:05 + 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 23^rd 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 dated 17^th November 2017 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 contest the illegal demand of higher duty by the revenue as stated above, Petitioner wrote Letters dated 27^th November 2017 (pg 63) and 28^th November 2017 (pg 64), to the department under acknowledgment submitting that in view of the compelling circumstances Petitioner will deposit the higher duty under ‘Protest and further made request that the subject goods may be cleared at the earliest.

9.8 In view of the above, the subject Bill of Entry dated 15^th November 2017 was re­assessed by the revenue on 1^st December 2017 while demanding further amount of Rs.99,83,741/­ (sum total of differential duty of Rs.95,08,315/­ and additional GST of Rs.4,75,416/­). Copy of re assessed subject Bill of Entry is appearing at pages 65 to 70. Petitioner deposited the aforesaid amount of Rs.99,83,741/­ on 1^st December 2017 under protest and copy of receipt for payment of aforesaid amount of Rs.99,83,741/­is appearing at page 71.

It is submitted that in total Petitioner paid excess amount of Rs.99,83,741 /­ as a result of re­assessment of the aforesaid subject bills of entry, as stated above.

Facts of SCA No.21675 of 2018 & SCA 21869 of 2017

10. The petitioner entered into separate purchase contracts with certain foreign sellers from 30^th September 2016 to 7^th April 2017 for import of Crude Degummed Soyabean Oil (edible­grade),

which is covered in custom tariff heading no.1507.10.00 under the Customs Tariff Act, 1975. On arrival of the vessel on 12^th November 2017, the clearing house agent of the petitioner filed bills of entry on 15^th November 2017. On the same day, the petitioner via licenses procured from the open market made payment of the requisite basic customs duty @ 17.5% and 3% cess payable for importation of the subject goods covered in the bills of entry. The petitioner also paid the IGST payable on the subject goods.

10.1 It appears that the respondent no.1 issued Notification No.87/2017­Cus dated 17^th November 2017 under section 25(1) of the Customs Act, whereby the rate of duty payable on the importation of the subject goods was increased from 17.5% to 30%. However, according to the petitioner, the said notification was uploaded on the website of the Central Board of Direct Customs only on 18^th November 2017 at around 1:30 hours and was published in the office gazette only on and around 20^th November 2017 at 11:56 hours. In such circumstances, it is the 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 15^th November 2017 and the petitioner has already paid the duty on IGST on 17^th 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 28^th 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 Section­ 25(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 and order dated 15^th October 2019 in context of Section­3 of the Foreign Trade (Development and Regulation) Act, 1992, which has the same language as that of Section 25(1) of the Customs Act. The Court while allowing the petition held amongst others that the subject notification though dated 25^th August 2017 had been digitally signed on 28^th August 2017 and had been electronically published in the official gazette on 28^th August 2017, the same would not apply to the subject bills of entry dated 25^th August 2017.

13. Reliance was also placed on the following decisions for applying the decision of the Andhra Pradesh High Court striking­down the amended Section 25(4) of the Customs Act would apply throughout the country.

(1) Darshan Boardlam Ltd. Vs. UOI – 2013 (287) ELT 401 (Guj.)

“103. We may only say to substantiate our findings recorded in this regard that the two documents dated 17th April 2012 and 22nd September 2011 which were relied upon by Mr.Oza and shown to us also do not refer to Section 37B but still the purpose with which such circulars were issued were to clarify certain issues for adopting a uniform practice informing the Excise Officers as to how a particular issue was required to be dealt with.

104. We have also noticed that the clarifications in the present case were followed by the Central Excise Officers in charge of the Commissionerate in Uttar Pradesh, Maharashtra, Andhra Pradesh, etc. The communications were issued by the Board to the Chief Commissioner of Patna, Chief Commissioner of Hyderabad and Chief Commissioner of Pune.

105. Under such circumstances, when other Central Excise authorities of equal and higher rank have followed and acted as per the clarifications, the Commissioner, Surat, could not have taken a contrary view on the assumption that the clarifications were only letters and not orders under Section 37B. Therefore, in our view, the action on the part of the respondents in denying the benefit of Notification No.6/2006 being contrary to the Board’s circulars can be termed as without jurisdiction.

106. Mr. Dave is quite justified in submitting that the Central Excise is a central levy and, therefore, such a levy has to be collected uniformly from all similarly situated manufacturers located all throughout the country. If Excise authority of a particular Commissionerate or State refuses 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).

(2) Kusum Ingots & Alloys Ltd. Vs. UOI – 2004 (168) ELT 3 (SC)

“21. A parliamentary legislation when receives the assent of the President of India and published in an Official Gazette, unless specifically excluded, will apply to the entire territory of India. If passing of a legislation gives rise to a cause of action, a writ petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the Act or some of them which were implemented shall give rise to civil or evil consequences to the petitioner. A writ court, it is well settled would not determine a constitutional question in vacuum.

22. The court must have the requisite territorial jurisdiction. An order passed on writ petition questioning the constitutionality of a Parliamentary Act whether interim or final keeping in view the provisions contained in Clause(2) of Art. 226 of the Constitution of India, will have effect throughout the territory of India subject of course to the applicability of the Act. Situs of office of the Respondents whether relevant?”

(3) Steel Authority of India Vs. CC – 2000 (115) ELT 42 (SC)

1. The appellants claimed the benefit of an exemption notification in respect of refractory blocks of special shape imported by them. The said notification gave such exemption to refractory bricks and there was a trade notice issued by the Bombay Customs House for the information and guidance of importers, clearance agents and all others concerned that refractory blocks of special shape were covered by the expression “bricks of special shape” appearing in the said notification. The Tribunal, however, declined to take the trade notice into account on the ground that it could not enlarge the scope of the said notification.

2. This Court has consistently held that the authorities are bound by the trade notices that they issue and cannot argue to the contrary. (See Ranadey Micronutrients V/s. CCE). It was, therefore, not open to the Revenue to contend that the said   notification did not exempt refractory blocks.

3. Learned counsel for the Revenue submitted  that this trade notice had been issued only by the Bombay Customs House. It is   hardly to be  supposed that the Customs Authorities 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 some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence. The thought that a decision reached in the secret recesses of a chamber to which the public have no access and to which even their accredited representatives have no access and of which they can normally know nothing, can nevertheless affect their lives, liberty and property by the mere passing of a Resolution without anything more is abhorrent to civilised man. It shocks his conscience. In the absence therefore of any law, rule, regulation or custom, we hold that a law cannot come into being in this way. Promulgation or publication of some reasonable sort is essential.

9. 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 tually 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 Law of England Huislam edition page 150 note there it is necessary to enact a special Act of Parliament to enable such proclamation to become law by publication in the Gazette through a Royal Proclamation is the highest kind of law, other than an Act of Parliament, known to the British Constitution, and in the publication in the London Gazette will not make the proclamation told in Scotland nor will publication in the Edinburgh Gazette make it will 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 n t of the publication has to be prescribed by an Act of Parliament.”

(b) In the case of B. K. Srinivasan Vs. State of Karnataka, 1987 (1) SCC 658, the Supreme Court held as under:

“15. There can be no doubt about the proposition that were a law, whether Parliamentary or subordinate, demands compliance, those that are governed must be notified directly and reliably of the law and all changes and additions made to it by various processes. Whether law is viewed from the stand­point of the ‘conscientious good man’ seeking to abide by the law or from the standpoint of Justice Holmes’s ‘Unconscientious bad man’ seeking to avoid the law, law must be known, that is to say, it 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 legislation prescribes a plainly unreasonable mode of publication, it will take effect only when it is published through the customarily recognised official channel, namely, the Official Gazette or some other reasonable mode of publication. There may be subordinate legislation 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.”

“What we find is that the High Court has stated for bringing the notification into force and make it effective, two conditions are mandatory, viz, (1) Notification should be duly published in the official gazette, (2) it should be offered for sale on the date of its   issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. In the present case, admittedly, second condition was not satisfied inasmuch as it was offered for sale only on 06.08.2001, as it was published on 03.08.2001 in late evening hours and 04/ 05.08.2001 were holidays.”We are in agreement with the aforesaid view taken by the High Court which is in conformity with the law laid down by this court in “Harla Vs. The State of Rajasthan (1952(1)SCR110) wherein this court   formulated the aforesaid principle in the following manner:­

(c) In the case of Union of India v. Param Industries (which arose in the context of Section 25 of the Customs Act as it stood prior to 14.5.2016), the Supreme Court, relied upon its judgment in the case of Harla v. Rajasthan to hold that:

“What we find is that the High Court has stated for bringing the notification into force and make it effective, two conditions are mandatory, viz, (1) Notification should be duly published in the official gazette, (2) it should be offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. In the present case, admittedly, second condition was not satisfied inasmuch as it was offered for sale only on 06.08.2001, as it was published on 03.08.2001 in late evening hours and 04/ 05.08.2001 were holidays.”

We are in agreement with the aforesaid view taken by the High Court which is in conformity with the law laid down by this court in “Harla Vs. The State of Rajasthan (1952(1)SCR 110) wherein this court formulated the aforesaid principle in the following manner:­

‘The principle underlying this question has been judicially considered in England. For example, on a somewhat later plane, it was held in Johnson v. Sargant that an Order of the Food Controller under the Beans, Peas and Pulse (Requisition) Order, 1917 does not become operative until it is made known to the public, and the difference between an Order of that kind and an Act of the British Parliament is Stressed. The different is obvious. Acts of the British Parliament are publicly enacted. The debates are   open to the public and the Acts are passed by the accredited representatives of the people who in theory can be trusted to say that their constituents know what  has been done. They also receive wide publicity on papers and, now, over the wireless. Not so  Royal Proclamations and Orders of a Food Controller and so forth. There must therefore be promulgation 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 “the date of issue” is required to be construed recording, viz. when the notification is issued and is published and offered for sale. Moreover, the Supreme Court in the case of Union of India v. Param Industries (supra) has agreed with the view adopted by the Karnataka High Court whereby it has been held that “for bringing the notification into force and make it effective, two conditions are mandatory, viz. (1) Notification should be duly published in the official gazette, (2) it should be offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi.” In the light of the view taken by the Supreme Court, the respondents cannot be heard to contend that sub­section (4)(b) of section 25 of the Act is only directory and not mandatory. The facts emphasized in the present case, reveal that the Notification no.1/2013 Customs dated 21.01.2013 was received by the government press on 21.01.2013 at 9.45 p.m., printed on 01.02.2013 and sent to Kitab Mahal on 04.02.2013. Clearly, therefore, the Notification No.1/2013­Customs, though issued on 21.01.2013, was neither published in the official gazette nor was offered for sale on the date, and therefore, would not come into force and be operative from 21.01.2013. Under the circumstances, the said notification cannot be made applicable to the goods imported by the petitioner which were cleared on 21.01.2013 “

SUBMISSIONS ON BEHALF OF THE RESPONDENTS:

15. On the other hand, learned standing counsels appearingfor the respondents relied up on the following averments made in the affidavit in reply filed on behalf of the respondent nos.2 and 3 in SCA No.11063 of 2018.

The law with regard to coming into force of notifications is laid down in Section 25(4) of the Customs Act, 1962 (5 of 1962). Section 25(4) of the Customs Act, 1962 reads as under:

25(4) Every notification issued under sub­section (1) or sub­section (2A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette.

13. It may be seen that a notification under Customs Act, 1962 comes into force on the date of its issue by the Central Government for publication in the Official Gazette So the relevant date in for coming into force is the date of issue of notification by the Central Government for publication 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

(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

(b) in the case of an Act of Parliament, of the President

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

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 regulation, shall mean the day on which the Act or Regulation comes into force;”

As section 25(4) lays down that the date of coming into force shall be the date of issue by the Central Government for publication in the official gazette. So the date of commencement shall also be the date of issue of concerned notification by the Central Government   for publication in the Official gazette as per the above definition of the term commencement, and not the date on which such   notification is published in the official gazette.

16. A combined reading of the stipulations reproduced above entails that thetime of coming into operation would be the moment of expiration of the day preceding commencement of the notification. This position has been exemplified in the matter of Commissioner   of Income Tax V.RB Jodha Mal Kuthiala.

“The Indian Income­tax (Amendment) Act 7 of 1939 was brought into force on April 1. 1939. Section 5(3) of the General Clauses Act (10 of 1897) provides that unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into being on the expiration of the day preceding its commencement Act 7 of 1939 must therefore be deemed to have come into operation at a point of time immediately on the expiration of March 31, 1939.”

17. Thus, any notification commencing on a particular date, issued by the Central Government, would be construed to have come into operation at precisely the expiration of the preceding day, [of the day on which it is issued by the Central Government for publication in the official gazette] which would be the moment coincidental with the beginning of that calendar day, viz. 00:00 Hrs of that day irrespective of the actual time of publication of the notification in the gazette.

18. To sum up, the date of coming into operation would be the date on whichthe notification is issued by the Central Government for publication of the official gazette, and the time for coming into operation would be 00:00 HRs of that day. Accordingly, all imports of subject goods, on the said date, shall attract revised rates of import duty.

19. Regarding the amendment of Section 25(4) of the Customs Act vide Finance Act 2016 wherein the sub­section 25(4)(b) was deleted is ultra vires it may be seen that the authority of Parliament with respect to taxation matters has been upheld by the 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 constitutional provision. There is no third ground. No enactment can be struck down by just saying that it is arbitrary or unreasonable. An enactment cannot be struck down on the ground that the court thinks it to be unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them.

22. This proposition of law has been clearly enunciated by a Constitutional Bench of the Hon’ble Supreme Court in K.T. Plantation (P)Ltd. v. State of Karnataka, (2011) 9 SCC The relevant paragraphs of the judgment are from 198 upto the conclusion of the judgment. Paras, 203, 205 and 217 in particular are reproduced hereunder:

“203. Even in McDowell case, it was pointed out that some or other constitutional infirmity may be sufficient to invalidate the statute. A three­Judge Bench of this Court in McDowell & Co. case held as follows: (SCC pp. 737­38, para 43)

“43. …. The power of Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by Parliament or the legislature can be struck down by courts on two grounds and 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 constitutional provision. There is no third ground…. No enactment can be struck down by just saying that it is arbitrary or unreasonable. Some or other constitutional infirmity has to be found before invalidating an Act. An enactment cannot be struck down on the ground that court thinks it unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom.”

205. Plea of unreasonableness, arbitrariness, proportionality etc. always raises an element of subjectivity on which a court cannot strike down a statute or a statutory provision, especially when the right to property is no more a fundamental right otherwise the court will be substituting its wisdom to that of the legislature, which is impermissible in our constitutional democracy.

217. The rule of law as a principle contains no explicit substantive component like 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 Legislatures of States

(1) Notwithstanding anything in Cls. (2) and (3). Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the “Union List”).

(2) …NR

(3) …NR

(4) …NR

SCHEDULE VII

Parliament has exclusive powers to make laws in respect of matters enumerated in List I in VII schedule.

Entry 97 in Schedule VII ­ List

Any other matter not enumerated in List Il or List II including any tax not mentioned in either of those lists.

ARTICLE 248: Residuary powers of legislation

Subject to article 246A, Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.

(2)   Such power shall include the power of making any law imposing a tax not mentioned in either of those Lists.

“ARTICLE 246A: Special provision with respect to goods and services tax

(1) Notwithstanding anything contained in articles 246 and 254, Parliament, and, subject to clause (2), the Legislature of every State, have power to make laws with respect to goods and services tax imposed by the Union or by such State.

(2) Parliament has exclusive power to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter­State trade or commerce.

Explanation. The provisions of this article, shall, in respect of goods and services tax referred to in clause (5) of article 279A, take effect from the date recommended by the Goods andServices Tax Council.”

Thus, the legislature is vested with the powers to firstly impose any tax and secondly make any law with respect to imposition of goods and service tax laws.

24. EMINENT DOMAIN NOT AMENABLE TO JUDICIAL REVIEW

“Eminent Domain” (jus or dominium eminens) is the right or power of a sovereign state to appropriate the private property within the territorial sovereignty to public uses or purposes.

(2008) 4 SCC 720 ­ Govt. of A.P. v. P. Laxmi Devi –

“..40. The court must always remember that invalidating a statute is a grave step, and must therefore be taken in very rare and exceptional circumstances.

41. We have observed above that while the court has power to declare a statute 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 the State not to deny to any person equality before the law or the equal protection of the laws. The phrase “equality before the law “contains the declaration of equality of the civil rights of all persons within the territories of India. It is a basic principle of republicanism. The phrase “equal protection of laws” is adopted from the Fourteenth Amendment to the U.S. Constitution. The right conferred by Article 14 postulates that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Since the State, in exercise of its government power, has, of necessity, to make laws operating differently on different groups of persons within its territory to attain particular ends in giving effect to its policies, it is recognised that the State must possess the power of distinguishing and classifying persons or things to be subjected to such laws. It is, however, required that the classification must satisfy two conditions, namely, () it is founded on an intelligible differentia which distinguishes those that are grouped together from others, and (i) the differentia must have a rational relation to the objects ought to be achieved by the Act. It is not the requirement that the classification should be scientifically perfect or 2.093 logically complete. Classification would be justified if it is not palpably arbitrary. (See Re. Special Courts Bill, 19785) If there is equality and uniformity within each Group, the law will not be condemned as discriminative, though due to some fortuitous circumstance arising out of a peculiar situation some included in a class get an advantage over others, so long as they are not singled out for special treatment.

21. Since in the present case we are dealing with a taxation measure it is necessary to point out that in the field of taxation the decisions of this Court have permitted the legislature to exercise an extremely wide discretion in classifying items for tax purposes, so long as it refrains from clear and hostile discrimination against particular persons or classes…”

27. It is further submitted that the Hon’ble Supreme Court has in its judgment reported in (1981) 4 SCC 675 R.K. Garg v. Union of India observed as under.

*..7. Now while considering the constitutional validity of a statute said to be violative of Article 14, it is necessary to 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 delivered in respect of unamended section 25(4) of the act and those judgments were of the nature of interrupting the unamended section 25(4)of the Act and hence the same cannot be relied upon   and can be distinguished easily.

29. In view of above coupled with the fact that the petitioner could not produce anything concrete about how the amended section 25(4) of the Customs Act, 1962 can be said to be ultra vires or unconstitutional and hence the petition deserves to be dismissed.

30. I respectfully say and submit that considering the above submissions, it is clear that the impugned provisions are constitutionally   valid and hence the petition deserves to be dismissed.”

16. Learned counsels for the respondents in addition to the above, relied upon the decision of Culcutta High Court in case of Ruchi Soya Industries Ltd., and another Vs. The Union of India & Ors. which is a petitioner in SCA no.11063 of 2018 in support of their submission that the Culcutta High Court has rejected the petition holding as under :-

“22. We already have quoted the section in extenso. For better understanding of Sub­section 4 we wish to reproduce the same as follows:­

a) Unless otherwise provided, every notification under sub­section 1 or con 2A shall come into force on the date of its issue by the   Central Government for publication in the official gazette.

b) Every notification issued under Sub­section 1 or Sub­section 2A shall also be published and offered for sale by the Directorate of   Publicity and Public Relation of the Board, New Delhi on the date of its issue by the Central Government.

23. A reading of the Sub­section 4 as above may lead to the inference that every notification issued under Sub­section 1 or Sub­section 2A shall come into force on the date of its issue by the Central Government for publication in the official gazette. This reading may appear to be slightly in conflict with Sub­section 1, which provides that notification in the official Gazette is required to grant the exemption. But this is not a conflict because the provision in Sub­section 1 is qualified to that extent by Sub section   4.   The notification comes into force when it is issued for publication in the official gazette. It is not dependent upon any further act, or activity. The mandate that the notification shall also be published and offered for sale by the 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.

I state that the according to Section 25(4) (b) of the Customs Act, 1962 the said Notification was published on 17.09.2015 and offered for sale on 17.09.2015 by the Directorate of Publicity and Public Relations of the Board, New Delhi. However, on17.09.2015 no person came to the sale counter of DPPR to purchase the above said Notification.”

24. The contents of the aforesaid affidavit have remained uncontroverted.

25. Mr. Saraf is right in contending that under Order 8 Rule 5 of the Code of Civil Procedure every allegation offact in a plaint or a pleading if not denied specifically or by necessary implication or stated to be not admitted in the pleading of the defendant or the respondent as the case may be shall be taken to be admitted except as against a person under disability

26. The writ petitioner obviously is not under any disability. Far from underlying the contents of the aforesaid affidavit no opposition thereto was filed. He also drew our attention to Section 58 of the Evidence Act, which reads as follows:

“58. Facts admitted need not be proved. No fact need be proved in any proceeding which the parties thereto or their agents agree to admit at the hearing, or which, before the hearing, they agree to admit by any writing under their hands, or which by any rule of pleading in force at the time they are deemed to have admitted by their pleadings:

Provided that the court may, in its discretion, require the facts admitted to be proved otherwise than by such admissions.”

27. There is thus ample evidence to hold that the mandate that the notification issued under Subsection 1 or Sub­section 2A shall also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relation of the Board was duly complied with. The learned Trial Court held in this regard as follows:­

“The Union has disclosed in an affidavit that the notification was published in the Official Gazette on September 17, 2015. There is no creditable denial to such assertion. It is not the petitioners’ case that the relevant official Gazette is ante dated. The Union has also claimed in the affidavit that though the Official Gazette containing the notification may not have been offered for sale on September 17, 2015, but copies of the notification were put on sale nonetheless. The Union says that 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 at pains to show that the copy of the official gazette was not available before 21 September, 2015 as would appear from the submissions recorded herein above. Copy of the official gazette may or may not have been available before 21 September, 2015. Nothing really turns on that. Once the fact that the notification was also published and offered for sale on 17th September, 2015 by the Directorate of Publicity and Public Relation of the Board is established there is no scope for any further controversy.

30. We may now notice the judgment in the case of Param Industries Ltd. (Supra) relied upon by Mr. Rawal. The question for   consideration before the Karnataka High Court was “did the notification under section 14(2) of the Customs Act come into effect on 3rd  August, 2001? Or did the same come into effect on 7th   August, 2001 when copy of a gazette notification was received
by the Customs authorities?

31. Section 14 of the Customs Act is a provision for valuation of goods. Subsection 2 of Section 14 provides as follows:

“14. Valuation of goods.­(1)..

(2) Notwithstanding anything contained 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.

Explanation.­For the purposes of this section –

(a) “rate of exchange” means the rate of exchange –

(i) determined by the Board, or

(ii) ascertained in such manner as the Board may direct, for the conversion of Indian currency into foreign currency or foreign currency into Indian currency;

(a) “foreign currency” and “Indian currency” have the meanings respectively assigned to them in clause (m) and clause (q) of Section 2 of the Foreign Exchange Management Act, 1999 (42 of 1999).]”

32. Ordinarily, under Sub­section 1 of Section 14 the transaction value is the basis unless the parties are related to each other. There is, however, provision in Sub section 1 of Section 14 for addition to the transaction value any amount paid or payable for costs and services etc. But Sub­section 2 is a departure from sub­section 1. The transaction value provided 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

34. He contended that under Section 81 of the Evidence Act there is a presumption in favour of a gazette which reads as follows:­

“81. Presumption as to Gazettes, newspapers, private Acts of Parliament and other documents.­- The Court shall presume the genuineness of every document purporting to be the London Gazette or 1[any Official Gazette, or the Government Gazette] of any colony, dependency or possession of the British Crown, or to be a newspaper or Journal, or to be a copy of a private Act of Parliament 2[of the United Kingdom] printed by the Queen’s Printer and of every document purporting to be a document directed by any law to be kept by any person, if such document is kept substantially in the form required by law and is produced from proper custody.”

35. He added that there is also a presumption under Section 114 of the Evidence Act that all official and judicial acts were regularly performed. The Hon’ble High Court of Karnataka inspite of the aforesaid presumption in law held that the respondents did not produce records to show that averment made in the writ petition was false.

36. Mr. Saraf contended that when there is a presumption in law as regards correctness of a fact it was not for the State to prove the negative. It was in that case the burden of the petitioner to rebut the presumption that the gazette ublication was not made on 3rd  August, 2001.

37. He contended that the Hon’ble Karnataka High Court also fell into an error in taking assistance of Sub­ections 4 and 5 of Section 25 for the purpose of construing the provision of Section 14 of the Customs Act, Section 14 and Section 25 provide for   two different situations and two different mechanism have been provided. Section 25 could not have been resorted to in interpreting Section 14 as was done by the Karnataka High Court. It is not, however necessary for us to go into that question because the Apex Court in the case of Union of India v. Param Industries Ltd. (supra) did not go into the same as would appear from paragraph 2 of the report which reads as follows:­

“There was some dispute as to whether the notification was published on 3­8­2011 itself or it was published on a later date. However, from the record, it gets revealed that the notification was sent or 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 is indeed evidence to show that both of them were duly complied with. The official gazette dated 17th September, 2015 was produced before us by Mr. Saraf. As regards the other condition, we have indicated above that the same was duly complied with.

41. We are unable to accept the submission of Mr. Rawal that both Sub­section (4) and (5) have to be read together. The Sub­section (5) of Section 25 deals with a situation in which the notification has been issued in advance and is intended to become operative at a future date.

42. For the aforesaid reasons, we find no merit in the appeal. The appeal is dismissed and the question formulated is answered by holding that the notification came into force on 17th September, 2015.”

17. Learned standing counsels for the respondents further submitted that the issue of validity of Section­25(4) is now pending before the Apex Court.

ANALYSIS

18. Having heard the learned advocates for the respective parties and having gone through the material on record, the first question arises for consideration is whether the petitioners would be liable to pay increased rate of duty as per the Notification issued under Section 25(1) of the Customs Act on the same day on which the bills of entry were field by the petitioner, but the notification was made available in official gazette in electronic form subsequently, in view of the provisions of Section 25(4) of the Customs Act as amended by the Finance Act, 2016, and Secondly, Whether the provisions of Section 25(4) of the Customs Act, 1962 as amended by the Finance Act, 2016 is arbitrary, illegal, ultra vires and unconstitutional or not.

19. We may note that the above questions came for the consideration before the Andhra Pradesh High Court in Writ Petition nos.4533 and 4534 of 2019 in case of M/s. Ruchi Soya Industries Ltd., (supra), the petitioner of SCA no.11063 of 2018 and the Andhra Pradesh High Court after considering the submissions canvassed by both the sides has held as under for striking down Section 25(4) of the Customs Act declaring as arbitrary and contrary to Section 25(1)(2A) of the Customs Act, 1962.

“In Re POINT:

The major contention urged before this Court is that, Section 25(4) of Customs Act, 1962, introduced by Amendment Act 28 of 2018 iscontrary to sub­section (1) of Section 25 of the Customs Act. According to sub­section (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 sections of tax laws:

The general principles of interpretation cannot be made applicable for interpretation of taxing statute, more particularly, when exemption clauses or charging clauses are to be interpreted,

In Innamuri Gopalam and Maddala Nagendrudu v. State of A.P, the Apex Court had an occasion to deal with the exemption clause and the exemption was denied to the assessee on the ground that the intention of the notification was to avoid double taxation, and as it was not a case of double taxation, no exemption could be granted. The Supreme Court held that on the plain language of the notification, the assessee was entitled to exemption, and since the intention was not reflected in plain words, it could not be taken into consideration. The Apex Court further observed that “In construing a statutory provision the first and foremost rule of construction is the literary construction. All that the court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear.”

it must be construed strictly. There is vast difference in interpretation of provisions of taxing statute, more particularly, charging and exempting sections in taxing statutes and other legislations. The principles for interpretation of charging sections and exemption in tax laws are laid down in various judgments. But, there is difference of opinion as to the benefit to be given in the event of any ambiguity in the provisions of the Act.

The role for interpretation of exemption clause is strict Construction. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, 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 o 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 notification may be directory in nature and some are of mandatory in nature. A distinction between provisions of statute which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in their nature, on the other, must be kept clearly distinguished. The  principles   as regard construction of an exemption notification are no longer res integra. Whereas the eligibility clause in relation to an exemption notification is given  strict meaning where for the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed literally.

In the recent judgment of the Supreme Court in Commissioner of Customs (Import), Mumbai v. M/s. Dilip Kumar and Company12, the Larger Bench of the Apex Court consisting of five Judges laid down the guidelines for interpreting taxing statute as follows:

(1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the Assessee to show that his case comes within the parameters of the exemption Clause or exemption notification.

(2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/Assessee and it must be interpreted in favour of the revenue.

(3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands over­ruled.”

The Apex Court in the above judgment considered various judgments as to how the provision in taxing statutes have to be interpreted including exemption notifications, concessions or exceptions in the statute to be given the subject/assessee. The Larger Bench judgment has clarified the rule of interpretation and as to the benefit to be given either to the assessee or to the revenue. In view of the law declared by the Apex Court in the judgments, which we referred in the earlier paragraphs, it is necessary to advert to certain provisions of the Customs Act.

Keeping in view the specific contention, it is necessary to advert to Section 14 of the Act, which deals with valuation of goods. According to sub­section (2) of Section 14 of the Act, notwithstanding anything contained 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 contrary to the fundamental right or it is arbitrary or capricious. The Government has to keep in mind that the amended provisions shall never be contrary to other provisions of the Act, while enacting such law by amending the existing provision.

Learned counsel for the petitioner contended that sub­section (4) of Section 25 is contrary to sub­sections (1) & (2A) of the Act and the later provision which was amended by Act 28 of 2018 is to be struck down as arbitrary and in support of his contention, learned counsel placed reliance on the judgment of the Supreme Court in Union of India v. Ganesh Raj Bhojraj (referred supra). Earlier, the Central Government while exercising power conferred on the government, amended Section 25 by enhancing the basic duty of 25% on the goods exempted wholly by Notification No. 129 of 1976 dated 02.08.1976 even though not made available to public at large, the Court concluded that, only on the date of publication, the provision is deemed to have been came into force.

When the notification amending the existing provision had not been made available to the public at large, and published on subsequent date, the notification is deemed to have come into force on the date of its publication and the transactions prior to publication of notification are not governed by the amended provision. The Apex Court finally concluded that publication of the notification in the official gazette in the manner contemplated by Section 25(1) of the Act would be enough to import the liability to pay customs duty without regard to the inquiry into the fact whether the notification had actually come to the knowledge of the importer or not. Whatever 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 be left open to be gone into in an appropriate case. Non­availability of the Gazette carrying the notification may provide the  foundation for a defence plea of innocence where  mens rea is an ingredient of offence committed by  breach of notification.

Even now, Section 25(1) and (2A) remained as it is and it specifically says that a notification is required to be published in he official gazette of the Central Government, to bring any provision into force. 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 eals 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 in the official gazette, whereas, sub­ection (4) of section 25 says that notification is deemed to have been came into force when it was issued by the Central Government for publication in the Gazette.

In State of Maharashtra v. Mayer Hanse George13, the Apex Court observed that, there would be no question of individual service of a general notification on every member of the public and all that the subordinate law making body can or need do, would be to publish it in such a manner that persons can, if they are interested, acquaint themselves with its content.

In Pankaj Jain Agencies vs. Union of India (UOI) and Ors14, the Supreme Court while relying on the judgment in State of Maharashtra v. Mayer Hanse George (referred supra), held that, The Notification was duly published in the official gazette and thus became erative and enforceable. “We, therefore, see no substance in the contention that notwithstanding the publication in the Official azette there was yet a failure to make the law known and that, therefore, the notification did not acquire he elements of operativeness and enforceability.”

As per the principle laid down in the above judgment, when a notification is required to be published in the gazette, unless it is published, it is not deemed to have been came into force. The facts of the present case are almost identical to the facts of the above judgment. The main reason for publication in the gazette is only to attribute knowledge to the public or the persons dealing with imported goods, but not otherwise. Therefore, by applying the principle laid down in the above judgment, it can safely be concluded that sub­section (4) of Section 25 giving effect to the notifications under sub­sections (1) and (2A) from the date of issue of notification for publication is an arbitrary act of the Government.

Learned Government Pleader Sri Y. N. Vivekananda and the learned Assistant Solicitor General for Central Government contended that, similar question was raised before Calcutta High Court in Ruchi Soya Industries Limited v. Union of India (referred supra) and the Calcutta High Court held against the petitioner.

It is brought to the notice of this Court that the order passed by the Calcutta High Court was challenged before the Supreme Court in Ruchi Soya Industries Limited v. Union of India15 while granting leave, 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. Overseas Limited (referred supra), wherein the Division Bench of Gujarat High Court held that, when notification was published on subsequent day, demanding the importer to deposit the differential customs duty with interest is illegal and the same was quashed. The question before Gujarat High Court is almost identical to the question involved in the present case. However, the judgment of Gujarat High Court in Union of India v. M/s M.D. Overseas Limited (referred supra) is challenged before the Supreme Court vide Diary No.29116 of 2017, the Apex Court while condoning delay, dismissed the appeal at the stage of admission, as they found no legal and valid ground for interference. If, these principles are applied to the present facts of the case, it is difficult to sustain the notification by Amendment Act 28 of 2018, which is impugned before this Court.

In Union of India v. Kumho Petrochemicals Company Limited16, a similar dispute came up before the Apex Court for consideration. In the facts of the above judgment, after Notification dated 02.01.2009, issued by the Central Government was to remain in force till 01.01.2014, during which anti­dumping duty remained operative on imports of acrylonitrile butadiene rubber (rubber product), Notification dated 31.12.2013 initiated sunset review and inter alia, called upon the interested parties to submit relevant information in the prescribed form, manner and furnish their views to the authority for its consideration. The Notification dated 31.12.2013 was published on the same date, however, it was made available (sent for distribution to Kitab Mahal Book) only on 06.01.2014 i.e. after the expiry of original notification. In those circumstances, the Court was called upon to decide the “duty commencement” notification dated 31.12.2013. Having considered the facts and circumstances of the case, the Apex Court was of the opinion that once a decision is taken by the Government on a particular date, that would be the relevant date and not the date on which it is made public. Therefore, initiation of sunset review by Notification dated 31.12.2013 is permissible and valid.

The facts in the present case are slightly different, as the notification was not published on the same day when it was issued and even signed on the subsequent date by digital mode. In those circumstances, the notification is deemed to have 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)  also be   published   and   offered  for sale on the date of its  ssue by the Directorate of  Publicity   and   Public Relations   of   the   Board,  New Delhi	Every notification issued under sub­section (1) or sub­section (2A)  shall, unless otherwise provided,  come into force on the date of   its issue by the Central   Government  for publication   in   the Official Gazette.

Section 25(1) of the Customs Act is not amended and according to Section 25(1) of the Customs Act, if the Central Government is satisfied that it is necessary in the public interest so to do, 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. But, Section 25(4) has been amended and the pre­amended and post­amended clauses are tabulated hereunder.

As per pre­amended Act of Section 25(4), every notification issued under sub­section (1) or sub­section (2A) is deemed to have come into force on the date of issue of notification by the Central Government for publication in the official gazette. Clause (b) of the pre­amended Act further says that notification shall also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi.

No doubt, Clause (b) of Section 25(4) of pre­amended Act is totally omitted and the notification is deemed to have come into force on the date of its issue by the Central Government for publication in the official gazette remained intact. Therefore, the pre­amended provisions of Sub­sections (1), (2A) and (4) are not reconciling with one another, but on account of deletion of Clause (b) of sub­section (4) of Section 25, a friction was created and both Sections 25(1), (2A) and 25(4) are not reconciling with one another. According to subsection (1) of Section 25 of the post­amended Act, the Central Government if satisfied that it is necessary in the public interest, may by “notification issue an Official Gazette”, exempt generally either absolutely or subject to such conditions, as such, the main intention of the Legislature to publish notification in the Gazette is only to inform the public about the notifications in their interest. But, on account of amendment, such public 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 the whole expression of the parliamentary intention” (vide Eastbourne Corporation v. Fortes Limited19). In case in which two provisos were somewhat repugnant to each other, LORD MACMILLAN said: “If proviso 2 is repugnant in any way to proviso 1, it must prevail for it stands last in the enactment and so to quote LORD TENTERDEN, C.J., ‘speaks the last intention of the makers’. The last word is with the respondent and must prevail” (vide King v. Dominion Engineering Company Limited20). But, the rule that the later section should always be preferred in case it is irreconcilable with a prior section, seems somewhat doubtful and illogical for as JERVIES, C.J., observed during the course of arguments in a case: “How can we say that one provision is repealed by the other when both received the Royal assent at the same time”? (vide Castrige v. Page21). In case of conflict between two sections of the same Act a more logical approach is indicated by LORD HERSCHELL, L.C.: “You have to try and reconcile them as best as you may. If you cannot, you have to determine which is the leading provision, and which the subordinate provision and which must give way to the other. (vide Institute of Patent Agents v. Lockwood22 quoted in another connection in Chief Inspector of Mines v. Karam Chand Thapar23, Laxmi Devi v. Mukund Kanwar24 where Section 2(d) of the Transfer of Property Act was held to prevail over Section 5 of the same Act.)

To avoid uncertainty and friction in the system which the statute purports to regulate, where words of a statute are clear, they must, of course, be followed but where alternative constructions are equally open, that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating; and that alternative is to be rejected which will introduce uncertainly, friction or confusion into the working of the system. (vide Shannon Realities Limited v. St. Michel (Ville De)25, Central Bank of India v. Ravindra 26).

The above principle was accepted and the observations of LORD SHAW were quoted from Maxwell in construing Section 193 of the Sea Customs Act and in coming to the conclusion that the Chief Customs Authority was not an ‘Officer of Customs’ (vide Collector of Customs v. Digvijaya Singhji Spinning & Weaving Mills Limited27). The same principle was applied in construing 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 recovering and taking into custody and delivery of the person to the custody of an officer­in­charge of the nearest camp under Section 4 of Abducted Persons (Recovery and Restoration) Act, 1949, is not arrest and detention within the meaning of Article 22(1) and (2). In holding so, S.R. DAS, J, observed: “If two constructions are possible then the court must adopt that which will ensure smooth and harmonious working of the Constitution and eschew the other which will lead to absurdity or give rise to practical inconvenience or make well­established provision of existing law nugatory. (vide State of Punjab v. Ajaib Singh 29) and in construing Article 371­D of the Constitution, the Supreme Court held that the words ‘civil service of the State’ as used therein did not include the High Court staff and the subordinate judiciary, although the same words used in Article 311 include these categories. The narrower construction of these words in Article 371­D was adopted on the ground that a wider construction would encroach upon the principle of independence of judiciary enshrined in Articles 229 and 235 of the Constitution and the narrower construction ensures smooth working of the Constitution and harmony amongst its various provisions, the Court observed: “Where two alternative constructions are possible, the court must choose the one which will be in accord with the other parts of the statute and ensure its smooth, harmonious working and eschew the other which leads to absurdity, confusion or friction, contradiction and conflict between its various provisions, or undermines or tends to defeat or destroy the basic scheme and purpose of the enactment.” (vide Chief Justice of Andhra Pradesh v. L.V.A. Dikshitulu).

One of the contentions raised before this Court is that, when an Act leads to absurdity, the Court can declare such statute as illegal and drawn attention of this Court to the judgment of the Apex Court in State of Uttar Pradesh v. Malik Zarid Khalid31, wherein, the Supreme Court held as follows:

“It is true that there are situations in which Courts are compelled to subordinate the plain meaning ofstatutory language. Not unoften, Courts do read down the plain language of a provision or give it a restricted meaning, where, to do otherwise may be clearly opposed the object and scheme of the Act or may lead to an absurd, illogical or unconstitutional result.”

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 being in force. Even according to Section 14(2) of the Customs Act, a gazette notification is mandatory fixing the tariff value for any class of import goods. Sub­section (1) of Section 25 remains as it is, on the statute even after amendment to sub­section (4) and the entire Section 25 of the Act deals with power to grant exemption from duty. The Central Government on satisfaction, issue any notification in the gazette, keeping in mind the public interest exempting generally either absolutely or subject to such conditions. Whereas, the language used in sub­section (4) of the amended provision conveys a different meaning that the notifications issued under sub­section (1) i.e for exemptions from duty is deemed to have come into force on the date of issue of such notification by the Central Government for publication in the Official Gazette. The issue of gazette notification, as contemplated under sub­section (1), (2A) of Section 25 is to bring the notifications to the notice of the public or to bring the same into effect on the date of publication. The purpose of gazette notification time and again is discussed by the Courts and intention of the Legislature of publication of any notification is only to give effect to particular provision or enactment, making the public to know about the Act or amendment, after any enactment passed by the State or Central Legislature. Unless, the public are aware about any enactment or amendment of any provision, they cannot be made liable for any acts or omissions which the public committed. Thus, the purpose of gazette notification is to import or attribute knowledge about amended provision or enactment to the public, to act within the limitations prescribed under the enactment or amended provisions. Otherwise, it amounts to keeping the public in dark and create confusion about the acts or omissions, if any, they committed. Take for an extreme instance where a notification was issued for publication in the gazette, but not published for sufficiently long time, the public are in total darkness about the amended provisions of the enactment or any new enactment. But, still they are liable for the consequences of such amendment or enactment passed by either State or Central Government, in view of similar provision Section 25(4) of the Act. In those circumstances, it leads to serious absurdity, confusion or friction, contradiction and 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.29 dated 1st March 2018 as arbitrary and inconsistent with sub­section (1) & (2A) of Section 25, keeping in view the principles of statutory interpretation laid down by various Courts referred above.

Even otherwise, a gazette notification was issued on 06.03.2018. Moreover, the competent officer signed on the notification affixing digital signature on 06.03.2018 only. Therefore, the notification is deemed to have come into force, at least on the date of signing on the notification by the competent authority and there is no notification in the eye of law and taking decision by the Legislature without signing on it by the competent authority does not amount to issue of notification in terms of the decision taken by the Legislature. On this ground also, the notification cannot be said to have came into force on the date of its issue for publication in the gazette, but, it shall be deemed to have come into force on the date when it is published.

Since the amended provision seriously affects the rights of the public, creating absurdity, confusion or friction, contradiction and conflict among the provisions i.e. sub­sections (1), (2A) and (4) of Section 25, it is difficult to uphold the notification issued by the Government as valid.

Section 15 of the Act deals with date for determination of rate and tariff valuation of imported goods, it reads as thus;

(1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force –

a. In the case of goods entered for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under this section;

b. In the case of goods cleared from a warehouse under section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section;

c. In the case of any other goods, on the date of payment of duty.

Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft or the vehicle by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be.

(2) The provisions of this section shall not apply to baggage and goods imported by post. The date for determination 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 applicability of any notification issued under sub­section (1) or order under sub­section (2) insert an explanation in such notification or order, as the case may be, by “notification in the Official Gazette”, at any time within one year of issue of the notification under sub­section (1) or order under sub­section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be. But, for different reasons, Section 25(4) conveying different intention, it is a deeming provision, according to it, on the date of issue of notification by the Central Government for publication in the official gazette and deleted clause (b) of sub­section (4) of Section 25 vide Act 28 of 2018. Publication of a notification in the final gazette is mandatory under Section 25(1) and Section 25(2A). The amendment to sub­section (4) of Section 25 creates any amount of confusion and causes inconvenience to the assessee and to the public at large as to the rate of duty payable on the imported goods and contrary to Section 25(1) and (2A).

The main intention to issue notification in the gazette is to import or attribute knowledge about rate of duty payable on imported goods. But, at this stage, it is important to emphasize the requirement of issue of notifications granting exemptions or fixing rate of duty payable on the imported goods, the consequences are serious and nobody knows what is duty payable.

In S.G. Jaisinghani v. Union of India and others32, the Larger Bench of the Apex Court observed that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey­”Law of the Constitution”­Tenth Edition, Introduction ex). The Apex Court made a reference in United States v. Wunderlick, it was held that, “when it has freed man from he unlimited discretion of some …….. 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 the Apex Court in B.K. Srinivasan v. State of Karnataka (referred supra) had an occasion to deal with the issue of publication of a public notice in the official gazette that the plan and regulations are permanently displayed and are available for inspection by the public with a view to invite comments from the public under Karnataka Town and Country Planning Act, 1961 and the Division Bench held as follows:

“There can be no doubt about the proposition that where a law, whether Parliamentary or subordinate, demands compliance, those that are governed must be notified directly and reliably of the law and all changes and additions made to it by various processes. Whether law is viewed from the stand­ point of the ‘conscientious good man’ seeking to abide by the law or from the standpoint of Justice Holmes’s ‘Unconscientious bad man’ seeking to avoid the law, law must be known, that is to say, it 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 Parliamentary 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 legislation prescribes a plainly unreasonable mode of publication, it will take effect only when it is published through the customarily recognised official channel, namely, the Official Gazette or some other reasonable mode of publication. There may be subordinate legislation 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 dated 1st March 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.

Learned counsel for the petitioners has drawn attention of this Court to the judgment of the Apex Court in Union of India v. M/s. Param Industries Limited (referred supra), wherein the question before the Apex Court was as to the date of notification came into effect. But, this judgment is pertaining to the pre­amended provision of sub­section (4) of Customs Act, since notification was not made available to the public offering for sale, as per sub­section (4)(b) of Section 25 of the pre­amended Act, the Court held that the notification is deemed to have come into force with effect from the date of publication of the notification and availability or offering those notifications for sale. In the said judgment, Supreme Court referred the judgment in Harla v. The State of Rajasthan34, where the question was whether mere passing of a resolution without promulgation or publication in the gazette or other means to make the Act known to the public, was sufficient to make it law was decided. The Court observed as follows:

“what laws were operative in Jaipur regarding the coming into force of an enactment in that State. We were not shown any, nor was our attention drawn to any custom which could be said to govern the matter. 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 some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence. The thought that a decision reached in the secret recesses of a chamber to which the public have no access and to which even their accredited representatives have no access and of which they can normally know nothing, can nevertheless affect their lives, liberty and property by the mere passing of a chamber to which the public have no access and to which even their accredited representatives have no access and of which they can normally know nothing, can nevertheless affect their lives, liberty and property by the mere passing of a Resolution without anything more is abhorrent to civilised man. It shocks his conscience. In the absence therefore of any law, rule, regulation or custom, we hold that a law cannot come into being in this way. Promulgation or publica­ tion 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 aragraph 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 roclamations 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 Brit­ ish 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 ublication before it can become law, and in England the nature of the publication has be prescribed by an Act of Parliament.”

Even according to these principles certainly it is difficult to attribute knowledge to the public at large or at least to assesses who are dealing with the imported goods. When the notification was issued and kept in the desk by competent authorities without publication, giving effect to such notification, the same would amount to keeping the assessee in total darkness as to raising demand at the enhanced rate is arbitrary.

Learned counsel for the petitioners also drawn attention of this Court in Union of India v. M/s M.D. Overseas Limited (referred supra), wherein the Division Bench of the Gujarat High Court while dealing with Section 25(4) (a) and (b) adverted to the law laid down in Union of India v. M/s. Param Industries Limited (referred supra) so also the Division Bench judgment of High Court of Judicature at Hyderabad in Agarwal Industries Limited v. Union of India35, the Court held that the date of publication for sale of notification is deemed to have been came into force. But on account of deletion of clause (b), amending sub­section (4) of Section 25, this Court is called upon to decide the arbitrariness and legality of the provision i.e. subsection 4 of Section 25, as it is totally contrary to the intention of the Legislature in incorporating sub­sections (1) and (2A) of Section 25 of the Act. When sub­sections (1) and (2A) of Section 25 made publication in the official gazette mandatory, such exemptions of customs duty is deemed to have come into force only from the date of notification in the official gazette, since publication of notification in the official gazette is the best method to attribute knowledge to the assessee or the public in general. Therefore, the judgment of the Gujarat High Court, affirmed by the Apex Court in Union of India v. M/s M.D. Overseas Limited (referred supra) has no direct bearing on the issue involved in this case.

Further, learned counsel for the petitioners while contending that, in the absence of notifying exemptions as per sub­sections (1) and (2A) of Section 25 in the official gazette, no knowledge is attributable to the assessee and in the absence of notification in the official gazette, the Court can quash such provision which is giving effect to such notifications from the date of issue for publication to the notification and placed reliance on the judgment of the Apex Court in Union of India v. Ganesh Raj Bhojraj (referred 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 of the persons concerned. Individual service of a general notification on every member of the public is not required and the interested person can acquaint himself with the contents of the notification published in the gazette. It is the usual mode followed since years and there is no other mode prescribed under the present statute except by the amendment in the year1998 by Bill No. 21 of 1998. The Apex Court also observed as follows:

“In our view, as noted above, in Pankaj Jain Agencies case [1994ECR28(SC)] the Court directly dealt with a similar contention and after relying upon the decision in the case of Mayer Hans George [1965]1SCR123 rejected the same. That decision is followed in I.T.C. Ltd. 1996(86)ELT477(SC) and other matters. Hence, it is difficult to agree that the decision in Pankaj Jain Agencies case was not helpful in deciding the question dealt with by the Court. 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 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. Additional requirement is that under Section 159 such notification is required to be laid before each House of Parliament for a period of thirty days as prescribed therein. Hence in our view Mayer Hans George [1965]1SCR123 (supra) which is followed in the Pankaj Jain Agencies case: 1994ECR28(SC) represents the correct exposition of law and the Notification under Section 25 of the Customs Act would come into operation as soon as it is published in the Gazette of India i.e. the date of publication of the Gazette. 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.”

After considering the law laid down by the Apex Court in earlier judgments and other Courts, the Apex Court concluded as follows:

“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 committed by breach of notification. Where mens rea is not an ingredient, want of circulation of Gazette may still be a reason for leniency in punishment. These are the questions which need to be left open.”

The law declared by various courts is consistent and if a particular provision of law is amended in the enactment, notification in the official gazette for grant of exemption is mandatory and such exemption shall be given effect only from the date of publication in the official gazette. In the present case, an anomalous situation is created on account of amendment of sub­section (4) of Section 25 of Customs Act, keeping the public or at least the assessee totally in dark who are concerned with such notification issued for publication is an arbitrary exercise of power by the Legislature and it would cause not only inconvenience to the assessee or the person concerned with such notification, it is nothing but absurdity creating friction and it would also create any amount of confusion as to the rate of customs duty payable on the imported goods as on the relevant date of presentation of ex bond bills of entry for clearance for home consumption as per the Customs Act.

Learned counsel for respondents placed reliance on various judgments of the Apex Court with regard to necessity of issuing notifications. In S.G. Jaisinghani v. Union of India and others (referred supra), the question before the Court as to constitutional validity of ‘seniority rule’ in Income­tax Service and ‘quota’ recruitment challenged as being violative of Articles 14 and 16 (1) of the Constitution of India. But, this judgment has no remote application to the present facts of the case, since it pertains to a service matter. Even in the facts of the above judgment, the notification was required to be published, but not published and that would not effect the rule. In the same judgment, the Apex Court made serious observations which we have noted in the earlier paragraphs.

In Global Energy Limited and another v. Central Electricity Regulatory Commission (referred supra), the Apex Court dealt with the principles of interpretation of statues. But, it relates to Electricity Act, not the taxing statute and there is no dispute with regard to the law declared by the Apex Court to interpret the legislation passed by either Parliament or other assemblies.

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 various provisions, the same is illegal and amendment of sub­section (4) of Section 25 giving effect to the notification from the date of its issue for publication in the gazette is an arbitrary exercise of power by the Legislature and it is totally contrary to the purport of sub­section (1) and sub­section (2A) of Section 25 of the Act, which mandates publication of notification in the official gazette. Therefore, to avoid inconvenience, serious absurdity, confusion or friction, contradiction and conflict between various provisions, amended provision of sub­section (4) of Section 25 which is enacted by arbitrary exercise of power by the Legislature, is liable to be struck down.

The notification was published on 06.03.2018 which is impugned in these writ petitions, published electronically on 06.03.2018. In view of the decision taken by the Government of India in terms of Section 8 of the Income Tax Act, to avoid physical printing of gazette notification to publish the same exclusively by electronic mode, so as to attribute knowledge to the public at large. The notification was signed by Rakesh Sukul on 06.03.2018 at 19:15:13 +05’30’. When notification needs to be signed digitally and only when the notification was uploaded and published in the official gazette, the same is made available for public. Perhaps, to avoid such contingency to give effect to the notification on the date of publication, the Government of India amended sub­section (4) of Section 25 of Customs Act, 1962. But, sub­section (1) and sub­section (2A) of Section 25 were not suitably amended and they remained as it is. Therefore, sub­sections (1), (2A) and (4) of Section 25 are running contra to one another, creating confusion in the minds of public at large, at least to the person who is dealing with the department. Thus, it is evident from the record that the notification was not signed at least by the competent authority on the date of presentation of ex­bond bill of entry before the competent authority for release of imported goods for human consumption in accordance with Section 15(1)(b) r/w Section 68 of the Customs Act for clearance of the goods for human consumption and the relevant date for determination of the duty is the date of presentation of ex­bond bills of entry for release of the goods which is explicit from Section 15(1) (b) of the Act. But the respondents collected the 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 statute as illegal or arbitrary. Therefore, we find no force in the argument of the learned counsel for the respondents and the same is rejected.

In view of our foregoing discussion, Section 25(4) of the Customs Act is declared as arbitrary and contrary to Section 25(1) and (2A) of the Customs Act, 1962 and that the respondents are liable to repay the amount collected from the petitioners for clearance of import goods for home consumption beyond the original rate prevailing on the date of prior to date of publication of notification i.e. Rs.2,88,16,200/­ with interest paid by the petitioner from the date of deposit till the date of payment.

In the result, writ petitions are allowed.”

20. In view of above judgment and order of the Andhra Pradesh High Court dealing with the same issue, we are of the opinion that the same should also apply to the cause of action within the territorial jurisdiction of this Court also so as to maintain consistency for application of the provision of the Customs Act, 1962, which is a Central Act. As held by the Supreme Court in case of Kusum Ingots (supra), the parliamentary legislation without receiving the consent of the President of India and published in a official gazette unless specifically excluded will apply to entire territory of India. If passing of the legislation gives rise to cause of action, the writ petition questioning the constitutionality thereof can be filed in any High Court of the country having requisite territorial jurisdiction and an order passed on writ petition questioning the constitutionality of Parliamentary Act, where interim or final keeping in view the provisions contained in clause (2) of Article 226 of the Constitution of India will effect throughout the territory of India, subject to applicability of the Act.

21. In such circumstances, we concur with the judgment and order passed by the Andhra Pradesh High Court and the judgment of Culcutta High Court in case of Ruchi Soya Industries Ltd. (supra) is not applicable in the facts of the case, as the same pertains to the provisions of Section 25(4) prior to its amendment by Finance Act, 2016 and the said decision was rendered on the facts of the case relying upon the affidavit of the respondent with regard to the publication of the Notification of 17^th September 2015.

22. As the contentions raised by the respondents are duly considered in the judgment and order passed by the Andhra Pradesh High Court, we do not reiterate the reasons to deal with the same.

23. In view of the foregoing reasons, the provisions of Section 25(4) of the Customs Act, 1962 is declared as arbitrary and contrary to Section 25(1) & (2)(A) of the Customs Act, 1962. The respondents are therefore, directed to refund the excess amount of custom duty and differential amount of IGST collected from the petitioners for clearance of imported goods for home consumption as per the Notification published subsequently to the date of filing of bills of entry with simple interest @ 6% p.a. from the date of deposit till the date of payment. The writ petitions therefore, succeed and are allowed. Rule made absolute to the aforesaid extent with no order as to costs.