Union of India & Ors. Vs M/s G S Chatha Rice Mills & Anr. (Supreme Court)
In the context of the Customs Act, and having regard to the Scheme, which, in the case of import duty, consists of filing of Bill of Entry for home consumption, self-assessment and payment of duty on the basis of the same and the rate being clearly fixed with reference to the particular point of time when the Bill of Entry is presented and there is a deemed presentation and even a deemed assessment, which is otherwise in order, and bearing in mind the principle that Section 8A does not provide power for increase of rate of duty with retrospective effect, the Notification must be treated as having coming into force not before its publication which is at 20:46:58 hrs. on 16.02.2019. This would necessarily mean that the Notification cannot be used to alter the rate of duty on the basis of which, in fact, there was presentation of Bill of Entry several hours ago, the self-assessment was done and what is more, the self-assessment was completed under Regulation 4(2) of the 2018 Regulations. There cannot be reassessment. The interpretation based on time of publication is in harmony with a view that accords respect for vested rights.
TWO INCONSISTENT RATES AT THE SAME POINT OF TIME
There is no merit in the submission of the appellants in this regard. Once it is found that the notification upon publication would take effect from the time of its publication then in regard to the bills of entries which stand presented within the meaning of Section 46 of the Customs Act read with 4(2) of the 2018 Regulations, earlier to such publication, the rate of duty in regard to the same would be only the rate of duty which prevailed at the time of the deemed presentation under Regulation 4(2) of the 2018 Regulations.
EFFECT OF THE WORD “OTHERWISE” IN SECTION 17(4) OF THE CUSTOMS ACT, 1962
The expression “otherwise” in Section 17(4), will not come to the rescue of the appellants, in the facts of the instant case. While the word “otherwise” may be capable of taking care of situations which are not covered by the preceding expressions, viz.,verification, examination, attesting of the goods, it cannot mean that it will empower the Officer to alter the rate of duty which is prevalent at the time of the self-assessment following the due presentation of the Bill of Entry. If it is otherwise, it will be open to the Department to reopen cases of concluded assessments by virtue of the deemed completion of assessment under Regulation 4(2) without any legal justification. That would be plainly impermissible being illegal. This is not a case where the assessment is assailed on any other ground except by insisting on a rate of duty which is in applicable.
The decision of this Court on Vikram Singh alias Vicky and Another v. Union of India and Others64 is relied upon to contend that the presumption runs that the legislature is well aware of the circumstances and the effect of the words that have been employed by it. In other words, the contention appears to be that since the word ‘the date’ is used in Section 15, it must be given full effect. As far as the judgment of this Court in The Government of Andhra Pradesh and Anotheer v. Hindustan Machine Tools Ltd. 65 is concerned, and the purpose for which it is relied upon, the decision appears to be inapposite in the facts. The contention taken is that it is competent for the legislature to make law retrospectively and as the rate of duty is to be determined as the rate in force on the day Section 15 is determinative. It is one thing to say that the legislature may have the power to make a law with retrospective effect subject to limitations imposed by the Constitution and quite another to contend that delegated legislation would carry retrospective effect irrespective of power to make such a law conferred by the parent enactment on the delegate. More importantly the scheme of the Customs Act and the Tariff Act and the Regulation 4(2) of the 2018 Regulations rule out the tenability of applying the notification in the manner sought by the appellants.
Reliance placed on the judgments Video Electronics Pvt. Ltds and Another vs. State of Punjab and Another; 66, Tamil Nadu Electricity Board and Another v. Status Spinning Mills Limited and Another; 67 of this Court, taking the view that the Schedule to an act is a part of the act and therefore an amendment to the Schedule by virtue of such a notification is an amendment to the Act itself and therefore, the notification issued under Section 8A of the Tariff Act partakes the character of legislation, is clearly untenable, if it is intended to convey that the notification issued under Section 8A of the Tariff Act is made by the legislature itself. By its very nature, delegated legislation is legislative in character but if it is to be a Central Act within the meaning of Section 5 of General Clauses Act, it must be made by the legislature. Delegated legislation which is called administrative legislation in England, is exercise of legislative power by the executive. It is to be further noticed the fact that the notification issued under Section 8A is in the exercise of its legislative power or that it may have to be read in the same manner as if it is a part of the Act, will not detract the Court from ascertaining as to who is the author of the exercise of the legislative power, namely, whether it is an exercise of power by the legislature or by its delegate. Upon answer to the question, namely, that the author of the legislative effort is the executive, the question would necessarily arise as to whether there is publication. In the scheme of the Customs Act, the Tariff Act and the 2018 Regulations, the time at which the notification under Section 8A is published would indeed have relevance as already found.
FULL TEXT OF THE SUPREME COURT JUDGEMENT
This judgment has been divided into sections to facilitate analysis. They are:
A The aftermath of Pulwama
B The backdrop
C Petitions before the High Court
D The judgment of the High Court
E Submissions in the appeals
F Determination of the rate under Section 15 of the Customs Act 1962
G Precedent
H Interpreting ‘day’ and ‘date’
I Notification under Section 8A of the Customs Tariff Act
J General Clauses Act
K Information Technology Act, 2000
L Effect of notifications issued in e-gazettes
M Retrospectivity
N Summation
1. Leave granted.
A The aftermath of Pulwama
2. A terrorist attack took place at Pulwama on 14 February 2019. On 16 February 2019, the Union Government issued a notification under Section 8A of the Customs Tariff Act 1975. The notification introduced a tariff entry by which all goods originating in or exported from the Islamic Republic of Pakistan were subjected to an enhanced customs duty of 200%. The precise time at which the notification was uploaded on the e-Gazette was 20:46:58 hours. Customs authorities at the land customs station at Attari sought to enforce the enhanced rate of duty on importers who had already presented bills of entry for home consumption before the enhanced rate was notified in the e-Gazette. Their action led to a challenge before the High Court of Punjab and Haryana. The consignments of import covered a diverse range of goods, ranging from dry dates to cement.
3. On 26 August 2019, a Division Bench of the High Court of Punjab and Haryana allowed a batch of writ petitions under Article 226 of the Constitution. The High Court held that since the importers, who had imported goods from Pakistan, had presented their bills of entry and completed the process of “self-assessment” before the notification enhancing the rate of duty to 200 per cent was issued and uploaded, the enhanced rate of duty was not attracted. The High Court held that the importers were liable to pay the duty applicable at the time when the bills of entry for home consumption were filed under Section 46 of the Customs Act, 1962.1 The Union of India was ordered to release the goods within seven days on the payment of duty ‘as declared and assessed’ without applying the notification enhancing the rate of duty on goods originating in Pakistan.
4. The Union of India is in appeal.
5. The judgment of the High Court is titled as Rasrasna Food Private Limited versus Union of India. Chronologically, the first petition listed before this Court by Special Leave under Article 136 of the Constitution is in the case of G S Chatha Rice Mills. Since the issues of law which have been raised are common to the batch of appeals, they have been heard together.
B The backdrop
6. The First respondent is a partnership firm based in Amritsar which is, inter alia, engaged in the import of cement. It imported a consignment of fourteen hundred bags of cement from Pakistan under an invoice dated 1 February 2019. A truck bearing registration number TLV-189 (cargo) crossed the ‘zero line’ on Saturday, 16 February 2019 under entry number 47195 with a Pakistan Custom’s Cargo Manifest bearing the time of 4:31 pm. The goods arrived at the Land Customs Station Road Cargo, Attari Road, Amritsar on the same day and IGM number 366870 was filed in respect of the goods. The truck unloaded its cargo at the Central Warehousing Corporation, ICP, Attari. The arrival of the goods and the filing of the IGM was before 18:00 hours on 16 February 2019. The First respondent filed bill of entry number 2083178 dated 16 February 2019 seeking clearance of the goods for home consumption. The bill of entry was self-assessed at 18:08 hours under the provisions of Section 17(1) of the Customs Act 19622 under Customs Tariff Heading 2523910 by levying nil customs duty in terms of notification 68/2012 dated 31 December 2012 (as amended by notification 50/2017- serial 129 dated 30 June 2017) and IGST at 28 percent rate (in terms of notification 1/2017- schedule III serial No. 3). The duty payable was assessed at Rs 73,342/-. Notification 50/2017-Cus (serial No. 129), prescribed a preferential rate of duty on specified goods originating in the Islamic Republic of Pakistan.
On 16 February 2019, notification 5/2019 was issued by the Ministry of Finance in the Department of Revenue, in exercise of powers conferred by sub-section (1) of Section 8A of the Customs Tariff Act 1975.3 By this notification, a new tariff entry was introduced in Chapter 98 of Section XXI in the following terms:
