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2024 Supreme(SC) 1008

SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, CJI., J.B. PARDIWALA, MANOJ MISRA, JJ.
Commissioner of Customs - Petitioner
Versus
M/s Canon India Pvt. Ltd. - Respondent
Review Petition No. 400 of 2021 In Civil Appeal No. 1827 of 2018 With C.A. No. 6142 of 2019 C.A. No. 6161 of 2019 C.A. No. 6160 of 2019 C.A. No. 6159 of 2019 C.A. No. 8828 of 2016 C.A. No. 6157 of 2019 C.A. No. 6158 of 2019 C.A. No. 9313 of 2016 C.A. No. 9406 of 2016 C.A. No. 6153 of 2019 C.A. No. 9315 of 2016 C.A. No. 10140 of 2016 C.A. No. 9436 of 2016 C.A. No. 9317 of 2016 C.A. No. 10012 of 2016 C.A. No. 10739 of 2016 C.A. No. 10422 of 2016 C.A. No. 10421 of 2016 C.A. No. 10991 of 2016 C.A. No. 10952 of 2016 C.A. No. 12345 of 2016 C.A. No. 6149-6152 of 2019 C.A. No. 430 of 2017 C.A. No. 8749 of 2016 C.A. No. 6127 of 2019 C.A. No. 8752 of 2017 C.A. No. 6139-6140 of 2019 C.A. No. 6143 of 2019 C.A. No. 6148 of 2019 C.A. No. 6248 of 2019 C.A. No. 6156 of 2019 C.A. No. 7292 of 2019 C.A. No. 2666-2695 of 2020 C.A. No. 1738 of 2021 R.P.(C) No. 402 of 2021 in C.A. No. 1875 of 2018 R.P.(C) No. 403 of 2021 in C.A. No. 1832 of 2018 R.P.(C) No. 401 of 2021 in C.A. No. 3213 of 2018 S.L.P.(C) No. 2504 of 2022 C.A. No. 2367-2368 of 2022 C.A. No. 10788 of 2024 C.A. No. 3253 of 2017 C.A. No. 10873 of 2024 C.A. No. 10819 of 2024 C.A. No. 4559 of 2022 C.A. No. of 2024 @ SLP(C) No. 12970 of 2022 W.P.(C) No. 501 of 2022 W.P.(C) No. 499 of 2022 W.P.(C) No. 502 of 2022 W.P.(C) No. 504 of 2022 W.P.(C) No. 522 of 2022 W.P.(C) No. 507 of 2022 W.P.(C) No. 526 of 2022 W.P.(C) No. 534 of 2022 W.P.(C) No. 537 of 2022 W.P.(C) No. 548 of 2022 W.P.(C) No. 575 of 2022 W.P.(C) No. 566 of 2022 W.P.(C) No. 568 of 2022 C.A. No. 10698 of 2024 C.A. No. 10693 of 2024 C.A. NO. 10752 of 2024 C.A. No. 10697 of 2024 C.A. No. 10753 of 2024 C.A. No. 10754 of 2024 C.A. No. 10755 of 2024 C.A. No. 10712 of 2024 C.A. No. 10756 of 2024 C.A. No. 10757 of 2024 C.A. No. 10710 – 10711 of 2024 C.A. No. 10758 of 2024 C.A. No. 10759 of 2024 C.A. No. 10760 of 2024 C.A. No. 10709 of 2024 C.A. No. 10761 of 2024 C.A. No. 10762 of 2024 C.A. No. 10763 of 2024 C.A. No. 10764 of 2024 C.A. No. 10765 of 2024 C.A. No. 10766 of 2024 C.A. No. 10767 of 2024 C.A. No. 10768 of 2024 C.A. No. 10769 of 2024 C.A. No. 10770 of 2024 C.A. No. 10771 of 2024 C.A. No. 10772 of 2024 C.A. No. 10774 of 2024 C.A. No. 4566 of 2022 C.A. No. of 2024 @ S.L.P. of 2024 @ Diary No. 33597/2022 C.A. No. 10707 - 10708 of 2024 C.A. No. 10781 of 2024 C.A. No. 10854 of 2024 C.A. No. 10694-10695 of 2024 R.P.(C) No. 155 of 2022 in C.A. No. 3411 of 2020 R.P.(C) No. 1289 of 2021 in C.A. No. 5053 of 2021 C.A. No. 10782 of 2024 C.A. No. 10784 of 2024 C.A. No. 10785 of 2024 C.A. No. 10706 of 2024 C.A. No. 10705 of 2024 C.A. No. of 2024 @ SLP(C) No. of 2024 @ Diary No. 30895 of 2022 C.A. No. 10699 - 10704 of 2024 C.A. No. 10786 of 2024 C.A. No. 10787 of 2024 C.A. No. of 2024 @ S.L.P.(C) No. of 2024 D. No. 38691 of 2022 C.A. NO.10845 of 2024 C.A. No. 10809 of 2024 T.P.(C) No. 1576-1597/2023 WP (C) D. No. 37678 of 2024 WP (C) D. No. 37700 of 2024
Decided On : 07-11-2024

Advocates appeared:
For the Petitioner(s): Mr. N. Venkataraman, ASG Mr. Gurmeet Singh Makker, AOR Mr. Deepak Agrawal, AOR Mr. Shivam Singh, Adv. Ms. Bahuli Sharma, Adv. Mr. Ishwar Singh, Adv. Mr. Shubham Janghu, Adv. Mr. Yoshit Jain, Adv. Mr. Rajiv Singh, Adv. Ms. Amrita Jhamb, Adv. Mr. Manish Kumar, Adv. Mr. Gopal Singh, AOR Mr. S. Hariharan, Adv. Ms. Jaikriti S. Jadeja, AOR Mr. Arshad Hidayatullah, Sr. Adv. Mr. Rupesh Kumar, Sr. Adv. Ms. Pankhuri Shrivastava, Adv. Ms. Neelam Sharma, AOR Mr. Makarand Joshi, Adv. Mr. Shariq Ahmed, Adv. Mr. Tariq Ahmed, Adv. Mr. Sunil Kumar Verma, AOR Mr. V Lakshmikumaran, Adv. Ms. Charanya Lakshmikumaran, AOR Ms. Neha Choudhary, Adv. Ms. Umang Motiyani, Adv. Ms. Falguni Gupta, Adv. Mr. Ayush Agarwal, Adv. Mr. Mukesh Kumar Maroria, AOR Ms. Sharmila Upadhyay, AOR Mr. Pawan R Upadhyay, Adv. Mr. Sarvjit Pratap Singh, Adv. Ms. Shobha Ramamoorthy, AOR Mr. Shilp Vinod, Adv. Mr. Gokulakrisnan, Adv. Mr. S. Nandakumar, Sr. Adv. Ms. Deepika Nandakumar, Adv. Mr. Naresh Kumar, AOR Mr. Aakash Elango, Adv. Ms. Rohini Musa, AOR Mr. B. Krishna Prasad, AOR Mr. Brajesh Kumar, AOR Dr. Purvish Jitendra Malkan, Sr. Adv. Ms. Dharita Malkan, Adv. Ms. Khushboo Aakash Sheth, AOR Mr. Alok Kumar, Adv. Mr. Shekhar Vyas,, Adv. Ms. Neha Warrier, Adv. Ms. Mrinal Kanwar, AOR Mr. Vaibhav, Adv. Mr. Nachiketa Joshi, Sr. Adv. Mr. Rahul Gajera, Adv. Ms. Sucheta Joshi, Adv. Mr. Alabhya Dhamija, Adv. Mr. Sai Shashank, Adv. Ms. Karishma Rajput, Adv. Ms. Sagrika Arya, Adv. Mr. Mohit Joshi, Adv. Mr. Pulkit Srivastava, AOR Mr. Shreevardhan Dhoot, Adv. Ms. Qurratulain, AOR Ms. Aakriti Mathur, Adv. Ms. Shagun Mishra, Adv.
For the Respondent(s): Mr. V Lakshmikumaran, Adv. Ms. Charanya Lakshmikumaran, AOR Ms. Umang Motiyani, Adv. Ms. Neha Choudhary, Adv. Mr. S Vasudevan, Adv. Mr. Rachit Jain, Adv. Ms. Falguni Gupta, Adv. Mr. Dhruv Matta, Adv. Mr. Ayush Agarwal, Adv. Mr. Nitish Massey, AOR Ms. Rashi Bansal, AOR Mr. Abhishek A Rastogi, Adv. Ms. Garima Gupta, Adv. Mr. Divyasha Mathur, Adv. Ms. Meenal Songire, Adv. Mr. Nikhil Jain, AOR Ms. Divya Jain, Adv. M/S. Ap & J Chambers, AOR Mr. Dama Sheshadri Naidu, Sr. Adv. Mr. Roddam Prashanth Reddy, Adv. Mr. Somanadri Goud Katam, AOR Mr. Ravi Bharuka, AOR Mr. Prateek Gattani, Adv. Mr. Rohit Agarwal, Adv. Mrs. Vanita Bhargava, Adv. Mr. Ajay Bhargava, Adv. M/S. Khaitan & Co., AOR Mr. Anil Kaushik, Sr. Adv. Mrs. Shashi Sharma, Adv. Mr. Rajat Rana, Adv. Mr. Mayank Gautam, Adv. Ms. Shilpa Singh, AOR Mr. Rajeev Singh, AOR Mr. K. Paari Vendhan, AOR Mr. Rishabh Sancheti, Adv. Mrs. Padma Priya, Adv. Mr. Armaan Arora, Adv. Mr. Naman Jain, Adv. Mr. Kumar Visalaksh, Adv. Mr. Rahul Khurana, Adv. Mr. Udit Jain, Adv. Mr. Arihant Tater, Adv. Ms. Akanksha Dikshit, Adv. Mr. Abhishek Vikas, AOR Mr. Pawanshree Agrawal, AOR Mr. M. P. Devanath, AOR Mr. T. L. Garg, AOR Mr. Mukesh Kumar Maroria, AOR Mr. Arshad Hidayatullah, Sr. Adv. Mr. Rupesh Kumar, Sr. Adv. Ms. Pankhuri Shrivastava, Adv. Ms. Neelam Sharma, AOR Mr. Makarand Joshi, Adv. Mr. Deepak Agrawal, AOR Mr. B. Krishna Prasad, AOR Mr. Ashok K. Mahajan, AOR Mr. Naresh Jain, Adv. Mrs. Arti Agrawal, Adv. Mrs. Neha Anchlia, Adv. Mr. Alok Kumar, Adv. Mr. Rishabh Jain, Adv. Mr. Rameshwar Prasad Goyal, AOR Mr. Raj Bahadur Yadav, AOR Ms. Manju Jetley, AOR Mr. Prasannan Namboodiri, Adv. Ms. Prathiibha Namboodiri, Adv. Mr. Deepak Goel, AOR Ms. Alka Goyal, Adv. Mr. Jitendra Bharti, Adv. Ms. Archana Preeti Gupta, Adv. Ms. Urvashi Sharma, Adv. Mrs. Anjali Jha Manish, AOR Mr. Rajat Mittal, AOR Mr. Suprateek Neogi, Adv. Mr. Priyanshu, Adv. Mr. Vivek Singh, AOR Ms. Merry Mitzy, Adv. Mr. Abhishek Gupta, Adv. Mr. Rajesh Kumar Chaurasia, AOR Mr. Sujeet Kumar, Adv. Mr. Anurag Jain, Adv. Mr. Onkar Prasad, Adv. Mr. Jaideep Singh Sethi, Adv. Mr. Sahil Tagotra, AOR Mr. Sujay Jain, Adv. Mr. Rakesh Talukdar, Adv. Mr. Prabhakar Mishra, Adv. Mr. Abhishek A Rastogi, Adv. Ms. Garima Gupta, Adv. Mr. Divyasha Mathur, Adv. Ms. Meenal Songire, Adv. Mr. Nikhil Jain, AOR Ms. Divya Jain, Adv. Mr. V Lakshmikumaran, Adv. Ms. Charanya Lakshmikumaran, AOR Ms. Umang Motiyani, Adv. Ms. Neha Choudhary, Adv. Mr. S Vasudevan, Adv. Mr. Rachit Jain, Adv. Ms. Falguni Gupta, Adv. Mr. Dhruv Matta, Adv. Mr. Ayush Agarwal, Adv. Mr. Abhishek A Rastogi, Adv. Ms. Garima Gupta, Adv. Mr. Divyasha Mathur, Adv. Ms. Meenal Songire, Adv. Mr. Nikhil Jain, AOR Ms. Divya Jain, Adv. Mr. Kumar Visalaksh, Adv. Mr. Rahul Khurana, Adv. Mr. Udit Jain, Adv. Mr. Arihant Tater, Adv. Ms. Akanksha Dikshit, Adv. Mr. Abhishek Vikas, AOR

DRI officers are designated as proper officers under the Customs Act, enabling them to issue show cause notices under Section 28, overruling previous judgments that restricted their authority.

Headnote:(A) Customs Act, 1962 – Sections 2(34), 5, 6, 17, and 28 – Review of judgment in Canon India Pvt. Ltd. v. Commissioner of Customs – DRI officers designated as proper officers under Notification No. 44/2011-Cus. (N.T.) – The court held that DRI officers are proper officers for the purposes of Sections 17 and 28, thus competent to issue show cause notices under Section 28. The previous judgments in Sayed Ali and Mangali Impex were overruled as they misinterpreted the statutory provisions and the role of DRI officers. (Paras 1, 168, 170)

(B) Constitutional validity – Section 97 of the Finance Act, 2022 – The court upheld the constitutional validity of Section 97, which retrospectively validated actions taken under the Customs Act, thereby allowing DRI officers to issue show cause notices. (Paras 97, 170)

(C) Jurisdiction – The court clarified that the proper officer for the purposes of Section 28 need not be the same officer who conducted the assessment under Section 17, thus allowing for multiple officers to issue notices without leading to chaos. (Paras 100, 170)

(D)

Findings of Court: The review petition was allowed, and the previous judgments were set aside, affirming the authority of DRI officers to issue show cause notices under Section 28. (E)

Result: Review petitions allowed; judgments in Sayed Ali and Mangali Impex set aside.

Judgement Key Points

Key Points: - (!) (!) (!) - (!) (!) (!) - (!) (!) (!) - (!) (!) (!)

What is the scope of review jurisdiction under Article 137 and Order XLVII for correcting errors in Canon India (supra) a) is DRI a proper officer under Section 2(34) for Section 28? b) can Section 6 entrustment be mandatory to empower DRI for Section 28?

What is the meaning and interplay of Section 17 and Section 28 of the Customs Act, 1962 post-2011 amendments regarding assessment, reassessment, and recovery of duties, including the impact of self-assessment and the need for a single proper officer?

What is the constitutionality and proper scope of Section 97 (Finance Act, 2022) and Section 110AA in validating past actions and in integrating with Section 28(11) and Explanation 2?


JUDGMENT :

J.B. Pardiwala, J.

For the convenience of exposition, this judgment is divided into the following parts: -

INDEX

A.

FACTUAL BACKGROUND OF THE REVIEW PETITION

B.

SUBMISSIONS ON BEHALF OF THE DEPARTMENT

i. Error apparent in the judgment under review

ii. Why the decision in Sayed Ali (supra) requires reconsideration

iii. The decision in Mangali Impex (supra) is liable to be set aside and the decision in Sunil Gupta (supra) ought to be affirmed

iv. Changes introduced by the Finance Act, 2022 are in the nature of surplusage

C.

SUBMISSIONS ON BEHALF OF THE RESPONDENTS

D.

ISSUES FOR CONSIDERATION

E.

ANALYSIS

i. Review jurisdiction

ii. The decision in Commissioner of Customs v. Sayed Ali

iii. Changes to Section 17 w.e.f. 11.04.2011 – the assessment of bill(s) of entry and shipping bill(s)

iv. Scheme of Sections 17 and 28 of the Act, 1962

v. Use of the article ‘the’ in the expression “the proper officer”

vi. DRI officers as proper officers under section 2(34)

vii. Section 4 of the Act, 1962

viii. Section 6 of the Act, 1962

ix. Observations on the constitutional validity of Section 28 (11) of the Act, 1962

x. Bombay High Court decision in Sunil Gupta (supra)

xi. Amendments made by the Finance Act, 2022

F.

CONCLUSION

1. Since the pivotal question of law involved in all the captioned petitions is the same, they were taken up for hearing analogously and are being disposed of by this common judgment and order.

2. For the sake of convenience, the Review Petition No. 400 of 2021 filed by the Customs Department is treated as the lead matter.

3. This Review Petition has been filed by the Customs Department through the Commissioner of Customs, New Delhi (the “Department”) under Order XLVII of the Supreme Court Rules, 2013 seeking review of the judgment and order dated 09.03.2021 passed by this Court in Civil Appeal No. 1827 of 2018 titled M/s Canon India Private Ltd. v. Commissioner of Customs.

A. FACTUAL BACKGROUND OF THE REVIEW PETITION

4. A two-Judge Bench of this Court in the case of Commissioner of Customs v. Sayed Ali and Another reported in (2011) SCC 537, had held that the Commissioner of Customs (Preventive) is not a “proper officer” as defined in Section 2(34) of the Customs Act, 1962 (“the Act, 1962”) and therefore did not have the jurisdiction to issue a show cause notice in terms of Section 28 of the Act, 1962. The Court observed that while all proper officers must be “officers of customs”, all “officers of customs” are not proper officers. It also held that only those officers of customs who were assigned the functions of assessment, which would include re-assessment, working under the jurisdictional collectorate within whose jurisdiction the bills of entry or baggage declarations had been filed and consignments had been cleared for home consumption, would have the jurisdiction to issue show cause notice under Section 28 or else it would lead to a situation of utter chaos and confusion, in as much as all officers of customs in a particular area, be it under the Collectorate of Customs (Imports) or the Preventive Collectorate, would fall under the definition of “proper officers”. Section 2(34) is extracted below:

    “(34) proper officer in relation to any functions to be performed under this Act, means the officer of customs who is assigned those functions by the Board or the Principal Commissioner of Customs or Commissioner of Customs”

5. As a result of the decision in Sayed Ali (supra), the Central Board of Excise and Customs (the “Board”) issued Notification No. 44/2011-Cus-NT dated 06.07.2011 under Section 2(34) of the Act, 1962, assigning the functions of the “proper officers” to the Commissioners of Customs (Preventive), Directorate of Revenue Intelligence (“DRI”), Directorate General of Anti Evasion (“DGAE”) and Officers of Central Excise. The notification specified that it would operate prospectively. With a vie

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                Cases Referred (12)

                Commissioner of Customs v. Sayed Ali and Another reported in (2011) SCC 537 [Para 4]

                Girdhari Lal Gupta v. D. H. Mehta reported in (1971) 3 SCC 189 [Para 63]

                M/s Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi reported in (1980) 2 SCC 167 [Para 64]

                Yashwant Sinha v. CBI reported in (2020) 2 SCC 338 [Para 65]

                Sow Chandra Kant and Anr. v. Sheikh Habib reported in (1975) 1 SCC 674 [Para 66]

                State of Andhra Pradesh v. Ganesweara Rao

                Management

                Shreya Singhal v. Union of India reported in (2015) 5 SCC 1 [Para 152]

                Empire Industries Ltd. v. Union of India reported in (1985) 3 SCC 314 [Para 161]

                Indian Aluminium Company Co. vs. State of Kerala reported in (1996) 7 SCC 637 [Para 162]

                Bhavesh D. Parish v. Union and India reported in (2000) 5 SCC 471 [Para 165]

                Shri Prithvi Cotton Mills Ltd. and Ors. v. Broach Borough Municipality & Ors.

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