1. Import of goods — Enhanced customs duty notification — Dispute over applicable rate on the date of presentation of bill of entry under Section 15, Customs Act. (Para 2 , 3 , 6 , 8 )
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2020 Supreme(SC) 557
SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, INDU MALHOTRA, K.M. JOSEPH, JJ.
Union of India & Ors. – Appellants
Versus
M/S G S Chatha Rice Mills & Anr. – Respondents
Civil Appeal No. 3249 of 2020 (Arising out of SLP(C) No. 3860 of 2020 With Civil Appeal No. 3250 of 2020 (Arising out of SLP (C) No. 3861 of 2020) With Civil Appeal No. 3250 of 2020 (Arising out of SLP (C) No. 3869 of 2020) With Civil Appeal No. 3252 of 2020 (Arising out of SLP (C) No. 3867 of 2020) With Civil Appeal No. 3253 of 2020 (Arising out of SLP (C) No. 3865 of 2020) With Civil Appeal No. 3262 of 2020 (Arising out of SLP (C) No. 5029 of 2020) With Civil Appeal No. 3265 of 2020 (Arising out of SLP (C) No. 7059 of 2020) With Civil Appeal No. 3267 of 2020 (Arising out of SLP (C) No. 6451 of 2020) With Civil Appeal No. 3269 of 2020 (Arising out of SLP (C) No. 7063 of 2020) With Civil Appeal No. 3270 of 2020 (Arising out of SLP (C) No. 7064 of 2020) With Civil Appeal No. 3271 of 2020 (Arising out of SLP (C) No. 7057 of 2020) With Civil Appeal No. 3272 of 2020 (Arising out of SLP (C) No. 5920 of 2020) With Civil Appeal No. 3273 of 2020 (Arising out of SLP (C) No. 7065 of 2020) With Civil Appeal No. 3274 of 2020 (Arising out of SLP (C) No. 7066 of 2020) With Civil Appeal No. 3275 of 2020 (Arising out of SLP (C) No. 7067 of 2020) With Civil Appeal No. 3276 of 2020 (Arising out of SLP (C) No. 6189 of 2020) With Civil Appeal No. 3277 of 2020 (Arising out of SLP (C) No. 7543 of 2020) With Civil Appeal No. 3278 of 2020 (Arising out of SLP (C) No. 6683 of 2020) With Civil Appeal No. 3279 of 2020 (Arising out of SLP (C) No.7068 of 2020) With Civil Appeal No. 3259 of 2020 (Arising out of SLP (C) No. 5036 of 2020) With Civil Appeal No. 3264 of 2020 (Arising out of SLP (C) No. 5823 of 2020) With Civil Appeal No. 3256 of 2020 (Arising out of SLP (C) No. 4960 of 2020) With Civil Appeal No. 3254 of 2020 (Arising out of SLP (C) No. 4959 of 2020) With Civil Appeal No. 3255 of 2020 (Arising out of SLP (C) No. 4961 of 2020) With Civil Appeal No. 3260 of 2020 (Arising out of SLP (C) No. 5822 of 2020) With Civil Appeal No. 3257 of 2020 (Arising out of SLP (C) No. 5033 of 2020) With Civil Appeal No. 3258 of 2020 (Arising out of SLP (C) No. 5821 of 2020) With Civil Appeal No. 3261 of 2020 (Arising out of SLP (C) No. 7058 of 2020) With Civil Appeal No. 3263 of 2020 (Arising out of SLP (C) No. 5028 of 2020) With Civil Appeal No. 3266 of 2020 (Arising out of SLP (C) No. 7061 of 2020) And With Civil Appeal No. 3268 of 2020 (Arising out of SLP(C) No. 7062 of 2020)
Decided On : 23-09-2020
Important Points
A notification issued under Section 8A of the Customs Tariff Act operates prospectively from the time of its publication in the e-Gazette. It does not apply to bills of entry presented and self-assessed prior to the upload timestamp, as the rate of duty crystallizes upon such presentation.
Subject
Tax Law - Customs Law
Act Referred
CONSTITUTION OF INDIA: Art.226, Art.136
CUSTOMS ACT: S.15, S.46, S.17(1), S.12
CUSTOMS TARIFF ACT: S.8(a), S.8(a)(1)
INFORMATION AND TECHNOLOGY ACT: S.13
LIMITATION ACT: Art.54
REPRESENTATION OF THE PEOPLE ACT: S.81
CUSTOMS ACT: S.15, S.46, S.17(1), S.12
CUSTOMS TARIFF ACT: S.8(a), S.8(a)(1)
INFORMATION AND TECHNOLOGY ACT: S.13
LIMITATION ACT: Art.54
REPRESENTATION OF THE PEOPLE ACT: S.81
Headnote
(A) Customs Act, 1962 - Section 15; Customs Tariff Act, 1975 - Section 8A - Increase of customs duty post-terror attack - Notification enhancing duty to 200% at 20:46:58 on 16 February 2019 was challenged - High Court found that rate applicable pre-notification was binding, ruling that date of presentation of bill of entry establishes relevant duty- The notification does not apply retrospectively to bills of entry presented before its issuance - Appeals dismissed. (Paras 1, 11, 12, 15, 67, 87)
(B) Fiscal Legislation - Time of Operation - The day referred to in duty assessment is regarded as a whole day, excluding fractions of it - Notification operates from its date of publication, not retroactively affecting transactions for which bills of entry were presented prior to the notification. (Paras 31, 32, 85)
Facts of the case:
The case pertains to multiple import bills presented for clearance on 16 February 2019; the bills were self-assessed before the customs duty increase notification was published. (Paras 3, 4)
Findings of Court:
On scrutiny, the court underscored the importance of precise timing for customs duty application and reaffirmed the binding nature of previous assessments. (Paras 11, 67)
Issues: The essence of the case revolves around the applicability of the new rate of duty against the background of the notification timing and existing bills of entry assessment. (Paras 11, 32)
Ratio Decidendi: The court ruled that for determining applicable customs duty, the date of bill entry presentation is crucial. The notification cannot affect previously assessed duties as it came into effect only upon publication. (Paras 31, 87)
Result: Appeals dismissed.
(B) Fiscal Legislation - Time of Operation - The day referred to in duty assessment is regarded as a whole day, excluding fractions of it - Notification operates from its date of publication, not retroactively affecting transactions for which bills of entry were presented prior to the notification. (Paras 31, 32, 85)
Facts of the case:
The case pertains to multiple import bills presented for clearance on 16 February 2019; the bills were self-assessed before the customs duty increase notification was published. (Paras 3, 4)
Findings of Court:
On scrutiny, the court underscored the importance of precise timing for customs duty application and reaffirmed the binding nature of previous assessments. (Paras 11, 67)
Issues: The essence of the case revolves around the applicability of the new rate of duty against the background of the notification timing and existing bills of entry assessment. (Paras 11, 32)
Ratio Decidendi: The court ruled that for determining applicable customs duty, the date of bill entry presentation is crucial. The notification cannot affect previously assessed duties as it came into effect only upon publication. (Paras 31, 87)
Result: Appeals dismissed.
Legal Category Hierarchy
- taxation
- administrative law
- statutory interpretation
Table of Contents
2. Whether notification enhancing duty applies to bills of entry filed on the same day but before publication — Applicability of General Clauses Act Section 5(3). (Para 13 , 14 )
3. Notification under Section 8A is delegated legislation — Electronic filing crystallizes duty rate — Digital publication time is the marker for enforceability — No statutory authority for retrospectivity. (Para 23 , 24 , 35 , 36 , 41 , 42 , 46 , 58 , 62 , 63 , 64 , 65 , 78 , 85 )
4. Delegated legislation enhancing customs duty operates prospectively from the time of publication in the e-gazette and cannot apply to bills of entry presented prior to publication. (Para 36 , 58 , 63 , 64 , 65 )
5. Appeals dismissed — High Court judgment upheld. (Para 68 , 86 )
6. When is the rate of customs duty determined for goods entered for home consumption?
Under Section 15(1)(a) of the Customs Act, the rate is determined by the rate in force on the date the bill of entry is presented. In electronic filing, this rate crystallizes when the bill of entry number is generated under Regulation 4(2) of the 2018 Regulations. (Para 17 , 22 , 23 , 24 )
7. Does a notification issued under Section 8A of the Customs Tariff Act operate retrospectively to the start of the day?
No. Such notifications are delegated legislation and operate prospectively from the time of publication. They do not date back to the preceding midnight unless the parent statute expressly or by necessary implication authorizes retrospectivity, which Section 8A does not. (Para 36 , 62 , 63 , 64 , 65 )
8. Does Section 5(3) of the General Clauses Act apply to notifications issued by the Central Government under delegated power?
No. Section 5(3) applies only to a Central Act (Act of Parliament) or a Regulation (as specifically defined in Section 3(50)). A notification issued under delegated authority does not meet these definitions and thus cannot be construed as coming into operation from the preceding midnight. (Para 41 , 42 , 43 , 44 , 45 , 46 , 59 , 60 , 61 )
9. How does the shift to e-gazettes affect the commencement of a notification?
In the era of electronic governance, the precise time of uploading a notification in the e-gazette is the relevant marker for its enforceability. It applies to transactions occurring after the specific time of publication, not retrospectively to the whole day. (Para 53 , 55 , 56 , 58 , 78 )
JUDGMENT :
Dr. Dhananjaya Y. Chandrachud, J.
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 8(a) 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 CUSTOMS ACT ”] 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[“the CUSTOMS ACT ”] 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 a
