SUPREME COURT REITERATES PRINCIPLES OF EFFECT OF GOVERNMENT NOTIFICATIONS

The Supreme Court has in a matter of Union of India and Others vs M/S G S Chatha Rice Mills & Anr. passed a Judgment dated 23-09-2020 pertaining to whether #Government #notifications issued in the e-#Gazette under the Customs Tariff Act 1975 would have #retrospective effect on goods #imported prior to the #publication of such notification.

In the aftermath of Pulwama Terrorist Attacks that happened on 14-02-2019, the Union Government had issued a Notification dated 16-02-2019 (Notification) around 20:46 hours under Section 8A of the Customs Tariff Act 1975 (the Customs Tariff Act), thereby inserting a new tariff entry pertaining to #customsduty of 200% on all goods originating or exported from the Islamic Republic of #Pakistan to India. The purpose of issuing the Notification was to discourage imports from Pakistan to India. A copy of the said Notification is attached below:

But the Customs Authorities at Attari sought to enforce the enhanced customs duty on importers who had already presented their bills of entry before the said Notification was notified in the e-Gazette. As a result, the aggrieved importers had challenged the said action of the Customs Authorities before the High Court of Punjab and Haryana.

The High Court passed an Order dated 26-08-2019 and held that as the importers had already presented the bills of entry and completed the process of “self-assessment” before the said Notification was issued, so the enhanced customs duty would not be applicable to them. Aggrieved by the Order of the High Court dated 26-08-2019, the Union of India filed an appeal before the Supreme Court.

The Apex Court made the following observations in this case:

1- Section 15 of the Customs Act 1962 (the Customs Act) provides that the rate of customs duty and tariff would be determined at the rate and valuation “in force” “on the date on which” bill of entry with respect to imported goods is presented/filed electronically on the custom automated system and self-assessed by the importer under Section 46 of the Customs Act 1962.

2- Regulation 4 of the Bill of Entry (Electronic Integrated Declaration and Paperless Processing) Regulations, 2018 (the 2008 Regulations) provides that the bill of entry is deemed to have been filed and self-assessment is deemed to have been completed, when the importer enters the electronic integrated declaration in the Customs Automated System and thereafter, a bill of entry number is generated by the Indian Customs Electronic Data Interchange System.

3- As per Section 7 (1) (c) of the Information Technology Act 2000, the date, time and details of receipt or dispatch of electronic record is crucial for maintenance of an electronic record.

4- Thus, the customs duty is leviable at the rate prevailing on the date of electronic filing of declaration and electronic generation of bill of entry number.

5- Section 8A of the Customs Tariff Act provides that the Central Government may increase the import duties in certain circumstances which render it necessary to exercise such emergency powers. But the Legislature has not authorised the Central Government to have retrospective effect of exercise of such emergency powers under the Act.

6- Further, the concerned officer may re-assess the duty under Section 17 (4) of the Customs Act, only if the self-assessment is not correctly processed.

7- But in this case, the importers had properly carried out declaration and self-assessment on the basis of the rate of duty which prevailed at the time of presentation of bill of entry, i.e. prior to the time when the enhanced rate was notified.

8- Thus, as the self-assessment of duty was correctly processed in terms of the rate which was in force on that date and at that time, the Customs Authorities could not have re-assessed the duty.

Therefore, the Apex Court while dismissing the Appeals held that in the scheme of the Customs Act, Customs Tariff Act and the 2018 Regulations, the time at which the notification is published under Section 8A of the Customs Tariff Act 1975 would have relevance.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

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