The Apex Court bench consisting of Justice DY Chandrachud, KM Joseph and Indu Malhotra on Wednesday observed that the precise time when the gazette is published in the electronic mode is significant for determining the enforceability of the notifications and thus upheld a Punjab and Haryana High Court judgement which allowed the writ petitions filed by various importers.
The terrorist attack at Pulwama, Jammu and Kashmir, on February 14 last year, led to the Narendra Modi government adopting ostensibly strong measures against Pakistan to demonstrate its determination to strike back against India’s perceived adversary and one of these measures was a notification published on 16.02.2019 in exercise of powers under Section 8A (1) of the Customs Tariff Act, 1975. This notification introduced a tariff entry by which all goods originating in or exported from the Islamic Republic of Pakistan were subjected to an enhanced custom duty of 200%. The precise time at which the notification was uploaded on the e-Gazette was 20:46:58 hours.
On August 26 last year, a division bench of the High Court allowed a batch of writ petitions. The High Court of Punjab and Haryana 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% was issued and uploaded, the enhanced rate of duty is not attracted.
- The Centre contended that irrespective of the point of time when a notification has been uploaded or published in the e-Gazette, the rate of duty leviable on imported goods cleared for home consumption is, by a legal fiction, the rate prevalent on the date of the presentation of the bill of entry.
- They further contended that under Section 5 (3) of the General Clauses Act, a Central Act or Regulation, unless the contrary is expressed, comes into force immediately on the expiration of the day preceding its commencement.
- It was further put forward that ‘Commencement’ can only be from a day which takes within its fold the entire period of 24 hours from midnight of the day before the issuance of the notification.
- The importers contended that the importers fulfilled the twin requirements of the goods having entered on 16 February 2019 and the bill of entry having been filed before 20:46 hours when notification 5/2019 was issued.
- The court observed that when the change in manner of publishing gazette notification from analog to digital, the precise time when the gazette is published in the electronic mode assumes significance. In the era of the electronic publication of gazette notifications and electronic filling of bills of entry, the revised rate of import duty under notification 5/2019 applies to bills of entry presented for home consumption after the notification was uploaded in the e-Gazette at 20:46:58 hours on February 16, 2019.
- The court further held that a notification issued by the government pursuant to the conferment of statutory power is distinct from an act of the legislature; administrative notifications, even when they are issued in pursuance of an enabling statutory framework, are subject to the statute. In empowering the Central government to exercise power under Section 8A of the Customs Tariff Act, parliament has not either expressly or by necessary implication indicated that a notification once issued will have a force and effect anterior in time. A notification enhancing the rate of duty under Section 8A has prospective effect, the notification must be treated as having coming into force not before its publication which is at 20:46:58 hours 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.
- While affirming the High Court judgement, the Court held that the rate of duty which was crystallized at the time and on the date of the presentation of the bills of entry in terms of the provisions of Section 15 read with Regulation of 2018. The power of reassessment under Section 17(4) could not have been exercised since this is not a case where there was an incorrect self-assessment of duty. The duty was correctly assessed at the time of self-assessment in terms of the duty which was in force on that date and at the time. The subsequent publication of the notification bearing 5/2019 did not furnish a valid basis for re-assessment.