Notification Issued Under Section 25 Of Customs Act, Effective From The Date It Is Digitally Signed: Gujarat High Court
The Gujarat High Court has ruled that the notification issued under Section 25 of the Customs Act, 1962, enhancing the rate of customs duty, would be applicable only on the bills of entry presented after the said notification was e-published in the electronic Gazette and digitally signed. The bench of Justices Sonia Gokani and Nisha M. Thakore took into account that, with effect...
The Gujarat High Court has ruled that the notification issued under Section 25 of the Customs Act, 1962, enhancing the rate of customs duty, would be applicable only on the bills of entry presented after the said notification was e-published in the electronic Gazette and digitally signed.
The bench of Justices Sonia Gokani and Nisha M. Thakore took into account that, with effect from 01.10.2015, the Ministry of Urban Development has switched over to e-publishing the Government of India Gazette Notification on its official website, and that it has done away with the physical printing of Gazette Notification. The Court added that only after the notification is signed digitally, can it be uploaded for e-publishing in the e-Gazette.
Thus, the Court ruled that the date of publication of a notification by the Central Government shall be the date on which it is e-published in the e-Gazette, and not the date on which it is issued by the Central Government for publication.
The petitioner- Adani Wilmar Ltd., imported edible oil and filed the bill of entry on 01.03.2018 with respect to the said goods, which were assessed in terms of the Notification No.50/2017-CUS dated 30.06.2017, and a customs duty of 40% was imposed on the goods.
Subsequently, the Central Government issued the Notification No.29/ 2018-CUS, dated 01.03.2018, enhancing the rate of customs duty from 40% to 54%. After the said Notification was digitally signed on 06.03.2018, the bill of entry filed by the petitioner was unilaterally reassessed to a higher rate of customs duty of 54%.
The petitioner filed a writ petition before the Gujarat High Court, challenging the reassessment of the bills of entry.
The petitioner Adani Wilmar submitted before the High Court that the order passed by the Customs Authority was contrary to the provisions of Section 17(5) of the Customs Act, 1962.
The petitioner averred that though the Notification No.29/2018-CUS was issued by the Central Government on 01.03.2018, however, the said Notification was digitally signed on 06.03.2018. Therefore, it contended that the said Notification came into effect only on 06.03.2018.
The revenue department argued that the said Notification was issued under Section 25(1) of the Customs Act, since it was necessary in public interest. It added that in view of Section 25(4) of the Customs Act, the said Notification is effective from the date it was issued by the Central Government for publication in the Official Gazette, and not on the date it was digitally signed.
The High Court ruled that under Section 25 of the Customs Act, the Central Government is empowered to exempt the whole or any part of the customs duty leviable on specified goods, through a Notification in the Official Gazette. Therefore, it held that the Central Government also has the power to modify and cancel the said exemption.
The Court referred to the decision of the Apex Court in Union of India versus G.S. Chatha Rice Mills (2020), where the Supreme Court was dealing with the issue as to whether the Notification issued by the Central Government under Customs Tariff Act, revising the rate of customs duty, can be made applicable to the bills of entry presented for home consumption before such Notification was uploaded on the e-Gazette. The Apex Court had ruled that the revised rate of duty was applicable to bills of entry presented subsequent to the uploading of the Notification in the e-Gazette form.
The Supreme Court in G.S. Chatha Rice Mills (2020) had ruled that Section 8A of the Customs Tariff Act, which confers an emergency power on the Central Government to increase import duties in respect of any article included in the first schedule, does not provide the power to increase the rate of duty with retrospective effect.
The bench further referred to the decision of the Gujarat High Court in Ruchi Soya Industries Ltd. versus Union of India (2020), where the High Court had ruled that the Notification is deemed to have come into force on the date it is signed by the competent authority, since in the absence of such signature, there can be no notification existing in the eyes of law. The Gujarat High Court had added that the Notification cannot be said to have come into force on the date it is issued by the Central Government for publication in the Official Gazette, however, it shall be deemed to have come into force on the date when it is published.
The Court took into account that the Ministry of Urban Development has discontinued the practice of physical printing and has replaced the same with electronic Gazette on 30.09.2015, in compliance with the provisions of Section 8 of the Information Technology Act, 2000. Thus, it noted that with effect from 01.10.2015, the Ministry has switched over to e-publishing the Government of India Gazette Notification on its official website, and that it has done away with the physical printing of Gazette Notification. Therefore, the Court concluded that the date of publication of a Notification shall be the date on which it is e-published on the official website by way of an electronic Gazette.
Thus, the High Court ruled that the notification issued by the Central Government would come into operation as soon as it was published in the electronic Gazette of India.
The Court added that the Notification No. 29/2018-Cus, dated 01.03.2018, on the basis of which the bills of entry were reassessed, cannot be said to have been published without a declaration form or a digital signature certificate. It ruled that only after the said Notification was signed digitally, could it be uploaded for e-publishing, which was done on 06.03.2018. Therefore, the bench held that the effective date of the Notification, in terms of Section 25(4) of the Customs Act, was the date it was published in the Official Gazette in e-mode, i.e., on 06.03.2018.
Thus, the Court held that the said Notification cannot be said to have come into force on 01.03.2018, i.e., the date the bills of entry were presented by the petitioner.
The bench reckoned that the rate of duty applicable to the imports made by the petitioner were the rates which were crystallized at the time and on the date the bills of entry were presented by it under Section 15 of the Customs Act. Therefore, the bills of entry could not have been reassessed on the basis of the subsequent publication of the Notification in the e-Gazette.
Holding that the enhanced rate of customs duty under Notification No. 29/2018-CUS, was not applicable to the goods imported by the petitioner, the Court allowed the petition and quashed the reassessment order passed by the Customs Authority.
Case Title: Adani Wilmar Limited versus Union of India
Citation: 2022 LiveLaw (Guj) 413
Counsel for the Petitioner: Gupta Law Associates, Mr. Jitendra Motwani with Mr. Paritosh R Gupta
Counsel for the Respondent: Mr. Nikunt K Raval