Time Of Publication Of E-Gazette Is Significant For Determining The Enforceability Of Notifications: SC [Read Judgment]

The Supreme Court has observed that the precise time when the gazette is published in the electronic mode is significant for determining the enforceability of the notifications.

The bench comprising Justices DY Chandrachud, KM Joseph and Indu Malhotra observed thus while upholding a Punjab and Haryana High Court judgment which had allowed the writ petitions filed by various importers.

Following the terror attack at Pulwama on 14th February 2019, the Government of India published a Notification on 16.02.2019 in exercise of powers under Section 8A(1) 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.

Allowing 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 per cent was issued and uploaded, the enhanced rate of duty was not attracted.

In appeal before the Apex Court, 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. Responding to this contention, 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.

One of the issues considered by the bench was whether r the notification that was issued by the Central government under Section 8A(1) at 20:46:58 hours on 16 February 2019 took effect commencing from 0000 hours on that day? Referring to various judgments, General Clauses Act and Information Technology Act, Justice DY Chandrachud, on behalf of himself and Justice Malhotra, observed:

"With the change in the manner of publishing gazette notifications from analog to digital, the precise time when the gazette is published in the electronic mode assumes significance. Notification 5/2019, which is akin to the exercise of delegated legislative power, under the emergency power to notify and revise tariff duty under Section 8A of the Customs Tariff Act, 1975, cannot operate retrospectively, unless authorized by statute. In the era of the electronic publication of gazette notifications and electronic filing of bills of entry, the revised rate of import duty under the 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 16 February 2019."

The Centre's contention was 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 contended 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.

Rejecting this contention, the bench held that that a piece of delegated legislation has been issued in exercise of a legislatively conferred power does not bring the delegated legislation within the ambit of the phrase "Central Act" as defined in Section 3(7) of the General Clauses Act.

"Notification issued by the Central government under sub-section (1) of Section 8A does not fulfill the description of a Regulation under Section 3(50) of the General Clauses Act. The expression is confined to specific species of Regulations. The definition does not extend to all subordinate legislation or to notifications issued by a delegate of the legislature acting in pursuance of a statutory authority."

"Notification 05/2019 was issued by the Central Government under the delegated authority to increase emergency tariff duties under Section 8A of the Customs Tariff Act, 1975. The notification has been issued in pursuance of a statutory power. The notification has the effect of enhancing the rate of duty prescribed in the First Schedule to the Customs Tariff Act. That does not, transform the notification which has been issued in pursuance of a statutory authority into a 'Central Act'."

Justice KM Joseph wrote a separate but concurring opinion in which he said that the interpretation based on time of publication is in harmony with a view that accords respect for vested rights. He observed:

"In the context of the Customs Act, and having regard to the Scheme, which, in the case of import duty, consists of filing of Bill of Entry for home consumption, self-assessment and payment of duty on the basis of the same and the rate being clearly fixed with reference to the particular point of time when the Bill of Entry is presented and there is a deemed presentation and even a deemed assessment, which is otherwise in order, and bearing in mind the principle that Section 8A does not provide power for increase of rate of duty with retrospective effect, the Notification must be treated as having coming into force not before its publication which is at 20:46:58 hrs. 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 judgment, the court said:

"The rate of duty which was applicable 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 4(2) of the Regulations 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."

Case name: Union of India vs. M/S G S Chatha Rice Mills 

Case no.: Civil Appeal No 3249 of 2020

Coram: Justices DY Chandrachud, KM Joseph and Indu Malhotra 

Counsel: ASG K.M. Nataraj  and Senior Advocates PS Narasimha

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