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RUCHI SOYA INDUSTRIES LIMITED AND ANOTHER – Versus THE UNION OF INDIA AND OTHERS

2016 (6) TMI 814 - CALCUTTA HIGH COURT

Rate of duty on import of crude degummed soyabean oil of edible grade - when a notification comes in effect - Scope of section 25 - The petitioners claim that a notification that had not become effective on the relevant date has been arbitrarily cited by the Customs authorities to demand duty at a much higher rate than payable by the petitioning assessee. - Held that:- The most cardinal rule in interpreting a statutory provision is that the language of the statute should be read as it is. If .....

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of words not found in the provision or the rejection of certain words as meaningless. It is elementary that if a provision in a statute can be read without adding words thereto or subtracting words therefrom, that would be the ideal construction, unless it throws up an absurd result. The literal construction in this case does not result in any absurdity. - The fallacy in the petitioners’ argument is that it is founded on the responses received following the queries raised under the Act of 2 .....

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issuance of the notification may have resulted in the publication in the Official Gazette to be made a day later. As long as the publication of a relevant notification is made in the Official Gazette, whether within reasonable time or at the first available opportunity of such notification being issued for publication therein, the notification comes into effect immediately upon its issuance for publication in the Official Gazette notwithstanding the publication in the Official Gazette being late .....

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, 2015. But that is of no consequence. The notification came into force on the date of its issue for publication in the Official Gazette and such date, indisputably, was September 17, 2015. Even if a strict view of the matter is taken and the publication in the Official Gazette is seen to be a precondition to the coming into force of the said notification, that was also completed on September 17, 2015. If the Union’s assertion of copies of the notification being put up for sale on September 17, .....

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- Dated:- 11-2-2016 - SANJIB BANERJEE, J. For the Petitioner: Mr G. L. Rawal, Sr Adv., Mr Anirban Ray, Adv., Mr Pronit Bag, Adv., Mr Pradyot Kumar Das, Adv., Mr Debabrata Das, Adv. For the respondent: Mr S. B. Saraf, Adv., Mr K. K. Maiti, Adv. JUDGEMENT SANJIB BANERJEE, J. : - The petitioners claim that a notification that had not become effective on the relevant date has been arbitrarily cited by the Customs authorities to demand duty at a much higher rate than payable by the petitioning asses .....

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1 of the Customs Act, 1962 at 0530 hours on September 17, 2015. The petitioners accept that in terms of the proviso to Section 15(1) of the said Act, the date for determination of the duty and tariff valuation of the imported goods was to be reckoned as September 17, 2015 as the date of entry inwards of the vessel would be the effective date if the bill of entry in respect of the imported goods were to be presented prior to the date of entry inwards of the vessel. The petitioners claim that as a .....

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ty is not questioned. The petitioners assert that the notification did not become effective till such time that it was published in the Official Gazette and till such time that the Official Gazette as containing the relevant notification was published and offered for sale by the Directorate of Publicity and Public Relations of the Central Board of Excise and Customs. 4. The petitioners rely on the replies furnished to them following the queries raised by them under the Right to Information Act, .....

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a Press by the petitioners was answered on October 30, 2015 to the effect that the relevant notification was published in the Gazette on September 17, 2015, but the Printed Gazette was despatched from the Govt. of India Press, Mayapuri, New Delhi for sale on 21.09.2015. At paragraph 14 of the petition, the petitioners have averred that a representative of the petitioners had gone around 12 noon on September 18, 2015 to Kitab Mahal at Kasturba Gandhi Marg, New Delhi to purchase a copy of the gaze .....

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2015 to the Department of Publication narrating the above. 5. The petitioners maintain that since the said notification of September 17, 2015 could not be said to have become effective prior to September 21, 2015 when a copy of the Official Gazette containing the said notification was offered for sale, the petitioning assessee is not liable to pay the enhanced duty as per the said notification as the assessee continued to be governed by the previous rate that was prevalent on September 17, 2015 .....

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n the Official Gazette, exempt … The petitioners contend that since the provision mandates that what the Central Government may do thereunder is only by notification in the Official Gazette, it is not possible for any notification under Section 25(1) of the said Act to be regarded as effective prior to the publication thereof in the Official Gazette. The petitioners next refer to key sub-section (4) of Section 25 of the said Act. According to the petitioners, two conditions are required t .....

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to demonstrate that the requirement of the twin conditions to be met under Section 25(4) of the Act for a notification under Section 25(1) to be effective may also be gauged from Section 25(5) of the Act and the words before the date on which the said notification comes into force appearing at the end of such sub-section. The petitioners submit that it is impermissible to read clause (a) of subsection (4) of Section 25 of the Act in isolation of clause (b) thereof. The petitioners maintain that .....

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1 (Bhavnagar University v. Palitana Sugar Mill Private Limited). The petitioners also invoke the accepted legal principle that if a provision in a fiscal statute is capable of two possible interpretations, the one in favour of the assessee should be accepted. 9. The petitioners suggest that Section 25(4) of the said Act has been interpreted by the Supreme Court in a recent judgment reported at (2015) 321 ELT 192 (Union of India v. Param Industries Limited) in an appeal arising out of a judgment .....

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The challenge was on the ground that the notification was published in the Official Gazette only on August 6, 2001 and, as such, it could not be made effective prior to its publication in the Official Gazette. The Customs authorities claimed that the notification published on August 3, 2001 itself. Though the adjudication in the matter did not pertain to a notification under Section 25 of the Act, the High Court referred to Section 25 of the Act by way of analogy to determine the time when a not .....

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urther stipulation that such notification shall also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. This clearly shows the intention of the Legislature that a notification is to be effective from the date when it is issued by the Central Government for publication in the Official Gazette. The same analogy will apply to the instant case. As per the intention of the Legislature and the order of the Supreme Co .....

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resent case the said notification was published in the Official Gazette on 6-8-2001 and not before 6-8-2001 and was offered for sale not before 6-8-2001. … 11. In taking up the special leave petition and consequent civil appeal, the Supreme Court noticed that the goods had already been cleared prior to the publication of the notification on August 3, 2001 as the notification was published just short of midnight on that day. The court raised an issue whether the publication of a notificati .....

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ion into force and make it effective, two conditions are mandatory, viz., (1) Notification should be duly published in the official gazette, (2) it should be offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi. In the present case, admittedly, second condition was not satisfied inasmuch as it was offered for sale only on 6-8-2001, as it was published on 3-8-2001 in late evening hours and 4/5-8-2001 were holidays. 12. The reason f .....

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s explained and held to be inapplicable to a situation as in Section 25(1) of the said Act. 13. In Ganesh Das Bhojraj, the Supreme Court considered a matter governed by Section 25(1) of the said Act as it operated prior to sub-sections (4) and (5) being incorporated into Section 25 by an amendment of 1998. Prior to the 1998 amendment, Section 25(1) of the said Act was similar, in its material terms, to Section 14(2) of the said Act as it then stood. The essence of the Supreme Court opinion is fo .....

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ic, bringing) notification into operation, the only requirement of the section is its publication in the Official Gazette and no further publication is contemplated. … 14. In referring to Harla, the Supreme Court observed, at paragraph 17 of the report, that in such judgment the court dealt with a provision of a statute that was never published in the Gazette and, therefore, the Court held that in the absence of some specific law or custom to the contrary, a mere resolution of a Council o .....

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of the Act are relevant for the present purpose. The other sub-sections have no bearing on the legal issue that has arisen herein. 25. Power to grant exemption from duty. - (1) If the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified descript .....

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d in sub-section (4), where a notification comes into force on a date later than the date of its issue, the same shall be published and offered for sale by the said Directorate of Publicity and Public Relations on a date on or before the date on which the said notification comes into force. (6) … (7) … (8) … 16. Prior to sub-section (4) being incorporated in Section 25 of the Act, a notification issued under Section 25(1) of the Act could be said to come into operation and b .....

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in sub-section (1). In the absence of sub-section (4), subsection (1) would imply that a notification under such provision would come into force upon its publication in the Official Gazette. Such provision has also been interpreted thus in Ganesh Das Bhojraj. 17. However, sub-section (4) contains two statutory commands: under clause (a) that a notification under Section 25(1) of the Act would come into force on the date of its issue by the Central Government for publication in the Official Gaze .....

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the context of a notification under Section 25(1) of the said Act, the statutory commands under the two several clauses of sub-section (4) are distinct and clause (b) may be seen to be somewhat dependant on clause (a), but clause (a) takes no colour from clause (b). The statutory requirement under Section 25(4)(a) of the said Act, as is material for the present purpose, may be seen to be thus: a notification under sub-section (1) shall come into force on the date of its issue by the Central Gov .....

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at if such a notification is issued on a particular day and it is asked to be published in the Official Gazette, notwithstanding its later publication in the Official Gazette, it would come into force on the date of its issue for publication in the Official Gazette. 18. The propriety of such provision has not been called into question. It is also not the submission on behalf of the petitioners that the provision should be read down and interpreted to imply something other than it apparently conv .....

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azette, without it being actually published in the Official Gazette and yet the notification be regarded as having come into force. That would be an irrational construction of the provision. But if a notification is issued on a particular date and is required immediately thereupon to be published in the Official Gazette, upon the publication being made in the Official Gazette within a reasonable time (or even at the earliest available opportunity) the notification would be deemed to have come in .....

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s accept that notwithstanding a notification under Section 25(1) of the Act coming into effect later in a day, the duty payable will be governed by such notification even if the bill of entry pertaining to the consignment and entry inwards of the vessel were deposited or issued earlier in the day. However, it is not a major concession made by the petitioners since Section 5 of the General Clauses Act, 1897 recognises the general legal principle that a Central Act or regulation shall be construed .....

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and, a notification may be issued just short of midnight of a particular day for it to become immediately effective as long as the notification is issued for publication in the Official Gazette and it is actually published in the Official Gazette within reasonable time or even on the next available working day. Further, there is a distinction between a notification being brought into effect contemporaneously and a notification proposed to be given effect to on a future date. Though the wording o .....

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e (b) of sub-section (4) of Section 25 of the Act is in furtherance of the made known concept. The failure to comply with such statutory command in clause (b) may not tell upon the efficacy of a notification that has been issued for publication in the Official Gazette and has been published in the Official Gazette. However, if a breach of a relevant notification results in any criminal liability, that would not fasten till clause (b) is complied with; the civil liability under the notification w .....

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not have been any warrant to do so since the interpretation of Section 14(2) would be governed by the dictum in Ganesh Das Bhojraj on the pari materia wording of Section 25(1) of the Act. The Supreme Court judgment in Param Industries Limited did not have any occasion to deal with Section 25 of the Act. Even though the dictum in the Supreme Court judgment may be seen to be applicable in a situation covered by Section 14(2) of the Act, it cannot govern Section 25 thereof in view of the special fe .....

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with. At any rate, the civil liability that arises upon a notification coming into force upon it being issued for publication in the Official Gazette cannot be diluted by the failure to adhere to the mandate in clause (b). 26. The most cardinal rule in interpreting a statutory provision is that the language of the statute should be read as it is. If the language of Section 25(4) of the Act is not distorted and the intention thereof gathered from the language used therein, the plain meaning of th .....

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without adding words thereto or subtracting words therefrom, that would be the ideal construction, unless it throws up an absurd result. The literal construction in this case does not result in any absurdity. 27. The fallacy in the petitioners argument is that it is founded on the responses received following the queries raised under the Act of 2005. The queries and the responses received are on the mistaken premise that it is the notification as published in the Official Gazette that must be pu .....

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nt notification is made in the Official Gazette, whether within reasonable time or at the first available opportunity of such notification being issued for publication therein, the notification comes into effect immediately upon its issuance for publication in the Official Gazette notwithstanding the publication in the Official Gazette being later. 28. The Union has disclosed in an affidavit that the notification was published in the Official Gazette on September 17, 2015. There is no creditable .....

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