2020 (2) TMI 1443 - HC - Customs

Non-adjudication of show cause notice within reasonable period - Seeking recalling of final judgment in Harkaran Dass Vedpal Vs. Union of India 2019 (7) TMI 1307 - PUNJAB AND HARYANA HIGH COURT - retroactive amendment of Section 28(9) of the Customs Act - HELD THAT - Recalling of our order dated 18.12.2019 in the present case would amount to recalling order passed in the case of Harkaran Dass Vedpal which is already under challenge before Hon ble Supreme Court. Thus, present application deserves to be dismissed on this ground. The judgment in Harkaran Dass Vedpal (Supra) is based upon two grounds/issues and Applicant is disputing only one issue. If the contention of Applicant is accepted still our order dated 18.12.2019 cannot be recalled because Applicant is not disputing second issue i.e. non-adjudication within reasonable period of limitation - We though not required, yet deem it appropriate to deal with argument raised by Applicant and clarify our findings qua retroactive amendment. Section 28(9) was amended w.e.f. 29.03.2018 and amended Section provides that if duty is not determined within one year from the date of notice, the proceeding shall be deemed to have concluded. We have held that amendment of Section 28(9) is retroactive in nature. If amendment is declared retrospective, all the notices issued prior to 29.03.2017 would have lapsed as soon as amended Section 28(9) came into force. We have not declared amendment as retrospective whereas we have applied principles of retroactive amendment. As per principle of retroactive amendment, all the show cause notices issued prior to 29.03.2018 are treated as if issued on 29.03.2018 and Authority was bound to determine duty liability within one year from 29.03.2018 unless time was extended in terms of the amended provision. The Explanation 4 amended by Finance Act, 2020 makes it clear that amendment of Section 28(9) is not retrospective. The present application is devoid of merits and deserves to be dismissed - application dismissed.

Summary

Issues:
1. Recall of final judgment and order dated 18.12.2019
2. Application of principles of retroactive amendment in customs cases

Issue 1: Recall of final judgment and order dated 18.12.2019
The Applicant, Department of Customs, filed an application seeking the recalling of the final judgment and order dated 18.12.2019 passed by the Court in a specific case. The Court had allowed the Civil Writ Petition based on the judgment in a previous case, Harkaran Dass Vedpal Vs. Union of India, where two key issues were identified: non-adjudication of a show cause notice within a reasonable period and retroactive amendment of Section 28(9) of the Customs Act. The Department argued that a recent amendment to Section 28 by the Finance Act, 2020, clarified that show cause notices issued before 29.03.2018 would be governed by the Customs Act as it stood prior to that date. Since the show cause notice in the present case was issued before 29.03.2018, the requirement to adjudicate it within one year, introduced after that date, did not apply. The Court noted that the main writ petition was disposed of based on the judgment in Harkaran Dass Vedpal, which was already under challenge before the Supreme Court. The Court held that recalling the order in the present case would essentially impact the judgment in Harkaran Dass Vedpal, and since the Applicant was only disputing one issue out of the two on which the judgment was based, the application for recall was dismissed.

Issue 2: Application of principles of retroactive amendment in customs cases
The Court clarified its findings regarding the application of retroactive amendment principles in customs cases. It explained that while Section 28(9) was amended with effect from 29.03.2018, the amendment was not declared retrospective. However, the Court applied the principles of retroactive amendment, treating show cause notices issued before 29.03.2018 as if they were issued on that date. The Court emphasized that the amended Section required duty liability to be determined within one year from 29.03.2018 unless an extension was granted. The recent Explanation 4, amended by the Finance Act, 2020, further confirmed that the amendment to Section 28(9) was not retrospective, and cases pending before 29.03.2018 would be adjudicated based on the law existing prior to that date. The Court concluded that the application lacked merit, as the principles of retroactive amendment were correctly applied, and accordingly, the application was dismissed.