1953 (8) TMI 32 - HC - Customs

Summary

Issues Involved:

1. Issuance of writ of mandamus or certiorari.
2. Assessment of duty based on pre-devaluation exchange rates.
3. Validity and application of departmental instructions.
4. Jurisdiction of Customs authorities to reassess duty.
5. Applicability of Article 226 of the Constitution.
6. Alleged violation of principles of natural justice.
7. Estoppel against the Customs authorities.
8. Existence of an alternative remedy.

Issue-wise Detailed Analysis:

1. Issuance of writ of mandamus or certiorari:

The appellant sought writs of mandamus and certiorari to cancel or withdraw Demand Notices issued by Customs authorities for additional duty. The Court found that the Customs authorities acted within their statutory powers under the Sea Customs Act. The Court dismissed the appellant's petition, stating that the demands for extra duty were legal and in accordance with the Act.

2. Assessment of duty based on pre-devaluation exchange rates:

The appellant argued that the duty should be assessed based on the exchange rates prevailing at the time of the forward exchange contracts, which were pre-devaluation. The Customs authorities, however, reassessed the duty based on the exchange rates at the time of importation, post-devaluation. The Court upheld the Customs' decision, stating that the real value of imported goods should be determined at the time of importation as per sections 29 and 30 of the Sea Customs Act.

3. Validity and application of departmental instructions:

The appellant contended that the Customs authorities should adhere to the departmental instructions that allowed the benefit of forward exchange contracts. The Court held that these instructions, being inconsistent with the statute, were invalid and ineffective. The Customs authorities were correct in reassessing the duty based on the post-devaluation exchange rates, following the withdrawal of the earlier instructions.

4. Jurisdiction of Customs authorities to reassess duty:

The appellant argued that the Customs authorities had no jurisdiction to reopen the assessment once it was finalized. The Court held that the Customs authorities had the jurisdiction to reassess the duty if the original assessment was found to be based on an incorrect exchange rate. The case fell within the purview of section 39 of the Sea Customs Act, which allows for correction of errors in duty assessment.

5. Applicability of Article 226 of the Constitution:

The appellant sought relief under Article 226 of the Constitution. The Court clarified that Article 226 is not retrospective but can be applied to ongoing issues post-Constitution. Since the demand for additional duty was enforced after the Constitution came into force, the appellant could invoke Article 226. The Court, however, found no merit in the appellant's case for relief under this Article.

6. Alleged violation of principles of natural justice:

The appellant claimed that the Customs authorities violated the principles of natural justice by not providing a proper hearing before demanding additional duty. The Court found that the appellant had been given ample opportunity to make representations and that the Customs authorities had provided detailed responses. The Court dismissed this ground, stating that there was no violation of natural justice.

7. Estoppel against the Customs authorities:

The appellant did not explicitly plead estoppel but implied that the Customs authorities, having once assessed the duty, could not reassess it. The Court rejected this implied argument, stating that there could be no estoppel against the statute. The Customs authorities were within their rights to correct the assessment based on the statutory provisions.

8. Existence of an alternative remedy:

The respondent argued that the appellant had an alternative remedy through an appeal to the Chief Customs Authority and a revision application to the Central Government. The Court noted that the existence of an alternative remedy is not an absolute bar to a writ petition. However, since the Central Board of Revenue had itself taken the action impugned, the alternative remedy was not deemed adequate.

Conclusion:

The appeal was dismissed with costs, and the Court upheld the reassessment of duty based on post-devaluation exchange rates. The Customs authorities acted within their statutory powers, and there was no violation of natural justice. The appellant's petition was found to lack candor and was liable to be dismissed on that ground alone. The Court also noted that the appellant had an alternative remedy, though it was not an absolute bar to the writ petition.