2020 (1) TMI 951 - SC - Customs

Advance Licence Scheme - clearance of the consignment free of import duty in terms of Customs N/Ns. 203/1992, 204/1992, both dated 19.05.1992 - HELD THAT - The order of the High Court is completely unsustainable. The entire consignment was imported under one advance licence issued to the petitioner prior to 19.05.1992. The fortuitous circumstance that part of the consignment was actually imported prior to 25.11.1993 and the rest subsequent thereto is hardly relevant in view of the clarificatory notification dated 18.03.1994 that the exemption would continue to apply subject to fulfilment of the specified terms and conditions. It is not the case of the respondents that the consignments imported subsequently did not meet the terms and conditions of the exemption. It is unfortunate that the High Court failed to follow its own orders in a similar matter. The High Court further gravely erred in holding that the authorities of the State were also unaware of the clarificatory notification and neither did the appellant bring it on record. The State is the largest litigant as often noted. It stands in a category apart having a solemn and constitutional duty to assist the court in dispensation of justice. The State cannot behave like a private litigant and rely on abstract theories of the burden of proof. The State acts through its officer who are given powers in trust. If the trust so reposed is betrayed, whether by casualness or negligence, will the State still be liable for such misdemeanor by its officers betraying the trust so reposed in them or will the officers be individually answerable - it is absolutely no defence of the State authorities to contend that they were not aware of their own notification dated 18.09.1994. The onus heavily rests on them and a casual statement generating litigation by State apathy cannot be approved. Appeal allowed - decided in favor of appellant.

Issues:
1. Denial of exemption under the Advance Licence Scheme.
2. Interpretation of customs notifications and clarificatory notifications.
3. Failure to consider relevant notifications by the authorities.
4. Duty of the State to assist the court in dispensation of justice.

Issue 1: Denial of exemption under the Advance Licence Scheme
The appellant imported a chemical under the Advance Licence Scheme and claimed clearance free of import duty. However, subsequent amendments to customs notifications made the imports liable for duty. The appellant sought exemption through representations and appeals, but the authorities held them liable for duty. The High Court opined that no mandamus for exemption could be issued as the consignments were imported after the withdrawal of exemption. The appellant argued that denial of exemption was unsustainable as they had imported the consignment under an advance licence issued prior to the amendments.

Issue 2: Interpretation of customs notifications and clarificatory notifications
The clarificatory notification dated 18.03.1994 permitted import without customs duty subject to specified terms and conditions. The High Court held that since the appellant did not produce the clarificatory notification along with the writ petition, they were not entitled to relief. However, the Supreme Court emphasized that the exemption would continue to apply as per the clarificatory notification, irrespective of the timing of import within the validity of the advance licence.

Issue 3: Failure to consider relevant notifications by the authorities
The authorities did not reference the clarificatory notification dated 18.03.1994 while fixing liability for customs duty. The High Court erred in holding that the State authorities were unaware of the clarificatory notification and that the appellant failed to bring it on record. The Supreme Court highlighted the duty of the State to assist the court in dispensation of justice and criticized the State's behavior in this matter.

Issue 4: Duty of the State to assist the court in dispensation of justice
The Supreme Court emphasized the duty of the State to act fairly and assist in dispensation of justice. It criticized the State's apathy and negligence in this case, stating that the State cannot behave like a private litigant and must fulfill its constitutional duty. The Court held that the onus was on the State to be aware of relevant notifications and act accordingly.

In conclusion, the Supreme Court found the orders of the High Court unsustainable and set them aside. The Court allowed the appeals, emphasizing the importance of following statutory notifications, the duty of the State to assist in dispensation of justice, and the need for fair and just behavior from all parties involved in legal proceedings.

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