1983 (12) TMI 66 - HC - Customs

Summary

Issues Involved:
1. Exemption from customs duty for cars imported for disabled persons.
2. Policy changes and their applicability.
3. Legitimacy of cut-off dates for application consideration.
4. Issuance of exemption orders based on committee decisions.
5. Treatment of applications post-policy review.
6. Handling of bank guarantees provided by petitioners.

Detailed Analysis:

1. Exemption from Customs Duty for Cars Imported for Disabled Persons:
The judgment addresses the lure of imported items and the government's policy to provide a 50% customs duty exemption for cars fitted with special systems for handicapped persons, introduced in 1978. This policy was reviewed in May 1978, leading to the decision to discontinue the exemption due to the ease of restoring such cars for normal use. However, in 1981, the policy was reinstated with conditions, including a total customs duty of 50% ad valorem for cars with engine capacity not exceeding 1000 cc/10 H.P., and later revised in July 1982 with further conditions.

2. Policy Changes and Their Applicability:
The petitioners, described as disabled persons, filed writ petitions claiming they applied for customs duty exemption under the July 1982 policy but were denied. They argued that similarly situated persons received exemptions under Section 25(2) of the Customs Act. The policy required applicants to obtain customs clearance from the Department of Revenue and then apply for an import license. A notification on 25-2-1982 provided a 50% ad valorem duty exemption for disabled persons, subject to certain conditions. The petitioners claimed to meet the July 1982 policy conditions and applied accordingly but were denied exemptions due to a new notification on 25-5-1983.

3. Legitimacy of Cut-Off Dates for Application Consideration:
The respondents argued that applications received after 13-12-1982 were not processed due to a policy review, and the new policy was governed by the 25-5-1983 notification. The court found no legitimate reason for denying exemptions to petitioners whose applications were cleared by the committee on 28-12-1982. The court directed the respondents to issue exemption orders to the petitioners in the same manner as those whose names were cleared in the 28-12-1982 meeting.

4. Issuance of Exemption Orders Based on Committee Decisions:
The court noted that applications received by 13-12-1982 were considered at the 28-12-1982 meeting, but found that some applications received later were also processed. The court held that the cut-off date of 13-12-1982 lacked rationality and directed that all complete applications received by 27-12-1982 should be considered. The court issued a mandamus directing the respondents to constitute a committee to consider these applications based on the July 1982 notification.

5. Treatment of Applications Post-Policy Review:
The court acknowledged the government's decision to review the policy on 23-12-1982 and its directive to halt further exemptions until the review was completed. The court found it reasonable for the committee to pause issuing exemptions during the review period. The court did not direct the consideration of applications filed after 28-12-1982 under the July 1982 notification, as these would be governed by the May 1983 notification.

6. Handling of Bank Guarantees Provided by Petitioners:
The court addressed the issue of bank guarantees furnished by petitioners. For the 10 petitioners entitled to concessional customs duty, the bank guarantees were discharged. For other petitioners whose cases were to be reconsidered, the bank guarantees would remain in place. If an exemption was granted, the guarantees would be discharged; if denied, the guarantees would not be encashed for three weeks post-decision.

Conclusion:
The petitions of the 10 petitioners in list B were allowed, and the respondents were directed to issue exemption orders. For other petitioners, a committee was to be constituted to reconsider their applications based on the July 1982 notification. The court made suggestions to prevent misuse of imported cars for disabled persons and disposed of the petitions with no order as to costs.