1963 (7) TMI 2 - HC - Customs

Summary

Issues Involved:
1. Interpretation and effect of Section 39 of the Sea Customs Act.
2. Legality of the Customs authorities' power to re-assess customs duty beyond the prescribed period.
3. Validity of the Customs authorities' decision to adjust refund claims against alleged short-levied duties.
4. Applicability of the law of limitation to the petitioners' refund claims.
5. Jurisdiction of the Court to issue orders for payment of money in writ petitions.

Detailed Analysis:

1. Interpretation and Effect of Section 39 of the Sea Customs Act:
The petitioners argued that under Section 39 of the Sea Customs Act, the Customs authorities had no power to reopen the final assessment of customs duty beyond three months from the relevant date. Section 39(1) stipulates that any short-levy or erroneous refund must be addressed within three months from the relevant date. The "relevant date" is defined in Section 39(2) and varies depending on the circumstances, such as the date of clearance, re-assessment, final adjustment, or refund.

2. Legality of Re-assessment Beyond the Prescribed Period:
The petitioners contended that the Customs authorities' attempt to reassess the duty on the consignment of brass tubes in December 1958 was impermissible as it was beyond the three-month period specified in Section 39. The final assessment was made in March 1958, and any re-assessment should have occurred before the end of June 1958. The Court agreed, stating that the final assessments are binding and can only be revised within the statutory period. The Customs authorities lacked the jurisdiction to reassess the duty after the expiration of the three-month period.

3. Adjustment of Refund Claims Against Alleged Short-Levied Duties:
The Assistant Collector of Customs had decided to adjust the petitioners' sanctioned refund amount of Rs. 28,388.21 nP against the alleged short-levied duty of Rs. 40,000.75 nP on the brass tubes consignment. The Court found this action to be illegal, as the short-levy claim was time-barred under Section 39. The Customs authorities were not justified in withholding the refund amount or making any demands for the alleged short-levied duty after the statutory period had lapsed.

4. Applicability of the Law of Limitation:
The respondents argued that the petitioners' claim for a refund was barred by the law of limitation, as the refund applications were made more than three years before the petition was filed. The Court rejected this argument, noting that the Sea Customs Act provides a complete code for matters arising under it, including the process for refund claims. The refund applications were filed within the three-month period specified by Section 40 of the Act. The Customs authorities acknowledged the refund claims by their letter dated July 28, 1962, and the petition was filed shortly thereafter on October 9, 1962. Therefore, the claim was not barred by limitation.

5. Jurisdiction to Issue Orders for Payment in Writ Petitions:
The respondents contended that the Court should not issue orders for payment of money in writ jurisdiction. The Court held that while it generally does not deal with money claims in writ jurisdiction, it can make incidental orders for payment if necessary to provide complete redress. Since the decision of the Assistant Collector of Customs was found to be illegal and without jurisdiction, the Court deemed it appropriate to order the refund of Rs. 28,388.21 nP to the petitioners.

Conclusion:
The Court ordered that the decision of the Assistant Collector of Customs to adjust the refund amount against the alleged short-levied duty was illegal. The Customs authorities were directed to refund the amount of Rs. 28,388.21 nP to the petitioners. The claim was not barred by the law of limitation, and the Court had the jurisdiction to issue an incidental order for payment. Respondents 1 and 2 were ordered to pay the costs of the petitioners, while Respondent 3 was to bear its own costs.