2021 (1) TMI 119 - HC - Customs

Refund of amounts collected from the Petitioners as stamp duty on Bills of Entry filed for the goods imported - Legality and validity of collecting the stamp duty on the Bills of Entry - HELD THAT - The issue is no longer res-integra in view of the pronouncement of this Court in the case of State of Gujarat and others Vs. Reliance Industries Ltd. 2011 (9) TMI 1208 - GUJARAT HIGH COURT , to which, one of us (J.B. Pardiwala, J.) was a party. In the said litigation also, the writ petitioners had challenged the notices issued by the authorities and the guidelines issued for charging the stamp duty on the Bills of Entry. The State of Gujarat lost before the learned Single Judge and accordingly, various appeals were filed and it was finally held that on bill of entry, the authorities cannot charge stamp duty under Art. 24. The respondents are directed to refund the amount of ₹ 22,41,866/- to the writ applicant No.1 (M/s. Ramratna Wires Ltd.) and ₹ 1,18,47,859/- to the writ applicant No. 2 (M/s. R.R. Kabel Ltd.). These two amounts were collected from the respective writ applicants as a stamp duty on the Bills of Entry filed for the goods imported by them, which otherwise could not have been recovered - application allowed.

Summary

Issues:
Challenge to decision on stamp duty refund on Bills of Entry.

Analysis:
The writ applicants sought relief through a writ application under Article 226 of the Constitution of India, challenging the decision communicated by Respondent no.1 regarding the stamp duty collected on Bills of Entry for imported goods. The applicants requested the quashing of the decision and refund of specific amounts collected as stamp duty. Additionally, they sought interest on the refunded amounts and immediate return of the said sums pending the final disposal of the petition. An ex-parte ad-interim relief was also requested along with any other suitable relief deemed fit by the court.

The applicants, engaged in manufacturing cables and wires, imported raw materials for production. They filed Bills of Entry as per Section 46 of the Customs Act, declaring details of imported goods. However, the respondent started levying stamp duty on Bills of Entry, claiming it as a "Delivery order in respect of goods" under the Bombay Stamp Act. This led to denial of clearance for imported goods without proof of stamp duty payment. The legality of collecting stamp duty on Bills of Entry was challenged, citing a previous judgment by the High Court where it was held that stamp duty cannot be charged on Bills of Entry.

In the hearing, arguments were presented by the counsel for the writ applicants and the AGP representing the State respondents. The court referred to a previous judgment in a similar case where it was established that Bills of Entry do not constitute a delivery order, thus stamp duty cannot be charged on them. Consequently, the impugned communication demanding stamp duty was quashed, and the respondents were directed to refund the collected amounts to the writ applicants within a specified period. One of the relief requests regarding interest on the refunded amounts was not pressed by the counsel. The court disposed of the writ application based on these findings and directions.