Adani Wilmar Limited vs. Union Of INDIA

Held

The Court held that the reassessment orders were liable to be quashed. It found that the duty rate applicable is determined at the time and date of presentation of the bill of entry for home consumption, as per Section 15 of the Customs Act, 1962. The Court reasoned that the power of reassessment under Section 17(4) could not be exercised when the self-assessment was correct based on the duty in force at that time. The subsequent publication of Notification No. 29/2018-Cus dated 01.03.2018, which amended notification no. 50/2017, could not retroactively alter the duty rate. The Court clarified that the effective date of the notification was 06.03.2018, the date of its e-publication, and not 01.03.2018. Therefore, the enhanced duty rate was not applicable. The constitutional validity of Section 25(4) was not explicitly decided, but the interpretation of its application regarding the effective date of notifications was central to the decision. The Court directed the refund of the differential duty paid by the petitioner with interest.

Facts

The petitioner, Adani Wilmar Limited, filed two Special Civil Applications challenging reassessment orders concerning bills of entry No. 5407944, 5407946, and 5404574. The petitioner argued that the reassessment orders were non-speaking, unreasoned, and violated Section 17(5) of the Customs Act, 1962, and principles of natural justice. The petitioner also contended that a delay in filing an appeal was unintentional. The respondents questioned the maintainability of the petition, arguing no fundamental or legal right was breached. They also challenged the constitutional validity of Section 25(4) of the Act as amended by the Finance Act, 2016, deeming it discriminatory and arbitrary. The core dispute revolved around the effective date of a customs notification that increased duty rates.

Key Issues

1. Whether the reassessment orders passed by the respondent No.2, being non-speaking and unreasoned, are liable to be quashed under Section 17(5) of the Customs Act, 1962, and in violation of principles of natural justice? 2. Whether the constitutional validity of Section 25(4) of the Customs Act, 1962, as amended by the Finance Act, 2016, is discriminatory, arbitrary, illegal, and violative of Article 14 of the Constitution of India? Petitioner's arguments: The reassessment orders were contrary to Section 17(5) of the Act and principles of natural justice. The delay in filing the appeal was unintentional. The Court could exercise its writ jurisdiction under Article 226 for gross injustice, citing PANOLI INTERMEDIATE (INDIA) PRIVATE LIMITED VS. UNION OF INDIA. Revenue's arguments: The petition was not maintainable as no fundamental or legal right was breached. Section 25(4) of the Act, as amended, was constitutionally valid. A notification issued under Section 25(1) comes into force on the date of its publication in the Official Gazette, and Section 25(4) mandates this. The date of issuance for publication in the Official Gazette is the relevant date.