Quite recently, in the judgment of the case – M/s Granules India Ltd. v. Union of India and Others, delivered on January 23, 2020, Justice Navin Sinha and Justice Krishna Murari , at the Supreme Court, have voiced the Court’s “considered opinion” that “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.
After considering the submissions made on behalf of the parties, the Supreme Court has stated that the order passed by the HC is completely unsustainable. The entire consignment was imported under one advance license issued to the petitioner prior to May 19, 1992. The fortuitous circumstance that part of the consignment was actually imported prior to November 25, 1993 and the rest subsequent thereto is hardly relevant in view of the clarificatory notification of March 18, 1994 that the exemption would continue to apply subject to fulfillment 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.
The HC had dismissed the writ application stating that no mandamus for exemption can be issued. The consignments were admittedly imported after November 25, 1993, and before the clarificatory notification of March 18, 1994. Thus, there was no arbitrariness on part of the respondent.
The appellant preferred a review application, relying upon a division bench 0rder of the Andhra HC in the case - Shri Krishna Pharmaceuticals Ltd. v. Union of India – (2004) 173 ELT 14. Rejecting the plea, the HC opined that since the appellant did not produce the clarificatory notification along with the writ petition and neither were the respondents aware of that notification, the appellant was not entitled to any relief.
In this regard, the SC has quoted from its decision in the case – National Insurance Co. Ltd. v. Jugal Kishore (1988)1 SCC 626, as under:
"10. Before parting with the case, we consider it necessary to refer to the attitude often adopted by the Insurance Companies, as was adopted even in this case, of not filing a copy of the policy before the Tribunal and even before the HC in appeal. In this connection what is of significance is that the claimants for compensation under the Act are invariably not possessed either of the policy or a copy thereof.
"This Court has consistently emphasized that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof.
"This duty is greater in the case of instrumentalities of the State such as the appellant, who are under an obligation to act fairly. In many cases even the owner of the vehicle for the reasons known to him does not choose to produce the policy orb a copy thereof.
"We accordingly wish to emphasize that in all such cases where the Insurance Company concerned wishes to take a defence in a claim petition that its liability is not in excess of the statutory liability it should file a copy of the Insurance policy along with its defence. Even in the instant case, had it been done so at the appropriate stage necessity of approaching this Court in civil appeal would in all probability have been avoided.
"Filing a copy of the policy,therefore, not only cuts short avoidable litigation but also helps the Court in doing justice between the parties. The obligation on the part of the State or its instrumentalities to act fairly can never be over-emphasized.”
The appellant was aggrieved by the orders of December 7, 2016 and June 14, 2017, which led to rejection of his writ petition and also of the review application by the HC at Hyderabad.
The appellant, during the year 1993, imported 96 tons of the chemical-“Acetic Anhydride” under three bills of entry numbered 290, 291 and 300 of December 1, 1993 and December 14, 1993 through the Inland Water Container Depot (ICD), Hyderabad under the Advance Licence Scheme. It claimed clearance of the consignment free of import duty in terms of Customs Notification Nos. 203/1992, and 204/1992, both of May 19,1992.The notification contained a scheme permitting import without payment of customs duty subject to fulfillment of certain norms and conditions.
These notifications were amended by a Notification 183/1993 on November 25, 1993, by which the subject imports became liable for duty, the exemption having been withdrawn. The Notification of November 25, 1993 was further amended by another clarificatory Notification 105/1994 of March 18, 1994 permitting the import of the chemical without customs duty subject to certain terms and conditions. This clarificatory notification was necessitated to obviate the difficulties faced by the importers like the appellant, who had imported the chemical under the advance licence issued by the Director General of Foreign Trade prior to the amendment Notification No. 183/1993 dated November 25, 1993.
Though the appellant was permitted to clear the consignments under those 3 Bills of Entry without payment of duty, subsequently, the respondents issued show-cause notice to him under section 28(1) of the Customs Act, 1962, with regard to the same consignments as having been imported after November 25, 1993.In response to the representation made by the appellant on November 20, 1997, seeking exemption. It was considered favourably in respect of 3 other consignments, though entire consignments were imported under the same advance licence. He was held liable to pay duty by the order of February 12, 1998 .
While fixing liability, the respondents did not make reference to the Notification of March 18, 1994.On the same reasoning, the Commissioner (Appeals) had rejected the appeal leading to filing of the writ petition by the appellant.
According to the SC, the HC failed to follow its own orders in a similar matter. The HC further gravely erred in holding that the authorities of the State were also unaware of the clarificatory notification and neither the appellant placed that 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 Supreme Court has also pointed out that the State cannot behave like a private litigant and rely on the abstract theories of burden of proof. The State acts through its officers 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.
The Supreme Court has held the impugned orders unsustainable and set those aside and allowed the appeals.