Date of the Judgment: February 11, 2020
Citation: (2020) INSC 121
Judges: Rohinton Fali Nariman, J., S. Ravindra Bhat, J., V. Ramasubramanian, J.
Can a High Court refuse to call for a statement from the Customs Appellate Tribunal when a reference application is made? The Supreme Court addressed this question, clarifying the discretionary power of the High Court in customs reference cases. This judgment settles the interpretation of Section 130A of the Customs Act, 1962, specifically regarding the High Court’s role in directing the Customs Appellate Tribunal to refer questions of law. The three-judge bench, consisting of Justices Rohinton Fali Nariman, S. Ravindra Bhat, and V. Ramasubramanian, delivered this judgment.
Case Background
The case involves an appeal against an order of the High Court concerning a reference application made under Section 130A of the Customs Act, 1962. The Commissioner of Customs and Central Excise, Goa, filed an appeal against M/s Adani Exports Ltd. The core issue revolves around the interpretation of Section 130A of the Customs Act, specifically whether the High Court is mandated to call for a statement from the Customs Appellate Tribunal in every case where a reference application is made.
Timeline
| Date | Event |
|---|---|
| 14.03.2018 | Reference order to a larger Bench. |
| 11.02.2020 | Supreme Court delivered the judgment. |
Legal Framework
The primary legal provision under consideration is Section 130A of the Customs Act, 1962, which deals with applications to the High Court regarding orders of the Customs Appellate Tribunal.
Section 130A(1) of the Customs Act, 1962 states:
“130A. Application to High Court.- (1) The Commissioner of Customs or the other party may, within one hundred and eighty days of the date upon which he is served with notice of an order under section 129B passed before the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment), by application in the prescribed form, accompanied, where the application is made by the other party, by a fee of two hundred rupees, apply to the High Court to direct the Appellate Tribunal to refer to the High Court any question of law arising from such order of the Tribunal.”
Section 130A(4) of the Customs Act, 1962 states:
“(4) If, on an application made under sub-Section (1), the High Court directs the Appellate Tribunal to refer the question of law raised in the application, the Appellate Tribunal shall, within one hundred and twenty days of the receipt of such direction, draw up a statement of the case and refer it to the High Court.”
Arguments
The Revenue argued that the High Court is obligated to call for a statement from the Tribunal in every case where a reference is made under Section 130A of the Customs Act, 1962. They relied on a previous judgment of the Supreme Court in Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27], which stated that the High Court should call for a statement and then decide the matter.
The respondent did not make any submissions that are mentioned in the judgment.
| Main Submission | Sub-Submissions |
|---|---|
| Obligation to call for statement |
|
Issues Framed by the Supreme Court
The primary issue before the Supreme Court was whether the High Court is mandatorily required to call for a statement from the Tribunal in every case where a reference is made under Section 130A of the Customs Act, 1962.
Treatment of the Issue by the Court
| Issue | How the Court Dealt with It |
|---|---|
| Whether the High Court is mandatorily required to call for a statement from the Tribunal in every case where a reference is made under Section 130A of the Customs Act, 1962. | The Supreme Court held that the High Court has discretion and is not mandatorily required to call for a statement in every case. The word “if” in Section 130A(4) indicates discretion. |
Authorities
The following authorities were considered by the Court:
✓ Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27] (Supreme Court): This case was relied upon by the Revenue, which stated that the High Court should call for a statement and then decide the matter.
| Authority | How it was used |
|---|---|
| Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27] (Supreme Court) | Overruled. The Supreme Court found the judgment to be incorrect and held that the High Court is not mandatorily required to call for a statement from the Tribunal in every case. |
Judgment
| Submission | How it was treated by the Court |
|---|---|
| The High Court is obligated to call for a statement from the Tribunal in every case where a reference is made under Section 130A of the Customs Act, 1962. | Rejected. The Supreme Court held that the High Court has discretion and is not mandatorily required to call for a statement in every case. |
✓ Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27]: The Supreme Court overruled this judgment, stating that it was incorrect to hold that the High Court must call for a statement from the Tribunal in every case.
What weighed in the mind of the Court?
The Court’s decision was primarily influenced by the plain language of Section 130A(4) of the Customs Act, 1962, which uses the word “if,” indicating that the High Court has a discretionary power to call for a statement from the Tribunal. The Court emphasized that there is nothing in the text of Section 130A that mandates the High Court to call for a statement in every case. The Court also considered the fact that the previous judgment in Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27], which was relied upon by the Revenue, was not in line with the statutory language of Section 130A.
| Sentiment | Percentage |
|---|---|
| Statutory Interpretation | 60% |
| Discretionary Power | 30% |
| Overruling Precedent | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 20% |
| Law | 80% |
The Court’s reasoning is as follows:
Start: Application to High Court under Section 130A(1) of the Customs Act, 1962
High Court considers the application
High Court decides whether to direct the Appellate Tribunal to refer the question of law
If High Court directs the Appellate Tribunal, the Tribunal refers the question of law
High Court decides on the question of law
The Court explicitly stated that
“We find nothing in the language of Section 130A which first mandatorily obliges the High Court to call for a statement from the Tribunal before deciding any such application.”
The Court further clarified that
“What is clear on a reading of sub-section (4) is that the High Court has a discretion on the facts of each case either to do so or not to do so. This becomes absolutely plain from the first word in sub-section (4), namely, “if”.”
The Court concluded by stating that
“The judgment in Commissioner of Customs, Bangalore (supra) being incorrect is therefore overruled.”
Key Takeaways
- ✓ The High Court has discretion under Section 130A(4) of the Customs Act, 1962, to decide whether to call for a statement from the Customs Appellate Tribunal.
- ✓ The High Court is not mandatorily required to call for a statement in every case where a reference application is made.
- ✓ The Supreme Court overruled its previous judgment in Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27].
Development of Law
The ratio decidendi of this case is that the High Court has discretionary power under Section 130A(4) of the Customs Act, 1962, to decide whether to call for a statement from the Customs Appellate Tribunal. This judgment overrules the previous position of law established in Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27], thereby clarifying the High Court’s role in customs reference cases.
Conclusion
The Supreme Court’s judgment in Commissioner of Customs and Central Excise, Goa vs. M/s Adani Exports Ltd. clarifies that the High Court is not obligated to call for a statement from the Customs Appellate Tribunal in every case where a reference application is made under Section 130A of the Customs Act, 1962. The High Court has the discretion to decide whether to call for a statement based on the facts of each case. This ruling provides clarity on the procedural aspects of customs reference cases and overrules the previous judgment of the Supreme Court in Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27].
Category:
- Customs Act, 1962
- Section 130A, Customs Act, 1962
- Customs Appellate Tribunal
- High Court
- Reference Application
FAQ
Q: What is Section 130A of the Customs Act, 1962?
A: Section 130A of the Customs Act, 1962, deals with the procedure for applying to the High Court to direct the Customs Appellate Tribunal to refer a question of law arising from its order.
Q: Does the High Court have to call for a statement from the Tribunal in every case under Section 130A?
A: No, the Supreme Court has clarified that the High Court has the discretion to decide whether to call for a statement from the Tribunal. It is not mandatory in every case.
Q: What did the Supreme Court decide in this case?
A: The Supreme Court held that the High Court has discretionary power under Section 130A(4) of the Customs Act, 1962, and is not obligated to call for a statement from the Customs Appellate Tribunal in every case. The Supreme Court also overruled its previous judgment in Commissioner of Customs, Bangalore v. Central Manufacturing Tech. Institute [2002 (146) ELT 27].