Customs Act, 1962 – ss.12, 25 – Special Economic Zones Act, 2005 – s.30 – SEZ Rules, 2006 – r.47(3) – Finance Act, 2010 – Firstly, what, in law, did the Gujarat High Court decide in its judgment dated 15 July 2015, and what is the true scope of that decision – Secondly, whether, in the period subsequent to 15 September 2010 and prior to 16 February 2016, there was any material changes in the statutory position or factual footing that would justify a different result from that arrived at in 2015 judgment – Thirdly, whether the High Court, in its impugned judgment of 28 June 2019, was justified in holding that no relief could be granted to the appellant in the absence of a specific and fresh challenge to Notification Nos. 91/2010Cus. and 26/2012-Cus. – Fourthly, whether, in view of the 2015 declaration of law and its affirmation, the High Court in 2019 was at liberty, being a coordinate Bench, to deny relief by narrowing the effect of the earlier pronouncement: Held: The Gujarat High Court’s judgment dated 15 July 2015, as a matter of law, declared that customs duty could not be levied on electrical energy cleared from the appellant’s SEZ unit to the DTA, having regard to the absence of a lawful charging event u/s.12 of the Customs Act, the limited scope of s.25 of that Act, the parity requirement of s.30 of the SEZ Act and the constitutional constraints of Arts.14 and 265 is squarely applicable to the judgment and order dated 28.06.2019 – That declaration was not confined in principle to Notification No.25/2010-Cus. or to the period ending 15 September 2010 – It went to the authority to levy customs duty on SEZ-to-DTA electricity clearances in the statutory setting then obtaining – The subsequent notifications namely, Notification No.91/2010-Cus. prescribing ten paise per unit and Notification No.26/2012-Cus. prescribing three paise per unit, did not create a new levy on a new footing – They merely continued the same levy in altered form – The change in arithmetical rate by prospective character does not cure the lack of authority in principle – There was no material change in law or fact between 15 September 2010 and 15 February 2016 that would justify a departure from the 2015 ruling – Section 30 of the SEZ Act remained unaltered – Imported electrical energy bore no customs duty under the Customs Tariff Act, 1975 – The same parity logic applied to S.C.A. No.2233 of 2016 disposed of on 28.06.2019 – The Division Bench of the High Court in 2019, being a co-ordinate Bench, was bound either to follow the 2015 decision or, if it doubted its correctness or applicability, ought to have referred the question to a larger Bench – It could not have circumvented that discipline by artificially narrowing down the earlier ruling – Its refusal to extend the 2015 declaration to the later period was therefore contrary to law – Once it is held that the levy itself was without authority of law, the State cannot retain the amount collected under such levy – Restitution is a necessary incident of the finding of illegality – Accordingly, the impugned judgment of the High Court dated 28 June 2019 cannot be sustained. [Para 86] Customs Act, 1962 – ss.12, 25 – Special Economic Zones Act, 2005 – s.30 – SEZ Rules, 2006 – r.47(3) – Finance Act, 2010 – Whether the levy of customs duty on electrical energy cleared by the appellant from its SEZ unit to the DTA during the relevant period, as sought to be enforced through Notification No. 25/2010-Cus., Notification No. 91/2010-Cus., Notification No. 26/2012-Cus., and similar instruments, was without authority of law:
Held: The levy of customs duty on electrical energy cleared by the appellant from its SEZ unit to the DTA during the relevant period, as sought to be enforced through Notification No.25/2010-Cus., Notification No.91/2010-Cus., Notification No.26/2012-Cus., and similar instruments, was without authority of law. [Para 87] Judicial Discipline – Decision by Co-ordinate Bench of the High Court:
Held: When a coordinate Bench of a High Court has already determined a question of law, a subsequent Bench of equal strength is bound to follow that view; if it doubts its correctness, the only permissible course is to refer the matter to a larger Bench. [Para 80] Administrative Law – Where a court of competent jurisdiction has struck down the foundation of a levy as ultra vires: Held: In administrative law, where a court of competent jurisdiction has struck down the foundation of a levy as ultra vires, that declaration renders all successive and derivative attempts to enforce the same levy equally unenforceable, unless the statutory or factual basis has materially changed – The State cannot defend the continuation of the same vice by saying, this is a different notification number – The Court is bound to look past the label and examine the substance. [Para 69]
Customs Act, 1962 – ss.12, 25 – Special Economic Zones Act, 2005 – s.30 – SEZ Rules, 2006 – r.47(3) – Finance Act, 2010 – Where a levy has been declared to be without authority of law: Held: Where a levy has been declared to be without authority of law, a subsequent petition seeking enforcement of that declaration and consequential relief cannot be treated as a fresh challenge merely because the levy is sought to be continued under later or similar notifications – In the absence of any new statutory basis, such notifications do not create a new cause of action – A constitutional court is entitled to grant effective relief without insisting upon separate challenges to each such notification. [Para 74]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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