Goenka Engineering India (P) Ltd. vs Union Of India & Ors.
1998 Latest Caselaw 858 Del

ORDER

R.C. Lahoti, J.

1. The petitioner imported certain spare parts and on 30-4-92 deposited customs duty of Rs.1,99,280/- for these goods. The bill of entry was filed on 26.3.1992. Subsequently, the petitioners became aware that the spareparts ported by them were exempt from payment of customs duty under the notification No. 106/92 dated 1.3.92. The petitioners made an application for refund of duty which was received by the authority competent to make the refund i.e. respondent No.2 on 6.11.1992. The application has been rejected as having been made not within the prescribed period of limitation of six months under Section 27 of the Customs Act, 1962.

2. As against the order of the Assistant Collector of Customs ( Refund) the petitioner preferred an appeal to the Collector of Customs (Appeal) which has been dismissed. A further appeal preferred to CEGAT has also been dismissed.

3. The core of controversy is that according to the petitioner the application for refund was made on 29.9.1992 on which date the application was prepared and posted under certificate of posting. According to the learned counsel for the petitioner, the limitation should have been calculated upto the date of posting of the application for refund without regard to the date on which it was received by the Assistant Collector of Customs. According to the respondents the application should have reached the hands of the Assistant Collector of Customs within the period of limitation without which it was certainly barred by time.

4. The relevant part of Section 27 of the Customs Act, 1962 is extracted and reproduced hereunder:

27. Claim for refund of duty.-(1) Any person claiming refund of any duty and interest, if any, paid on such duty-

(i) paid by him in pursuance of an order of assessment; or

(ii) borne by him may make an application for refund of such duty and interest, if any, paid on such duty to the Assistant Collector of Customs-

(a) in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, before the expiry of one year;

(b) in any other case, before the expiry of six months, from the date of payment of duty and interest, if any, paid on such duty, in such form as may be specified in the regulations made in this behalf..

 

      (2) If on receipt of any such application, the Assistant  Collector  of  Customs is satisfied that the whole or any part  of  the 
     duty  and interest, if any, paid on such duty paid by the  applicant  is  refundable, he may make an order  accordingly  and  the amount so determined shall be credited to the fund:       xxxx xxxx xxxx 
 

5. The learned counsel for the petitioners has submitted that the word 'make' as occurring in Section 27(1) is not defined. This word has to be read in contra-distinction with several similar words used elsewhere in the context of submitting of applications. The words so used are 'deliver' in Section 30, 'presenting' in Section 46, 'presented' in Section 15, 'receipt' in Section 27A and S.27(2). If the intention of the legislature would have been to calculate the period of limitation by reference to the date of receipt of the application by the Assistant Collector of Customs then nothing prevented the Parliament from choosing an appropriate word in place of 'make' in sub-section (1) of Section 27. Placing reliance on Cheda Industries Vs. Collector of Customs, , the learned counsel submitted that if any vague or indefinite word has been used in a fiscal law like the Customs Act, then it should be so interpreted as to benefit the tax payers. Moreover, the petitioner having suffered the payment of duty on an erroneous impression that it was so payable while it was not so in view of the exemption notification, the respondent should not have guided themselves by the technical plea of limitation and should have allowed the claim for refund which only was just and equitable.

6. The learned counsel for the respondents has supported the impugned orders and submitted that the law of limitation is enacted in public interest so as to bring to an end all controversies and uncertainties by a certain date. The underlying principle and policy behind the statutory bar taking away jurisdiction of the Assistant Collector of Customs to make a refund on expiry of the time prescribed could not have been given a go-bye in the name of equity. The law is explicit and clear. Making an application contemplates a person who moves an application and a person who receives and deals with the same. 'Making an application' has to be read along with 'to the Assistant Collector of Customs' and if so read, the meaning is clear that the act of making an application is not complete unless it reaches the hands of the Assistant Collector of Customs.

7. The entire controversy centres around what meaning is to be assigned to 'make an application'. Black's Law Dictionary (6th Edn) defines 'make' to mean, inter alia, 'to do, perform or exclude, as to make an issue, to make oath, to make a presentment'. Loosely interpreted, make may amount to bringing something into existence but in the context of 'make an application....to the Assistant Collector of Customs', the phrase has to be assigned a meaning akin to presentation of the application.

8. The phrase 'issue of an order by Government' in the context of renewal of agreement came up for the consideration of a Division Bench of High court of Madhya Pradesh in Shiv Saran Lal Vs. State of M.P., . The learned Chief Justice ( G.P. Singh, CJ) spoke for the Division Bench as under:- "What is the meaning of "issue of an order by Government" in the context of this sub-clause? In our opinion,in the context in which these words have been used, they mean service of the order on the purchaser by the ?Government. In other words, merely passing of an order by the Government before 31st of January is not enough and the order of renewal must also be communicated to or served on the purchaser by 31st January so as to make it effective. The whole object of clause (1) is that the purchaser must know by 31st of January whether the Government has decided to renew the agreement so that he may arrange his business accordingly. This object cannot be achieved unless the order of renewal is communicated to the purchaser by 31st of January. Our conclusion that the word `issue' used in clause (1) means communication or service and not merely passing of an order is further supported by a look of clause (3) which requires the purchaser to execute a fresh agreement within 15 days from the date of the issue of the order granting renewal. Now if the purchaser is to execute an agreement within 15 days from the date of passing of the order,m in most of the cases it would he impossible for him to execute the agreement because the order of the Govt after it is passed, is normally sent to the Conservator of Forests and then to the Divisional Forest Officer for communication to the purchaser and the purchaser in the normal course does not receive the order before 15 days of its passing. This shows that the words "issue of the order" as used in clause (3) also mean communication or service of the order granting renewal and not merely passing of the order by the Government. it can be presumed that the Draftsman of the Agreement used the word "issue" in clause (1) and (3) in the same sense. The use of the word "issue" to denote service is also not uncommon. In Koon Wing Lau Vs. Calvell, 1950 All LR 97, it was held in the context of Section 4 of the Immigration Act, 1901-48 (Australia) that a certificate which is written out and signed but not delivered to the immigrant is not issued within the meaning of that section:[ See Strouds Judicial Dictionary, 4th Edn, Vol 3 p. 1433] In Banarsi Debi Vs. I.T.Officer, . It was pointed out by the Supreme Court that in the legislative practice of our country the expressions `issued' and `served upon' are sometimes used to convey the same idea. Our conclusion, therefore, is that the context of the renewal lause with which we are concerned in this case, the word `issue' has been used therein to denote service. So an order of renewal which is passed before 31st of January by the Government but is communicated after 31st January to the purchaser cannot be said to have been issued by 31st January as required by the renewal clause. The order of renewal in the instant case, in our opinion was invalid as it was not communicated to the petitioner by 1st January, 1969. "

8.1 It is noteworthy that the word 'issue' ordinarily means 'the giving out' or 'sending out' but in the context it was interpreted to mean communication or service of the order.

9. In Raja Masih Chandra Raj Singh Vs. The Deputy Land Acquisition Officer , the expression 'the date of award' as occurring in Section 18(2), Proviso (b) of Land Acquisition Act, 1894 and the expression ' the date of the order' as occurring in U.P. Motor Vehicles Taxation Act, 1935 came up for the consideration of their Lordships. It was held that communication to or making it known to the party concerned was of essence and that would be 'the date'. Mere writing an order and keeping it in the file kept in the office is no order in the eye of law: it must be communicated.

10. Section 66(1) of the Income-tax Act, 1922 required an application under that provision of law to be made to the Tribunal. A division Bench of Allahabad High Court has in Aligarh District Wholesale Cloth Dealers' Syndicate, Vs. CIT Uttar Pradesh, held that mere delivery of the application to the postal authorities after addressing the cover containing the application to the Tribunal or the Registrar thereof cannot be held to comply with the requirement of Section 66 (1) because no application can be said to be made to the Tribunal until it is presented to the Tribunal.

11. It is noteworthy that the Customs Act or the rules made thereunder do not provide for an application for refund being made by post to the Assistant Collector of Customs. There is not even any departmental order or instruction to that effect. When law contemplates making or presentation of an application by post then the post office becomes an agent of the addressee and delivery of the application in a duly paid and properly addressed cover to the post office amounts to presentation of application to the addressee. In the absence of such a provision the post office acts as an agent of the person communicating and therefore entrusting the application to the postal agency does not amount to making and presenting of the application to the addressee.

12. Section 27 of the Customs Act, 1962 prescribes the period of limitation for making an application for refund. The application has to be made before the expiry of one year or six months, as the case may be. The concept behind prescribing limitation is recognition of lapse of time as destructive of rights and remedies, instead of merely as evidence for and against their existence. To avoid the difficulties, complications and other consequences flowing from lapse of time, periods of limitation are prescribed. Away from the rule of delay and laches, rule of limitation prescribes a dead line beyond which one may not relax except on pain of losing remedy and sometimes the right itself. That is why it is said that statute of limitation and prescription are statutes of peace and repose. The object of statute of limitation is preventive and not productive. It introduces a statutory bar after a certain period and gives a hiatus to suits to enforce an existing right.

13. Making of an application is not merely preparing of application. Not textual but contextual interpretations is needed. Element of communication is a must. Making of an application, to be effective, has to be presentation of application, that is, the prayer contained in the application becoming available for consideration by the authority competent to deal with it. That is the meaning the phrase as occurring in Section 27 of Customs Act has to be assigned.

14. We are, therefore, clearly of the opinion that an application for refund of duty must reach to the Assistant Collector of Customs before the expiry of the prescribed period of one year or six months as the case may be. The application claimed to have been sent by post before the expiry of the period but reaching the Assistant Collector of Customs after such expiry is barred by time and hence could not have been entertained.

15. There is another aspect of the matter. The petitioner is in Delhi and so are the respondents from whom the petitioner is claiming refund. The application is said to have been sent through post under certificate of posting on 29.9.92. It has reached the Assistant Collector of Customs on 6.11.92. It took more than one month and seven days to reach from one point to the other point within Delhi. The learned counsel for the respondent expressed grave doubts about the genuineness of the certificate of posting and for that purpose invited attention of the court to a Division Bench decision of Patna High Court in Baidyanath vs. The State 1961 (1) CrLJ 544, wherein it has been observed : "It is not at all difficult to obtain postal seal marks on cards with wrong dates." However, we do not wish to dwell any further on this aspect inasmuch as none of the respondents has chosen to form and express a definite opinion on the genuineness or otherwise of the certificate of posting. Still we would like to observe that there is substance in the submission of the learned counsel for the respondents that nothing had prevented the petitioners in sending the application at least through registered AD post inasmuch as the subject matter thereof was refund of a substantial amount of duty.

16. No fault can be found with the view taken by the respondents on the petitioner's application for refund of duty. The petition is without any merit. It is dismissed though without any order as to costs.