The bench comprising of Justice Navin Sinha and Justice Krishna Murari passed judgment in the case titled M/S. Granules India Ltd. v. Union of India and Others.
The Appellant imported 96 tons of the chemical “Acetic Anhydride” under three Bills of Entry 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 various Customs Notification. The respondents while considering the reply to the show cause notice and fixing liability for payment of customs duty did not make any reference to their notification dated 18.03.1994. The Commissioner (Appeals) on the same reasoning rejected the appeal leading to the institution of the writ application.
The High Court dismissed the writ application stating that no mandamus for exemption could be issued “the consignments were admittedly imported before the clarificatory notification dated. Thus, there was no arbitrariness on part of the respondent. The appellant preferred a review application inter alia relying upon a Division Bench Order of the Andhra Pradesh High Court in Shri Krishna Pharmaceuticals Limited v. Union of India, (2004) 173 ELT 14. Rejecting the plea, the High Court opined that since the appellant did not produce the clarificatory notification along with the writ petition and neither were the respondents aware of the clarificatory notification the appellant was not entitled to any relief.”
The Supreme Court of India was of the considered opinion that the Order of the High Court is completely unsustainable and stated that,
“It is unfortunate that the High Court failed to follow its own orders in a similar matter. The High Court further gravely erred in holding that the authorities of the State were also unaware of the clarificatory notification and neither did the appellant bring it 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 State cannot behave like a private litigant and rely on abstract theories of the burden of proof. The State acts through its officer 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 set aside the Order of the High Court. The Court explained, “it is absolutely no defence of the State authorities to contend that they were not aware of their own notification.”
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