2. A terrorist attack took place at Pulwama on 14 February 2019. On 16 February 2019, the Union Government issued a notification under Section 8A of the Customs Tariff Act 1975. The notification introduced a tariff entry by which all goods originating in or exported from the Islamic Republic of Pakistan were subjected to an enhanced customs duty of 200%. The precise time at which the notification was uploaded on the e-Gazette was 20:46:58 hours. Customs authorities at the land customs station at Attari sought to enforce the enhanced rate of duty on importers who had already presented bills of entry for home consumption before the enhanced rate was notified in the e-Gazette. Their action led to a challenge before the High Court of Punjab and Haryana. The consignments of import covered a diverse range of goods, ranging from dry dates to cement.

3. On 26 August 2019, a Division Bench of the High Court of Punjab and Haryana allowed a batch of writ petitions under Article 226 of the Constitution. The High Court held that since the importers, who had imported goods from Pakistan, had presented their bills of entry and completed the process of “self-assessment” before the notification enhancing the rate of duty to 200 per cent was issued and uploaded, the enhanced rate of duty was not attracted. The High Court held that the importers were liable to pay the duty applicable at the time when the bills of entry for home consumption were filed under Section 46 of the Customs Act, 1962. The Union of India was ordered to release the goods within seven days on the payment of duty ‘as declared and assessed’ without applying the notification enhancing the rate of duty on goods originating in Pakistan.

4. The Union of India is in appeal.

The submissions of the ASG are summarized below:

A (i) Under Section 15 of the Customs Act, the date for the determination of the rate of duty and valuation of imported goods, in the case of goods which are entered for home consumption under Section 46, is the date on which the bill of entry in respect of the goods is presented. The expression “on the date” comprehends the entire period of 24 hours, in this case beginning at midnight on 16 February 2019;

(ii) Section 15 does not make any reference to time and hence, irrespective of the point of time when a notification has been uploaded or published in the e-Gazette, the rate of duty leviable on imported goods cleared for home consumption is, by a legal fiction, the rate prevalent on the date of the presentation of the bill of entry;

(iii) Section 15 should be interpreted in light of the rule of literal construction, and the law has to be applied as it is; and

(iv) This case is not about the prospective or retrospective application of the Notification at issue. Rather, it is the simple intent of Parliament to consciously make the date on which the Notification is issued as the date for determination of the rate of duty (as applicable), which this court must uphold.

14. Opposing the above submissions, Mr PS Narasimha, learned Senior Counsel submitted that “the General Clauses Act”

A (i) The levy of customs duty under Section 12 of the Customs Act is at the rates prescribed under the Customs Tariff Act;

(ii) Under Section 15 of the Customs Act, the rate of duty is the rate prevalent on the date of the presentation of the bill of entry under section 46 of the Customs Act, where goods are cleared for home consumption; and

(iii) The importers fulfilled the twin requirements of the goods having entered on 16 February 2019 and the bill of entry having been filed before 20:46 hours when notification 5/2019 was issued. The bills of entry had to be assessed to customs duty at the rate which was in existence prior to the publication of the notification.

B (i) Notification 5/2019 having been published at 20:46:58 hours on 16 February 2019 it was never updated on the EDI portal;

(ii) Notification 5/2019 would apply only to bills of entry for home consumption presented after 20:46:58 hours on 16 February 2019 or upon amendment in the online EDI portal of ICEGATE;

(iii) A notification issued under the provisions of Section 8A (1) of the Customs Tariff Act cannot have a retrospective character; and

(iv) Subordinate legislation is not retrospective unless the statute under which it has been framed, expressly or by necessary implication, imports retrospectivity. Subordinate legislation cannot always be equated as an ‘Act of legislature’ for the interpretation of ‘Central Act’ as defined by the General Clauses Act.

17. Section 12 specifies that the rates of duty on goods imported and exported are those which are provided in the Customs Tariff Act or in any other law. Section 12 does not indicate when the duties under those enactments will come into being or force. Section 15 specifies the date with reference to which the rate of duty and tariff valuation of imported goods is determined. Clauses (a), (b) and (c) of sub-section (1) of section 15 contain distinct provisions which apply to:

(i) goods entered for home consumption under Section 46;

(ii) goods cleared from a warehouse under Section 68; and

(iii) other goods.

Where goods are entered for home consumption under Section 46, the rate of duty and tariff valuation is to be the rate and valuation “in force” “on the date on which” a bill of entry in respect of such goods is presented under that Section. In relation to the rate of duty, the effect of clause (a) of Section 15(1), is that the rate which is in force on the date on which a bill of entry is presented under Section 46 (in the case of goods entered for home consumption) is applicable to the imported goods. When the duties come into force under the enactments imposing them is dependent on and defined by the terms of the particular enactment.

34. The decisions to which a reference has been made earlier, have construed the expression “day” or, as the case may be, “date” in varying contexts ranging from the law governing elections, insurance and limitation. A general position in law has not been laid down that is divorced from subject, context and statute. In interpreting the statute, the court is guided by the terms of its provisions, the purpose underlying their adoption and the scheme which emerges from interrelated provisions and the nature of the provision. The court in the present case is interpreting the terms of a fiscal levy. The court here has to construe the scheme and provisions of the Customs Act and their relationship with the provisions of the Customs Tariff Act. The provision which falls for construction is Section 15(1) of which both clauses (a) and (b) use the expression “on the date”. In clause (a), the rate of duty and valuation is the rate and valuation in force on the date on which a bill of entry is presented under Section 46 where goods are entered for home consumption. Under Clause (b), where goods are cleared from a warehouse under Section 68 it is the date on which a bill of entry for home consumption is presented under that Section which is determinative of the rate and valuation.

36. It is with these principles of interpretation in mind that we must evaluate the submission which was urged by Mr Nataraj, on behalf of the Union, that upon the issuance of a notification enhancing the rate of duty under Section 8A of the Customs Tariff Act, the date on which the notification was issued will govern the rate applicable to all bills of entry, including those which were presented before the enhanced rate was notified. The submission cannot be accepted for several reasons. For one thing, it misses the significance of the expression “in force’ which has been employed in the prefatory part of Section 15(1). A notification under Section 8A(1) of the Customs Tariff Act, even though it has the effect of amending the First Schedule, takes effect prospectively. Section 8A does not confer upon the notification an operation anterior to its making. In the language of the law, its operation is prospective. To accept the submission of the ASG would mean that the notification under Section 8A would have effect prior to its making, something which Parliament has not incorporated by language or intent. If, as we hold, the notification operates for the future beginning with the point of its adoption, it cannot operate to displace the rate of duty which is applicable when a bill of entry is presented for home consumption under Section 46. The submission of the Union cannot be accepted in view of the provisions contained in Section 46 for the presentation of a bill of entry for home consumption in an electronic form on the customs automated system. While making that provision, specifically by means of an amendment by Act 8 of 2011 and later by the Finance Act of 2018, Parliament used the expression “in such form and manner as may be prescribed.” Regulation 4(2) of the Regulations of 2018 provides when the bill of entry shall be deemed to have been filed and self-assessment completed. The legal fiction which has been embodied in Regulation 4(2) emanates from the enabling provisions of Section 46. The provisions of Sections 15(1)(a), 17, 46(1) and 47(2)(a) constitute one composite scheme. As a result of the modalities prescribed for the electronic presentation of the bill of entry and self-assessment after the entry of the electronic declaration on the customs automated system, a bill of entry number is generated by the EDI system for the declaration. Regulation 4(2) provides for a deeming fiction in regard to the filing of the bill of entry and the completion of self-assessment. In the context of these specific provisions, it would do violence to the overall scheme of the statute to interpret the language of Section 15(1)(a) in the manner in which it is sought to be interpreted by the ASG. The submission of the ASG, simply put, is that because notification 5/2019 was issued on 16 February 2019, the court must regardless of the time at which it was uploaded on the e-Gazette treat it as being in existence with effect from midnight or 0000 hours on 16 February 2019. The consequence of this interpretation would be to do violence to the language of Section 8A(1) of the Customs Tariff Act, and to disregard the meaning, intent and purpose underlying the adoption of provisions in the Customs Act in regard to the electronic filing of the bill of entry and the completion of self-assessment.

39. A notification which is issued in terms of the provisions of Sub-section (1) of Section 8A is akin to the exercise of a delegated legislative power. The Central government is empowered to issue a notification enhancing the rate of duty where it is satisfied that immediate action is necessary to increase the rate of customs duty on an article specified in the First schedule. The effect of the notification is to amend the First schedule to the Customs Tariff Act in respect of the import duty leviable on an article under Section 12 of the Customs Act. In issuing a notification under Sub-section (1) of Section 8A, the Central government exercises power as a delegate of the legislature. The issue now to be considered is whether the notification that was issued by the Central government under Section 8A(1) at 20:46:58 hours on 16 February 2019 took effect commencing from 0000 hours on that day. The ASG relied on the provisions of the General Clauses Act in support of his submission that it did.

J. General Clauses Act

40. Section 5(3) of the General Clauses Act 1897 provides thus: “(3) Unless the contrary is expressed, a Central Act or Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement.” The above provision applies to a “Central Act” or “Regulation”. Hence, the above provision makes it abundantly clear that it is only a ‘Central Act’ or ‘Regulation’ which comes into operation immediately on the expiration of the day preceding its commencement……..

43. The above analysis is based on a textual reading of the two definitions – those of a “Central Act” and “Regulation”. The precedent on the subject confirms the analysis. This Court has held that the mere fact that a piece of delegated legislation has been issued in exercise of a legislatively conferred power does not bring the delegated legislation within the ambit of the phrase “Central Act” as defined in Section 3(7) of the General Clauses Act.

46. Notification 05/2019 was issued by the Central Government under the delegated authority to increase emergency tariff duties under Section 8A of the Customs Tariff Act, 1975. The notification has been issued in pursuance of a statutory power. The notification has the effect of enhancing the rate of duty prescribed in the First Schedule to the Customs Tariff Act. That does not, transform the notification which has been issued in pursuance of a statutory authority into a ‘Central Act’.

K. Information Technology Act, 2000

50. In the above context, it is to be noted that the rate of customs duty is determined on the date on which the bill of entry for home consumption is presented (Section 15). The presentation of the bill of entry has to be made electronically (Section 46 read with the 2018 Regulations). The presentation is required to be made on the customs automated system. The provisions in the Customs Act for the electronic presentation of the bill of entry for home consumption and for self-assessment have to be read in the context of Section 64 of the Information Technology Act which recognizes “the dispatch of an electronic record” and “the time of receipt of an electronic record”. The legal regime envisaging the electronic presentation of records, such as the presentation of a bill of entry, has been imparted precision as a result of the enabling framework of the Information Technology Act under which these records are maintained. The presentation of the bill of entry under Section 46 is made electronically and is captured with time stamps in terms of the requirements of the Information Technology Act read with Rule 5(1) of the Information Technology (Electronic Service Delivery) Rules 2011.

M. Retrospectivity

62. Section 8A of the Customs Tariff Act confers an emergency power upon the Central government to increase import duties “in respect of any article included in the first schedule”. By the notification dated 16 February 2019, the Union Ministry of Finance in the Department of Revenue introduced a distinct tariff item – 980 60 000 – encompassing “all goods originating in or exported from the Islamic Republic of Pakistan” for which a rate of duty of 200 per cent has been prescribed. The exercise of the power under Section 8A is contingent on the satisfaction of the Central government that (i) the duty on any article in the first schedule should be increased; and (ii) that circumstances exist which render it necessary to take immediate action. The Central government in the exercise of this power may by a notification in the official gazette direct an amendment of the schedule to be made “so as to provide for an increase in the import duty leviable on such article to such extent as it thinks necessary”. Section 8A does not contain language indicative of a legislative intent to authorize the Central government to relate back the exercise of the power to a period prior to its exercise. The exercise of the power under Section 8A (2) is governed by the prescriptions contained in sub-sections (3) and (4) of Section 7. The conferment of the power has not been made retrospective either expressly or by necessary implication.

63. Section 8A enables the Central government to increase the rate of duty on an article in the first schedule in emergent situations. The notification dated 16 February 2019 adds a new entry altogether. Such an exercise may well be regarded as relatable to the provisions of Section 11A. Section 11A confers a power on the Central Government to amend the First schedule in public interest. Section 8A on the other hand contemplates an increase in duty on an article contained in the First schedule. Notification 5/2019 introduces a new tariff entry to provide for a duty of 200% on all articles originating in or exported from Pakistan. However, this aspect of the matter need not be explored further for the reason that neither before the High Court, nor before this Court, was the challenge to the vires of the notification pressed during the course of the submissions. The legal position which needs emphasis is that the entrustment of the power to issue a notification enhancing the rate of duty under Section 8A is not accompanied by a statutory entrustment of authority to the Central government to exercise it with retrospective effect. An enhancement of the rate of duty pursuant to the exercise of power under Section 8A can only be prospective.

64. Parliament and the state legislatures are entrusted with the power to enact legislation under Articles 245 and 246 of the Constitution. Parliament and the state legislatures possess the plenary power to enact legislation, with prospective and retrospective effect, subject to due observance of constitutional requirements. A notification issued by the government pursuant to the conferment of statutory power is distinct from an act of the legislature. Administrative notifications, even when they are issued in pursuance of an enabling statutory framework, are subject to the statute. Delegated legislation does not lose its character even when it has the same force and effect as if it is contained in the statute. This is a settled position of law…….

N. Summation

66. The imposition of a tax encompasses three stages. The locus classicus on the subject is embodied in the dictum of Lord Dunedin in Whitney vs. Commissioners of Inland Revenue36 which has been consistently applied in the decisions of this court. There is, first, the declaration of liability which determines “what persons in respect of what property are liable”. The second is the stage of assessment. Liability, it is well settled, does not depend on assessment since ex-hypothesi, that has already been fixed. Assessment particularizes the exact sum which a person is liable to pay. Third (and the last) are the methods of recovery if a person who is taxed does not voluntarily pay. (See in this context the decisions of the Federal Court in Chatturam v. CIT, Bihar, (1947) FCR 116 at 126 and of this Court in A V Fernandez vs. State of Kerala, 1957 SCR 837 at para 39  and Deputy CTO vs. Sha Sukraj Peerajee, (1967) 3 SCR 661 at para 5.

67. In the present case the twin conditions of Section 15 stood determined prior to the issuance of Notification 5/2019 on 16 February 2019 at 20:46:58 hours. The rate of duty was determined by the presentation of the bills of entry for home consumption in the electronic form under Section 46. Self-assessment was on the basis of rate of duty which was in force on the date and at the time of presentation of the bills of entry for home consumption. This could not have been altered in the purported exercise of the power of re-assessment under Section 17 or at the time of the clearance of the goods for home consumption under Section 47. The rate of duty which was applicable was crystallized at the time and on the date of the presentation of the bills of entry in terms of the provisions of Section 15 read with Regulation 4(2) of the Regulations of 2018. The power of reassessment under Section 17(4) could not have been exercised since this is not a case where there was an incorrect self-assessment of duty. The duty was correctly assessed at the time of self-assessment in terms of the duty which was in force on that date and at the time. The subsequent publication of the notification bearing 5/2019 did not furnish a valid basis for re-assessment.

68. For the above reasons, we have come to the conclusion that there is no merit in the appeals. The appeals shall stand dismissed. There shall be no order as to costs. 69 Pending application(s), if any, stands disposed of.