M. Satyanarayana Murthy, J.:— W.P. No. 4533 of 2019 is filed for issue of writ of mandamus to declare Section 25(4) of the Customs Act, 1962 as amended by the Finance Act, 2016 as arbitrary, illegal, ultravires and unconstitutional and strike down the same accordingly; and consequently declare the Notification No. 29/2018-Cus dated 01.03.2018 being illegal, arbitrary, ultravires and infringing the fundamental rights of the petitioner to trade and otherwise bad in law.

2. W.P. No. 4534 of 2019 is filed to issue writ of mandamus calling for the records pertaining to re-assessment of the subject Ex-Bond Bills of Entry viz., Bills of Entry No. 5401915 and 5402027, both dated 01.03.2018 and Bills of Entry No. 5419273, 5419349, 5419387 and 5419452, all dated 02.03.2018 by the respondents asking the petitioner to pay higher rate of duty for clearance of the subject goods and quash the same holding that higher rate of duty is not applicable and consequently direct the respondents to refund the petitioner, an amount of Rs. 2,88,16,200/- with interest paid by the petitioner from the date of deposit till the date of payment.

3. The petitioner in both the petitions is M/s. Ruchi Soya Industries Limited, and it is a public limited company, duly incorporated under the Indian Companies Act. The petitioner company is engaged in the business of solvent extraction, refining of edible oils, manufacture of soya food products, import, export and trading of agri-commodities. The petitioner company has been importing crude vegetable oils in bulk from different parts of the world for the last more than two decades, maintaining various manufacturing units for refining edible oils like refined soya bean oil, refined palmolein, vanaspati and other oils.

4. The petitioner entered into a contract dated 18.01.2018 with its foreign supplier “Just Oil and Gran Pte, Ltd.” Singapore for purchase of 9500 Metric Tonnes (+/-2%) of Crude Palm Oil of Edible Grade in bulk which will hereinafter be referred, as “the subject goods”. Pursuant to and in terms of the aforesaid contract, the aforesaid foreign supplier of the petitioner, shipped 4000 Metric Tonnes of the subject goods vide four Bills of Lading No.C18/DMI/KK-01 to No.C18/DMI/KK-04 all dated 06.02.2018 as per vessel ‘MT CAMDEN VOY. 18’ from the port of Dubai, Indonesia with port of discharge being Kakinada, Andhra Pradesh.

5. The petitioner further contended that the petitioner filed Six Ex-Bond Bills of Entry under Section 68 of the Customs Act, 1962, for clearance of the subject goods for home consumption viz., Bills of Entry Nos. 5401915 and 5402027, both dated 01.03.2018 and Bills of Entry No. 5419273, 5419349, 5419387 and 5419452, all dated 02.03.2018, the subject goods shipped had initially filed Warehousing Bill of Entry No. 5295797 dated 21.02.2018. The subject goods merit classification under Customs Tariff Heading 15111000 of the Customs Tariff Act and the subject goods are covered by Entry 57II(A) of the Notification No. 50/2017-Cus dated 30.06.2017 and the petitioner was required to pay, 30% basic customs duty. Further, vide Notification No. 50/2017-Cus dated 30.06.2017, rate of duty from 7.5% (basic customs duty) was increased from time to time and by the date of import, the rate of duty was 30%, vide Notification No. 87/2017-Cus dated 17.11.2017.

6. It is further contended that, the petitioner filed the aforesaid two Ex-Bond Bills of Entry both dated 01.03.2018 claiming classification and rate of duty under Section 68 of the Customs Act, 1962 seeking clearance of 2000 Metric Tonnes of subject goods for home consumption. The subject goods with regard to Ex-Bond Bills of Entry dated 01.03.2018 were assessed on 01.03.2018, levied @ 30% basic customs duty, where the duty structure with regard to the subject goods was 30% (basic customs duty) plus 10% (social welfare surcharge).

7. The two Ex-Bond Bills of Entry both dated 01.03.2018 were assessed as claimed by the petitioner and the records were updated in the department on 02.03.2018. Vide Notification No. 29/2018-Cus (purportedly dated 01.03.2018) issued under Section 25(1) of the Customs Act, 1962, basic customs duty on the subject goods was increased from 30% to 44%. It is contended that with regard to the balance 2000 Metric Tonnes of the subject goods, the petitioner filed four Ex-Bond Bills of Entry No. 5419273, 5419349, 5419387 and 5419452, all dated 02.03.2018 for clearance of the subject goods for home consumption.

8. The petitioner pursued the matter with the department for clearance of the subject goods, but to no avail, as the department was insisting upon the petitioner to pay enhanced rate of duty for permitting clearance of the subject goods. It is also contended that the Notification No. 29/2018-Cus was published in the Official Gazette only on 06.03.2018 and the same was made available to the public only on 06.03.2018, hence the notified rate is not applicable to the issue on hand. The revenue was not permitting clearance of the subject goods as requested by the petitioner, however, as the subject goods were urgently needed by the petitioner, amongst others, on account of business commitments, and to run the manufacturing units, the petitioner was incurring lot of expenses everyday on various counts, paid duty @ 44% under protest.

9. The main contention of the petitioner is that, when the duty payable on the imported goods is increased and kept in the office of the respondents without publication, no knowledge as to the increase of rate of duty is attributable to anyone, at least the concerned. When the notification is not published in the gazette, the notification is not deemed to have came into force in view of Section 6 of General Clauses Act in the absence of specific provision in the Customs Act. But, the Customs Act itself specified as to the date of commencement of such notification. However, sub-section (4) of Section 25 of Customs Act is accepted as it is, it may create any amount of confusion and contrary to the intention of the Legislature in incorporating sub-sections (1) and (2A) of Section 25 of the Customs Act, as such there is any amount of contradiction between subsections (1)(2A) and (4) of Section 25 of the Customs Act. Giving effect to the notifications from the date of issue of notification, for publication in the gazette will have serious consequences if it is not published in the gazette on the same day and it is nothing but arbitrary exercise of power by the Legislature, creating confusion, and inconvenience to the persons dealing with the import business.

10. Sub-section (4) of Section 25 of the Act is amended as per Notification No. 28/2018-Cus, published on 06.03.2018 giving effect from 01.03.2018. The amendment of sub-section (4) of Section 25 is arbitrary, illegal and contrary to purport of sub-sections (1) and (2A) of Section 25 of the Act, seeks declaration as stated supra.

11. In W.P. No. 4534 of 2019, the petitioner sought for a consequential direction for refund of the amount of Rs. 2,88,16,200/- paid, with interest, as the petitioner paid in excess of the rate of customs duty applicable as on the date of presentation of Bills of Entry referred above. But the allegations made in the petition are one and the same, therefore, to avoid repetition, the entire contents of the affidavit are not extracted.

12. The 1 and 2 respondent filed separate counters, but raised identical contentions in both the counter affidavits, denying material allegations, inter alia contending that as per Section 15 of Customs Act, 1962 - (1) the rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force:—

(a) in the case of goods entered for home consumption under Section 46, on the date on which a bill of entry in respect of such good is presented under that section;

(b) in the case of goods cleared from a warehouse under Section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section.

13. The respondents admitted about the issue of notification increasing the customs duty on crude palm oil of edible grade from 30% to 44% by amending the principal notification No. 50/2017-Cus dated 30.06.2017 by Notification No. 29/2018-Customs dated 01.03.2018 exercising power under Section 25(1) of Act 1962. The Principal Notification No. 50/2017 dated 30.06.2017 was issued and published on 30.06.2017, in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i). The Notification No. 29/2018-Customs dated 01.03.2018 was issued by the Government, Ministry of Finance, Department of Revenue on 01.03.2018 bearing the words “TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION(i)”. Thus, the Notification is deemed to have came into effect on 01.03.2018 as it was issued for publication in the official gazette. Sub-section (4) of Section 25 of the Customs Act, substituted by Act 28 of 2016, Section 119(i) of the Finance Act, 2016, for sub-section (4) with effect from 14.05.2016, and according to pre-amended sub-section (4) of Section 25 of the Customs Act, every notification issued under sub-section (1) or sub-section (2A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the official Gazette. The EDI system was also updated on the same day, as such the notification is deemed to have come into force on 01.03.2018 only.

14. The petitioner being the importer, filed two Bills of Entry on 01.03.2018 and four bills of Entry on 02.03.2018 for clearance of total quantity of 4000 Metric Tonnes of imported cargo for home consumption. By the date of presentation of Bills of Entry, the rate of customs duty is increased to 44% and consequently, petitioner is liable to pay customs duty as per prevailing rate @ 44%. A letter dated 07.03.2018, 08.03.2018 was addressed to the Commissioner, Customs of Kakinada, claiming that the petitioner is liable to pay customs duty @ 44% vide Notification No. 29/2018 dated 01.03.2018, paid customs duty @ 44% on six bills of entry under protest. Thus, the petitioner paid Rs. 1,44,08,102/- for the two Bills of Entry dated 01.03.2018 and Rs. 1,44,08,102/- on other bills (four bills of entry) reserving the right to claim refund in future.

15. One of the contentions raised in the counter is that the petitioner is having efficacious alternative remedy provided under Section 128 and 129(A) of the Customs Act, 1962, by approaching the Commissioner (Appeals) and Tribunal. But the petitioner approached this Court at premature stage, even before the assessment is not finalized and on this ground also, the writ petitions are liable to be dismissed.

16. The contention that the publication was made in the official in Gazette of India on 06.03.2018 but not on 01.03.2018 is contrary to Sub-section (1)(2A) of Section 25 of the Act is without any legal basis, in view of substituting Sub-section (4) of Section 25 of the Act specifying that the notification is deemed to have come into force on the date of its issue for its publication.

17. It is further contended that the judgment of the Apex Court in Union Of India v. Param Industries Limited . (2015) 321 ELT 192 (SC), is not applicable, since every notification is deemed to have come to force on the date of its issue, for publication in gazette, in terms of Sub-section (4) of Section 25 of the Act. As such, the contention of the petitioner is baseless and assessment of subject goods at the tariff rate of 44% is in accordance with law and prayed for dismissal of the writ petitions.

18. During hearing, learned counsel for the petitioner contended that, unless the notification is published in the gazette, it is deemed that the notification has not come into force, since the public have no knowledge about issue of such notifications by the authorities for fixing tariff rates under the Act and Section 14(2) specifies as to how notifications are to be issued by the Customs Department, giving effect and the amendment of sub-section (4) of Section 25 is contrary to sub-section (1) and (2A) of Section 25 of the Act. The Apex Court in Union of India v. Param Industries (referred supra), considered the same issue and held against the Union of India, accepting the contention raised in the petition similar to that of the petitioner. Therefore, the notification is deemed to have come into effect, only on the date of publication on the website of customs department, duly signed by the competent authority, affixing digital signature. Till the date of signing on the notification by the competent authority, the notification is not deemed to come into force and this issue is covered by catena of judgments, in support of his contention he relied on Union of India v. Ganesh Raj Bhojraj (2000) 9 SCC 461, B.K. Srinivasan v. State of Karnataka (1987) 1 SCC 658, Ruchi Soya Industries Limited v. Union of India (2016) 336 ELT 463 (Cal.), Union Of India v. Param Industries Limited . (referred supra), Union of India v. M.D. Overseas Limited Special Civil Application No. 20859 of 2015 dated 10.04.2017.

19. Whereas, learned counsel for the respondents relied on the judgments of the Supreme Court in S.G. Jaisinghani v. Union of India AIR 1967 SC 1427, Global Energy Limited v. Central Electricity Regulatory Commission (2009) 15 SCC 570 , AIR 2009 SC 3194, Lala Hari Chand Sarda v. Mizo District Council AIR 1967 SC 829 and State of Rajasthan v. Nath Mal and Mitha Mal AIR 1954 SC 307 in support of their contention, while reiterating the grounds raised in the counter affidavit.

20. Considering rival contentions, perusing the material available on record, the point that arise for consideration is:

“whether amended sub-section (4) of Section 25 of the Customs Act creates any amount of confusion, absurdity and contradiction to sub-sections (1) and (2A) of Section 25 of the Customs Act. If so, sub-section (4) of Section 25 of Customs Act be declared as arbitrary and illegal?”

In Re POINT:

21. The major contention urged before this Court is that, Section 25(4) of Customs Act, 1962, introduced by Amendment Act 28 of 2018 is contrary to sub-section (1) of Section 25 of the Customs Act. According to sub-section (1), whenever, a notification is to be issued by the Central Government in the public interest, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions to be fulfilled before or after clearance as may be specified in the notification, goods of any specified description from the whole or any part of duty of customs leviable thereon. The notification enhanced the rate of duty from 30% to 44% by Amendment Act 28 of 2018 to be notified in the Gazette, it must be only in the public interest in general. But, according to sub-section (4) of Section 25, introduced by Amendment Act 28 of 2018, substituted sub-section says that every notification issued under sub-sections (1) & (2A) of Section 25 of the Act shall be, unless otherwise provided came into force by the date of issue by the Central Government for publication in the Gazette. The purport of sub-sections (1), (2A) and (4) of Section 25 are inconsistent with one another. In those circumstances, in view of the inconsistency between sub-sections (1), (2A) and (4), introduced by Notification 28 of 2018, has to be struck down.

Scope of interpretation of charging or exempting sections of tax laws:

22. The general principles of interpretation cannot be made applicable for interpretation of taxing statute, more particularly, when exemption clauses or charging clauses are to be interpreted, it must be construed strictly. There is vast difference in interpretation of provisions of taxing statute, more particularly, charging and exempting sections in taxing statutes and other legislations. The principles for interpretation of charging sections and exemption in tax laws are laid down in various judgments. But, there is difference of opinion as to the benefit to be given in the event of any ambiguity in the provisions of the Act.

23. In Innamuri Gopalam and Maddala Nagendrudu v. State of A.P (1963) 14 STC 742 (SC), the Apex Court had an occasion to deal with the exemption clause and the exemption was denied to the assessee on the ground that the intention of the notification was to avoid double taxation, and as it was not a case of double taxation, no exemption could be granted. The Supreme Court held that on the plain language of the notification, the assessee was entitled to exemption, and since the intention was not reflected in plain words, it could not be taken into consideration. The Apex Court further observed that “In construing a statutory provision the first and foremost rule of construction is the literary construction. All that the court has to see at the very outset is what does the provision say. If the provision is unambiguous and if from the provision the legislative intent is clear, the court need not call into aid the other rules of construction of statutes. The other rules of construction are called into aid only when the legislative intent is not clear.”

24. The role for interpretation of exemption clause is strict Construction. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in the Statute and the object and purpose to be achieved. If exemption is available on complying with certain conditions, the conditions have to be complied with. The mandatory requirements of those conditions must be obeyed or fulfilled exactly, though at times, some latitude can be shown, if there is a failure to comply with some requirements which are directory in nature, the non-compliance of which would not affect the essence or substance of the notification granting exemption.

25. In the present case, it is not the case of granting exemption, but it is the case as to what is the relevant date for application of notification to grant exemption. Section 25(1) authorised the Central Government to issue notification granting exemptions from duty and such exemption shall generally either be absolutely or subject to such conditions, but it has to be notified.

26. In Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise & Customs, Surat (1969) 2 SCR 253, the Apex Court held that such a notification has to be interpreted in the light of the words employed by it and not on any other basis. This was so held in the context of the principle that in a taxing statute, there is no room for any intendment, that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification, i.e., by the plain terms of the exemption. Some of the provisions of an exemption notification may be directory in nature and some are of mandatory in nature. A distinction between provisions of statute which are of substantive character and were built in with certain specific objectives of policy, on the one hand, and those which are merely procedural and technical in their nature, on the other, must be kept clearly distinguished. The principles as regard construction of an exemption notification are no longer res integra. Whereas the eligibility clause in relation to an exemption notification is given strict meaning where for the notification has to be interpreted in terms of its language, once an assessee satisfies the eligibility clause, the exemption clause therein may be construed literally.

27. In the recent judgment of the Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar and Company (2018) 9 SCC 1 , AIR 2018 SC 3606, the Larger Bench of the Apex Court consisting of five Judges laid down the guidelines for interpreting taxing statute as follows:

(1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the Assessee to show that his case comes within the parameters of the exemption Clause or exemption notification.

(2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/Assessee and it must be interpreted in favour of the revenue.

(3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands over-ruled.”

28. The Apex Court in the above judgment considered various judgments as to how the provision in taxing statutes have to be interpreted including exemption notifications, concessions or exceptions in the statute to be given the subject/assessee. The Larger Bench judgment has clarified the rule of interpretation and as to the benefit to be given either to the assessee or to the revenue. In view of the law declared by the Apex Court in the judgments, which we referred in the earlier paragraphs, it is necessary to advert to certain provisions of the Customs Act.

29. Keeping in view the specific contention, it is necessary to advert to Section 14 of the Act, which deals with valuation of goods. According to sub-section (2) of Section 14 of the Act, notwithstanding anything contained in sub-section (1), if the Board is satisfied that it is necessary or expedient so to do, it may, by notification in the Official Gazette, fix tariff values for any class of imported goods or export goods, having regard to the trend of value of such or like goods, and where any such tariff values are fixed, the duty shall be chargeable with reference to such tariff value. Thus, when the tariff value is changed, it must be published in the official gazette.

30. In view sub-section (2) of Section 14, whenever there is a change in the tariff valuation for any class of imported goods or export goods, it must be by way of notification in the official gazette. But, Section 25(4) conveys totally a different meaning and such notifications changing the rate of customs duty leviable on import goods is deemed to have come into force from the date of issue of notification by Central Government for publication in the Gazette.

31. Vires of a provision in the statute can be challenged on limited grounds only when the amended provision is totally inconsistent to the other provisions in the Act or if the amended provision nullifies other provision in the Act or whether the amended provision is contrary to the fundamental right or it is arbitrary or capricious. The Government has to keep in mind that the amended provisions shall never be contrary to other provisions of the Act, while enacting such law by amending the existing provision.

32. Learned counsel for the petitioner contended that sub-section (4) of Section 25 is contrary to sub-sections (1) & (2A) of the Act and the later provision which was amended by Act 28 of 2018 is to be struck down as arbitrary and in support of his contention, learned counsel placed reliance on the judgment of the Supreme Court in Union of India v. Ganesh Raj Bhojraj (referred supra). Earlier, the Central Government while exercising power conferred on the government, amended Section 25 by enhancing the basic duty of 25% on the goods exempted wholly by Notification No. 129 of 1976 dated 02.08.1976 even though not made available to public at large, the Court concluded that, only on the date of publication, the provision is deemed to have been came into force.

33. When the notification amending the existing provision had not been made available to the public at large, and published on subsequent date, the notification is deemed to have come into force on the date of its publication and the transactions prior to publication of notification are not governed by the amended provision. The Apex Court finally concluded that publication of the notification in the official gazette in the manner contemplated by Section 25(1) of the Act would be enough to import the liability to pay customs duty without regard to the inquiry into the fact whether the notification had actually come to the knowledge of the importer or not. Whatever will be the impact of publication in the Government Gazette, though the Gazette in spite of having been published, was not available, to be seen by the persons affected when criminal consequences are sought to be inflicted is a question which should be left open to be gone into in an appropriate case. Non-availability of the Gazette carrying the notification may provide the foundation for a defence plea of innocence where mens rea is an ingredient of offence committed by breach of notification.

34. Even now, Section 25(1) and (2A) remained as it is and it specifically says that a notification is required to be published in the official gazette of the Central Government, to bring any provision into force. The word ‘notification’ means a notification in the gazette unless the Act otherwise provides. The word ‘notification’ is not defined in the General Clauses Act, but the word “Official Gazette” or “Gazette” is defined under Section 3(39) of General Clauses Act, 1897, which defined that the word ‘Gazette’ or ‘Official Gazette’ shall mean the Gazette of India or the Official Gazette of a State.

35. Section 21 of General Clauses Act deals with Power to issue, to include power to add to, amend, vary or rescind notifications, orders, rules or bye-laws, it is also relevant to the present case and it reads as follows:

“Where, by any 13[Central Act] or Regulation, a power to 27[issue notifications], orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add to, amend, vary or rescind any 26[notifications], orders, rules or bye-laws so 28[issued].”

36. When the rule prescribed specific procedure to be followed, the Central Government has to follow such rules and issue notifications. In the instant case, Section 25(1), (2A) of the Act mandates issue of notification in the official gazette, whereas, sub-section (4) of Section 25 says that notification is deemed to have been came into force when it was issued by the Central Government for publication in the Gazette.

37. In State Of Maharashtra v. Mayer Hans George . AIR 1965 SC 722, the Apex Court observed that, there would be no question of individual service of a general notification on every member of the public and all that the subordinate law making body can or need do, would be to publish it in such a manner that persons can, if they are interested, acquaint themselves with its content.

38. In Pankaj Jain Agencies v. Union of India (UOI) 1994 ECR 28 (SC), the Supreme Court while relying on the judgment in State Of Maharashtra v. Mayer Hans George . (referred supra), held that, The Notification was duly published in the official gazette and thus became operative and enforceable. “We, therefore, see no substance in the contention that notwithstanding the publication in the Official Gazette there was yet a failure to make the law known and that, therefore, the notification did not acquire the elements of operativeness and enforceability.”

39. As per the principle laid down in the above judgment, when a notification is required to be published in the gazette, unless it is published, it is not deemed to have been came into force. The facts of the present case are almost identical to the facts of the above judgment. The main reason for publication in the gazette is only to attribute knowledge to the public or the persons dealing with imported goods, but not otherwise. Therefore, by applying the principle laid down in the above judgment, it can safely be concluded that sub-section (4) of Section 25 giving effect to the notifications under sub-sections (1) and (2A) from the date of issue of notification for publication is an arbitrary act of the Government.

40. Learned Government Pleader Sri. Y.N. Vivekananda and the learned Assistant Solicitor General for Central Government contended that, similar question was raised before Calcutta High Court in Ruchi Soya Industries Limited v. Union of India (referred supra) and the Calcutta High Court held against the petitioner.

41. It is brought to the notice of this Court that the order passed by the Calcutta High Court was challenged before the Supreme Court in Ruchi Soya Industries Limited v. Union of India (2017) 350 ELT A53 (SC) while granting leave, observed that the Calcutta High Court in its impugned order had held that primarily, exemption notification comes into force when it is issued for publication in official gazette and its publication and offer for sale by Directorate of Publicity and Public Relation though mandatory, is only a follow up action to be undertaken immediately. It is not necessary that copy of official gazette has also to be made available on the same day. In the above case pleading of Revenue was that a copy of notification alerting rate of duty on crude Soyabean Oil issued on 17 September, 2015 was offered for sale on DPPR counter on same day has neither controverted nor opposed by petitioner. Since ample evidence of complying with both conditions of Section 25 of Customs Act has been adduced by Revenue, said notification is effective from 17 September, 2015. Thus, in view of the observations of the Apex Court, the judgment of Calcutta High Court cannot be applied to the present facts of the case, consequently, the contention of the learned counsel for the respondents is hereby rejected.

42. Another identical question came up for consideration before Gujarat High Court in Union of India v. M.D. Overseas Limited (referred supra), wherein the Division Bench of Gujarat High Court held that, when notification was published on subsequent day, demanding the importer to deposit the differential customs duty with interest is illegal and the same was quashed. The question before Gujarat High Court is almost identical to the question involved in the present case. However, the judgment of Gujarat High Court in Union of India v. M.D. Overseas Limited (referred supra) is challenged before the Supreme Court vide Diary No. 29116 of 2017, the Apex Court while condoning delay, dismissed the appeal at the stage of admission, as they found no legal and valid ground for interference. If, these principles are applied to the present facts of the case, it is difficult to sustain the notification by Amendment Act 28 of 2018, which is impugned before this Court.

43. In Union of India v. Kumho Petrochemicals Company Limited (2017) 8 SCC 307, a similar dispute came up before the Apex Court for consideration. In the facts of the above judgment, after Notification dated 02.01.2009, issued by the Central Government was to remain in force till 01.01.2014, during which anti-dumping duty remained operative on imports of acrylonitrile butadiene rubber (rubber product), Notification dated 31.12.2013 initiated sunset review and inter alia, called upon the interested parties to submit relevant information in the prescribed form, manner and furnish their views to the authority for its consideration. The Notification dated 31.12.2013 was published on the same date, however, it was made available (sent for distribution to Kitab Mahal Book) only on 06.01.2014 i.e. after the expiry of original notification. In those circumstances, the Court was called upon to decide the “duty commencement” notification dated 31.12.2013. Having considered the facts and circumstances of the case, the Apex Court was of the opinion that once a decision is taken by the Government on a particular date, that would be the relevant date and not the date on which it is made public. Therefore, initiation of sunset review by Notification dated 31.12.2013 is permissible and valid.

44. The facts in the present case are slightly different, as the notification was not published on the same day when it was issued and even signed on the subsequent date by digital mode. In those circumstances, the notification is deemed to have been came into force only on the day of its publication in the official gazette, though Section 25(4) says that it is deemed to have been came into force only on the date when the notification was issued for publication in the gazette, which is totally contrary to sub-section (1), (2A) of Section 25 of the Customs Act. In those circumstances, it is difficult to harmonise both the sub-sections.

45. At the cost of repetition, vires of the provisions enacted by the State Government or Central Government can normally be challenged on various grounds, only when it is arbitrary, unreasonable or violative of the constitutional provisions. In view of inconsistency between sub-sections (1), (2A) and (4) of Section 25 of Customs Act, the pre-amended and post-amended provisions of Section 25(4) as to power to grant exemption from duty are extracted hereunder for better appreciation of the case.

Pre-amended Post-amended by Notification 29 of 2018 Section 25(4) Every notification issued under sub-section (1) or sub-section (2A) shall,- (a) unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette; (b) also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi Every notification issued under sub-section (1) or sub-section (2A) shall, unless otherwise provided, come into force on the date of its issue by the Central Government for publication in the Official Gazette.

46. Section 25(1) of the Customs Act is not amended and according to Section 25(1) of the Customs Act, if the Central Government is satisfied that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt generally either absolutely or subject to such conditions (to be fulfilled before or after clearance) as may be specified in the notification goods of any specified description from the whole or any part of duty of customs leviable thereon. But, Section 25(4) has been amended and the pre-amended and post-amended clauses are tabulated hereunder.

47. As per pre-amended Act of Section 25(4), every notification issued under sub-section (1) or sub-section (2A) is deemed to have come into force on the date of issue of notification by the Central Government for publication in the official gazette. Clause (b) of the pre-amended Act further says that notification shall also be published and offered for sale on the date of its issue by the Directorate of Publicity and Public Relations of the Board, New Delhi.

48. No doubt, Clause (b) of Section 25(4) of pre-amended Act is totally omitted and the notification is deemed to have come into force on the date of its issue by the Central Government for publication in the official gazette remained intact. Therefore, the pre-amended provisions of Sub-sections (1), (2A) and (4) are not reconciling with one another, but on account of deletion of Clause (b) of sub-section (4) of Section 25, a friction was created and both Sections 25(1), (2A) and 25(4) are not reconciling with one another. According to subsection (1) of Section 25 of the post-amended Act, the Central Government if satisfied that it is necessary in the public interest, may by “notification issue an Official Gazette”, exempt generally either absolutely or subject to such conditions, as such, the main intention of the Legislature to publish notification in the Gazette is only to inform the public about the notifications in their interest. But, on account of amendment, such public interest becomes redundant or otiose and issuance of notification for publication in the gazette is sufficient. Therefore, there is any amount of inconsistency between Sub-sections (1), (2A) and (4) of Section 25 of the Act.

Scope of interpretation - A provision in the statute on the ground of inconvenience, absurdity and contradiction:

49. When an amendment creates absurdity, friction, making the other provisions redundant in the statute and unable to reconcile the provisions, the method to be adopted was discussed in various judgments. In fact, it is the duty of the Court to read entire Act to come to any conclusion. If two sections of an Act cannot be reconciled, as there may be absolute contradiction, it is often said that the last must prevail (vide Wood v. Riley [1867] 3 C.P. 26 and K.M Nanavati v. State Of Bombay . AIR 1961 SC 112). But, this should be accepted only in the last resort. As observed by LORD EVERSHED, M.R:“It is no doubt true that if two sections of an Act of Parliament are in truth irreconcilable, then prima facie the later will be preferred. But these are arguments of the last resort. The first duty of the Court must be, if the result is fairly possible, to give effect to the whole expression of the parliamentary intention” (vide Eastbourne Corporation v. Fortes Limited (1959) 2 All ER 102. g 107 (CA)). In case in which two provisos were somewhat repugnant to each other, LORD MACMILLAN said:“If proviso 2 is repugnant in any way to proviso 1, it must prevail for it stands last in the enactment and so to quote LORD TENTERDEN, C.J., ‘speaks the last intention of the makers'. The last word is with the respondent and must prevail” (vide King v. Dominion Engineering Company Limited AIR 1947 PC 94 pg 95). But, the rule that the later section should always be preferred in case it is irreconcilable with a prior section, seems somewhat doubtful and illogical for as JERVIES, C.J., observed during the course of arguments in a case:“How can we say that one provision is repealed by the other when both received the Royal assent at the same time”? (vide Castrige v. Page (1853) 138 ER 1278). In case of conflict between two sections of the same Act a more logical approach is indicated by LORD HERSCHELL, L.C.:“You have to try and reconcile them as best as you may. If you cannot, you have to determine which is the leading provision, and which the subordinate provision and which must give way to the other. (vide Institute of Patent Agents v. Lockwood [1894] A.C. 347 p. 360 quoted in another connection in Chief Inspector of Mines v. Karam Chand Thapar AIR 1961 SC 838, Laxmi Devi v. Mukund Kanwar AIR 1965 SC 834 where Section 2(d) of the Transfer of Property Act was held to prevail over Section 5 of the same Act.)

50. To avoid uncertainty and friction in the system which the statute purports to regulate, where words of a statute are clear, they must, of course, be followed but where alternative constructions are equally open, that alternative is to be chosen which will be consistent with the smooth working of the system which the statute purports to be regulating; and that alternative is to be rejected which will introduce uncertainly, friction or confusion into the working of the system. (vide Shannon Realities Limited v. St. Michel (Ville De) [1924] A.C. 185 pp. 192 193 (PC), Central Bank of India v. Ravindra (2002) 1 SCC 367 , AIR 2001 SC 3095 p.3114).

51. The above principle was accepted and the observations of LORD SHAW were quoted from Maxwell in construing Section 193 of the Sea Customs Act and in coming to the conclusion that the Chief Customs Authority was not an ‘Officer of Customs’ (vide Collector of Customs v. Digvijaya Singhji Spinning & Weaving Mills Limited AIR 1961 SC 1549). The same principle was applied in construing Section 2(c) of the Suppression of Immoral Traffic in Women and Girls Act, 1956, which defines a Magistrate to mean ‘a District Magistrate, a Sub-Divisional Magistrate of the First Class specially empowered by the State Government’ in State Of Gujarat v. Chaturbhuj Maganlal . (1976) 3 SCC 54 , AIR 1976 SC 1697, wherein, the Apex Court held that the empowering does not require the process of selection or discrimination as regards an individual on whom the special power is conferred and the adverb ‘specially’ refers to the special purpose of empowerment. One of the reasons given was that a contrary conclusion would impede the efficacy of the provision and introduce inconvenience, friction, confusion and artificiality in the working of the provision. Similar principle was applied by the Supreme Court in construing the fundamental right under Articles 22(1) and (2) of the Constitution; and it was held that the said Article applied to give protection against such arrests as are effected otherwise than under a warrant issued by a Court on the allegation or accusation that the arrested person has committed some criminal or quasi-criminal act and that the physical restraint put upon an abducted person in process of recovering and taking into custody and delivery of the person to the custody of an officer-in-charge of the nearest camp under Section 4 of Abducted Persons (Recovery and Restoration) Act, 1949, is not arrest and detention within the meaning of Article 22(1) and (2). In holding so, S.R. DAS, J, observed:“If two constructions are possible then the court must adopt that which will ensure smooth and harmonious working of the Constitution and eschew the other which will lead to absurdity or give rise to practical inconvenience or make well-established provision of existing law nugatory. (vide State of Punjab v. Ajaib Singh AIR 1953 SC 10 p. 14) and in construing Article 371-D of the Constitution, the Supreme Court held that the words ‘civil service of the State’ as used therein did not include the High Court staff and the subordinate judiciary, although the same words used in Article 311 include these categories. The narrower construction of these words in Article 371-D was adopted on the ground that a wider construction would encroach upon the principle of independence of judiciary enshrined in Articles 229 and 235 of the Constitution and the narrower construction ensures smooth working of the Constitution and harmony amongst its various provisions, the Court observed:“Where two alternative constructions are possible, the court must choose the one which will be in accord with the other parts of the statute and ensure its smooth, harmonious working and eschew the other which leads to absurdity, confusion or friction, contradiction and conflict between its various provisions, or undermines or tends to defeat or destroy the basic scheme and purpose of the enactment.” (vide Chief Justice of Andhra Pradesh v. L.V.A. Dikshitulu (1979) 2 SCC 34 , AIR 1979 SC 193).

52. One of the contentions raised before this Court is that, when an Act leads to absurdity, the Court can declare such statute as illegal and drawn attention of this Court to the judgment of the Apex Court in State Of U.P. v. Malik Zarid Khalid (1988) 1 SCC 145 , AIR 1988 SC 132, wherein, the Supreme Court held as follows:

“It is true that there are situations in which Courts are compelled to subordinate the plain meaning of statutory language. Not unoften, Courts do read down the plain language of a provision or give it a restricted meaning, where, to do otherwise may be clearly opposed the object and scheme of the Act or may lead to an absurd, illogical or unconstitutional result.”

53. Following the principles laid down in the above judgments, the basic purpose construction or interpretation of statute is to avoid inconvenience, friction, confusion in the working of the provision. Such interpretation is permissible when there is ambiguity in the two provisions of same section or two sections of the same enactment. The power of the Court is to achieve the real object to serve the purpose of enactment introducing any amendment. Moreover, if two constructions are possible then the court must adopt that which will ensure smooth and harmonious working of the enactment and eschew the other which will lead to absurdity or give rise to practical inconvenience or make well-established provision of existing law nugatory.

54. Keeping in view the principles, we would like to examine the inconsistency which may result in absurdity, confusion or friction, contradiction and conflict between two provisions of the section i.e. sub-sections (1), (2A) and (4) of Section 25 of the Act. We have extracted the pre-amended and post-amended provisions of Section 25(4) and even Section 14(2) also made it mandatory for the purpose of Customs Act, 1975 or any other law for the time being in force. Even according to Section 14(2) of the Customs Act, a gazette notification is mandatory fixing the tariff value for any class of import goods. Sub-section (1) of Section 25 remains as it is, on the statute even after amendment to sub-section (4) and the entire Section 25 of the Act deals with power to grant exemption from duty. The Central Government on satisfaction, issue any notification in the gazette, keeping in mind the public interest exempting generally either absolutely or subject to such conditions. Whereas, the language used in sub-section (4) of the amended provision conveys a different meaning that the notifications issued under sub-section (1) i.e for exemptions from duty is deemed to have come into force on the date of issue of such notification by the Central Government for publication in the Official Gazette. The issue of gazette notification, as contemplated under sub-section (1), (2A) of Section 25 is to bring the notifications to the notice of the public or to bring the same into effect on the date of publication. The purpose of gazette notification time and again is discussed by the Courts and intention of the Legislature of publication of any notification is only to give effect to particular provision or enactment, making the public to know about the Act or amendment, after any enactment passed by the State or Central Legislature. Unless, the public are aware about any enactment or amendment of any provision, they cannot be made liable for any acts or omissions which the public committed. Thus, the purpose of gazette notification is to import or attribute knowledge about amended provision or enactment to the public, to act within the limitations prescribed under the enactment or amended provisions. Otherwise, it amounts to keeping the public in dark and create confusion about the acts or omissions, if any, they committed. Take for an extreme instance where a notification was issued for publication in the gazette, but not published for sufficiently long time, the public are in total darkness about the amended provisions of the enactment or any new enactment. But, still they are liable for the consequences of such amendment or enactment passed by either State or Central Government, in view of similar provision Section 25(4) of the Act. In those circumstances, it leads to serious absurdity, confusion or friction, contradiction and conflict between various provisions. In those circumstances, by applying the principles laid down in the above judgments, interpreting the section to achieve the object and to avoid resulting serious inconvenience, serious absurdity, confusion or friction, contradiction and conflict between its various provisions to the public is essential. On cojoint reading of sub-sections (1), (2A) and (4) of Section 25, there is any amount of inconsistency leading to serious absurdity, confusion or friction, contradiction and conflict between its sub-section of same provision. When sub-section (1) made it clear that in the public interest, a notification shall be published in the official gazette granting exemption, only to impute or attribute knowledge to the public about such exemptions. But, whereas, sub-section (4) runs contra to subsection (1), since the amended provisions are deemed to have been came into force when it was issued for publication. Thus, it creates any amount of inconvenience to the public. Therefore, to avoid such serious absurdity, confusion or friction, contradiction and conflict between two sub-sections of Section 25, we find that it is a fit case to declare Notification No. 29/2018-Cus dated 01.3.2018 as arbitrary and inconsistent with sub-section (1) & (2A) of Section 25, keeping in view the principles of statutory interpretation laid down by various Courts referred above.

55. Even otherwise, a gazette notification was issued on 06.03.2018. Moreover, the competent officer signed on the notification affixing digital signature on 06.03.2018 only. Therefore, the notification is deemed to have come into force, at least on the date of signing on the notification by the competent authority and there is no notification in the eye of law and taking decision by the Legislature without signing on it by the competent authority does not amount to issue of notification in terms of the decision taken by the Legislature. On this ground also, the notification cannot be said to have came into force on the date of its issue for publication in the gazette, but, it shall be deemed to have come into force on the date when it is published.

56. Since the amended provision seriously affects the rights of the public, creating absurdity, confusion or friction, contradiction and conflict among the provisions i.e. sub-sections (1), (2A) and (4) of Section 25, it is difficult to uphold the notification issued by the Government as valid.

57. Section 15 of the Act deals with date for determination of rate and tariff valuation of imported goods, it reads as thus;

(1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force -

a. In the case of goods entered for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under this section;

b. In the case of goods cleared from a warehouse under section 68, on the date on which a bill of entry for home consumption in respect of such goods is presented under that section;

c. In the case of any other goods, on the date of payment of duty

Provided that if a bill of entry has been presented before the date of entry inwards of the vessel or the arrival of the aircraft or the vehicle by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards or the arrival, as the case may be.

(2) The provisions of this section shall not apply to baggage and goods imported by post.

58. The date for determination of duty of imported goods is specific, more particularly, in case of home consumption of such goods. The word ‘notification’ is defined under Section 2(30)(AA) of the Act, “notification” means notification published in the Official Gazette and the expression “notify” with its cognate meaning and grammatical variation shall be construed accordingly. As per the definition of “notification”, it is only the notification in the Gazette. When Subsection (1) & (2A) of Section 25 made it mandatory; that grant of exemption from duty in the public interest, it may by notification in the Official Gazette, exempting generally or absolutely, a notification in the gazette is mandatory. Unless, there is a notification in the official gazette, exempting such imported goods either absolutely or conditionally, or subject to conditions, it is not known to the public whether such imported goods are exempted or not. Hence, issue of notification in the official gazette is mandatory to grant exemption from payment of duty.

59. According to Section 25(2A) of the Act, the Central Government may, if it considers it necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order under sub-section (2) insert an explanation in such notification or order, as the case may be, by “notification in the Official Gazette”, at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be. But, for different reasons, Section 25(4) conveying different intention, it is a deeming provision, according to it, on the date of issue of notification by the Central Government for publication in the official gazette and deleted clause (b) of sub-section (4) of Section 25 vide Act 28 of 2018. Publication of a notification in the final gazette is mandatory under Section 25(1) and Section 25(2A). The amendment to sub-section (4) of Section 25 creates any amount of confusion and causes inconvenience to the assessee and to the public at large as to the rate of duty payable on the imported goods and contrary to Section 25(1) and (2A).

60. The main intention to issue notification in the gazette is to import or attribute knowledge about rate of duty payable on imported goods. But, at this stage, it is important to emphasize the requirement of issue of notifications granting exemptions or fixing rate of duty payable on the imported goods, the consequences are serious and nobody knows what is duty payable.

61. In S.G. Jaisinghani v. Union of India (1967) 2 SCR 703, the Larger Bench of the Apex Court observed that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. In a system governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is. If a decision is taken without any principle or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law. (See Dicey-“Law of the Constitution”-Tenth Edition, Introduction ex). The Apex Court made a reference in United States v. Wunderlick 342 US 98 (1951), it was held that, “when it has freed man from he unlimited discretion of some ruler …….. Where discretion; absolute, man has always suffered”. It is in this sense that the rule of law may be said to be the sworn enemy of caprice. Discretion, as Lord Mansfield stated it in classic terms in the case of John Wilkes (2), “means sound discretion guided by law. It must be governed by rule, not by humour : it must not be arbitrary, vague and fanciful.”

62. In view of the observations of the Larger Bench of the Apex Court, it is clear that the decision of Government should be predictable and the citizen should know where he is, giving effect on the date of its issue of notification before its publication, such notification is not known to any citizen as to the rate of duty on imported goods, amendment of sub-section (4) of Section 25 of the Act is not only arbitrary exercise of power by Central Government, but also created friction and contradiction between two sub-sections of same section.

63. Learned counsel for the petitioners placed reliance on several judgments of the Apex Court as to the interpretation of statutory provision, so also, the mandatory requirement of notification. The Division Bench of the Apex Court in B.K. Srinivasan v. State of Karnataka (referred supra) had an occasion to deal with the issue of publication of a public notice in the official gazette that the plan and regulations are permanently displayed and are available for inspection by the public with a view to invite comments from the public under Karnataka Town and Country Planning Act, 1961 and the Division Bench held as follows:

“There can be no doubt about the proposition that where a law, whether Parliamentary or subordinate, demands compliance, those that are governed must be notified directly and reliably of the law and all changes and additions made to it by various processes. Whether law is viewed from the stand-point of the ‘conscientious good man’ seeking to abide by the law or from the standpoint of Justice Holmes's ‘Unconscientious bad man’ seeking to avoid the law, law must be known, that is to say, it must be so made that it can be known. We know that delegated or subordinate legislation is all pervasive and that there is hardly any field of activity where governance by delegated or subordinate legislative powers is not as important if not more important, than governance by Parliamentary legislation. But unlike Parliamentary Legislation which is publicly made, delegated or subordinate legislation is often made, unobtrusively in the chambers of a Minister, a Secretary to the Government or other official dignitary. It is, therefore, necessary that subordinate legislation, in order to take effect, must be published or promulgated in some suitable manner, whether such publication or promulgation is prescribed by the parent statute or not. It will then take effect from the date of such publication or promulgation. Where the parent statute prescribes the mode of publication or promulgation that mode must be followed. Where the parent statute is silent, but the subordinate legislation itself prescribes the manner of publication, such a mode of publication may be sufficient, if reasonable. If the subordinate legislation does not prescribe the mode of publication or if the subordinate legislation prescribes a plainly unreasonable mode of publication, it will take effect only when it is published through the customarily recognised official channel, namely, the Official Gazette or some other reasonable mode of publication. There may be subordinate legislation which is concerned with a few individuals or is confined to small local areas. In such cases publication or promulgation by other means may be sufficient.”

64. If the principle laid down in the above judgment is applied to the present facts of the case, when the statute prescribed to grant exemption from payment of customs duty or rate of duty on imported goods, it must be published in the gazette notification or any amendment thereto shall also be published in the official gazette vide sub-section (1) and sub-section (2A) of Section 25 of the Customs Act. But, sub-section (4) of Section 25 as amended by Notification No. 29 of 2018, almost dispensed with the notification indirectly and frustrating the very intention of Legislature to notify the exemptions in the official gazette.

65. When the law provides issue of notification granting exemptions, or customs duty payable on the imported goods or the tariff rates (vide Section 14(2) and Section 15 of the Act), such notification is deemed to have come into force on the date of publication for the purpose of attributing knowledge to the public, including the subject goods or assesse under the Customs Act.

66. Learned counsel for the petitioners has drawn attention of this Court to the judgment of the Apex Court in Union Of India v. Param Industries Limited . (referred supra), wherein the question before the Apex Court was as to the date of notification came into effect. But, this judgment is pertaining to the pre-amended provision of sub-section (4) of Customs Act, since notification was not made available to the public offering for sale, as per sub-section (4)(b) of Section 25 of the pre-amended Act, the Court held that the notification is deemed to have come into force with effect from the date of publication of the notification and availability or offering those notifications for sale. In the said judgment, Supreme Court referred the judgment in Harla v. The State of Rajasthan (1952) 1 SCR 110, where the question was whether mere passing of a resolution without promulgation or publication in the gazette or other means to make the Act known to the public, was sufficient to make it law was decided. The Court observed as follows:

“what laws were operative in Jaipur regarding the coming into force of an enactment in that State. We were not shown any, nor was our attention drawn to any custom which could be said to govern the matter. In the absence of any special law or custom, we are of opinion that it would be against the principles of natural justice to permit the subjects of a State to be punished or penalised by laws of which they had no knowledge and of which they could not even with the exercise of reasonable diligence have acquired any knowledge. Natural justice requires that before a law can become operative it must be promulgated or published. It must be broadcast in some recognisable way so that all men may know what it is; or, at the very least, there must be some special rule or regulation or customary channel by or through which such knowledge can be acquired with the exercise of due and reasonable diligence. The thought that a decision reached in the secret recesses of a chamber to which the public have no access and to which even their accredited representatives have no access and of which they can normally know nothing, can nevertheless affect their lives, liberty and property by the mere passing of a Resolution without anything more is abhorrent to civilised man. It shocks his conscience. In the absence therefore of any law, rule, regulation or custom, we hold that a law cannot come into being in this way. Promulgation or publica-tion of some reasonable sort is essential. In England the rule is that Acts of Parliament become law from the first moment of the day on which they receive the Royal assent, but Royal Proclamations only when actually published in the official Gazette. See footnote (a) to paragraph 776. page 601, of Halsbury's Laws of England (Hailsham edition), Volume VI and 32 Halsbury's Laws of England (Hailsham edition), page 150 note (r). But even there it was necessary to enact a special Act of Parliament to enable such proclamations to become law by publication in the Gazette though a Royal Proclamation is the highest kind of law, other than an Act of Parliament, known to the British Constitution; and even the publication in the London Gazette will not make the proclamation valid in Scotland nor will publication in the Edinburgh Gazette make it valid for England. It is clear therefore that the mere enacting or signing of a Royal Proclamation is not enough. There must be publication before it can become law, and in England the nature of the publication has to be prescribed by an Act of Parliament.”

67. Even according to these principles certainly it is difficult to attribute knowledge to the public at large or at least to assesses who are dealing with the imported goods. When the notification was issued and kept in the desk by competent authorities without publication, giving effect to such notification, the same would amount to keeping the assessee in total darkness as to raising demand at the enhanced rate is arbitrary.

68. Learned counsel for the petitioners also drawn attention of this Court in Union of India v. M.D. Overseas Limited (referred supra), wherein the Division Bench of the Gujarat High Court while dealing with Section 25(4)(a) and (b) adverted to the law laid down in Union Of India v. Param Industries Limited . (referred supra) so also the Division Bench judgment of High Court of Judicature at Hyderabad in Agarwal Industries Limited v. Union of India (2016) 5 ALT 795, the Court held that the date of publication for sale of notification is deemed to have been came into force. But on account of deletion of clause (b), amending sub-section (4) of Section 25, this Court is called upon to decide the arbitrariness and legality of the provision i.e. sub-section 4 of Section 25, as it is totally contrary to the intention of the Legislature in incorporating sub-sections (1) and (2A) of Section 25 of the Act. When sub-sections (1) and (2A) of Section 25 made publication in the official gazette mandatory, such exemptions of customs duty is deemed to have come into force only from the date of notification in the official gazette, since publication of notification in the official gazette is the best method to attribute knowledge to the assessee or the public in general. Therefore, the judgment of the Gujarat High Court, affirmed by the Apex Court in Union of India v. M.D. Overseas Limited (referred supra) has no direct bearing on the issue involved in this case.

69. Further, learned counsel for the petitioners while contending that, in the absence of notifying exemptions as per sub-sections (1) and (2A) of Section 25 in the official gazette, no knowledge is attributable to the assessee and in the absence of notification in the official gazette, the Court can quash such provision which is giving effect to such notifications from the date of issue for publication to the notification and placed reliance on the judgment of the Apex Court in Union of India v. Ganesh Raj Bhojraj (referred supra). Section 25 of the Customs Act came up for consideration in the above judgment and the majority was of the view that Section 25 of the Customs Act empowers the Central Government to exempt either absolutely or subject to such conditions, from the whole or any part of the duty of customs leviable thereon by a notification in Official Gazette. The said notification can be modified or cancelled. The method and mode provided for grant of exemption or withdrawal of exemption is by way of issuance of notification in the Official Gazette. For bringing Notification into operation, the only requirement of the section is its publication in the Official Gazette and no further publication is contemplated. Apart from prescribed requirement under Section 25, usual mode of bringing into operation such notification followed since years in this country is its publication in the Official Gazette and there is no reason to depart from the same by laying down additional requirement. It is further observed that, it is established practice that the publication in the official gazette, that is, Gazette of India is ordinary method of bringing a rule or subordinate legislation to the notice of the persons concerned. Individual service of a general notification on every member of the public is not required and the interested person can acquaint himself with the contents of the notification published in the gazette. It is the usual mode followed since years and there is no other mode prescribed under the present statute except by the amendment in the year 1998 by Bill No. 21 of 1998. The Apex Court also observed as follows:

“In our view, as noted above, in Pankaj Jain Agencies case [1994 ECR 28 (SC)] the Court directly dealt with a similar contention and after relying upon the decision in the case of Mayer Hans George (1965) 1 SCR 123 rejected the same. That decision is followed in I.T.C. Ltd. (1996) 86 ELT 477 (SC) and other matters. Hence, it is difficult to agree that the decision in Pankaj Jain Agencies case was not helpful in deciding the question dealt with by the Court. Section 25 of the Customs Act empowers the Central Government to exempt either absolutely or subject to such conditions, from the whole or any part of the duty of customs leviable thereon by a notification in Official Gazette. The said notification can be modified or cancelled. The method and mode provided for grant of exemption or withdrawal of exemption is issuance of notification in the Official Gazette. For bringing Notification into operation, the only requirement of the section is its publication in the Official Gazette and no further publication is contemplated. Additional requirement is that under Section 159 such notification is required to be laid before each House of Parliament for a period of thirty days as prescribed therein. Hence in our view Mayer Hans George (1965) 1 SCR 123 (supra) which is followed in the Pankaj Jain Agencies case : 1994 ECR 28 (SC) represents the correct exposition of law and the Notification under Section 25 of the Customs Act would come into operation as soon as it is published in the Gazette of India i.e. the date of publication of the Gazette. Apart from prescribed requirement under Section 25 usual mode of bringing into operation such notification followed since years in this country is its publication in the Official Gazette and there is no reason to depart from the same by laying down additional requirement.”

70. After considering the law laid down by the Apex Court in earlier judgments and other Courts, the Apex Court concluded as follows:

“The case at hand is one where through the writ petition filed by the respondent before the High Court the liability to pay customs duty at the rate of 25 per cent of the value of the goods was sought to be avoided and goods were sought to be released from detention of the customs authorities. In such a case the publication of notification in the Government Gazette in the manner contemplated by Section 25(1) of the Customs Act would be enough to import the liability to pay customs duty without regard to the enquiry into the fact whether the notification had actually come to the knowledge of the importer or not. It is not the respondent's case that the relevant Gazette has been published ante-dated. What will be the impact of publication in the Government Gazette though the Gazette in spite of having been published was not available to be seen by the persons affected when criminal consequences are sought to be inflicted - is a question which should in my opinion be left open to be gone into in an appropriate case. Non-availability of Gazette carrying the notification may provide foundation for a defence plea of innocence where mens rea is an ingredient of offence committed by breach of notification. Where mens rea is not an ingredient, want of circulation of Gazette may still be a reason for leniency in punishment. These are the questions which need to be left open.”

71. The law declared by various courts is consistent and if a particular provision of law is amended in the enactment, notification in the official gazette for grant of exemption is mandatory and such exemption shall be given effect only from the date of publication in the official gazette. In the present case, an anomalous situation is created on account of amendment of sub-section (4) of Section 25 of Customs Act, keeping the public or at least the assessee totally in dark who are concerned with such notification issued for publication is an arbitrary exercise of power by the Legislature and it would cause not only inconvenience to the assessee or the person concerned with such notification, it is nothing but absurdity creating friction and it would also create any amount of confusion as to the rate of customs duty payable on the imported goods as on the relevant date of presentation of ex bond bills of entry for clearance for home consumption as per the Customs Act.

72. Learned counsel for respondents placed reliance on various judgments of the Apex Court with regard to necessity of issuing notifications. In S.G. Jaisinghani v. Union of India (referred supra), the question before the Court as to constitutional validity of ‘seniority rule’ in Income-tax Service and ‘quota’ recruitment challenged as being violative of Articles 14 and 16 (1) of the Constitution of India. But, this judgment has no remote application to the present facts of the case, since it pertains to a service matter. Even in the facts of the above judgment, the notification was required to be published, but not published and that would not effect the rule. In the same judgment, the Apex Court made serious observations which we have noted in the earlier paragraphs.

73. In Global Energy Limited v. Central Electricity Regulatory Commission (referred supra), the Apex Court dealt with the principles of interpretation of statues. But, it relates to Electricity Act, not the taxing statute and there is no dispute with regard to the law declared by the Apex Court to interpret the legislation passed by either Parliament or other assemblies.

74. In Lala Hari Chand Sarda v. Mizo District Council (referred supra), the dispute was with regard to permitting non-tribals to carry on certain business by issuing notification in Mizoram granting license. The principle laid down in the above judgment has no relevance at all to the present facts of the case, since it is not relating to interpretation of any provision, which is not consistent with the principle provision of the same section.

75. Learned counsel for the respondents has also drawn attention of this Court to the judgment of the Supreme Court in State of Rajasthan v. Nath Mal and Mitha Mal (referred supra), so also in B.B. Rajwanshi v. State of U.P (1988) 2 SCC 415. But, the principle laid down in the above judgments has no direct application as to the interpretation of taxing statue on account of inconsistency between two sub-sections of same section which deals with the exemption.

76. In view of the law declared by the Courts with regard to interpretation of taxing statutes, it is clear that when the amended provision or any provision of the statute creates serious inconvenience, serious absurdity, confusion or friction, contradiction and conflict between its various provisions, the same is illegal and amendment of sub-section (4) of Section 25 giving effect to the notification from the date of its issue for publication in the gazette is an arbitrary exercise of power by the Legislature and it is totally contrary to the purport of sub-section (1) and sub-section (2A) of Section 25 of the Act, which mandates publication of notification in the official gazette. Therefore, to avoid inconvenience, serious absurdity, confusion or friction, contradiction and conflict between various provisions, amended provision of sub-section (4) of Section 25 which is enacted by arbitrary exercise of power by the Legislature, is liable to be struck down.

77. The notification was published on 06.03.2018 which is impugned in these writ petitions, published electronically on 06.03.2018. In view of the decision taken by the Government of India in terms of Section 8 of the Income Tax Act, to avoid physical printing of gazette notification to publish the same exclusively by electronic mode, so as to attribute knowledge to the public at large. The notification was signed by Rakesh Sukul on 06.03.2018 at 19 : 15 : 13 +05′30′. When notification needs to be signed digitally and only when the notification was uploaded and published in the official gazette, the same is made available for public. Perhaps, to avoid such contingency to give effect to the notification on the date of publication, the Government of India amended sub-section (4) of Section 25 of Customs Act, 1962. But, sub-section (1) and sub-section (2A) of Section 25 were not suitably amended and they remained as it is. Therefore, sub-sections (1), (2A) and (4) of Section 25 are running contra to one another, creating confusion in the minds of public at large, at least to the person who is dealing with the department. Thus, it is evident from the record that the notification was not signed at least by the competent authority on the date of presentation of ex-bond bill of entry before the competent authority for release of imported goods for human consumption in accordance with Section 15(1)(b) r/w Section 68 of the Customs Act for clearance of the goods for human consumption and the relevant date for determination of the duty is the date of presentation of ex-bond bills of entry for release of the goods which is explicit from Section 15(1)(b) of the Act. But the respondents collected the customs duty initially @ 30%, but later by the time of release, customs duty was enhanced @ 44% and demanded the variation of 14%.

78. As discussed above, sub-section (4) of Section 25 created absurdity, confusion and friction. The very collection of customs duty @ 44% on the imported goods belonging to these petitioners prior to the publication of notification in electronic mode is an illegality. Therefore, the petitioners are entitled to claim refund of the amount paid in excess of 30% of the original rate of customs duty as on the date of presentation of ex bond bills of entry for clearance of import goods for human consumption. Therefore, the respondents are liable to repay the excess amount which they collected from the petitioners beyond 30% of customs duty.

79. One of the contentions raised by the learned counsel for the respondents, when a remedy by way of appeal under Section 128 and 129(A) of the Customs Act is available, the petitioner is disentitled to claim relief under Article 226 of the Constitution of India. But, the said contention cannot be accepted for the simple reason that the appellate authority or tribunal cannot declare any provision in the statute as illegal or arbitrary. Therefore, we find no force in the argument of the learned counsel for the respondents and the same is rejected.

80. In view of our foregoing discussion, Section 25(4) of the Customs Act is declared as arbitrary and contrary to Section 25(1) and (2A) of the Customs Act, 1962 and that the respondents are liable to repay the amount collected from the petitioners for clearance of import goods for home consumption beyond the original rate prevailing on the date of prior to date of publication of notification i.e. Rs. 2,88,16,200/- with interest paid by the petitioner from the date of deposit till the date of payment.

81. In the result, writ petitions are allowed.

82. Consequently, miscellaneous petitions pending if any, shall stand closed.