By TIOL News Service

NEW DELHI, JAN 25, 2016: THE present appeal is directed against the judgment and order dated 14.09.2004 passed by the Division Bench of the High Court of Judicature at Bombay in Notice of Motion No. 62 of 2004 in Review Petition (Lod) No. 6 of 2004 in Writ Petition No. 71 of 1993 (2003-TIOL-08-HC-MUM-CUS) whereby the High Court while dealing with an application of review has declined to condone the delay of 129 days in preferring the application for review and also opined that the application for review was totally devoid of merit. The expression of the said view led to dismissal of the application for review.

The facts: The appellants filed an application for refund of excess provisional customs duty amounting to Rs. 39,71,412/- which was claimed under Section 18(2) of the Customs Act, 1962 (for brevity, "the Act"). After the application was submitted, the 2nd respondent i.e., Assistant Collector of customs by letter dated 01.06.1992 communicated that the claim of the appellants was filed under the provisions of Section 27(2) of the Act and it was required to comply with the formalities envisaged under the said provision. The appellants reiterated their stand that Section 27(2) was not applicable and prayed for refund of the amount alongwith interest. However, as nothing effective ensued, the appellants, left with no option, filed a writ petition before the High Court of Bombay assailing the memo dated 23.12.1991 and letter dated 01.06.1992 which had required the appellants to apply for refund under Section 27(2) of the Act. During the pendency of the writ petition the 2nd respondent passed an ex-parte order dated 04.12.1992 dismissing the claim of the refund under Section 27 of the Act and opined that the claim was inadmissible.

The main plank of submission before the High Court was that the assessment was provisional and hence, it remained provisional for all purposes and on finalisation of assessment under Section 18(2) of the Act if refund is due, then it was obligatory on the part of the customs authorities to refund the amount without applying the provisions contained in Section 27 of the Act.

The High Court appreciating the factual matrix and the legal submissions came to hold as follows:-

"... while exercising the Writ jurisdiction, if the Writ Court finds that any direction to refund results in unjust enrichment to the Petitioners, then it is open to the Writ Court to decline to exercise its Writ jurisdiction, even though the Petitioner has a right to obtain refund. This reasoning of ours is supported by the Full Bench decision of this Court in the case of New India Industries vs. Union of India reported in 1990 (1) B.C.R. 315, as well as the decision of the Apex Court in the case of Mafatlal Industries Ltd. (supra at para 95). In the present case, admittedly, the Petitioners have passed on the incidence of duty to the customers and have recovered the amount due to them. In this view of the matter, we decline to issue Writ in favour of the Petitioners."

Being of the aforesaid view, the High Court dismissed the writ petition. An application for review was filed which was dismissed being barred by limitation and also being devoid of substance.

And so the present appeal in the Supreme Court.

The senior counsel for the Revenue raised a preliminary objection in the Supreme Court that the main order, that is, the order passed in the writ petition having not been assailed, the challenge only to the order passed in review is not tenable; and, therefore, the appeal deserves to be dismissed as not maintainable.

The Supreme Court observed,

"It has to be understood that the Court has evolved and formulated a principle that if the basic judgment is not assailed and the challenge is only to the order passed in review, this Court is obliged not to entertain such special leave petition. The said principle has gained the authoritative status and has been treated as a precedential principle for more than two decades and we are disposed to think that there is hardly any necessity not to be guided by the said precedent. In this context, we may profitably reproduce a passage from Government of Andhra Pradesh and others v. A.P. Jaiswal and others wherein a three-Judge Bench has observed thus:-

"Consistency is the cornerstone of the administration of justice. It is consistency which creates confidence in the system and this consistency can never be achieved without respect to the rule of finality. It is with a view to achieve consistency in judicial pronouncements, the Courts have evolved the rule of precedents, principle of stare decisis etc. These rules and principle are based on public policy..."

The appeal, being not maintainable, stands dismissed."

(See 2016-TIOL-08-SC-CUS)