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CASE NO.:

Appeal (civil) 6071 of 1999

PETITIONER:

UNION OF INDIA & OTHERS

Vs.

RESPONDENT:

M/S GANESH DAS BHOJRAJ

DATE OF JUDGMENT: 22/02/2000

BENCH:

B.N. Kirpal & M.B. Shah.

JUDGMENT:

Shah, J.

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Two Judges Bench of this Court by order dated 15th

October, 1999 has referred this matter to a larger Bench by@@

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observing thus:-@@

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It appears that there is a conflict in the ratio of the

decisions of this Court in M/s Pankaj Jain Agencies vs.

Union of India and others {1994 (5) SCC 198}, Collector of

Central Excise vs. New Tobacco Co. and others {1998 (8)

SCC 250} and I.T.C. Limited vs. Collector of Central

Excise, Bombay {1996 (5) SCC 538} is also relevant. In our

view it is appropriate that this appeal is to be heard by a

larger Bench.

Before referring to the said decisions, we would narrate

few facts involved in the matter.@@

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Respondent admittedly imported a consignment of Green

Beans (Pulses) weighing 505-505 M.T. vide Invoice No.14/099

dated 31.12.1986. They have filed bill of entry for the

same on 05.2.1987. The importer claimed clearance of the

said goods free of duty on the basis of Exemption

Notification No.129/76-Cus dated 02.8.1976. However, it was

pointed out that on 04.2.1987 the said notification was

amended vide Notification No.40/87-Cus, whereby basic duty @

25% was levied. As the duty was levied @ 25%, importer

filed Writ Petition No. 535 of 1987 in the High Court of

Bombay contending inter alia that the said notification was

not duly published and that it was not in force on the date.

A Division Bench of the High Court of Bombay accepting the

said contention on the basis of Full Bench decision of the

said Court in the case of Apar (P) Ltd. Vs. Union of India

and others, {1985 (22) ELT 644} allowed the writ petition.

Hence the present appeal by the State.

At the outset, we may state that in appeal filed before

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this Court the judgment of the Full Bench of the High Court

of Bombay in Apar (P) Ltd.s case (supra) was set aside {Re:

Union of India v. Apar (P) Ltd., (1999) 6 SCC 117}.

A copy of Original Extraordinary Gazette of India dated

February 04, 1987 [Part-IISection 3Sub-section (i)] is

produced for our perusal. The said notification reads as

under: -

MINISTRY OF FINANCE

(Department of Revenue)

New Delhi, the 4th February, 1987

NOTIFICATION

No.40/87-CUSTOMS G.S.R. 81(E).In exercise of the

powers conferred by sub-section (1) of section 25 of the

Customs Act, 1962 (52 of 1962), the Central Government,

being satisfied that it is necessary in the public interest

so to do, hereby makes the following amendment in the

notification of the Government of India in the Department of

Revenue and Banking No.129/76- Customs, dated the 2nd

August, 1976, namely:-

In the said notification, for the words from the whole

of the duty of customs leviable thereon which is specified

in the said First Schedule the words from payment of so

much of that portion of the duty of customs, which is

specified in the said First Schedule as is in excess of

twenty five per cent ad valorem shall be substituted.

The contention is the aforesaid Notification was not

made available to public at large and, therefore, on the

basis of the said Notification customs duty cannot be

levied. The learned counsel for the appellant relied upon

the decision in M/s Pankaj Jain Agencies v. Union of India

and others1 and the learned counsel for the

respondentimporter has relied upon the decision in

Collector of Central Excise v. New Tobacco Co. and others2

in support of their respective contentions.

In Pankaj Jain Agencies (Supra), this Court considered

similar contention with regard to the Exemption Notification

issued under Section 25 of the Customs Act, 1962 and held

that there was no substance in the contention that

notwithstanding the publication of the notification in the

Official Gazette there was yet a failure to make law known

and that, therefore, the notification did not acquire the

elements of operativeness and enforceability. For this

purpose, Court referred to Section 25(1) of the Customs Act,

which reads as under: -

25. Power to grant exemption from duty.(1) 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.

On the basis of the aforesaid Section, the Court

negatived the contention that until the notification was

available in Bombay and shown to be so available the

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statutory rules or instrument would not become operative.

The Court relied on Three Judge Bench decision in State of

Maharashtra v. Mayer Hans George3 and also referred to the

decision in B.K. Srinivasan and others v. State of

Karnataka and others4 and held thus: - In the present case

indisputably the mode of publication prescribed by Section

25(1) was complied with. The notification was published in

the Official Gazette on the 13.2.1986. As to the effect of

the publication in the Official Gazette, this Court held

[Srinivasan case AIR at p. 1067: SCC pp.672-73, para 15]:

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.

(emphasis supplied)

As against this, learned counsel for the respondent

referred to the decision in Collector of Central Excise v.

New Tobacco Co. and others5 and emphasized that in the

aforesaid case, the Court has specifically held that if

publication is through a Gazette then mere printing of it in

the Gazette would not be enough unless the Gazette

containing the notification is made available to the public.

The Court after considering the contentions has held as

under: -

Our attention was also drawn to the decisions of this

Court in Pankaj Jain Agencies v. Union of India6 and I.T.C.

Ltd. v. CCE7 but they are not helpful in deciding the

question that arises in these cases.

We hold that a Central Excise notification can be said

to have been published, except when it is provided

otherwise, when it is so issued as to make it known to the

public. It would be a proper publication if it is published

in such a manner that persons can, if they are so

interested, acquaint themselves with its contents. If

publication is through a Gazette then mere printing of it in

the Gazette would not be enough. Unless the Gazette

containing the notification is made available to the public,

the notification cannot be said to have been duly

published.

In Garware Nylons Ltd. v. Collector of Customs &

Central Excise, Pune8 similar question was considered by

this Court. In that case by Notification dated 30.9.1985

the customs basic duty was enhanced from 100% to 150% w.e.f.

30.9.1985. The question was whether enhanced rate of duty

was applicable in respect of goods which were cleared from

the warehouse during the period 30.9.1985 till 31.10.1985.

The case of the Company was that the notification came into

effect only from 1.11.1985 since it was made available to

the public for sale on that date. Relying upon the decision

in New Tobacco Co., the Court allowed the said appeal by

holding that the notification can be said to have been duly

published when it is made known to the public.

It has been submitted by the learned counsel for the

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appellant that the afore-quoted observations in the case of

New Tobacco Co. are directly in conflict with the law laid

down by this Court in Pankaj Jain Agencies and in I.T.C.

Ltd. (supra). We agree with the said submission.

In our view, as noted above, in Pankaj Jain Agencies

case, the Court directly dealt with a similar contention and

after relying upon the decision in the case of Mayer Hans

George (Supra) rejected the same. That decision is followed

in I.T.C. Ltd. (Supra) 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 (supra) which is followed in the Pankaj Jain

Agencies case 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.

In the case of Mayer Hans George, it was contended that

the Notification under Section 8 of the Foreign Exchange

Regulation Act, 1947 of the Reserve Bank of India could not

be deemed to have been in force and operation merely from

the date of issue or publication in Gazette. It would have

effect only from the date on which the person against whom

it is sought to be enforced had knowledge of its making. A

contention was raised as regards the precise point of time

when a piece of delegated legislation like exemption

notification by the Reserve Bank would in law take effect.

In support of that contention reliance was placed on the

decision of Privy Council in Lim Chin Aik v. The Queen9.

The Court negatived the said contention by holding that in

the first place the order of Minister dealt with by the

Privy Council was never published since admittedly it was

transmitted to the Immigration official who kept it with

himself. The Court observed: - But in the case on hand,

the notification by the Reserve Bank varying the scope of

the exemption, was admittedly published in the Official

Gazettethe usual mode of publication in India, and it was

so published long before the respondent landed in Bombay.

The question, therefore, is not whether it was published or

not, for in truth it was published, but whether it is

necessary that the publication should be proved to have been

brought to the knowledge of the accused Lastly, the order

made by the Minister in the Singapore case, was one with

respect to a single individual, not a general order, whereas

what we have before us is a general rule applicable to every

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person who passes through India. In the first case, it

would be reasonable to expect that the proper method of

acquainting a person with an order which he is directed to

obey is to serve it on him, or so publish it that he would

certainly know of it, but 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 contents.

The Court further referred to the judgment of Bailhache

J. in Johnson V. Sargant & Sons10 and did not approve the

observation made therein to the effect that the order was

not known until the morning of May 17 but it came into

operation before it was made known. On the contrary, Court

held that there was great force in learned authors (Prof.

C.K. Allen) following comment on reasoning in Sargants

case:

This was a bold example of judge-made law. There was

no precedent for it, and indeed a decision, Jones v.

Robson11, which, though not on all fours, militated strongly

against the judges conclusion, was not cited; nor did the

judge attempt to define how and when delegated legislation

became known. Both arguments and judgment are very brief.

The decision has always been regarded as very doubtful, but

it never came under review by a higher court.

The Court also held that:

It is obvious that for an Indian law to operate and be

effective in the territory where it operates viz., the

territory of India it is not necessary that it should either

be published or be made known outside the country. Even if,

therefore, the view enunciated by Bailhache, J. is taken to

be correct, it would be apparent that the test to find out

effective publication would be publication in India, not

outside India so as to bring it to the notice of everyone

who intends to pass through India. It was published and

made known in India by publication in the Gazette on the

24th November and the ignorance of it by the respondent who

is a foreigner is, in our opinion, wholly irrelevant.

The Court further observed: -

but where there is no statutory requirement we

conceive the rule to be that it is necessary that it should

be published in the usual form i.e., by publication within

the country in such media as generally adopted to notify to

all the persons concerned in the making of rules. In most

of the Indian statutes, including the Act now under

consideration, there is provision for the rules made being

published in the Official Gazette. It therefore stands to

reason that publication in the Official Gazette viz., the

Gazette of India is the ordinary method of bringing a rule

or subordinate legislation to the notice of the persons

concerned.

From the aforesaid judgment it can be stated 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

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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 year1998 by Bill No. 21 of 1998.

Further, in New Tobacco Co.s case (Supra) the Court

referred to the decision in Harla v. State of Rajasthan12.

In Harlas case the Court referred to Section 3 of Jaipur

Laws Act, 1923 which inter alia provided that the Court of

Jaipur State shall administer the law passed from time to

time by the State and published in the official gazette. In

that case, it was admitted that Jaipur Opium Act was never

published in the Gazette and, therefore, the Court held that

in the absence of some specific law or custom to the

contrary, a mere resolution of a Council of Ministers in the

Jaipur State without further publication or promulgation

would not be sufficient to make a law operative. The Court

also observed: -

We take it that if these Proclamations are not

published strictly in accordance with the rules so drawn up,

they will not be valid law..The mode of publication can

vary; what is a good method in one country may not

necessarily be the best in another. But reasonable

publication of some sort there must be.

Further, in the case of New Tobacco Co. (Supra), the

Court relied on the decision in B.K. Srinivasan (Supra).

In that case (in para 15) after considering various

contentions, the Court specifically held that 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.

From the aforesaid observations, it is plain and clear

that the decision in B.K. Srinivasan (Supra) also

reiterates that the notification will take effect only when

it is published through the customarily recognised official

channel, namely, the official gazette. We also agree with

the reasons recorded in Mayer Hans George (supra) and hold

that notification under Section 25 of the Customs Act would

come into operation as soon as it is published in the

Official Gazette and no further publication is required.

Hence, the decision rendered in Pankaj Jain Agencies (supra)

represents the correct exposition of law on the subject.

The decision rendered in New Tobacco Co. followed in

Garware Nylons Ltd. (supra) does not lay down the correct

law.

The learned counsel for the respondent, however,

submitted that there is nothing on record to establish that

notification dated 4.2.1987 withdrawing full exemption from

the levy of customs duty was published on the same day. For

this purpose, original copy of the Notification dated

4.2.1987 published in the Extra-ordinary Gazette on the said

date had been produced before us. The Gazette is admissible

being official record evidencing public affairs and the

Court is required to presume its contents as genuine under

Sections 35 and 38 read with Section 81 of the Evidence Act,

unless contrary is proved. Hence, there is no substance in

the contention that notification dated 4.2.1987 was not

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published in the Gazette on the same day. In our view, said

notification came into force on the same date.

Lastly, at this stage, we would mention that Parliament

has added sub- sections (4) and (5) to Section 25 of the

Customs Act by Act No.21 of 1998 w.e.f. 1.6.1998 which

prescribe the method and mode of publication of the

Notification and the date on which it comes into force.

Newly inserted sub- sections (4) and (5) to Section 25 are

as under: -

(4) Every notification issued under sub-section (1)

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.

(5) Notwithstanding anything contained in sub-section

(4), where a notification comes into force on a date later

than the date of its issue, the same shall be published and

offered for sale by the said Directorate of Publicity and

Public Relations on a date on or before the date on which

the said notification comes into force.

In the result, the appeal is allowed. The impugned

judgment and order passed by the High Court is set-aside and

quashed. The respondent is held liable to pay customs duty

@ 25% under Notification No.40/87-Cus. dated 4.2.1987.

There shall be no order as to costs.