It must be said right at the outset before saying anything else that the Supreme Court most recently in a recent and notable judgment titled M/S Granules India Ltd. Vs Union Of India And Others in Civil Appeal No(s). 593-594 of 2020 (Arising out of SLP (Civil) No(s). 30371-30372 of 2017) in exercise of its civil appellate jurisdiction has minced just no words to remark most unequivocally and unambiguously that, State, as a litigant, cannot behave as a private litigant, and it has solemn and constitutional duty to assist the court in dispensation of justice. The Apex Court was considering an appeal against the High Court order which had dismissed a writ petition challenging denial of exemption from Customs duty on the ground that the authorities of the State were also unaware of the clarificatory notification and neither did the petitioner bring it on record. No doubt, it is high time and the State must now without fail certainly pay heed to what the top court of our country has said so clearly and convincingly which has lot of merit in it and therefore must be adhered to in totality!

To begin with, this latest, landmark and laudable judgment authored by Justice Navin Sinha for himself and Justice Krishna Murari of the Apex Court Bench sets the ball rolling in para 2 by first and foremost observing that, The appellant is aggrieved by orders dated 07.12.2016 and 14.06.2017, rejecting the writ petition as also the review application arising from the same.

While elaborating in detail, the Bench then observes aptly in para 3 that, The appellant, during the year 1993 imported 96 tons of the chemical Acetic Anhydride under three Bills of Entry bearing nos. 290, 291 and 300 dated 01.12.1993, 01.12.1993 and 14.12.1993 through the Inland Water Container Depot (ICD), Hyderabad under the Advance Licence Scheme. It claimed clearance of the consignment free of import duty in terms of Customs Notification nos. 203/1992, 204/1992, both dated 19.05.1992. The notification contained a scheme permitting import without payment of customs duty subject to fulfillment of certain norms and conditions.

The Notification nos. 203/1992 and 204/1992 were amended by a Notification no. 183/1993 dated 25.11.1993, by which the subject imports became liable for duty, the exemption having been withdrawn. The Notification dated 25.11.1993 was further amended by another clarificatory Notification no. 105/1994 dated 18.03.1994 permitting the import of the chemical without customs duty subject to certain terms and conditions. The clarificatory notification was necessitated to obviate the difficulties faced by the importers like the appellant, who had imported the chemical under the advance licence issued by the Director General of Foreign Trade prior to the amendment Notification no. 183/1993 dated 25.11.1993.

While continuing in the same vein, the Bench then further very rightly points out in para 4 that, The appellant was allowed to clear the consignments under the aforesaid three Bills of Entry without payment of duty. Subsequently the respondents issued show cause notice under Section 28 (1) of the Customs Act, 1962 with regard to the same consignments as having been imported after 25.11.1993.

The appellant made a representation on 20.11.1997 seeking exemption. It was considered favourably in respect of three other consignments under Bill of Entry No. 312 dated 12.09.1993, Bill of Entry No. 28 dated 10.02.1994 and Bill of Entry No. 27 dated 09.02.1994. The entire consignments were imported under the same advance licence. In pursuance of the show cause notice the appellant was held liable to duty by order dated 12.2.1998 with regard to the consignment under three Bills of Entry bearing nos. 290, 291 and 300 dated 01.12.1993, 01.12.1993 and 14.12.1993 respectively though these were also under the same advance licence. The respondents while considering the reply to the show cause notice and fixing liability for payment of customs duty did not make any reference to their notification dated 18.03.1994. The Commissioner (Appeals) on the same reasoning rejected the appeal leading to the institution of the writ application.

Interestingly enough, it is then disclosed in para 5 that, Dismissing the writ application, the High Court opined that no mandamus for exemption could be issued. The consignments were admittedly imported after 25.11.1993 and before the clarificatory notification dated 18.03.1994. Thus, there was no arbitrariness on part of the respondent. The appellant preferred a review application inter alia relying upon a Division Bench of the Andhra Pradesh High Court in Shri Krishna Pharmaceuticals Limited vs. Union of India, (2004) 173 ELT 14. Rejecting the plea, the High Court opined that since the appellant did not produce the clarificatory notification along with the writ petition and neither were the respondents aware of the clarificatory notification the appellant was not entitled to any relief.

On the one hand, it is pointed out in para 6 that, Shri B. Adinarayana Rao, learned senior counsel appearing on behalf of the appellant, submitted that denial of exemption to the consignment actually imported after 25.11.1993 under the advance licence obtained prior to 19.05.1992 notwithstanding the clarificatory notification dated 18.03.1994 holding the appellant liable for customs duty is completely unsustainable. Special Leave Petition (Civil) No. 14288 of 2004 (CC No. 5418/2004) preferred against the order in Shri Krishna Pharmaceuticals Limited (supra) was dismissed. The mere failure to enclose a copy of the notification could not be a ground for denial of relief. Denial of exemption in the facts and circumstances of the case in view of the statutory notifications were per se arbitrary.

On the other hand, it is then just aptly pointed out in para 7 that, Learned counsel appearing for the State supported the order of the High Court and urged that the consignments having been imported after withdrawal of the exemption and before issuance of the clarificatory notification was justified.

On the whole, the Bench then observes rightly after listening to both the sides in para 8 that, We have considered the submissions on behalf of the parties and are of the considered opinion that the order of the High Court is completely unsustainable. The entire consignment was imported under one advance licence issued to the petitioner prior to 19.05.1992. The fortuitous circumstance that part of the consignment was actually imported prior to 25.11.1993 and the rest subsequent thereto is hardly relevant in view of the clarificatory notification dated 18.03.1994 that the exemption would continue to apply subject to fulfillment of the specified terms and conditions. It is not the case of the respondents that the consignments imported subsequently did not meet the terms and conditions of the exemption.

Most remarkably, it is then very rightly held in para 9 that, It is unfortunate that the High Court failed to follow its own order in a similar matter. The High Court further gravely erred in holding that the authorities of the State were also unaware of the clarificatory notification and neither did the appellant bring it on record. The State is the largest litigant as often noted. It stands in a category apart having a solemn and constitutional duty to assist the court in dispensation of justice.

The State cannot behave like a private litigant and rely on abstract theories of the burden of proof. The State acts through its officer who are given powers in trust. If the trust so reposed is betrayed, whether by casualness or negligence, will the State still be liable for such misdemeanor by its officers betraying the trust so reposed in them or will the officers be individually answerable. In our considered opinion it is absolutely no defence of the State authorities to contend that they were not aware of their own notification dated 18.09.1994. The onus heavily rests on them and a casual statement generating litigation by State apathy cannot be approved.

No doubt, it is a brief but brilliantly written judgment. Before concluding, it holds in the last para 11 that, The impugned orders are therefore held to be unsustainable and are set aside. The appeals are allowed. Also, it ably cites the relevant case law titled National Insurance Co. Ltd. vs. Jugal Kishore (1988) 1 SCC 626 in para 10 and briefly stated very rightly holds that, This Court has consistently emphasized that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof. This duty is greater in the case of instrumentalities of the State such as the appellant who are under an obligation to act fairly.

The obligation on the part of the State or its instrumentalities to act fairly can never be over-emphasised. There has not even an iota of doubt been left by the Apex Court Bench in this leading case to hold most clearly, convincingly and categorically that, State, as a litigant, cannot behave as a private litigant, and it has solemn and constitutional duty to assist the court in dispensation of justice.

Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi, A 82, Defence Enclave,
Sardhana Road, Kankerkhera, Meerut – 250001, Uttar Pradesh.