G.S.Marketing Company v. Archana Arora & Ors

SANJIV KHANNA, J MARCH 22, 2011 pk

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Decided on: 22nd March, 2011 + WRIT PETITION (CIVIL) NO. 7538 OF 2007 G.S.MARKETING COMPANY ..... Petitioner Through: Mr. Rajiv Nanda, Mr. Amit Jain, Ms. Rachna Saxena, Advs. versus ARCHANA ARORA & ORS ..... Respondents Through: Mr. K.K. Ahuja, Adv. for R-1&2 Mr. A.S. Chandhiok, ASG with Mr. Sumeet Pushkarna, Mr.Bhagat Singh, Mr. Jitendra, Adv. for R3/UOI CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA 1. Whether reporters of the local papers be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes DIPAK MISRA, CJ Invoking the inherent jurisdiction of this Court under Article 226 of the Constitution of India, the petitioner has prayed for issue of a writ of mandamus or any other writ or direction commanding the respondents to allow the petitioner to take refund/input tax credit on the additional custom duty imposed under Notification No.19/2006-CUS dated 1.3.2006 for the period between 1.3.2006 and 14.9.2006. It is apposite to mention here that that is the only prayer on the basis of which notice was issued and learned counsel for the petitioner has only addressed us on the said issue. 2. The brief resume of facts which are essential to be stated for appreciating the controversy is that the petitioner is a registered dealer under Delhi Value Added Tax Act (VAT) and Central Sales Tax Act, vide TIN No. 07450307181 and is engaged in trading, i.e., import and export of paper, paper board and lamination film etc. The Central Government issued a Notification No.19/2006-CUS dated 1.3.2006 under Section 3(5) of the Customs Tariff Act, 1975 (for short "the 1975 Act") and Notification No. 102/2007-CUS dated 14.9.2007. By Notification dated 1.3.2006, the third respondent imposed additional duty of customs (CVD) to countervail State taxes/VAT. A reference has also been made to the speech of the Finance Minister relating to the Budget session of the year 2005-06. 3. It is averred that Section 3 of the 1975 Act has been substituted w.e.f. 1.3.2005 vide Section 72 of the Finance Act, 2005 read with the declaration made under the Provisional Collection of Taxes Act, 1931 with Finance Bill, 2005. The new provision, as contended, enables the Government to impose an additional duty at a rate not exceeding 4% ad valorem to countervail the sales tax, value added tax, local taxes and other charges leviable on sale or purchase or transportation of like goods in India. The value for the purpose of the said levy would include the assessable value, basic custom duty and any sum chargeable as customs duty under Section 12 of the Customs Act, 1962 and any additional duty of custom leviable under sub-section (1) of Section 3A of 1975 Act. Various assertions have been put forth to highlight that the circular dated 14.9.2007 issued by the Government of India, Ministry of Finance only clarifies the notification No. 19/2006-CUS dated 1.3.2006 and, therefore, it has to have retrospective effect from 1.3.2006 and, therefore, the benefit should be available to the petitioner. In support of the aforesaid stand, it is contended by Mr.Nanda, learned counsel for the petitioner that the circular dated 14.9.2007, if appreciably understood, would only convey that the factual position as it existed on 1.3.2006 has been clarified to allay any kind of apprehension in the mind of the adjudicating authority and, therefore, it has to be treated as retrospective being clarificatory in nature. To bolster the said submission, he has placed reliance on the decision in W.P.I.L. Ltd. v. Commissioner of Central Excise, Meerut, UP, 2005 (181) ELT 359 (SC). 4. Mr. A.S. Chandhiok, learned ASG, per contra, contended that the said circular is prospective as the language would clearly so reveal and it really does not clarify any aspect as there was no previous notification or a communication or a circular or prevalent practice which can be