Importer loses case in Supreme Court after 28 years of litigation - all because of a wrong plea taken in the High Court
YESTERDAY, the Supreme Court decided an interesting Customs case.
The appellant imported a printing machine in 1987 and claimed exemption under a notification, which prescribed a condition that the machine should have a printing capacity of more than 30,000 copies. The appraiser of Customs noticed that the machine's output was shown as 36,000 copies in the invoice while the leaflet pertaining to the machine showed it as 25,000 copies. The machine was ordered to be kept in the warehouse. Even after repeated requests, the Customs did not release the machine and so the appellant approached the High Court in writ petition. The High Court ordered release of the machine in an interim order. The writ petition was kept pending. The importer got his machine and started using it.
After 14 years, in 2002, the writ came up for hearing in the High Court. It must be noticed that the Department had not issued any Show Cause Notice in all these 14 years, even though there was no stay of adjudication proceedings. The Department could have initiated the adjudication proceedings which for some reason it did not. At this stage the importer could have even withdrawn the writ petition - it had used the machine for 14 years. Even if the department were to issue a Show Cause Notice at this stage, it would have been time barred. But it committed virtual legal hara-kiri - it insisted on the High Court to decide the issue on merits.
The helpless High Court observed,
"The long pendency of this petition for 14 years and the peculiar stand taken by the petitioners prevented us from remitting this matter to the adjudicating authorities under the Act to determine the disputed questions of fact. Left with no other alternative, we are constrained to decide this matter on merits on appreciation of evidence."
Now comes the shock - the High Court decided the issue against the importer and held that the importer was not eligible for the exemption as it has not discharged the burden of proving that it was entitled.
The importer is before the Supreme Court contending that the High Court had no jurisdiction to decide the issue as the Customs Act provides for complete adjudication machinery to adjudicate this issue; the issue is time barred and even on merits, the High Court was not correct.
The Supreme Court was not impressed and observed,
After inviting the High Court to decide the matter on merits and finding that the decision has gone against the appellant, contrary argument is nothing but a desperate attempt to chicken out of the situation which is appellant's own creation. This kind of somersault, taking completely reverse stand before us, cannot be countenanced. We, therefore, reject the contention of the appellant that High Court was not competent to decide the issue in exercise of its writ jurisdiction .
The Supreme Court held that the powers of the High Court under Article 226 of the Constitution, while issuing appropriate writs, are very wide. Even if there is an alternate remedy that may not preclude the High Court from exercising the jurisdiction in a particular case. In the face of alternate statutory remedies, when the High Court declines to exercise the jurisdiction under Article 226 of the Constitution, it is a self imposed restriction only. In the instant case, what is pertinent is that it is the appellant which not only made a prayer in the writ petition for deciding the issue in question, even at the time of hearing, it is the appellant which pressed for the decision with the submission that existence of alternate remedy should not deter the Court to render the decision on merits. In such a situation, the objection, if any, to the maintainability of the writ petition could have been taken by the respondent and it does not behove the appellant to raise this objection in the present appeal after pleading in the High Court that the matter be decided on merits.
Even on merits, the Supreme Court agreed with the view taken by the High Court on merits that burden of proof was on the appellant to establish that the machine imported by it generates more than 35,000 composite impressions or copies per hour, which the appellant failed to do.
In trying to avoid litigation and get a final decision at the end of 14 years, the importer not only had to continue litigation for another 13 years at a higher court, but lost the game at end of it all. Even if the writ petition was dismissed by the High Court, the importer would have still won the case, at least on limitation.
Look before you litigate!
We bring you this case today.