Isha Exim carrying on business Vs. Union of India and Ors. (Neutral Citation: 2023:BHC-AS:38177-DB) - (High Court of Bombay) (18 Dec 2023)

Advance ruling shall be binding unless there is a change of law or facts on the basis of which the advance ruling has been pronounced

MANU/MH/5122/2023

Customs

Present petition under Article 226 of the Constitution of India mounts a challenge to an Order-in-Original (O-I-O) passed by the Deputy Commissioner of Customs. The challenge to such order is primarily on the ground that the said order is in complete defiance of an order dated 31 March 2017 passed by the Authority for Advance Rulings (AAR) under the Chapter V B of the Customs Act, 1962 containing Sections 28E to 28M.

The Petitioner is primarily engaged in the business of import of various edible products including products of betel nut (processed supari). The Petitioner would contend that the classification issue in its own case has been decided by the AAR vide order dated 31st March, 2017 which has attained finality since the same was not challenged before the higher forum and, therefore, relying upon Section 28J(1) of the Act would contend that the said ruling is binding on the Respondents.

It is a well settled in law that the assessee can invoke writ jurisdiction under Article 226 of the Constitution of India, despite an alternate statutory remedy of an appeal on the ground that there is a breach of fundamental rights, breach of natural justice, order passed is without jurisdiction or there is a challenge to the vires of the statute. In these circumstances, the Court can exercise writ jurisdiction inspite of appeal remedy being available to the Petitioner.

Section 28J (1) provides that, the advance ruling pronounced by the authority shall be binding not only on the applicant who had sought it but also on the Principal Commissioner of Customs or Commissioner of Customs and the customs authorities subordinate to him, in respect of the applicant. However, Section 28J (2) provides that, the advance ruling shall be binding unless there is a change of law or facts on the basis of which the advance ruling has been pronounced. In the present proceedings, the only contention raised by the Respondents is that because of change in law on account of dismissal of appeal by the Supreme Court against the order passed by CESTAT in case of other assessees, advance ruling is not binding.

The decision of the AAR dated 31st March 2017 in the case of Petitioner's own case has not been challenged by the respondents before the higher forum. The Respondents did make an attempt for review of the said ruling by filing an application before the AAR which came to be dismissed on 30th March 2022 wherein the Respondents have once again raised an issue of classification. The said rejection by the AAR dated 30th March 2022 is also not challenged before the higher forum.

The decision of the Madras High Court in the petitioner's own case also holds that, the seizure memo of the respondents therein is contrary to the ruling pronounced by the AAR in case of the petitioner. This observation has also not been challenged before any higher judicial forum which also amounts to the Respondents having accepted the ruling pronounced by the AAR in case of the Petitioner.

The ruling dated 31st March 2017 passed by the AAR in the petitioner's own case is binding under Section 28 J (1) on the petitioner and the respondents as there being no change in law post the said decision and the said decision having been accepted by the respondents in the absence of any further challenge before the higher forum. In the instant case, the Respondents have passed the O-I-O contrary to the provisions of Section 28J of the Act and, therefore, the same is without jurisdiction. The impugned order is passed without jurisdiction, writ petition is maintainable. The Petitioner hence ought not to be relegated to take recourse to an appellate remedy. The impugned O-I-O is quashed and set aside.

Tags : AAR RULING DEFIANCE LEGALITY