The battle lines for a renewed Mahabharata on ‘proper officer under Customs Act, 1962 are being redrawn again with both the Judiciary and the Executive becoming hyper active post the Cannon India Pvt Ltd vs Union of India matter.
While the Department has filed a review petition against the case listed for hearing on March 9, 2022, and is also battling out on new turf of other cases pending in the Supreme Court, the Executive has done its bit through proposed amendments in Finance Bill, 2022.
The Bill is likely to become Finance Act on approval by the Parliament. In the recent matter of Union of India and Others vs Godrej and Boyce Manufacturing Company Ltd., the matter of Cannon India Pvt Ltd was brought into contention.
The apex court, after being pointed out that Cannon India had while focusing on the definition of ‘Proper Officer’ under the Customs Act, ignored Section 28(11) as amended which would have come to the rescue of the Customs Department, issued notice to the other side.
The Department had engaged the Attorney General and whole contingent of advocates to argue the matter from the side of Union of India. The notice has been issued to the respondents and the matter is listed for arguments on March 8, 2022.
In the meanwhile, on the legislative side through the Budget and Finance Bill, a set of amendments have been proposed under Section 2(34) in the definition of ‘Proper Officer’ and in Section 3 to include DRI officers within the ambit of ‘Classes of Officers of Customs’.
Further, Sections 5(1A), (1B) have been introduced to give the Board the power to assign function as officers of Customs and also sub-Section 5(4) and 5(5) have been introduced to allow Central Board of Indirect Taxes and Customs (CBIC) to impose conditions, while assigning any function to officers of Customs and also to give concurrent powers to two or more officers of Customs.
The note on Clause 96 provides that the Clause has been introduced to give validation to any action taken or function performed before Finance Act, 2022 under various specified Chapters of Customs Act, 1962 and Notifications issued thereunder for appointing an officer of Customs or assessing functions, by giving retrospective effect to Sections 2, 3 and 5 of the Customs Act, 1962, amended by the Act to that effect.
While it cannot be denied that notes on clauses can be a good guide of interpretation, a good draftsman would rather like the relevant provision to be clear and unambiguous and conveying the whole meaning and purposes rather than drawing aid from any interpretation tool.
It is here that Clause 96 has done the opposite and the same is reproduced below:
“Validation of certain actions taken under Customs Act – Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, or in the provisions of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Customs Act) –
(i) Anything done or any duty performed or any action taken or purported to have been taken or done under Chapters V, VAA, VI, IX, X, XI, XII, XIIA, XIII, XIV, XVI and XVII of the Customs Act, as it stood prior to its amendment by this Act, shall be deemed to have been validly done or performed or taken.
(ii) Any notification issued under the Customs Act for appointing or assigning functions to any officer shall be deemed to have been validly issued for all purposes, including for the purposes of Section 6.
(iii) For the purposes of this Section, Sections 2, 3 and 5 of the Customs Act, as amended by this Act, shall have and shall always be deemed to have effect for all purposes as if the provisions of the Customs Act, as amended by this Act, had been in force at all material times.
Explanation — For the purposes of this Section, it is hereby clarified that any proceeding arising out of any action taken under this Section and pending on the date of commencement of this Act shall be disposed of in accordance with the provisions of the Customs Act, as amended by this Act.
A plain reading of the provision indicates that non-obstante clause operates irrespective of any judgment, decree or order of any Court, Tribunal or any other authority as well as in preference to any provision of Customs Act and includes in its ambit, “anything done or any duty performed or any action taken or purported to have been taken or done” under stipulated 12 Chapters of the Customs Act as they stood prior to the amendment by the Act.
While Clauses 2 and Clause 3 still deal with point of appointments of officers, Clause 1 has been drafted broadly enough to include anything done or any duty performed or action taken. The Clause is thus comprehensively wide to include almost actions like search, seizure and arrest, confiscation of goods, adjudication etc. and if anything done was reversed by any court then department can take resort to the provision even to legally revise the same as act done or any action taken prior to amendment by the Finance Act, 2022 on which no judgment, decision can have impact.
One cannot ignore the fact that Clause 1 has been badly drafted and does not bring out the object of the note on Clauses. One cannot be oblivious of the fact that language as used affords an interpretation that various Acts like seizures and confiscation by any officer gets validated even when reversed by courts, in any routine litigation.
Scope of better language therefore cannot be denied. The Customs Department has been a victim of poor drafting of provisions, at least twice earlier on account of DRI officers declared to be not ‘proper officer’ in the Sayed Ali vs Commissioner of Customs case, as reported in 2011 (E.L.T. 17 (S. C.) and in Cannon India Pvt Ltd in 2021.
Relevant provision should not therefore suffer a vice of loose cannon of drafting. The Department should, therefore, contemplate amending the provision when Finance Bill undergoes process of becoming the Act. For it is a provision that should dictate the law and not the explanatory clauses, (which are last drawn aids of interpretation) and can never replace the simple and plain words of the statute.
[Advocate Somesh Arora is the Chief Consultant (Amicus Rarus) and Former Commissioner of Customs & Central Excise. The views expressed are personal]