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Chandra Sekhar Jha vs. Union of India

Civil Appeal · 2022 INSC 246Decided 28 Feb 2022
Civil Appeal No. 1566 of 2022
K.M. Joseph · Hrishikesh Roy

Background

The appellant was intercepted while traveling by train and allegedly found carrying gold smuggled from Bangladesh. The Commissioner of Customs imposed a penalty of Rs. 75 lakhs on him in 2015. When he appealed to the Customs, Excise and Service Tax Appellate Tribunal in 2017, the Tribunal dismissed his appeal because he had not made the mandatory "pre-deposit" (a partial payment required before an appeal can even be heard) under Section 129E of the Customs Act, 1962, and the High Court upheld this dismissal.

Decision Breakdown

The appellant argued that since the smuggling incident occurred in 2013, before Section 129E was amended in 2014 to require a fixed 7.5% pre-deposit (replacing an earlier regime where the full disputed amount was payable, subject to discretionary waiver for "undue hardship"). He should get the benefit of the older, more flexible provision. The Supreme Court rejected this, holding that a legal substitution of a provision effectively repeals and replaces it, and what matters is the law in force when the penalty order (2015) and appeal (2017) were made, not the date of the underlying incident. Since the appellant was only being asked to pay the lower fixed percentage under the new law (not the full amount under the old law), he could not also claim the old law's discretionary waiver benefit. The Court dismissed the appeal but extended his deadline to make the pre-deposit by two months.

Lesson Learnt

When a law changes while your case is pending, the version of the law that applies is generally the one in force at the time of the relevant order/appeal, not the one existing when the underlying incident occurred, and a taxpayer cannot selectively pick the most favourable features of both the old and new versions of a statute.

Official source (sci.gov.in)View Judgment (PDF)

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