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Union of India (Ministry of Finance) v. M/s Kumho Petrochemicals Co. Limited

Civil Appeal · 2017 INSC 476Decided 9 Jun 2017
Civil Appeal Nos. 008309-008310 of 2017
Justice A.K. Sikri · Justice Ashok Bhushan

Background

India had imposed anti-dumping duty on imports of Acrylonitrile Butadiene Rubber (NBR) from Korea, periodically extended after "sunset reviews." The original five-year extension (notified 02.01.2009) was due to expire on 01.01.2014. A third sunset review was initiated by a notification dated 31.12.2013, but the notification was made public only on 06.01.2014, and a further notification extending the duty by one more year was issued only on 23.01.2014, after the original notification had already lapsed. Importers Kumho Petrochemicals and Fairdeal Polychem challenged this, and the Delhi High Court partly ruled in their favour, holding that the extension issued after expiry was invalid, while rejecting their separate argument that the review itself was invalid for being publicised after 01.01.2014. Both the Union of India/domestic industry and the importers cross-appealed to the Supreme Court.

Decision Breakdown

The Supreme Court dismissed both sets of appeals, affirming the High Court on both points. First, it held that under Section 9A(5) of the Customs Tariff Act, only the decision to initiate a sunset review (not its public notification) needs to occur before the original duty's five-year period expires; so the review here, initiated internally on 31.12.2013 (one day before expiry), was validly initiated even though published later. Second, it held that the "second proviso" allowing anti-dumping duty to "continue" pending a review is only an enabling power, not automatic: it requires the government to actively issue a fresh notification before the original notification lapses. Since the Notification dated 02.01.2009 had already expired on 01.01.2014, the Centre's attempt to amend/extend it via a notification dated 23.01.2014 came too late, as there was nothing left in force to amend; such a duty, being a form of tax, cannot be revived without proper legal authority under Article 265 of the Constitution.

Lesson Learnt

A government cannot revive a tax, duty, or similar statutory levy after it has lapsed by issuing a notification once the deadline has already passed: any extension of a time-bound duty or similar levy must be formally notified before the original period expires, not after a gap, even if a review process was already set in motion in time.

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

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