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The State will always be liable for the misdemeanor by its officers if it is caused by their neglige

M/s. Granules India Ltd. Vs. Union of India and Others, Civil Appeal Nos. 593-594 of 2020 arising out of SLP (Civil) No(s). 30371-30372 of 2017 – January 23, 2020.

The Supreme Court Bench comprising of Justice N. Sinha and Justice Krishna Murari allowed the appeals.


The appellant imported 96 tons of chemical ‘Acetic anhydride’ under bills of entry through Inland Water Container Depot under the Advance Licence Scheme. It claimed for clearance of consignment free of import duty in terms of customs notification. The notification permitted without payment of customs duty subject to fulfillment of some norms and conditions. The notifications were amended which made the imports liable for duty, exemption having been withdrawn. This notification was again amended which allowed the imports of chemicals without any duty but subject to certain terms and conditions. The clarificatory notification led to some difficulties. The appellants were allowed to clear the consignments without any duty. The respondents issued a show cause notice that the consignments have been imported after the date of notification.

The contention of the appellants is that the appellants are not liable for customs duty is completely unsustainable. The mere failure to enclose a copy of the notification could not be a ground for the denial of relief. Denial of exemptions in the facts and circumstances of the case in view of the statutory notifications were per se arbitrary.

The State supported the order of the High Court and urged that the consignments having been imported after withdrawal of the exemption and before issuance of the clarificatory notification was justified.

The Court considered the submissions of both the parties and held that the order of High Court was completely unsustainable. It is the error made by the High Court in being unaware of the clarificatory notification. The State will always be liable for the misdemeanor by its officers if it is caused by their negligence or casualness. The State authorities have no defence to contend that they were unaware of the notification. The Court relied upon National Insurance Co. Ltd. vs. Jugal Kishore.

Therefore, the impugned orders are held unsustainable and are set aside. The appeals are allowed.

–  Vydurya Selvi Baskaran



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