In an eleventh-hour twist, the Bombay High Court threw a lifeline to Patanjali Foods, saving them from a ₹62 lakh customs duty hike. Justices KR Shriram and Jitendra Jain determined that the notification revising tariff rates was issued 25 minutes too late, after Patanjali had already filed their ex-bond bills of entry.
The court’s decision comes as a significant relief for Patanjali Foods, which had imported crude palm oil for home use. The company’s filings were meticulously timed between 8:20 PM and 9 PM, while the new tariff rates only kicked in at 9:24 PM. The court acknowledged this crucial timing, which meant the reassessment by the Department of Revenue was void.
Patanjali’s legal team highlighted that all four bills of entry were self-assessed well before the tariff changes, with the precise timings recorded to the second. In their petition, Patanjali contended that the reassessment led to unwarranted additional charges, including customs duty, agriculture and infrastructure development cess, social welfare surcharge, and IGST, summing up to ₹61,69,890. This amount was paid under protest, as the company argued the incorrect application of post-facto tariff rates.
The Revenue department’s attempt to direct Patanjali towards an appeal process was dismissed by the court. The reassessment orders were deemed non-speaking, offering no grounds for the company to challenge. Instead, the court referenced a previous Supreme Court ruling in Union of India & Ors. v M/s GS Chatha Rice Mills & Anr., underscoring that the applicable tariff rate should be the one in effect at the exact time of filing the bills of entry.
Despite arguments from the Revenue about the company missing the refund application deadline, the court cited another Supreme Court precedent, affirming that the limitation period does not apply when the duty is paid under protest.
In conclusion, the court not only nullified the reassessment orders but also instructed Patanjali to submit a refund application, which the proper officer must address within 12 weeks. This ruling not only safeguards Patanjali from substantial financial impact but also sets a critical judicial benchmark on the timing of tariff notifications and their enforceability.
