ivil Appeal No 679 of 1978
From the Judgment and Order dated 309
1976 of the Madhya Pradesh High Court in Misc
Petition No 63 of 1976
SK Agnihotri for the Appellants
Nemo for the Respondent
The Judgment of the Court was delivered by 265 SABYASACHI MUKHARJI CJ
This is an appeal by special leave from the judgment and order of the High Court of Madhya Pradesh dated 30th September 1976 in Miscellaneous Petition No 63 of 1976
The respondent was the owner of a truck which was seized by the Police Sorwa on 10th December 1974 for alleged con travention of the provisions of the hereinafter called the Act  in connection with Crime No 42 of 1972
The respondent made applications under Articles 226 and 227 of the Constitution of India to the High Court to quash the orders of the Judicial Magistrate First Class Alirajpur and the Sessions Judge Jhabua re spectively rejecting
his request for the return of the vehicle on furnishing security and to quash the order of the District Collector and restrain him from proceeding further in pursuance of the notice issued by him under Section 68 of the Act for confiscation of the vehicle and ask for return of the vehicle or in the alternative to direct the District Judicial Magistrate to dispose of the application in accord ance with law The High Court after setting out the facts addressed itself to three questions namely 1 whether Section 6A of the as amended by the Amendment Act No 30 of 1974 was prospective or retrospective 2 whether in the facts and circumstances the criminal Court had jurisdiction to entertain an application under section 523 read with section 516A of the Criminal Procedure Code for the return of the vehicle seized by the Police pending final decision of the criminal case and 3 whether the respondent was entitled on the merits for the return of the vehicle as prayed for On the first question the High Court was of the view that it was a fundamental rule of law that no Statute should be construed to have a retrospective operation unless such a construction appeared very clearly in the terms of the Act or arose by necessary implication direct or indirect
The High Court referred to several decisions which it is not necessary for us to refer to
It is well settled that the normal rule of construction is that a provision in a statute is prospective but not retrospective however in the case of statutes which are merely declaratory or which relate to only matters of procedure or of evidence it may have retro spective effect if there are indications to that effect or the manifest purpose compels one to construe the Act as such
On an examination of the statute and the provisions referred to herein the High Court found that there was no retroactivity
We are 266 of the opinion that for the reasons given by the High Court it is difficult to accept the position that there was no retroactivity
Indeed Mr Deshpande appearing for the appel lant did not seriously challenge this finding of the High Court
There is no dispute in this case that the contraven tion of the provisions of the Act is alleged to have taken place in the instant case on the night of 15th March 1972
The vehicle was seized on 10th December 1974
The High Court examined Section 4 of the Amendment Act along with Section 6A of the Principal Act and came to the conclusion that there was no retrospective effect
We are of the opin ion that the High Court was right in holding that Section 4 of the Amendment Act 1974 was only prospective and not retrospective
Not only that there were no specific words to indicate the provisions of retrospective effect but the positive provisions of sub section 2 of section 1 were to the effect that the amendment must be deemed to have come in effect on a particular date is a pointer and that puts the matter beyond doubt
The provisions of section 6A as it stood on 15th March 1972 only were applicable to the present case and section 4 of the Amendment Act 1974 could not therefore be applied as the Act was not in force on the date of offence
The challenge to the High Court order on this aspect cannot therefore be entertained
It was next contended by the respondent before the High Court that the Criminal Court was empowered under section 7 of the Act to confiscate the vehicle after due and proper inquiry and therefore the proceedings by the District Col lector under section 6A and Section 6B of the Act should be quashed
Reliance was placed on several decisions and au thorities
Our attention was drawn to the decision of the Mysore High Court in the case of The State vs Abdul Rasheed AIR  Sri Bharat Mahey  Ors
vs The State of U P  Ors as well as the decision of the learned Single Judge in State of MP vs Basant Kumar 1972 JLJ Short Note No 99
On a consideration of the relevant authorities the High Court came to the conclu sion that the criminal Court had jurisdiction to deal with the matter
Mr Deshpande sought to argue that in view of the enactment of the provisions of Section 6A as well as section 7 of the Act it cannot be held that the criminal Court continued to retain jurisdiction
He submitted that in view of the enactment of these provisions it would be useless to hold that the criminal Court continued to retain jurisdiction otherwise the very purpose of enacting section 6A read with section 7 would be defeated
We are however unable to accept this contention because normally under the Criminal Procedure Code the Criminal Courts of the country have the jurisdiction and the ouster of 267 the ordinary criminal Court in respect of a crime can only be inferred if that is the irresistible conclusion flowing from necessary implication of the new Act In view of the language used and in the context in which this language has been used we are of the opinion that the High Court was right in coming to the conclusion that the Criminal Court retained jurisdiction and was not completely ousted of the jurisdiction
In that view of the matter the High Court was therefore right in passing the order under consideration and in the facts and circumstances of the case to return the vehicle to the respondent on furnishing the security In the premise the appeal must fail and is dismissed
There win however be no order as to costs
NPV Appeal dismissed


Summary:
The appellant imported Top Line Tube Winder Endless Belts which were assessed to duty under heading 4005163 at 40 plus countervailing duty at the rate of 25 under Item 16 A4 of the 
Thereafter the appellant made an application for refund of the excess of duty so charged contending that the goods were in fact liable to be classified under heading 591617 and without countervailing duty
The Assistant Collector rejected the claim by his order dated October 12 1979 and against it the appellant pre ferred an appeal under Section 128 of the to the Appellate Collector who allowed the appeal holding that the goods were classifiable under heading 591617
The Government however issued a suo motu show cause notice dated November 21 1981 to the appellant under Sec tion 1313 asking the appellant to show cause as to why the goods should not be classified under heading 3907 which attracted duty at 100 ad valorem and also as to why the order dated May 2 1981 passed by the Appellate Collector should not be annulled
Against the aforesaid show cause the appellant pre ferred an appeal to the Customs Excise and Gold Control Appellate Tribunal contending that the show cause notice was barred by limitation under sub section 5 of Section 131 read with Section 28 of the Act which was six months from the date of short levy and in any case six months from the date of the Appellate order
97 The Tribunal dismissed the appeal holding that the notice was in time and that the assessment proposed to be made under heading 3907 was proper and set aside the order of the Appellate Collector allowing the revision
In the appeal to this Court the question for considera tion was whether the Central Government violated the bar of limitation while exercising suo motu revisional powers under Section 13 of the 
Dismissing the appeal by a 21 Majority this Court HELD Sabyasachi Mukharji CJ
and PB Sawant J Per Sawant J 1
The provisions of Section 1315 and therefore the limitation laid down in section 28 of the Act do not apply to the action taken by the government under section 1313
103D Geep Flashlight Industries Ltd vs Union of India   followed
Even if it was held that the limitation as laid down in Section 28 would apply to the initiation of action under Section 1313 since the appellate order in the instant case has only allowed the appeal of the appellant declaring him as being entitled to the refund and no refund has yet been made the action of the Government under section 1313 is clearly not barred by limitation 102G H 3
In the case of erroneous refund the notice under section 28 of the Act has to be given within six months from the date of actual  refund
If no refund has in fact been made limitation cannot be said to arise inasmuch as the relevant date  under section 28 in the case of erroneous refund speaks of the date of refund The Order granting refund is not actual refund
Admittedly in the instant case no refund has been made to the appellant under the appellate customs order dated May 2 1981
Hence even if it is held that the provisions of subsection 3 of Section 131 are governed by sub section 5 thereof and therefore the limitation laid down under section 28 of the Act applied to the action of the Government under section 1313 the present show cause notice is not barred by limitation 103C D 4
It is clear from the provisions of sub section 3 of Section 131 that it does not give power to the Central Government to act suo motu 98 to annul or modify an order passed by the original assessing authority
On the other hand the provisions of sub section 5 of Section 131 contemplate proceedings against actions of the original assessing authority which have resulted in either not levying or short levying the goods
That sub section by implication also covers cases of refunds when goods are cleared initially under a provisional assessment and the final assessment shows that the assessee is entitled to a refund of duty charged in excess earlier
But all the cases whether of non levy short levy or of refund which are contemplated in sub section 5 are cases arising out of the acts of omissions and commissions of the original assessing authority and it is when such orders passed by the original assessing authority which are sought to be annulled or modified that the provision of limitation contained in Section 28 applies
103G H 104A B 5
Thus the situations contemplated by sub section 3 and by sub section 5 of Section 131 are mutually exclusive in that whereas sub section3 speaks of the annulment or modification of the appellate or revisional orders sub section 5 speaks of the orders passed by the original assessing authority
104B 6
Hence the limitation applies when the Government seeks to annul or modify orders of the original assessing authority under subsection 5 and not when the Government takes action to annul or modify the appellate or revisional orders under sub section 3 104C 7
The above interpretation is also consistent with the provisions of sub sections 1 and 4 of Section 131
104D 8
The conclusion is inescapable that the limitation prescribed by Section 28 is applicable when under sub sec tion 5 of Section 131 the Government seeks to annul or modify orders other than those passed under Sections 128 and 130
It is not applicable to the action taken under sub section 3 for annulling or modifying orders passed under Sections 128 and 130
104G H 9
In the instant case since the impugned show cause notice is issued to annulmodify the order passed by the Appellate Collector of Customs under Section 128 it is not barred by limitation
105A Per MM Punchhi J dissenting 1a Section 28 envisages three kinds of errors in regard to custom duties
One is non levy
This means that the goods were not 99 classified to duty whereas they could be
The second is short levy
In this could be included a case in which the goods could be classified in one Entry but were erroneously classified under another Entry resulting in short levy of custom duty or the like
The third is the case of erroneous refund
This category springs up in the process of assess ment only where two kinds of error ie non levy or short levy may occur and lead to an erroneous refund
108H 109A b It is clear from section 28 that in case of duty not levied or short levied the relevant date  is the date on which the concerned officer makes some orders for the clear ance of the goods on payment of duty on framing the final assessment as the case may be
109E Geep Flashlight Industries Ltd vs Union of India  Ors   referred to
Since levy is linked to assessment a case for refund may arise which may be erroneous
109A In the instant case the Tribunal seems to take the view that sub section 3 of Section 131 if employed eclipses sub section 5 of Section 131
It was of the view that when the Central Government on its own motion proposes to annul or modify any order passed under Section 128 or Section 130 then it is not lettered by the time limit specified in Section 28 even though it entertains the opinion that any duty of customs has either not been levied or has been short levied
This approach appears to wholly erroneous
108D E 3
There is nothing in the language of sub section 3 to suggest that it over powers or renders otiose sub section 5
Both the sub sections need not militate against each other components as they are of the singular power con ferred by the legislature on the Central Government for revision
108E 4
The harmonious way is therefore to read these sub sections would be that the Central Government is empow ered on its own motion to annul or modify any order passed under Section 128 or Section 130 but if it is an order whereby any duty of customs has either not been levied or has been short levied the Central Government can levy or enhance the duty by giving the person affected by the pro posed order a notice to show cause against it but within the time limit specified in Section 28 which is six months from the date of the order
100F G 100 5
Merely because the Central Government had the power to suo motu revise the orders of refund passed by the Appel late Collector it does not follow a fortiori that it had the power to revise the orders of short levy at that stage
110D 6
The orders of levy of duty in the instant case had two facets
The duty from the point of view of the appellant had been excessively levied necessitating him to challenge the same and seek refund
On the other hand from the point of view of the Revenue the duty had been short levied giving rise cause to have it levied under proper heading
It was incumbent on the Central Government to exercise its suo motu power under sub section 3 read with sub section 5 of Section 131 within six months from 6879 the date when the duty was short levied and undeniably the Central Govern ment did not take such timely step even though it had a cause to do so
The appellant however made claim for the refund of the excess duty levied taking shelter under anoth er heading and on its refusal by the Assistant Collector on 121079 had its appeal accepted on 2581 from the Appel late Collector who ordered refund
The Central Government then got a cause to take suo motu action under Section 1313 of the to annul or modify the order of the Appellate Collector or the actual refund itself under that order
It being a case of erroneous refund sub section 3 of Section 131 was attracted and not sub section 5 of Section 131 as at that point of time it was not a case of non levy or short levy and these two categories of errors could not be equated with the error of erroneous refund inasmuch as these three categories of errors are treated separately in the scheme of things
109H 100A B 7
The error committed by the Tribunal in the instant case is so patent that it cannot be allowed to go uncor rected as a tolerable error
The appeal has therefore to be allowed The orders of the Tribunal passed in appeal have to be modified so as to revive the order of the original assessment dated 6879 and the order of the Assistant Collector of Customs dated 121079 keeping upset the orders dated 2581 of the Appellate Collector of Customs
 110G H