BHAVYA APPARELS PRIVATE LIMITED AND ANR versus UNION OF INDIA

Citation: [2007] 10 S.C.R. 1 · Decided: 18-09-2007 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Case Partly allowed

Judgment (excerpt)

BHA VY A APPARELS PRIVATE LIMITED AND ANR 
A 
"}· 
V. 
UNION OF INDIA 
SEPTEMBER 18, 2007 
(S.B. SINHA AND H.S. BEDI, JJ.] 
B 
). 
Customs Act, 1962 : 
s. J 29E-Predeposit of custom duty-Order passed by Tribunal 
directing pre deposit of duty of Rs. 3 crores as condition to hear appeal c 
of assessee-Tribunal dismissing appeal on failure of predeposit of duty 
amount-High Court affirming same-Correctness of-Held: Not 
correct-While passing order of predeposit, Tribunal failed to consider 
the fact that part of goods was in custody of Revenue-Also Tribunal 
did not apply its mind in regard to question of undue hardship on D 
assessee-Matter remitted to Tribunal for reconsideration. 
Interpretation of statutes: 
Taxing statutes-Held: To be construed strictly. 
Mandatory or directory statute-Use of word 'shall' -Held: Is E 
imperative in nature but may be interpreted as directory if context 
otherwise demands. 
'!' 
An adjudication proceeding was initiated against the appellant 
and assessment of Custom Duty was made. An appeal was preferred' F 
thereagainst. Tribunal dismissed appeal for failure to predeposit, 
Rs. 3 crores. Appellant filed writ petition before High Court which 
was also dismissed. Hence the present appeal. 
Partly allowing the appeal, the Court 
G 
+, 
HELD: 1. The Customs Act, 1962 was enacted to consolidate 
and amend the law relating to customs. It provides for assessing an 
order of custom duty. S.129E mandates pre-deposit of any duty and 
interest, in appeal which is preferred in respect of the goods which 
I 
H 
2 
SUPREME COURT REPORTS 
[2007] 10 S.C.R. 
A are not under the control of the custom authorities or any penalty 
-r 
levied under the Act. Proviso appended thereto, however, empowers 
the Commissioner of Appeal or the appellate tribunal to dispense 
with such deposit-if it comes to the conclusion that the deposit of duty 
and interest would cause undue hardship to the appellant. 
B 
[Para 8) [5-G; 6-B, CJ 
2. A right of appeal is not a fundamental right. It is a statutory 
right. As a right of appeal is a statutory right, it may also be hedged 
by conditions. It is, however, trite that conditions imposed may not 
be such which may for all intent and purport take away a vested right 
C of appeal. [Para 9) [6-D] 
Dilip S Dahanukarv. Kotak Mahindra Co. Ltd. & Anr., (2007) 5 
SCALE 452, relied on. 
3. S.129E of the Customs Act would be attracted where the 
D goods in question are not in the custody of the Revenue. The said 
provision, therefore, would be attracted only when the ingredients 
thereof exist. In the instant case, part of the goods is in custody of 
the Revenue. It was obligatory on the part of the Tribunal to take 
that factor into consideration in making the order of pre-deposit. 
E Furthermore, while exercising its jurisdiction, the Tribunal was also 
required to apply its mind in regard to the question of undue hardship 
on the part of the appellants upon considering existence of a prim a 
facie case. Merit of the case ordinarily should not othenvise be gone 
into unless the question on the face of it appears to be concluded. 
F 
[Paras 10 and 11) [6-E-G] 
Kishori Pujari Granite Pvt. Ltd v. Union of India, 184 EL T 225 
andAshoka Rubber Products v. Colleetor ofC.Ex., (1989) 43 ELT 605, 
ref erred to. 
G 
4.1. The taxing statute must be strictly construed. However, only 
because the word "shall" is used, the same may not be construed to 
_4-
. '. 
be imperative in .character. [Para 17) [10-A, B] 
' 
. 
. 
~ 
Manish Maheshwari v. Asstt. Commissioner of Income Tax and 
Anr., (2007) 3 SCALE 627 and Southern Petrochemical Industries Co. 
H Ltd. v. Electricity Inspector and E.Tl.O. and Ors., (2007) 7 SCALE 
BHAVYAAPPARELSPRIVATELIMITEDv. U.O.I. 
.., 
.) 
}---
392, relied on. 
A 
Mardia Chemicals Ltd and Ors. v. Union of India and Ors., [2004] 
4 sec 311, referred to. 
4.2. The word "shall" primafacie would be construed to be 
B 
imperative in character. It may, however, be held to be directory in 
certain situation. While construing a statute of this nature, the 
context plays an important role. Interpretation of a statute would 
also depend upon the fact situation obtaining in the case. There are, 
however, certain exceptions to the said rule. Even where a statute 
is clearly mandatory or prohibitory, yet, in many instances, the courts c 
will regard certain conduct beyond the prohibition of the statute 
through the use of various devices or principles. Most, if not all of 
these

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