Case Note & Summary
The petitioners, Lalit Kulthia and another, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court seeking two directions: first, to direct the Commissioner of Customs (Appeals) to admit their appeal without insisting on the pre-deposit required under Section 129E of the Customs Act, 1962; and second, to restore the appeal which had already been dismissed for want of pre-deposit. The petitioners were involved in the gold and diamond jewellery business and had been penalized by customs authorities. The petitioners argued that no penalty could be imposed on gold without foreign marking, contending that out of 12 gold bars only one had foreign marking and the assessor found gold of 99.5 purity instead of 99% in another bar. They submitted that in these peculiar circumstances, the customs authorities had no jurisdiction to impose any penalty. The petitioners relied on two Delhi High Court decisions: Pioneer Corporation v. Union of India and Mohammed Akmam Uddin Ahmed v. Commissioner Appeals Customs, to argue that in appropriate cases a court exercising jurisdiction under Article 226 can waive the requirement of pre-deposit. They also claimed inability to pay the pre-deposit. The respondents, represented by the Customs and DRI, opposed the petition. The court observed that the petitioners' contentions on the merits were irrelevant and did not impress the court, and that an argument about penalty being without jurisdiction could not be sustained. The court held that the relief sought contradicted Section 129E of the Customs Act, which mandates a pre-deposit. Relying on the Supreme Court decision in Kotak Mahindra Bank Pvt Ltd v. Ambuj A Kasliwal, the court stated that even the High Court should not direct appellate authorities to admit and hear appeals unaccompanied by the minimum pre-deposit requirement. The court also noted that a coordinate bench in Manjit Singh v. Union of India had declined similar relief. The court further observed that the petitioners had earlier filed Writ Petition No. 2884 of 2017 challenging the order-in-original without resorting to appellate remedy, and that petition was disposed of with a clarification that the petitioners would have to satisfy the pre-deposit requirement. The petitioners did not challenge that order but chose to file an appeal without pre-deposit. The court distinguished the Delhi High Court decisions relied upon by the petitioners, noting that they did not consider the Supreme Court's decision in Kotak Mahindra, and that Mohammed Akmam involved poor daily wage earners, whereas the petitioners deal in gold and diamond jewellery and cannot compare themselves with poor daily earners. The court concluded that no case was made out to grant any relief and dismissed the petition without any order as to costs.
Headnote
A) Customs Law - Pre-deposit - Section 129E Customs Act, 1962 - Mandatory Pre-deposit - Petitioners sought direction to admit appeal without pre-deposit and to restore dismissed appeal - Court held that Section 129E mandates pre-deposit and even High Court under Article 226 cannot waive it, relying on Kotak Mahindra Bank Pvt Ltd v. Ambuj A Kasliwal (2021) 3 SCC 549 - Held that discretion under Article 226 cannot be exercised against mandatory statutory requirement (Paras 6-8). B) Customs Law - Pre-deposit - Section 129E Customs Act, 1962 - Waiver in Rare Cases - Petitioners relied on Delhi High Court decisions Pioneer Corporation and Mohammed Akmam - Court distinguished those cases as they did not consider Kotak Mahindra and involved poor daily earners, whereas petitioners deal in gold and diamond jewellery - Held that this is not a rare and deserving case for waiver (Paras 10-11). C) Customs Law - Pre-deposit - Section 129E Customs Act, 1962 - Previous Proceedings - Petitioners had earlier filed Writ Petition No. 2884 of 2017 which was disposed of with clarification that pre-deposit requirement must be satisfied - Petitioners did not challenge that order and later filed appeal without pre-deposit - Held that such relief contrary to statutory provisions cannot be granted under Article 226 (Para 9).
Issue of Consideration
Whether the High Court can direct the appellate authority to admit an appeal under the Customs Act without insisting on the mandatory pre-deposit under Section 129E of the Customs Act, 1962.
Final Decision
The Bombay High Court dismissed the writ petition without any order as to costs, holding that the mandatory pre-deposit under Section 129E of the Customs Act, 1962 cannot be waived under Article 226 of the Constitution of India, relying on the Supreme Court decision in Kotak Mahindra Bank Pvt Ltd v. Ambuj A Kasliwal.
Law Points
- Pre-deposit under Section 129E Customs Act is mandatory
- High Court cannot waive it under Article 226
- Kotak Mahindra Bank precedent binding
- Delhi High Court decisions not applicable
- petitioners dealing in gold cannot claim parity with poor daily earners
