Kerala HC: High Court not empowered to waive Payment of Interest under Customs Act as it is a Statutory Imposition

Judgment:-

The Kerala High Court ruled that the high court was not empowered to waive the payment of interest under Customs Act as it is a statutory imposition.

Facts of the case:-

Mr. C.K. Karunakaran for the petitioner, Pomsy Food Products contended that proceedings of the Policy Relaxation Committee show that a decision on the petitioner’s review petition was arbitrarily taken. He would further contend that at any rate, the petitioner is not liable for payment of any interest for the period during which the review petition was pending before the competent authority. In support of this contention, the learned counsel has placed reliance on the judgment of the Supreme Court in Ram Chand and others v. Union of India and others and Mohamad Kavi Mohamad Amin v. Fatmabai Ibrahim and also the judgment of this Court in John v. Executive Officer.

Interpretation of law:-

The counsel appearing for the respondents would however submit that the terms and conditions upon which the advance license is issued under the terms of the EXIM policy are very clear and categorical and that on failure to achieve export obligation, action, as contemplated by the policy, had to be taken against the petitioner. Regarding the plea raised by learned counsel for the petitioner that the petitioner is not liable to pay interest for the period during which Ext.P1 review petition was pending before the respondent, it is submitted that interest is statutory and this court in the exercise of jurisdiction under Article 226 of the Constitution of India cannot waive statutory interest.

Conclusion:-

The single-judge bench of Justice Gopinath P. found that the petitioner had made zero exports within the original validity of the advance license authorization, despite being given an extension of 6 months. The court said that the failure on the part of the statutory authority to exercise power vested in it cannot automatically result in an order that the petitioner should be relieved from the payment of interest for any period of unreasonable delay in exercise of statutory power.

“Interest under the Customs Act is statutory. There can be no waiver of such interest unless such waiver is provided for in the provisions of the Customs Act itself,” the court said.

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