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Date: 28.02.2026
Kerala High Court Affirms Tribunal’s Directive for Speaking Order in Customs Duty Reassessment Dispute
This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email idΒ intelconsul@gmail.com or on his Mobile +91-9999005379.
On December 16, 2024, the High Court of Kerala at Ernakulam, presided over by the Honourable Justice , delivered a significant judgment in the Customs Appeals No. β 10 and 11 of 2024. β The appeals were filed by the Commissioner of Customs, challenging the final orders issued by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), South Zonal Bench, Bangalore, on July 26, 2023. β
Background of the Case β
The case revolved around the import of “Galvanised Steel Hollow Sections” from China by Jai Hind Traders, represented by its proprietor. The importer had filed bills of entry declaring a specific transaction value for the goods to assess customs duty. β However, the Customs Authorities disagreed with the declared value and reassessed the goods at a higher transaction value. β
Faced with the prospect of delays and demurrage charges, the importer communicated to the Customs Authorities on March 13, 2015, expressing their willingness to pay the higher reassessed value to expedite the clearance of goods. β However, the communication indicated that the acceptance of the reassessed value was not unconditional and was made under protest. β
Following the clearance of goods, the importer requested a “speaking order” from the Customs Authorities, seeking an explanation for the reassessed transaction value. β This request was denied by the Customs Authorities, citing Section 17(5) of the Customs Act, 1962. β The provision states that a speaking order is not required if the importer or exporter confirms their acceptance of the reassessed value in writing. β
Legal Proceedings
Aggrieved by the rejection, Jai Hind Traders approached the First Appellate Authority, which upheld the decision of the Customs Authorities. β Subsequently, the importer filed an appeal with the CESTAT, South Zonal Bench, Bangalore. β The Tribunal ruled in favor of the importer, stating that the acceptance of the reassessed value was made under protest and was not unconditional. β It directed the Customs Authorities to pass a speaking order on the reassessment after hearing the importer. β
The Commissioner of Customs then filed two appeals (CUS.Appeal Nos. β 10 and 11 of 2024) before the High Court of Kerala, challenging the Tribunal’s decision. β
High Court Judgment β
The High Court dismissed both appeals, upholding the Tribunal’s decision. β The court emphasized the importance of fairness and transparency in administrative actions, particularly in cases involving reassessment of customs duty. β The judgment highlighted the following key points:
- Interpretation of Section 17(5) of the Customs Act, 1962: The court clarified that the provision requires a speaking order to be issued unless the importer or exporter provides a clear, unconditional, and unambiguous acceptance of the reassessed transaction value. β In this case, the importer’s communication indicated acceptance under protest, which necessitated the issuance of a speaking order. β
- Culture of Justification: The court underscored the evolving jurisprudence in India, which has shifted from a “culture of authority” to a “culture of justification.” β Citizens are entitled to seek explanations for state actions, and authorities are obligated to provide reasons for their decisions. β
- Tribunal’s Decision: The High Court found no reason to interfere with the Tribunal’s order, which directed the Customs Authorities to pass a speaking order on the reassessment after hearing the importer. β
Implications of the Judgment
This judgment reinforces the principle of fairness and accountability in administrative actions. β It underscores the importance of providing clear and reasoned explanations for decisions, especially when they impact the rights and interests of individuals or businesses. β The ruling also highlights the significance of adhering to statutory provisions, such as Section 17(5) of the Customs Act, to ensure transparency and justice.
Conclusion
The High Court’s decision in CUS.Appeal Nos. β 10 and 11 of 2024 serves as a reminder to Customs Authorities and other administrative bodies to act in accordance with the principles of natural justice and statutory requirements. β By upholding the Tribunal’s decision, the court has reaffirmed the importance of issuing speaking orders in cases where reassessed values are accepted under protest. β This judgment is a step forward in promoting a culture of justification and accountability in administrative processes.
Source: Kerala High Court
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