The Commissioner v. The Provident

F.N.Roy v. Collector of Customs. Calcutta Sor/;,11r ]. 1152 SUPREME COURT REPORTS [1957] except that s. 183 thereof shall have effect as the word 'may' are substituted. 'shall' the word • Imports and Exports The petitioner imported certain goods import of which had been prohibited by the Central Government under s. 3( I) of (Control) Act. By an order oL the Collector of Customs, made under s. 167, item 8, of the Sea these goods were confiscated and a penalty of Custoins Act, Rs. the petitioner. The petitioner challenged the validity of this order. 1,000, was imposed Held: (!) Section 3(2) of the Imports and Exports (Control) Act, 1947, docs not offend Art. 14 of the Constitution. It does not by its own force give any discretion to the Customs-authorities at all, an<l its only effect is to apply the Sea Customs Act, 1878, to' certain cases. (2) Section 183 of the Sea Customs Act, 1878, does not authorise confiscation of goods. It is not a confiscate under other provisions of i.t may be statutory provision two parts with regard sai<l that one part offends Art. 14 while the other part does not. 1~he section contains only one statutory provision. that a power It to \Vhici': the Act exists. assun1es (3) Section 167, item 8, of the Sea Customs Act, 1878, does not of1end Art. 14 of the Canstitution . ORIGINAL JURISDICTION : Petition No. 438 of 1955. Petition under Article 32 of the Constitution of India for enforcement of Fundamental Rights. H. /. Umrigar and N. H. Hingorani, for the peti tioner. Porus A. Mehta, R. Ganapati Iyer and R. H. Dhebar, ·for the respondents.

#1957. May 16. The Judgment of the Court was delivered by SARKAR J.-By a notification dated March 16, 1953, India from certain countries in the the goods the Government of India gave general permission all persons to import any guods of anv of the descriptions specified schedule annexed to the notification. Among specified in the Schedule were the following : Iron and steel chains of all sorts assessable under Indian Customs Tariff, excluding to length item 63(28) of the chains for automobiles and cycles whether cut or in rolls. -' 1957 F.N. RoY v. Collector of CwtomJ, Calcutta Sarkar]. S.C.R. SUPREME COURT REPORTS 1153 · not possess valid import stating the goods taken against The petitioner is an the goods could be cleared from importer of goods. He states the notification _mentioned above he that relying on placed an order with a company Japan sometime in August, 1953, for the supply of certain goods called in the trade, Zip Chains. The goods arrived port of Calcutta in due course and the petitioner's bank paid the price of the goods amounting to Rs. 11,051-4-0. the port of Before received a communication from Calcutta, the petitioner for Appraisement, the Assistant Collector of Customs Calcutta, dated November 19, 1953, in which it was the petitioner did stated that it had been found ·that licence requiring him to show cause why the goods should not be confiscated and action the petitioner the Sea Customs Act. The under s. 167, item 8, of the petitioner wanted communication also enquired to be heard in person. The petitioner submitted answer a written explanation the Zip Chains imported by him were chains of the kind free import of which had been permitted by the notification of March 16, 1953, and to import thereafter again asked them was necessarv. He was a personal hearing to which he replied that he did not. the. Collector of Thereafter on December 25, 1953, the goods and Customs made an order confiscating the petitioner. imposing a penalty of Rs. 1,000 on it had been This order bore an endorsement despatched to the petitioner on February 1, 1954. It The order reached him on February 3, 1954. stated it to the Central that an appeal would against three months Board of Revenue, New Delhi, within its despatch as noted on it. The from the date of petitioner preferred an appeal and posted the memo randum of appeal on Mav 4, 1954. The memorandum reached the Central Board of Revenue on ~,,fay 6, 1954, .had been and was dismissed on preferred after for the purpose. The petitioner then made an application for revision of the order of the Government of this application was the Central Board of Revenue but ' the Customs-authorities whether he wanted therefore no licence the expiry of the ground time limited India 1957 F.N. Ro7 v. Collector of Cu.·;toms, Calcutta Sarkar], 1154 SUPREME COURT REPORTS (19571 thereafter applied rejected. The petitioner High Court of Punjab under Art. 226 of the Consti tution the order the fine on him imposing confiscating his goods and but this application too was dismissed. for an appropriate writ to quash · that he could not do so The petitioner has now applied to this Court under the validity of Art. 32 of the Constitution challenging the order made against tiim. Learned counsel for the decision of petitioner did not challenge Customs-authorities the goods were not covered by the notification of March 16, 1953. He conceded this application. Nor did to confis he challenge the goods. Learned counsel however challenged it did not give the order of confiscation because petitioner an option to pay a fine in lieu of confiscation. This contention was based on s. 183 of the Sea Customs Act which provides as follows : the Customs-authorities' power Whenever confiscation is authorised this Act, the owner of the it shall give in lieu of confiscation such fine the officer adjudging goods an option to pav as the officer thinks fit. This section undoubtedly requires an option to pay to be given and this was a fine in lieu of confiscation, not done. A difficulty howe,·cr is caused the way of this argument by s. 3 of the Imports and Exports (Control) Act, 1947. The reb·ant portion of s. 3 is set out below:

#3. ( 1) The Centro! Government mav, by order published in the official Gazette, make provision in all prohibiting. restricting or otherwise controlling, cases or specified classes of cases. and subject ro such exceptions, if any, as may be made by or under the order,- (a) the shipment as ship' stores of goods of any specified description ; coastwise import, carriage export, (b) ........ " .... " .... (2) All goods to which any order under sub section (I) applies shall be deemed to be goods of which the import or export has been prohibited or. restricted under section 19 of the Sea Customs Act, 1878 (VIII 1957 F.N. Roy v. Collector of Customs, (!akuJI r Sarkar J . .. S.C.R. SUPREME COURT REPORTS 1155 \ of 1878), and all the provisions of that Act shall effect accordingly, except that section 183 have effect as the word "shall" if for word "may" were substituted. thereof shall therein as modified . by the in lieu of confiscation. Learned Counsel for It is admitted that the Imports and Exports (Control) Act applies to the goods with which we are concerned and in th, is case taken . was by the action that was virtue of this Act. That being so, s. 183 of the Sea Customs Act became applicable because of the Imports and Exports (Control) Act and it could hence be applied latter Act. So applied the did not make it obligatory on the Customs section to give an authorities when ordering confiscation, option to the o\vner to pay a fine in lieu of confiscation· but gave them a discretion whether to do so or not. The order of confiscation was not therefore bad even though it had not given the petitioner an option to pay a fine that portion of s. 3(2) of petitio~er then contended section 183 the Act of 1947 which "shall" thereof shaU have effect left an therein the word "may" were uncontrolled · discretion to pay a fine in lieu of give or not to give an option compensation and consequently offended Art. 14 of the Constitution. He this portion of the section after the offending portion was deleted from s. 3(2) of the Sea the Act . of 1947 to be applied without any modification Customs Act at all . and it would be obligatory on Cu<toms-authorities when making an order of confis to gi\'.e an option to the petitioner to pay a fine cation of compensation e\·en where the Act of 1947 in lieu this had not applied. Learned counsel been done, the order of confiscation made in this case was bad. should be struck out of it. ·He said read "except that if for the word suhstituted'', it would require s. 183 of the Customs-authorities therefore said said that as therefore on the contention This argument is based that a portion of s. 3(2) of the Act of 1947 offends Art. 14 and has therefore to be deleted. This contemion is wrong. to give . no part of s. 3(2) purports Bv There · any discretion to the Custom:r-authorities at all. its own force 1957 F. }f. Ro,J v. Collector of Customs, Calcutta Sarkar J. 1156 SUPREME COURT REPORTS [1957) that a statute-~ in it therefore is nothing to offend Art. 14. The only effect of s. 3(2) is to apply the Sea Customs Act to certain cases. It is impossible to say which only makes another statute applicable to certain cases, offends Art. 14. Such a statute has obviously It is true that s. 3(2) of nothing to do with Art. 14. the Act of 1947 makes s. 183 of the Sea Customs Act applicable with a modification. It was said that s. 183 that s. 183 as so modified offends Art. 14. Assume then? Clearly on modified this assumption s. 183 as modified becomes ultra vires and illegal and it goes out of the statute book. But that does not affect the question before us at all. It does not make the order of confiscation without an L in lieu thereof bad. The confisca- T option to pay a fine another section of item 8, which so far as is relevant is in these terms : is made under It the Sea Customs Act, namely, s. 167, is not made under s. 183. infringes Art. 14. What

#167. The offences mentioned following of the extent mentioned in the reference to such offences respectively : in the first schedule shall be punishable to column. third column of the same with Sections of the Act to which offence has reference 18 & 19 Offences

#8. If any good~, the importation or expor tation of which is for the time being prohi bited or restrict~d by vr under Chapter IV of this Act, be imported into or exported from India contrary to such prohrbition or restric tion. Penalties Such goods shall be liable to confiscation;;---. and any person con.{ cerned in anv such offence shall be lia11le to a penaltynotexce-ed .. ing thre ~ _value of the goods, or not execeding one thou- sand rupees. t mes that all goods Chapter IV of the Sea Customs Act contains s. 19. the Act of It has to be remembered that s. 3(2) of 1947 states to which any order under sub-s. (1) applies shall be deemed to be goods of which the import has been prohibited under s. 19 of the Sea ( 1) of s. 3 of the Act Customs Act. Admittedly sub-s. of 1947 applies concerned. Under s. 3(2) of the Act of 1947 the import to the goods with which this case .. _} \ 1957 F. N. Ro7 v. Collector of Cwtoms, Calcutta Sarkar]. S.C.R. SUPREME COURT REPORTS 1157 is not necessary of these goods is to be deemed to have been prohibited It follows that under s. 19 of the Sea Customs Act. action under s. 167, item 8, of the Sea Customs Act can be taken in respect of these goods and they can be confiscated and illegal the person concerned import made liable to a penalty. Resort to s. 183 of the Sea Customs Act order of confiscation made in this case at all. Indeed It assumes a s. 183 does not authorise confiscation. confisc:ition authorised by other provisions of the Sea Customs Act and provides that on a confiscation being adjudged, an option to pay a tine in lieu of it shall be It cannot therefore be said, even on the assump given. that learned counsel was right in his contention that s. 183 as modified offends Art. 14 that the order to whether the contention of confiscation of learned counsel is right or not we decide nothing as it is not necessary to do so. is bad. As justify it as it was the petitioner the Customs-authorities to pay a It was then contended that the effect of Art. 14 of the Constitution on s. 183 of the Sea Customs Act, as to make the the Act of 1947, was not rnoLlifie<l by i!legal but to invalidate the amendment entire s. 183 this amendment alone which offended Art. 14. so that s. 183 as' it stands in the Sea Customs Act had to be applied to this case and therefore again to give it was obligatory on an option fine in lieu of confmation. To accept this argument we would have that s. 3(2) of the Act of 1947 itself offends to say the Sea Art. 14, and it cannot modifv s. Customs Act as it purports to do. Vole are unable that a statutory provision In order to say that provision. to examine offends Art. 14, we have \Ve have here two statutory provisions. One is s. 3(2) of the Act of 1947 and that does not offend Art. 14. The reasons for this view we have stated earlier. The other is s. 183 of the Sea Customs Act as modified by the Act of 1947. As so modified we have If it present purpose assumed that it offends Art. 14. docs it goes out as a whole. It is not really a statutory provision in two parts with regard to which it might have been possible to say that one part offends Art. 14 183 of this. • 1158 SUPREME COURT REPORTS [1957] 1957 F. N. Hoy v. Collector of Customs, Calcutta while the otl)er part. does not. Section 183 with or without the modification really contains one statutory provision and therefore it must go out of the statute book as a whole or not at all. This contention on behalf of the petitioner must therefore fail. that it Learned counsel said that s. 183 was bad also for the left it to the uncontrolled discretion of reason the Customs-authorities to decide the quantum of fine to be imposed in lieu of confiscation. On the facts of this case, it is an academic argument. Even if it was right the entire s. 183 would have to be ignored but that would not have the effect of making the order of confiscation passed in this case invalid. All that the petitioner is concerned with is to show that the order of confiscation was bad. The present argument does not touch that point and therefore it is not necessary to consider it at all. Another similar argument was that s. 167, item 8, of itself to . the uncontrolled offended Art. 14 to decide discretion of amount of the penalty to he imposed. The section makes it clear that the maximum penalty that might be imposed under it is Rs. 1,000. The discretion that the section gives must be exercised within the limit so ·uncontrolled or unreasonable fixed. This discretion. Furthermore, ·the discretion high Customs officers and there are appeals from their order. The imposition of the fine is really a quasi juclicial act and the test of the quantum of it is in the gravity of prevent unauthorised discretion has to be exercised with that object in view. the offence. The object of the Act is importation of goods and the Sea Customs Act the Customs-authorities is not an is vested it left Learned counsel that the order of then contended It was fide. confiscation hac! been made ma/a that it had been pa<Sed ex parte. This is not correct for the petitioner had been asked before the order was made whether he wanted a personal hearing and he had stated in reply that he did not and had ample the authorities. It is not therefore open confidence that he had no oppor to the petitioner to contend the order against him was tunity of being heard before 1957 F. N. Ruy .... Collector of Customs, Calcutta Sarkar j. S.C.R. SUPREME COURT REPORTS 1159 therefore the petitioner notice which it was his fault It was also stated in respect of these transactions without that existed between him and into certain other passed. He had been given an opportUnity and had not availed himself of it. deciding not to give the petitioner an option to pay a lieu of confiscation the Customs-authority had ·giving any notice that this would be done. the petitioner was not given an It., was said opportunity of being heard actions. The the Customs-authorities the petitioner to show cause 'why the goods should not be confiscated also informed him necessarily that an order for confiscation might be made without an option to pay a fine in lieu of confiscation being given and if he did not appear at the hearing and showed cause why the order of confiscation should not be absolute but should give It was also said tint he him an option to pay a fine. the option because of the differ had been deprived of Public Relations Officer. of Calcutta. This point of view was sought to be sup ported by citing the cases of two other persons who time, imported similar goods at or about the same and who had been given the option. The facts of these different. that goods had There was nothing to show in the order of the Government while the petitioner there are materials on which such a view could he formed. It appe:irs the Manager oi a firm called Federal Clearing Agency had received a communication the Customs-authorities on July 30, 1953, th:it Zip Chains were not covered by the notification of March 16, 1953, and within a fortnight of that communication he had placed the orders for identical goods which he now claims to be within the the Customs It was not unreasonable for notification. the petitioner had deliberately authorities imported Government purpose, and on that ground to think it proper not to if it was give him the option. This would be so even in deliberate violation of the case of in breach of specific the order . of licence for the Customs Department to think the goods th:it the petitioner as and without substantially cases were imported however 1957 F. N. Ro:J v. Collector of Cwtoms, Calcutta Sarkar J. 1160 SUPREME COURT REPORTS [1957] assumed that in the dispute with the Public Relations Officer the petitioner was in the right. to file received that he . It was then stated that the petitioner had not been given personal hearing of the appeal that he preferred to the Central Board of Revenue and the application in revision to the Government. But there is no rule of natural justice that at every stage a person is entitled the appeal was to a personal hearing. Furthermore, out of time. The memorandum of appeal to the Central Board of Revenue was posted on May 4, 1954. The the appeal, however, expired on May 1, 1954, so that even if the ~ate of the posting is taken as the date of the appeal the petitioner was out of time. The petitioner states the order of confiscation on February 3, 1954. Even so, on May 4, 1954, he would not be within time. The memorandum of appeal however was received by the Central Board of Revenue on May 6, 1954. That must be taken to be filed, and that being so the date when the appeal •.vas to have been filed clearly out the appeal must be taken the Customs time. The petitioner authorities wrongfully and arrest on May I, 1954, and he obtained his release It was suggested that this arrest was on May 2, 1954. procured in order to prevent him from filing his appeal in time. This contention is entirely idle. Admittedly, the petitioner had May I, 1954, to file his appeal but he did not take advantage of this long period. He waited till the end for filing the appeal. There is nothing to show that the arrest was wrongful or that at the date of the arrest the Customs-authorities had any knowledge that the petitioner had not filed his appeal. The contentions that the order complained of was mala fide or that the appeal had not been filed out of time are entirely untenable. from February 3, 1954, rnaliciously procured stated The result is dismissed with costs. that this application fails and it 1s Petition dismissed. •