TMI Blog1962 (5) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs for confiscation of these goods under Section. 167(8) of the Sea Customs Act, 1878. The appellants contend that the proceedings are entirely without jurisdiction as the Collector can confiscate only when there is an import in contravention of an order prohibiting or restricting it and in the present case the collector was proceeding to confiscate on the ground that a condition of the licence under which the goods had been imported had been disobeyed. The appellants, therefore, ask for a writ of prohibiting directing the Collector to stop the proceedings. The question is, has the Collector jurisdiction to adjudicate whether the goods are liable to be confiscated?. The decision of that question, however, depends on certain statutory provisions and the facts of the case to which, therefore, I shall immediately turn. 2. Sub-section (1) of Section 3 of the Imports and Exports (Control) Act, 1947 provides that the Government may by order prohibit, restrict or otherwise control the import of goods. By Notification No. 23 I.T.C./43 issued under Rule 84 of the Defence of India Rules which by virtue of Section 4 of the Act of 1947 is to be deemed to have been issued under that Act, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed officers of the company nor that right from the time of applying for the licence, the intention was to sell the goods or part thereof. 6. The other proceeding was a prosecution of the second appellant and another person under Section 5 of the Act of 1947. That section provides that if any person contravenes any order......under this Act, he shall.....be punishable with imprisonment....... . It was alleged that the accused person had, in violation of the conditions of the licence, disposed of portions of the goods covered by it and, therefore, committed an offence under Section 5 of the Act, of 1947. This proceeding resulted in acquittal by the trial Court which was confirmed by the High Court at Calcutta on March 3, 1955. Sen, J., who delivered the judgment of the High Court said that it was difficult to hold that a condition of the licence amounted to an order under the Act and unless the Penal section included the contravention of the condition as an offence. It could not be held that such a contravention amounted to an offence under the section. 7. While these proceedings were pending an order was made by the High Court on January 16, 1953 directing the seized goods t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Act is contained in Chapter IV of that Act. Section 167(8) of the Sea Customs Act states that If any goods, the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction.......such goods shall be liable to confiscation; and any person concerned in any such offence shall be liable to a penalty . Section 182 of this Act authorises various Customs Officers including a Customs Collector to adjudicate on questions of confiscation and penalty under Section 167(8). 11. As earlier stated the question is one of jurisdiction. The contention of learned counsel for the appellant is that under Section 167(8) of the Sea Customs Act read with Section 182 of that Act under which the Collector of Customs is proceeding, he has jurisdiction only to decide whether goods have been imported contrary to the prohibition or restriction imposed by an order made under Section 3(1) of the Act of 1947 but he has no jurisdiction under these sections to decide any question of confiscation of goods for breach of a condition of a licence issued under such an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by fraudulent misrepresentation. The notice hence alleges that the goods had been imported really without a licence, that is, in breach of an order. Even if it be assumed, as the appellants contend, that an importation under a licence fraudulently procured is not an importation without a licence, that would only show that there has been no importation without a licence, that is, in breach of an order, but it would not deprive the Collector of his jurisdiction to decide that question. Likewise the fact that a Magistrate has decided that the licensing authority had not been deceived by the appellants in the matter of the issue of the licence which, if binding on the Collector, would only show that the licence had not been fraudulently procured and cannot affect the Collector s jurisdiction in any way. 14. It is also said that the decision of a High Court on a point of law is binding on all inferior Tribunals within its territorial jurisdiction. It is, therefore, contended that the Collector is bound by the decision of Sen,J, to which I have earlier referred that a breach of a condition of a licence is not a breach of the order under which the licence was issued and the condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been brought into India. Therefore, under the Act of 1947 the Government has power to restrict or control imports in this way; it would lawfully provide that the goods would not after import be dealt with in a certain way. It would follow that Notification No. 2-ITC/48 was quite competent and intra vires the Act and, therefore, the condition in the licence issued in this case that the goods would not be sold after they had been brought into India had been legitimately imposed. The contrary has not indeed been seriously contended. When, therefore, such a condition is contravened, it is really the order authorising its imposition that is contravened. That seems to me to be the clear intention of the legislature for otherwise the efficacy of the Act of 1947 would be largely destroyed. That Act was intended to preserve and advance the economy of the State on which the welfare of the people depended. In such a statute large powers have to be given to the Government and they were undoubtedly so given in the present case. The statute clearly intended and it should be so read that these powers could be effectively exercised. Therefore the breach of a condition of a licence legitimately imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at p. 66. How are the word `against the provisions of the Act to be read? The two statutes are to be construed as one. In my opinion, to break the regulations made under the authority of a statute is to break the statute itself, and therefore Section 19 of the London Hackney Carriages Act, 1853 must be read thus : For every offence against the regulations promulgated under these two Acts, which are to be read as one, a penalty not exceeding forty shillings may be imposed. That case received the full approval of the House of Lords in Wicks v. Director of Public Prosecutions, 1947 AC 362 (365) where Viscount Simon said: There is, of course, no doubt that when a statute like the Emergency Powers (Defence) Act, 1939 enables an authority to make regulations, a regulation which is validly made under the Act, i.e. which is intra vires of the regulation making authority, should be regarded as though it were itself an enactment. I think these observations fully apply to an Act like the Imports and Exports (Control) Act. Then I find that in our country too the same view has been taken. Thus in Emperor v. Abdul Hamid, AIR 1923 Pat I, Mullick,J., observed. When a notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the High Court with the consent of both the parties because the goods were deteriorating. Therefore there can be not doubt that the sale proceeds of the goods which could be confiscated, can also be confiscated. I think that the appeal fails and should be dismissed. 22. Majority judgment per : Subba Rao, J. (for self and Mudholkar, J.). 22. This appeal by special leave is directed against the judgment of a Division Bench of the High Court at Calcutta dated January 5, 1957 confirming the order of a single Judge of that Court dismissing the petition filed by the appellants under Article 226 of the Constitution. 23. The dispute which culminated in this appeal has had a tortuous career and had its origin in the year 1948. To appreciate the contentions of the parties it is necessary to survey broadly the events covering a long period. The appellants are Messrs East India Commercial Co. Ltd., a company having its registered office in Calcutta and the Director of that Company. On September 27, 1948 the appellant-Company filed an application with the Chief Controller of Imports, New Delhi for the grant of a licence to import 20,000 fluorescent tubes and 2,000 fluorescent fixture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the appellants filed an application before the Chief Presidency Magistrate, Calcutta, for the return of the seized goods, whereupon the learned Magistrate called for a report from the Special Police Establishment, New Delhi. On January 12, 1951 the said Police Establishment submitted a challan against appellant No. 2 and others for alleged offences under Section 420/120B of the Indian Penal Code and the same was registered as Case No. C. 121 of 1951. On the same day, the Assistant Collector of Customs filed a complaint before the said Magistrate against appellant No. 2 and others for committing an offence under Section 5 of the Imports and Exports (Control) Act, 1947 (hereinafter called the Act), for having sold a portion of the stock of fluorescent tubes and fixtures in contravention of the terms of the licence and the same was registered as Case No. C. 120 of 1951. On June 28, 1951 the learned Presidency Magistrate discharged all the accused in both the cases under Section 253 of the Code of Criminal Procedure after holding that no prima facie case had been made out against any of them. Two revisions were filed against that order in the High Court one by the State and the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avention of the conditions of licence issued under the Act or issued under a statutory order made under that Act, and dismissed the revision. On March 24, 1955, the appellants filed an application before the Chief Presidency Magistrate for making over the sale proceeds to them; and the said Magistrate issued a notice to the Assistant Collector of Customs and also to the Delhi Special Police Establishment to show cause on or before April 19, 1955. On April 19, 1955, the Superintendent, Special Police Establishment, did not show cause, but the Assistant Collector of Customs asked for an adjournment and the same was granted till May 7, 1955; and again on May 7, 1955, he took another adjournment of the hearing of the application on the ground that departmental proceedings were pending against the appellants. On May 9, 1955, the appellants filed a revision in the High Court, presumably, against the order adjourning the application and the said revision was numbered as Revision Case No. 582 of 1955 and it was adjourned from time to time at the request of the respondent. On May 28, 1955, the respondent started a proceeding purported to be under Section 167(8) of the Sea Customs Act, rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re had been a contravention of the relevant provisions of the Act as would entail an order of confiscation and that, therefore, Sinha, J., was right in refusing to issue a writ; but they made it clear that all the questions raised in the case were left open for decision by the Chief Controller of Imports. Hence the present appeal. 24. Mr. Viswanatha Sastri, learned counsel for the appellants, raised before us the following points : (1) The Assistant Collector of Customs has no jurisdiction to initiate proceedings under Section 167(8) of Sea Customs Act, 1878, read with Section 3(2) of the Imports and Exports (Control) Act, 1947, in the circumstances of the case, and therefore, the High Court should have issued an order in the nature of a writ of prohibition restraining him from proceeding with the said inquiry. (2) A Division Bench of the High Court of Calcutta in Criminal Revision No. 1124 of 1953, to which the respondent was a party, declared the law on the construction of the provisions of Section 5 of the Act, read with Section 3(2) thereof, viz., that it penalizes only a contravention of an order made or deemed to have been made under the Act and not a contravention of a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourts, though the decision of the High Court may have persuasive influence on them. (4) The condition imposed in a licence is under the relevent order issued by the Central Government in exercise of its power under Section 3 of the Act, and, as the appellants infringed that condition, the goods imported are liable to be confiscated under Section 167(8) of the Sea Customs Act, read with Section 3(2) of the Act. (5) As the appellants imported goods on a misrepresentation in law the import must be deemed to be one made without a licence therefore the goods imported are goods either prohibited or restricted within the meaning of Section 167(8) of the Sea customs Act. (6) The Customs Collector has jurisdiction to confiscate goods after they have left the customs barrier, and, as the money in deposit in court is the proceeds of the sale directed to be held by the High Court in the interest of both the parties. It represents the said goods, and, in any view, as the order of the High Court is binding on both the parties, it is not to the appellants to plead that the goods are not represented by the said money. 26. The first question is whether the petition filed by the appellants under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, if on a true construction of the provisions of the said two sections the respondent has no jurisdiction to initiate proceedings or make an inquiry under the said sections in respect of certain acts alleged to have been done by the appellants, the respondent can certainly be prohibited from proceeding with the same. We, therefore, reject this preliminary contention. 28. The next question is, what is the true construction of the provisions of the relevent sections? It would be convenient at this stage to read the relevant parts of Sections 3 and 5 of the Act and Sections 19 and 167(8) of the Sea Customs Act. Imports and Exports (Control) Act, 1947 Section 3. (1) The Central Government may, by order published in the Official Gazette make provisions for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as made by or under the order :- (a) the import, export, carriage coast-wise or shipment as ship stores of goods of any specified description. (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1946 (XX of 1946), and in force immediately before the commencement of this Act, shall continue in force and be deemed to have been made under this Act. The contravention of only these two categories of orders attracts the provisions of Section 19 of the Sea Customs Act. By reason of Section 3(2) of the Act, all goods to which any order under sub-section (1) of Section 3 applies shall be deemed to be of goods of which the import or export has been prohibited under Section 19 of the Sea Customs Act, with some modifications with which we are not concerned now shall apply. This provision in its turn attract, along with others, Section 167(8) of the Sea Customs Act, and under that section, read with Section 3(2) of the Act, the goods imported in contravention of an order under the Act shall be liable to be confiscated. But the section does not expressly or by necessary implication empower the authority concerned to confiscate the goods imported under a valid licence on the ground that a condition of the licence not imposed by the order is infringed or violated. If that be the true construction of the said provisions, the question arises whether in the instant case the allegations ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d conform to the law laid down by it. Such obedience would also be conducive to their smooth working; otherwise, there would be confusion in the administration of law and respect for law would irretrievably suffer. We, therefore, hold that the law declared by the highest court in the State is binding on authorities or tribunals under its superintendence and they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. If that be so, the notice issued by the authority signifying the launching of proceedings contrary to the law laid down by the High Court would be invalid and the proceedings themselves would be without jurisdiction. 30. We shall now proceed to consider the merits. Sub-section (2) of Section 3 of the Act clearly lays down that all goods to which an order under sub-section (1) thereof applies, shall be deemed to be goods of which the export or import has been prohibited or restricted under Section 19 of the Sea Customs Act. Therefore, Section 167(8) of the Sea Customs Act can be attracted only if there was a contravention of the order issued under Section 5 of the Act. Does any order so issued by its own force impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in force, he shall either permanently or for a specified period be refused any further licence for import of goods." It will be seen from this order that it does not provide for a condition in the licence that subsequent to the import the goods should not be sold. Condition (v) of cl. (a) only empowers the licensing authority to impose a condition from an administrative point of view. It cannot be suggested that the condition, with which we are now concerned, is a condition imposed from an administrative point of view, but it is a condition which affects the rights of parties. Learned counsel for the respondent argues that a public notice issued by the Government on July 26, 1948 is an order made in exercise of the power conferred on the Central Government under Section 3 of the Act and that the order directs the imposition of a condition not to sell to a third party the goods permitted to be imported and that condition was contravened. The public notice dated July 26, 1948, was published in the Gazette on July 29, 1948. The relevant part of it reads : Government of India MINISTRY OF COMMERCE PUBLIC NOTICES New Delhi, the 26th July, 1948 Subject :- Principles governing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt under Section 3(1) of the Act. On the other hand, learned counsel for the appellants contends that public notices are not such orders but only information given to the public for their guidance. 33. Firstly, the said notice does not purport to have been issued under Section 3(1) of the Act, whereas the orders referred to earlier, that is, Notification Nos. 23-ITC/43 and 2-ITC/48 and similar others, were issued by the Central Government in exercise of the power conferred on it by sub-rule 3 of R.84 of the Defence of India Rules or Section 3(3) of the Act, as the case may be. The Central Government itself makes a clear distinction in the form adopted in issuing the notice. Secondly, while the notifications issued under Section 3 of the Act are described as orders, the notices are described as public notices , while the notifications under Section 3 of the Act regulate the rights of parties, the public notices give information to the public regarding the principles governing the issue of import licences for specified periods. It is also clear that the orders issued under Section 3 of the Act, having statutory force, have to be repealed, if the new order in any manner modifies or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded in the manner prescribed by law. On May 1, 1948, the Central Government issued an order in exercise of the power conferred on it by Section 3 of the Act to provide for licences obtained by misrepresentation, among others, and it reads : The authorities mentioned in the Schedule hereto annexed may under one or other of the following circumstances cancel licences issued by any officer authorised to do so under clauses (viii) to (xiv) of the notification of the Government of India in the late Department of Commerce, No. 23-ITC/43, dated July1, 1943, or take such action as is considered necessary to ensure that the same is made ineffective, namely :- (i) When it is found subsequent to the issue of a licence that the same had been issued inadvertently, irregularly or contrary to rules, fraudulently or through misleading statement on the part of the importer concerned; or (ii) when it is found that the licensee has not complied with any one or more of the conditions subject to which the licence may have been issued. SCHEDULE Clauses Licencing authority Cancelling authority Clause (xiii) Any officer authorizes by the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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