TMI Blog1962 (9) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... tember 1954 for the first time. As the facts in all the petitions are similar, we shall only give the facts generally to understand the questions raised before us. The two firms, it may be mentioned, did not carry on any business in Pondicherry before September 1954 when they got a `patent each and the proprietor of one of them is a resident of New Delhi while the proprietor of the other is a resident of Bombay. 2. The administration of Pondicherry was taken over by the Union of India from November 1, 1954. Before that Pondicherry was under the administration of the Government of France and was a free port. Import into Pondicherry was thus not subject to any restriction, except with regard to certain goods with which we are not concerned in the present petitions. Any merchant desiring to carry on business in the territory of Pondicherry had however to obtain a `patent before he could do so. These `patents were of five kinds one of which was a `patent authorising the trader to carry on the business of import of goods other than those which were under restriction. Though the importers were entitled by virtue of the `patent to import goods subject to certain restrictions, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1947 and the Indian Tariff act, 1934 were extended to Pondicherry. This S.R.O. contained a saving clause which laid down that :- Unless otherwise specially provided in the Schedule, all laws in force in the French Establishments immediately before the commencement of this order, which correspond to the enactments specified in the Schedule, shall cease to have effect, save as respects things done or omitted to be done before such commencement. As a consequence of these two S.R.Os. a press communique was issued by the Government of India on November 1, 1954, explaining the effect of these notifications, in which it was stated that imports into and exports from the French Establishments would be regulated in accordance with the provisions of the Imports and Exports (Control) Act, 1947. It was further stated that as regards orders placed outside the Establishments and finalised through grant of a licence by competent French authorities in accordance with the laws and regulations in force prior to November 1, 1954, licence-holders were advised to apply to the Controller of Imports and Exports for validation of licences held by them. Licence-holders were further advised not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though they say that they have been making representations to the Government of India in that behalf without any effect and that the last communication from the Government of India was received by them in this connection in August 1961. 4. In the meantime certain importers of Pondicherry filed petitions in this Court in 1959 challenging the order of confiscation and the alternative order imposing penalties on them by the Collector of Customs, Pondicherry in somewhat similar circumstances [see Universal Imports Agency v. Chief Controller of Imports and Exports, (1961) 1 SCR 305]. Those petitions were decided on August 23, 1960 and this Court held that in view of para 6 of S.R.O. 3315, already referred to, which saved the effect of all laws in force in the French Establishments immediately before the commencement of the Order, even though those laws were repealed by the order, with respect to things done or omitted to be done before such commencement, the authorisation granted by the French authorities before November 1, 1954 for import were sufficient to protect the goods imported on the basis of those authorisations whether the exchange was secured officially or from the open ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s however unnecessary for us to detail all the grounds raised on behalf of the Union of India in view of an objection that has been taken to the maintainability of these petitions based on the decision of this Court in Smt. Ujjambai v. State of Uttar Pradesh, W.P. No. 79 of 1959, dated 10-4-1962. We shall therefore refer only to such parts of the counter-affidavit filed on behalf of the Union of India as will suffice to explain the preliminary objection raised on its behalf. 7. The Union s case is that the talks for the de facto transfer of the French-Indian Establishments to the Government of India were resumed in August 1954, and that as a result of these talks, an agreement dated October 20, 1954 between the Government of India and the Government of France for the settlement of the question of the future of the French Establishments in India was arrived at. Pursuant to this agreement, the administration of the French Establishments (including Pondicherry) was transferred to the Government of India from November 1, 1954. In consequence, the Government of India promulgated two orders, namely, S.R.Os. 3314 and 3315 of October 30, 1954, to come into force from November 1, 1954. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tried to show before the Collector of Customs, Pondicherry that they had placed firm orders before August 15, 1954, though shipments could only be made in three cases before November 1, 1954 and were delayed in others because of dock strike in England and in Continental countries. This case was scrutinised by that Collector of Customs and he pointed out in his order that though the orders for these goods are said to have been placed before August 15, 1954, the two firms could only start functioning in Pondicherry from the month of September in which month they had obtained patent for conducting business there legally. The Collector also pointed out that in the ordinary course of business, commitments were not made without entering into correspondence with the suppliers regarding the prices, terms of payment etc., but in these cases, the petitioners produced no such correspondence. it was also found that the petitioners had not done any business of this kind even in the Indian Union before this. The Collector therefore held that it had not been proved that the goods had in fact been ordered before August 15, 1954 and therefore ordered their confiscation and imposed penalty in lieu t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment made by an authority under a taxing statute which is intra vires, open to challenge as repugnant to Article 19(1)(g), on the sole ground that it is based on a misconstruction of a provision of the Act or of a notification issued thereunder? 2. Can the validity of such an order be questioned in a petition under Article 32 of the Constitution? As was pointed out by Das J. in that case, the two questions were inter-connected and substantially related to one matter, namely, Is the validity of an order made with jurisdiction under an Act which is intra vires and good law in all respects, or a notification properly issued thereunder, liable to be questioned in a petition under Article 32 of the Constitution on the sole ground that the provisions of the Act or the terms of the notification issued thereunder, have been misconstrued? It was not disputed in that case that where the statute or a provision thereof is ultra vires, any action taken under such ultra vires provision by a quasi-judicial authority which violates or threatens to violate a fundamental right does give rise to a question of enforcement of that right and a petition under Article 32 of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven the authority complete jurisdiction to decide. The decision is therefore a valid act irrespective of its being erroneous. An order of assessment passed by a quasi-judicial tribunal under a statute which is ultra vires cannot be equated with an assessment order passed by that tribunal under an intra vires statute even though erroneous. The former being without authority of law is wholly unauthorised and has no existence in law and therefore the order is an infringement of fundamental rights under Article 19(1)(f) and (g) and can be challenged under Article 32. The latter is not unconstitutional and has the protection of law being under the authority of a valid law and therefore it does not infringe any fundamental right and cannot be impugned under Article 32. Sarkar J. agreed with Das and Kapur JJ. Hidayatullah J. held as follows :- But where the law is made validly and in conformity with the fundamental rights and the officer enforcing it acts with jurisdiction, other considerations arise. If, in the course of his duties, he has to construe provisions of law and miscarries, it gives a right of appeal and revision, where such lie and in other appropriate cases, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in law until and unless it is corrected in the appropriate manner. So long as that decision stands, despite its being erroneous, it must be regarded as one authorised by law and where under such a decision a person is held liable to pay a tax that person cannot treat the decision as a nullity and contend that what is demanded of him is something which is not authorised by law. The position would be the same even though upon a proper construction, the law under which the decision was given did not authorise such a levy. Mudholkar J. therefore agreed with Das J. and was of the view that the two questions must be answered in the negative. 11. The other two learned Judges, Subba Rao and Ayyangar took the contrary view. They were of the view that there could be no valid distinction between an order passed by an authority without jurisdiction, in the sense that the authority is not duly constituted under the Act or that it has inherent want of jurisdiction, and a wrong order passed by the authority on a misconstruction of the relevant provisions of the Act; in either case if the order affects a fundamental right it will be open to challenge by petition under Article 32 on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ujjambai s case (AIR 1962 SC 1621) in connection with the decision in the case of Universal Imports Agency, (1961) 1 SCR 305. Kapur J. observed with respect to this decision that in any case this is an instance of want of jurisdiction to tax transactions which the law excludes from the taxing powers of the authority levying the tax, though he pointed out further that the question of the applicability of Article 32 to quasi-judicial determinations was not raised in that case. With respect, it may be pointed out that as the question of the applicability of Article 32 to quasi-judicial determinations was not raised at all in the case of Universal Imports Agency, (1961) 1 SCR 305, the Court had no occasion to consider the question whether the authority in that case had inherent jurisdiction to decide the matter. The majority judgment on which the petitioners rely has nowhere considered the question whether the authority in that case suffered from inherent lack of jurisdiction when it decided to confiscate the goods imported and levy penalties in the alternative. All that the learned counsel for the petitioners could draw our attention to was a sentence in the majority judgment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax, is not very accurate. Similarly, it may be added that the inclusion of he said decision in the list of judgments cited by Das J. which, in his opinion, illustrate categories of cases where executive authorities have acted without jurisdiction, is also not justified. Since the point about the competence of the writ petition was not raised or considered in the case of Universal Imports Agency, (1961) 1 SCR 305, it would not be accurate or correct to hold that the decision turned on the absence of jurisdiction of the appropriate authority. It is well known that after the decision of the Court in the case of Kailash Nath v. State of U.P., AIR 1957 SC 790, some writ petitions were entertained on the ground that the jurisdiction of the Court under Article 32 could be invoked even if a tribunal exercising quasi-judicial authority had misconstrued the law under which it purported to act. Having regard to the decision of the Special Bench in the case of Ujjambai, (AIR 1962 SC 1621) these precedents have now lost their validity. 16. Then we come to the question whether this is a case of a misconstruction of a provision of the law which is intra vires by an authority acting under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of original Section 2 would be an interpretation of the Sea Customs Act. So the contention that Ujjambai s case (AIR 1962 SC 1621) does not apply, for there has been no misconstruction of any of the provisions of the Sea Customs Act has no force. It may be added that it is not disputed in this case that the Collector of Customs had inherent jurisdiction to deal with this matter and the only attack on his order and on the subsequent orders passed in appeal and revision is that they misconstrue the provision of para 6 of the S.R.O. 17. Finally, it is urged that there was in fact no misconstruction of the provisions of para 6 of S.R.O. 3315 in these cases and Ujjambai s case (AIR 1962 SC 1621) will not apply to these petitions. Literally speaking, it may be correct to say that there was no actual misconstruction of para 6 of S.R.O. 3315 in these cases by the Collector of Customs. What had happened was as we have already indicated, that the petitioners tried to bring their case before him within the terms of the press communique of January 5, 1955 by which certain concessions were extended to genuine importers. They therefore tried to prove that they had placed firm orders before Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the authorities concerned, and the authorities concerned have found against the petitioners on the main question of fact involved in their contentions before them, it cannot be said that the authorities were wrong in the view they took for the reasons given by them and there would therefore be no question of any interference under Article 32. Further, if a petition under Article 32 is not maintainable when a provision of law is misconstrued, it could be much less maintainable when there is a mistake of fact though as we have indicated already, it cannot be said in this case that the Collector was wrong in his conclusion on the facts. 20. The petitioner s case, as put forward in this Court, is that even if firm orders were not placed before August 15, 1954, they were entitled to take advantage of the judgment of this Court in Universal Imports Agency s case - (1961) 1 SCR 305, if they had placed orders after obtaining the patents in September and had received authorisations and had arranged for foreign exchange to the extent necessary before November 1, 1954. if this is the case of the petitioners, now, and they want to succeed on it, it must be held that the Board by implic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present petitions. We therefore hold that the validity of the orders impugned cannot be questioned in a petition under Article 32 of the Constitution. The petitions are hereby dismissed with costs one set of hearing costs. Das Gupta J. :- 22. In sixteen petitions under Article 32 of the Constitution the petitioner, a merchant carrying on business under the name and style, Messrs Eastern Overseas (Pondicherry), seeks relief against the orders by which the Collector of Customs purporting to act under Section 167(8) of the Sea Customs Act read with Section 3(2) of the Imports and Exports (Control) Act, 1947 directed confiscation of goods which he had imported into Pondicherry, at the same time giving him option to pay in lieu of confiscation, fines aggregating in all the sixteen cases to ₹ 96,400. The appeals against these orders to the Central Board of Revenue were unsuccessful except that the penalty of fine payable was reduced to a total sum of ₹ 60,235. The petitioners then moved to the Government of India for revision of these orders but the revision applications were rejected. 23. Shortly stated, the petitioner s case is that in all the sixteen cases he had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of confiscation and penalty has been made by an authority under a statute which is intra vires and in the undoubted exercise of its jurisdiction. The validity of such an order cannot therefore be called in question in a petition under Article 32 of the Constitution even though the authority may have misconstrued the provisions of para 6 of S.R.O. 3315. 26. In resisting the preliminary objection Mr. N.C. Chatterjee has argued on behalf of the petitioner that all these 16 cases are cases of a quasi-judicial authority acting without jurisdiction and so, the decision in Ujjambai s case (AIR 1962 SC 1621) (Supra), far from creating any difficulty in the way of the issue of a writ, definitely helps the petitioner. It is not disputed that in deciding the preliminary objection the Court has to proceed on the basis that the petitioner s allegations about the importations having been made on the basis of contracts concluded before November 1, 1954 are correct. The necessary consequence of this fact, it is argued, is that the Sea Customs Act would not apply to these cases of importations and consequently the Collector of Customs, an officer, who derives his jurisdiction from the Sea Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticle 32 would be competent. That is the case here. There is no dispute that the taxing officer had no jurisdiction to tax inter-State sales, there being a constitutional prohibition against a State taxing them. He could not give himself jurisdiction to do so by deciding a collateral fact wrongly. That is what he seems to have done here. Therefore, we think the decision in Ujjambai s case (AIR 1962 SC 1621) is not applicable to the present case and the petitions are fully competent. It is hardly necessary to cite any further authority for the proposition that an inferior tribunal cannot give to itself jurisdiction by deciding a collateral fact wrongly. I shall only refer to the decision in Rex v. Shoreditch Assessment Committee, (1910) 2 KB 859 at p. 880, where the matter was discussed in picturesque language thus : No tribunal of inferior jurisdiction can by its own decision finally decide on the question of the existence or extent of such jurisdiction;......................................a Court with jurisdiction confined to the city of London cannot extend such jurisdiction by finding as a fact that Piccadilly Circus is in the ward of Chepe. 28. What has happened in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced. The Government of India also found no reason to interfere with the orders passed by the Central Board of Revenue. 31. These facts can however make no difference to the position in law that if in fact the importations were made on the basis of contracts concluded before November 1, 1954 the Sea Customs Act would not apply and the Collector or the Central Board of Revenue would have no jurisdiction to make any order of confiscation or penalty. Where an authority whether judicial or quasi-judicial, has in law no jurisdiction to make an order the omission by a party to raise before the authority the relevant facts for deciding that question cannot clothe it with jurisdiction. 32. The substance of the matter is that the Collector assumed jurisdiction on the view that the Sea Customs Act applied to these cases : if the importations were on the basis of contracts concluded before November 1, 1954 as we have assumed the Sea Customs Act does not however apply to these cases. Therefore, the Collector acted without jurisdiction and the fact that the assumption of jurisdiction was based on the Collector s wrong decision, does not change that position. The writ petitions would there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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