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TMI Blog1965 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... time being in force as aforesaid"; ...... The penalty clause thereof reads : "such person shall on conviction before a Magistrate be liable to imprisonment for any term not exceeding two years or to fine, or to both". This clause introduces a criminal offence. It is triable by a Magistrate. The person convicted is liable to imprisonment for a term not exceeding two years or to fine or to both. The rule of construction of such a clause creating a criminal offence is well settled. The following passage from the judgment of the Judicial Committee in The Gauntlet - (1872) L.R. 4 P.C. 184, 191 may be quoted : "No doubt all penal statutes are to be construed strictly, that is to say, the court must see that the thing charged as an offence is within the plain meaning of the words used, and must not strain the words on any notion that there has been a slip, that there has been a casus omissus, that the thing is so clearly within the mischief that it must have been intended to be included, and would have been included if thought of. On the other hand, the person charged has a right to say that the thing charged, although within the words, is not within the spirit of the enactment. But whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the intention to evade such a prohibition or restriction against the import or export of goods, as the case may be. A person who knowingly purchases smuggled goods from an importer cannot have an intention to evade a prohibition against import, for the prohibited goods have already been imported. A person who receives goods with the knowledge that they are stolen goods cannot possibly have an intention to commit theft, for the theft has already been committed, though he may have the intention to receive the stolen goods. Knowledge of an offence cannot be equated with an intention to commit the offence. Such a construction effaces the distinction between the two distinct elements of mens rea, knowledge and intention, laid down in the clause. 3.The only possible way out of the inevitable effect of the plain words used in the said clause is to give a meaning to the expression "import" which the word cannot bear. To accept the argument of the learned Counsel for the appellant is to hold that the process of import continues through innumerable transactions between different persons without reference to time or place and whether the goods existed or ceased to exist. Ordinarily the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead to the anomaly of a purchaser, even after 20 years of the import, being attributed the intention to evade the prohibition against import. Suppose before the purchase of the goods by a stranger the prohibition was lifted. In such a situation, does the purchaser commit an offence? If the contention is sound, he does. This illustrates that the crux of the offence is the import of goods with the requisite intent contrary to the prohibition. For the said reasons the intention to contravene the prohibition cannot be imputed to subsequent dealers in the said goods after the importer parts with them. 4.It is said that if the construction suggested by the learned Counsel for the appellant be not accepted, many a person who purchases smuggled goods will escape punishment. A fair reading of the Act discloses that the Act makes a distinction between a customs offence and a criminal offence. The smuggled goods in the hands of whomsoever they are found can be confiscated and, therefore, the States can always trace the smuggled goods to their ultimate destination. The smuggler and the persons concerned in the smuggling are guilty of both customs and criminal offences. The Legislature, either ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese accused also tried to run away. The constable appealed to the members of the public to help him in securing the Chinese accused and he was secured with the help of two college students and one other youngman. As the Chinese accused was running away he threw away three packets which were picked up. In the meantime Sergeant Mukherjee came there on a motor-cycle from the opposite direction and detained the Chinese accused. The three packets thrown away by him were also handed over by the three youngmen to the Sergeant. Thereafter all the three persons who were arrested were taken to the police station along with the three packets. It was found in the police station that the three packets contained 23 gold bars of about sixteen tolas each with Chinese inscription thereon. On search of the person of Sitaram Agarwala, a sum of Rs. 49,320/- in notes of various denomination was found on him. The customs authorities were informed and took charge of the gold bars. Eventually, the gold bars were confiscated under Section 167 (8) of the Act and thereafter the police after investigation prosecuted the two respondents and the third man in respect of the offence under Section 167 (81) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under or by virtue of the Act. In view of the intent necessary, the High Court was of the view that before a person could be convicted under Section 167(81) it must be shown that he was either a direct importer or concerned in some way in the import of the smuggled article. In other words, the High Court thought that the section dealt with goods while they were being smuggled; it did not include in its scope a person who subsequently obtained the smuggled goods and then dealt with them, though the smuggled goods themselves might be liable to confiscation when seized. Consequently the High Court ordered the acquittal of the Chinese accused also. As the interpretation of Section 167(81) was involved, the High Court granted certificates; and that is how the two appeals have come up before us. 10.The facts are not in dispute in this case and have been set out above. Thus the question that arises before us is the interpretation of Section 167(81) and two aspects of that section have to be considered. The first aspect is the ambit of the words "in any way concerned in any manner dealing with any goods with respect to the importation of which any prohibition or restriction is for the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the first column of the"167. following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively :- Offences Section of this Act to which Offence has reference Penalties (8) If any goods, the importation or exportation of which is for the time being 18 & 19 such goods shall be liable to confiscation; and any person concerned in any such offence shall be liable to a panalty not prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from India contrary to such prohibition or restriction; or etc. etc. exceeding three times the value of the goods, or not exceeding one thousand rupees." Section 167(81) with which we are particularly concerned reads thus : "(81) If any person knowingly and with intent to defraud the Government of any duty payable thereon, or to evade any prohibition or restriction for the time being in force under or by virtue of this Act with respect thereto acquires possession of, or is in any way concerned in carrying, removing, depositing harbouring, keeping or concealing or in any manner dealing with any goods which have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was raised on behalf of Sitaram Agarwala and which also found favour with the High Court. It will be seen that Section 167(81) deals with persons who do certain things with the knowledge and intent therein specified and one such person with whom that provision deals is a person who is in any way concerned in any manner dealing with any goods with respect to importation of which any prohibition or restriction is for the time being in force. The High Court has held on the facts in this case that Sitaram Agarwala cannot be said to have been concerned in any manner dealing with prohibited goods inasmuch as he was merely negotiating with the Chinese accused for their purchase but the deal had not been concluded. The view which found favour with the High Court thus was that if the deal had been completed, Sitaram Agarwala could be said to have been concerned in dealing with the prohibited goods but as the deal was not completed and he was merely attempting to purchase the goods it could not be said that he was in any way concerned in any manner dealing with them. We are of opinion that the view taken by the High Court is not correct. The words "in any way concerned in any manner dealin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... something". Therefore when a person enters into some kind of transaction or attempts to enter into some kind of transaction with respect to prohibited goods and it is clear that the act is done with some kind of prior arrangement or agreement, it must be held that such a person is concerned in dealing with prohibited goods. The fact that the act stopped at an attempt to purchase as in the present case when the police intervened does not in any way mean that Sitaram was not concerned in dealing with the smuggled gold. The evidence shows that there must have been a previous arrangement with the Chinese accused to purchase the smuggled gold. Sitaram went to the appointed place and met the Chinese accused surreptitiously and had a large sum of money with him to pay for the gold. He had sat down with the Chinese accused in the taxi and there is no doubt that if the taxi had not been stopped, the transaction for the purchase of the smuggled gold would have gone through. In these circumstances even though Sitaram had not come into actual possession of the smuggled gold before the police intervened, there is no doubt that he was concerned in dealing with prohibited goods. We are therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or have evaded the prohibition or restriction with respect to their import and the smuggling whether of dutiable or prohibited goods is complete, a third person who comes into possession of such goods thereafter and who had nothing to do with the smuggling itself cannot be said to have the intent to defraud the Government of any duty payable (for such defrauding had already taken place) or to evade any prohibition or, restriction, (for such prohibition or restriction had already been evaded). In effect, the argument is that this part of Section 167 (81) corresponds to Section 167(8) where a person has to be concerned in the actual importation before he can be liable to a penalty. 15.Now if the intention of the legislature was that the person guilty under Section 167(81) could only be a person who was concerned in some way or other with the actual importation or exportation it would have been easy for it to use the same words in Section 167(81) as were used in the first part of Section 167(8). But the legislature has not done so and the question is whether the words used in Section 167(81) have a different meaning from those used in Section 167(8). What Section 167(81) requires ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less he can find a market for smuggled goods. Therefore the purchaser of smuggled goods though he may not be concerned in the smuggling would in our opinion be equally guilty of evading the prohibition by making the purchase. The same in our opinion applies to defrauding the Government of the duty. Where goods had been smuggled in without paying duty the smuggler in such a case also intends to sell the goods and make profit thereby. The purchaser of such smuggled goods even though he may have nothing to do with actual smuggling, usually acquires the goods at a lower price because the payment of duty has been evaded. Therefore when such goods reach even third hands there is always the intention to defraud the Government of the duty payable on the goods. This appears to us to be the true interpretation of Section 167(81), which as we have said earlier is in different words from the first part of Section 167(8), which deals with actual importation or exportation. Section 167(81) does not deal with actual importation or exportation; it deals with defrauding the Government of the duty payable or evading the prohibition or restriction. So long as the duty is payable and has not been paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 17.It remains now to refer to a few English cases because our Act of 1878 was modelled on the English Customs Consolidation Act, 1876. Decisions of English courts therefore with respect to corresponding provisions of the English Act would in our opinion be helpful in the matter of the interpretation of Section 167(81). 18.Section 186 of the English Act corresponds to many of the provisions contained in Section 167 of the Act. In particular, the provision corresponding to Section 167(81) is in these terms :- "Every person who ....... shall be in any way knowingly concerned in carrying, removing, depositing, concealing, or in any manner dealing with any such goods with intent to defraud Her Majesty of any duties due thereon or to evade any prohibition or restriction of or application to such goods ........." "Such goods" in the context of the section mean either prohibited or restricted goods or goods on which duty is leviable. 19.The other clauses of Section 186 of the English Act do not specifically contain words relating to intent. But in Frailey v. Charlton - L.R. (1920) 1 K.B. 147 it was decided, that intent to defraud the revenue or to evade a restriction or prohibition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he was carrying them with intent to defraud His Majesty of the duties thereon." 21.The next case to which reference may be made is Rex v. Cohen - L.R. (1951) 1 K.B. 505. In that case 352 Swiss watches which were uncustomed were recovered from the accused and he was charged with being in possession of uncustomed goods with intent to defraud His Majesty of the duties thereon contrary to Section 186 of the English Act. Dealing with the question of intent to defraud, it was held that if the accused knew that the goods were uncustomed, the intention to defraud the revenue may be inferred. Here also the uncustomed goods were recovered from the house of the accused at Edgware and there was nothing to show that he was in any way concerned with actual smuggling. Even so, that court held that he must be held to be intending to defraud the revenue. 22.The next case to which reference may be made is Sayce v. Coupe - L.R. (1953) 1 K.B. 1. In that case the accused was in possession of certain American cigarettes on which duty had not been paid. It was held that where a person has in his possession goods which are to his knowledge uncustomed and which he intends to use or sell, he is guilty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fraud the Government of revenue. The same applies to prohibition and restriction and so long as the prohibition or restriction remains in force, the person dealing with the smuggled goods which had evaded the prohibition or restriction must also be held to evade the prohibition or restriction. In the view that we have taken it is therefore unnecessary to consider when the import or smuggling ends, for Section 167(81) hits not only persons concerned in smuggling or importing but also all others who come into possession of or deal with smuggled goods after the smuggling is over. 26.Lastly learned Counsel for the respondents refers us to Section 135 of the Customs Act (No. 52 of 1962). That section provides for what was formerly provided in Section 167(81) of the Act. The argument is that it is in very different terms. That is undoubtedly so. But it does not follow from the fact that the corresponding section in the 1962-Act is differently worded that the provision in Section 167(81) cannot have the meaning which is being pressed before us on behalf of the appellant. The interpretation of Section 167(81) must depend upon the language of that provision itself and on the language used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hings. The taxi in which the respondent Amin Khan came arrived at about 7-10 A.M. on July 15, 1959 and waited opposite gate No. 5, Kidderpore dock. There was one occupant on the rear seat of the taxi, namely, Amin Khan while the driver of the taxi was sitting in the driver's seat. Amin Khan had come down from the taxi and appeared to be restless. Shortly thereafter, Amin Khan got back into the taxi. But as there was a crowd there, Samsul Huq, though he could see Amin Khan while he was on the road and was getting into the taxi, could not keep the taxi in full view. Soon after Amin Khan got into the taxi and it started. Thereupon Samsul Huq stopped the taxi and rushed forward along with other customs officers. Amin Khan was then sitting in the rear seat of the taxi with a small attache case beside him. Samsul Huq asked Amin Khan what the attache case contained and Amin Khan replied that it contained gold. Thereafter the attache case was opened and it was found to contain 60 gold bars in six packets under a cotton jacket which was also in the attache case. Each packet contained 10 gold bars. Thereafter Amin Khan was arrested. Later the gold bars were confiscated under the Act and Amin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utside Kidderpore dock that morning at 7-10 A.M. knowingly or with intent to avoid a prohibition or restriction. The High Court further observed that the presence of Amin Khan near the dock area with a large quantity of gold was very suspicious; but in view of the nature of the evidence that the customs officers were on watch from before and did not see Amin Khan going into the dock area or did not see any one else dropping the attache case into the taxi, it could not be held that Amin Khan had acquired possession of the gold bars that morning at that place. That being so, the High Court was of the view that Amin Khan must be given the benefit of doubt in respect of the charge framed against him and consequently acquitted him. 32.This is an appeal under Article 136 of the Constitution and we cannot say in the circumstances that the view taken by the High Court is necessarily incorrect, keeping in mind the charge that was framed against Amin Khan. In view of our decision in Shri Sachidananda Benerji, Assistant Collector of Customs v. Sita Ram Agarwala (the judgment in which is being delivered today), the matter would have been different if the charge against Amin Khan was not of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods or deals with them long after the smuggling was over and who was not the smuggler himself or was not concerned in the smuggling in any manner. The High Court further held that it was only the person who was concerned in the transaction of smuggling in any manner who would either have the intent to defraud the Government of the duty payable or have the intent to evade any prohibition or restriction imposed on importation. As it was not shown in these cases that the two respondents were smugglers or were in any way concerned with the actual smuggling, the High Court ordered their acquittal and did not go into other points urged on behalf of the respondents against the judgment of the Presidency Magistrate by which they had been convicted under Section 167(81) of the Act. We have held in Sita Ram Agarwala case Cr. A. 192 of 1961 that Section 167(81) applies not only to a person who might be concerned in smuggling but also to a person who deals with smuggled goods after the smuggling is over and that such a person also has the intent to avoid the prohibition or restriction or defraud the Government of the duty payable thereon provided he has the knowledge that the goods were smug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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