TMI Blog1978 (9) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... oms Act, 1962 (52 of 1962) with effect from January 3, 1969. Amongst amendments so made was the insertion of a new Chapter, namely, Chapter IVB, in the said Act headed "PREVENTION OR DETECTION OF ILLEGAL EXPORT OF GOODS". This Chapter consists of six sections, namely, sections 11H to 11M. Section 11H is the definition section. Clauses (c), (d) and (e) of that section define "specified area", "specified date" and "specified goods" respectively. These clauses provide as follows - "11H Definitions. - In this Chapter, unless the context otherwise requires, - (c) "specified area" includes the Indian customs waters, and such inland area, not exceeding one hundred kilometres in width from any coast or other border of India, as the Central Government may, having regard to the vulnerability of that area to smuggling, by notification in the Official Gazette, specify in this behalf: Provided that where a part of any village, town or city falls within a specified area, the whole of such village, town or city shall, notwithstanding that the whole of it is not within one hundred kilometres from any coast or other border of India, be deemed to be included in such specified area : (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsport of specified goods from, into or within any specified area or loaded on any animal or conveyance in any such area, unless they are accompanied by a transport voucher in a prescribed form prepared by the person owning, possessing, controlling or selling such goods, except where the transport is within a village, town or city, of any specified goods, the market price of which on the date of the transport does not exceed one thousand rupees. Under Section 11L every person who, on or after the specified date, owns, possesses or controls within a specified area any specified goods of a market price exceeding fifteen thousand rupees, is to maintain a true and complete account of such goods in such form and in such manner as may be specified by rules made in that behalf and is further required, as often as he acquires or parts with any specified goods, to make an entry in the said account in relation to such acquisition or parting with. In such a case he is further to state the particulars of the person from whom such goods have been acquired or in whose favour such goods have been parted with. Section 11M requires every person who sells or otherwise transfers within any specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied area for the purposes of the said Act. On the same day two other Notifications were issued by the Central Government. These Notifications are as follows : - "Notification No. 7-Cus., dated January 3, 1969. - Whereas the Central Government, having regard to the magnitude of the illegal export of the goods mentioned in the Schedule hereto annexed is satisfied that it is expedient in the public interest to take special measures for the purpose of checking the illegal export of the said goods, and facilitating the detection of the said goods which are likely to be illegally exported; Now, therefore, in exercise of the powers conferred by Section 11-I of the Customs Act, 1962 (52 of 1962), the Central Government hereby specifies the goods mentioned in the said Schedule as the goods with respect to which special measures for the purpose of checking their illegal export and facilitating the detection of the said goods which are likely to be illegally exported, shall be taken. 1. Silver bullion and coins." "Notification No. 9-Cus., dated January 3, 1969. - In exercise of the powers conferred by sub-section (2) of Section 11K of the Customs Act, 1962 (52 of 1962), the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... patched on the same day to Ahmedabad. The petition then alleges that in view of the difference between the carriage charges for silver articles and for machinery involved in transport by Angadia Service, it was decided to declare the goods in question as machinery and that the said silver articles were put in 24 wooden boxes and dispatched to the said firm of Messrs Kantilal Somabhai Angadia. The Mehtaji of the First Petitioner firm, one Dhirajlal Jivanlal Shah went with the said goods. The said Dhirajlal was to pay the Angadia's charges for the carriage of goods as also to deliver a letter addressed to the consignee, namely, the said Manubhai. Dhirajlal had also taken with him a copy of the letter which was to be delivered to the consignee for the purpose of taking the signature of the Angadia on it. The Mehtaji of Angadia Service, however, informed the said Dhirajlal that as the goods were received after 5.30 p.m. the same could only be sent on Monday the 26th May, 1969, and for this reason the said Dhirajlal did not deliver to the Angadia's Mehtaji the letter addressed to the consignee. It appears that he also did not obtain the signature of the Angadia's Mehtaji on a copy of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot maintained the accounts in respect of the said seized silver as required by Section 11L (i) of the Customs Act and as they had also contravened the provisions of Sections 11-J (i) and 11-J (ii) of the said Act. By their attorneys' letter dated July 6, 1971 addressed to the Additional Collector (Preventive), Central Excise, Bombay, the original second Petitioner and the third Petitioner pointed out that no extension order under Section 110(2) of the said Act had been served upon them and that no notice or opportunity was given to them prior to the issue of such an order, if one had in fact been passed. They further contended that in view of the judgment of the Supreme Court in Civil Appeal No. 1056 of 1967, Assistant Collector of Customs v. Charandas Malhotra the seized goods had become liable to be returned, and they called upon the Additional Collector of Customs to return the seized goods to them. It appears that an order of extension was in fact passed by the Collector of Central Excise Customs, Bombay on November 3, 1970. The Additional Collector before whom the matter was pending was then transferred and the case was then posted before the second Respondent, his successor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there were silver bullion in the shape of statues, plates and kadas. With respect to the wooden boxes and the remaining silver articles, weighing 10,730 Kgs. which consisted of twisted and broken spoons, glasses, thalis and scrap sheets, he held that they were used for concealing smuggled goods, and he ordered their confiscation under Section 119 of the said Act. He, however, gave to the original second Petitioner and the third Petitioner an option to redeem them on payment of a fine of Rs. 5,000/-. He further imposed a personal penalty of Rs. 50,000/- on each of them. In arriving at his conclusion that the said statues plates and kadas were bullion, the Additional Collector relied upon his visual inspection of the said articles and upon the said Panchanama made on May 1, 1970. According to him, these articles were not fully manufactured, the statues were too heavy and could not serve the purpose of an article of art or decoration and that some piece had been cut from some of them for the purpose of testing. He accordingly held that the statues were not genuine articles and were not intended to be used as such and were in fact silver bullion within the meaning of the said term in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses the expression "Silver bullion and coins". The expression "silver bullion" is not defined either in the Customs Act or by the said Notification. Therefore to ascertain the meaning of the expression "silver bullion" as used in the Notification the first Respondent has turned to the Statement of Objects and Reasons given by the Finance Minister when he introduced the Bill which finally become the Amending Act 12 of 1969. After setting out and the Statement of Objects and Reasons the first Respondent has stated in his said order as follows : "It is, therefore, clear that the amendment was warranted because of large scale smuggling of silver out of the country etc. and the object of incorporating Chapter IVB in the Customs Act was to prevent such smuggling and to facilitate detection and confiscation. It is also clear that only genuine articles and ornaments meant to be used for genuine purposes are excluded and not those articles and ornaments which by some device are made to look like silver articles and silver ornaments, but which are not intended to be used as such and which, in effect, remain 'silver bullion'. Therefore, the term 'silver bullion' for the purposes of the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Dental Medical Supply Co. (1976) 37 S.T.C. 336, and in Commissioner of Sales Tax v. Telco Industries, (1976) 38 S.T.C. 93. September 12, 1978 : In State of Uttar Pradesh and another v. Kores (India) Ltd. (1977) 39 S.T.C. 8 S.C. the Supreme Court had to consider two questions; (1) whether carbon paper was paper falling within the purview of the word and 'paper' as used in entry No. 3 of the Notification dated July 1, 1966 issued by the Government of Uttar Pradesh in exercise of the powers conferred upon it by Section 3-A of the U.P. Sales Tax Act, 1948, so as to be liable to sales tax at the point and at the rate specified in the Schedule to the said Notification, and (2) whether ribbon was an accessory or a part of the typewriter. The Supreme Court held that a word which was not defined in an enactment had to be understood in its popular commercial sense with reference to the context in which it occurred. Proceeding upon this principle the Court held that the word 'paper' formed part of the denomination of a specialised article and that it was not decisive of the question whether the article was paper as generally understood. It further held that the word 'paper' in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the First Schedule to the Indian Tariff Act or whether it fell under the residuary entry No. 87. The Supreme Court held that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course, but once an article was classified and put under a distinct entry, the basis of the classification was not open to question. The Court further held that technical and scientific tests offered guidance only within limits and that once the articles were in circulation and came to be described and known in common parlance, then there was no difficulty for classification under a particular entry. 13.I will now turn to the cases in which the word 'bullion' has come up for interpretation before the Court. In Sri Akhrai Parekh v. The State of Andhra Pradesh, (1960) 11 S.T.C. 483, a Division Bench of the Andhra Pradesh High Court held that the expression "gold or silver bullion" in Section 6 of the Hyderabad General Sales Tax Act, 1950, connoted only pure gold or silver and it did not take in gold or silver mixed with copper or lead. In arriving at this conclusion the Court relied upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Respondent has overlooked that it is now well-settled by decisions, including those of the Supreme Court, that a Statement of Objects and Reasons accompanying a Bill when introduced in Parliament cannot be used to determine the true meaning and effect of the substantive provisions of a statute nor can it be used except for the limited purpose of understanding the background and the antecedent state of affairs leading to the legislation, but it cannot be used as an aid to the construction of an enactment. He has forgotten that a statute, as passed by the Parliament, is the expression of the collective intention of the legislature as a whole, and any statement made by an individual of the intention and objects of the Act cannot be used to cut down the generality of the words used in the statute or conversely to enlarge it. It is needless to cite all the authorities on this proposition. Suffice it to refer to but one of them, namely, State of West Bengal v. Union of India, A.I.R. 1963 S.C. 1241. 15.Let us now see what the position would be if the popular or trade parlance test were applied to the present case. The Petitioners had led the evidence of three witnesses Parsuram Haribh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the weight of these articles. It is nowhere stated in the said panchanama that these articles were bullion. All that is stated is that the articles were of an excessive weight and were unpolished. It is also pertinent to note that the statements of these two panchas were at no time recorded by the Department. They were merely panchas who witnessed the weighing of these articles and were not witnesses. It may also be mentioned at this stage that during the hearing of this Petition learned Counsel for the Respondents voluntarily produced these articles before the Court. After producing them he was hard put to support what had been said about the appearance of the statues and the kadas in the said panchanama and in the impugned order, and ultimately gave up the attempt. Thus, the record before the First Respondent clearly shows that these articles were not bullion and could not be and were not considered as bullion by people in the trade. 16.In view of this position, it is really unnecessary to refer to the dictionary meaning of the word 'bullion', but even if one were to refer to the dictionary meaning, none of the dictionaries shown to me in any manner support the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les in question were bullion and not silver articles and ornaments. In advancing this argument learned Counsel lost sight of the fact that when the question is whether gold is smuggled or not, what is at issue is the nature of possession of the gold in question and not as to the form of that gold, as to whether it is in the form of bullion or in the form of ornaments or other articles of gold. Bullion would remain bullion whether it was smuggled into the country or was acquired lawfully, and similarly gold ornaments would remain gold ornaments whether they were smuggled into the country or were lawfully acquired. Attendant suspicious circumstances would only go to show whether the acquisition of bullion or ornaments, as the case may be, was lawful or illegal. 18.Shri Sukthankar next submitted that it was for the Customs authorities to determine whether the articles in question were bullion or not and that if there were two constructions and one of them, which was in favour of the Revenue, was adopted the Court had no jurisdiction to interfere merely because the other interpretation favourable to the subject appealed to the Court as the better one to adopt. In support of this subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the appellate authority to dispense with such deposit either unconditionally or subject to such conditions as it may deem fit where in any particular case the appellate authority is of the opinion that the deposit of penalty levied would cause undue hardship to the appellant. Under Section 131 the decision of the Board given in appeal is subject to revision by the Central Government. The Petitioners have not filed any appeal to the Board. The question is whether their failure to do so disentitles them from obtaining relief from this Court in these proceedings. In the present Petition the petitioners have averred that they have been wrongly deprived of their property without authority of law in violation of the provisions of Article 31 of the Constitution. They have further averred that the impugned order and the demand of penalty from them are in violation of the fundamental rights guaranteed to them by clauses (f) and (g) of Article 19(1) of the Constitution. It is well settled by decisions, including those of the Supreme Court, that when the fundamental right of a party is infringed, the High Court will not refuse to exercise its jurisdiction under Article 226 of the Constit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action taken is without jurisdiction, then a petition under Article 32 would be competent'. Similar observations are to be found in the opinion of Kapur, J. Therefore, the majority view considered that a breach of fundamental right guaranteed by Article 31(1) is involved in a demand for tax which is not leviable under a valid law." The passage from the decision of Das. J., cited in the later decision is the very passage relied upon by Shri Sukthankar. Sikri, J. (as he then was), who gave a dissenting judgment in Ujjam Bai's case, however, agreed with the view of the majority on the preliminary objection raised by the Respondents in that Petition. The authority relied upon by Shri Sukthankar does not, therefore, in any way lend support to his contentions. It may also be noted that under Article 226 of the Constitution, as substituted by the Constitution (Forty-second Amendment) Act, 1976, the existence of an alternative remedy is not a bar for the enforcement of any of the fundamental rights. In view of the fact that the Petitioners have complained and in my opinion rightly complained, about the infringement of their fundamental rights, it is unnecessary for me to consider whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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