LAWS(MAD)-1984-12-46

C ARASAKUMAR Vs. UNION OF INDIA

Decided On December 21, 1984
C.ARASAKUMAR Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) These appeals laid under the Foreign Exchange Regulation Act, 1973, raise an interesting point.

(2.) It is seen from the two certificates dt. 20-6-1972, issued by the office of the High Commissioner of India at Colombo that A.S.G. Chelliah Nadar son of A.S. Ghanamuthu Nadar, was a general merchant carrying on business at 168 Maliban St. Colombo, and is one of the persons affected by the Ceylon Government's Scheme of Repatriation of Indian Nationals and was returning to India for good. He had remitted moneys from Colombo through P.Edward Vedanayagam and the appellant in C.M.A. 409 of 1980 had received Rs. 50,000 during March 1970 from Edward Vedanayagam after tendering a number E. 86 contained in a letter sent by his father from Colombo. A sum of Rs. 29,076 being the balance of the said sum of Rs. 50,000 was seized by the Director of Enforcement. From the account books handed over by the appellant to the Director of Enforcement, the name and address of the parties to whom amounts were disbursed as per instructions of A.S.G. Chelliah Nadar, are found. The original authority of Director of Enforcement issue show cause notice both to the appellant in C.M.A. 409 of 1980 and Edward Vedanayagam, the appellant in C.M.A. 410 of 1980, accusing them of having contravened S. 5(1)(aa)and 5(1)(c) of the Foreign Exchange Regulation Act 1947 and imposed the following penalty on Edward Vedanayagam : - SCN-I for contravention of S. 5(1)(aa) to the extent of Rs. 1,45,000 consisting of thousand 4 payments(Two payments only) viz. Nos. 5 and 6 have been dropped by the Deputy Director) Rs. 15,000 (Rs. fifteen thousand only) SCN-II for contravention of S. 5(1)(c) to the extent of Rs. 1,47,191 consisting of 389 payments Rs. 25,000(Rs. Twenty-five thousand only) SCN-III for contravention of S.5(1)(c) read with S.23B to the extent of Rs. 350 consisting of 3 payments. Rs. 100 (Rs. one hundred only) SCN-IV for contravention of S.5(1)(aa) to the extent of Rs. 50,000 consisting of five one payment Rs. 2,500(Rs. two thousand five hundred only) SCN-V for contravention Rs. 15000 of S. 5(1)(c) to the extent of Rs. 80061 consisting of 267 payments. Rs. 15000(Rs. fifteen thousand only) SCN-VI for contravention of S. 5(1)(c) read with S. 23B to the extent of Rs. 2760 consisting of 5 payments. Rs. 500(Rs. five hundred only) and on the appellant in C.M.A. 409 of 1980 the three amounts viz. Rs. 28,076, Rs. 1,000 and Rs. 100 which were directed to be confiscated to the Government of India. The appellants preferred appeals to Foreign Exchange Regulation Appellate Board, viz, A Nos. 341 of 1977 and 372 of 1977 respectively. The appeals were dismissed except that the order regarding the charge under S. 5(1)(c) read with S. 23 B against Vedanayagam (appellant in C.M.A. 410 of 1980) was set aside. Hence these appeals.

(3.) Mr. Chellaswamy, learned counsel for the appellants, did not dispute the contravention of the Foreign Exchange Regulation Act by the appellants. Nonetheless, three points were placed before us by the said learned counsel. The first contention is that the policy of the Central Government as could be seen from Notification No. 22-7-1970-I.T.A. of Central Board of Taxes dated 5-8-1971, and from the letter bearing reference No. 1(10/69) TFL dated 28-8-1970, addressed by the Under Secretary, Central Board of Taxes, is to grant all reliefs to the Indian National repatriates from Ceylon and that in view of the said policy, the Central Board of Taxes, one wing of the Central Government had waived production of direct or documentary evidence in the shape of transfer through banks, hundies, etc., to support remittances from Ceylon, provided it is established that (i) the assessee has migrated to India from Ceylon on or after 1-11-1964, (ii) the assessee had sufficient resources in Ceylon to which the remittance could be reasonably attributed, (iii) the assessee had no source of income either in India or in any foreign country other than Ceylon prior to migration and he was not assessed as resident in India either for the assessment year preceding the year in which he migrated or for earlier years and (iv) the assessee has intimated the Income-tax Officer concerned about the sum brought over and the date of its introduction in the books of accounts within two months of the date of his arrival in India and in the case of persons who have already migrated by 31st Oct. 1971, the above concession in the first instance was to an over-all ceiling of Rs. 60,000, but later it was raised to Rs. 2,00,000. In this case, it is seen from the two letters issued by the High Commissioner of India, Colombo that Chelliah was carrying on business and had enough resources at Colombo. It is also fairly established that the said Chelliah Nadar, an Indian National repatriate from Ceylon had come down to India and settled here once and for all The other conditions are also complied with are not disputed. Thus, the said Chelliah Nadar had complied with the four conditions which would enable him to claim the benefits as per the directions issued by the Central Board of Direct Taxes stated supra.