GOLLA RAMA RAO Vs. UNION OF INDIA

JUDGEMENT

(1.) THE plaintiff in O.S. No. 857 of 1967 on the file of the City Civil Court, Madras is the appellant herein. He is a dealer in tobacco and he used to get tobacco from various merchants from Andhra State and other places. On 23-5-1966 one Kotty Venkayya doing tobacco business at Eluru despatched 11 bundles of tobacco weighing dry weight 759 kgs. under T.P.I., permit in his name by Lorry. THE said Lorry was unloaded on 25-5-1965 at Madras. THE third respondent, who is the Inspector of Central Excise, came and scrutinised the permit and weighed the tobacco. On weighment it was found that the gross weight was 1, 060 kgs. and net weight was 994 kgs. as against 759 kgs. gross dry weight and 693 kgs. net dry weight as found in the permit. In view of this excess weight on the ground that the same was not covered by a permit, the excess tobacco was seized. Ex. B 3 dated 25-5-1966 is the statement given by the appellant before the Collector of Central Excise and Ex. B 3 dated 26-5-1966 is the form of seizure report of the Inspector of Central Excise. THEre had been correspondence between the appellant and the Collector of Central Excise and an order was passed on 17-6-1966 marked as Ex. A 5 by the second respondent, the Collector of Central Excise, permitting the appellant to take delivery of the tobacco seized on executing a bond. Ultimately by an order dated 28-7-1966 marked as Ex. A 7 the Assistant Collector of Central Excise stated that the excess weight was due to the wetting of the tobacco and that constituted only 43 % excess weight and up to 45 % the excess could be allowed and therefore, purporting to give the benefit of doubt to the appellant, he directed the release of the tobacco. THE appellant did not take delivery of the tobacco even then. THEreafter the Collector of Central Excise wrote a further communication to the Collector on 6-10-1966 marked as Ex. A 16 calling upon him to take delivery of the tobacco which had been ordered to be released even on 28-7-1966 itself. Contending that by the time the order was passed on 28-7-1966 the tobacco had become useless for the purpose of manufacturing snuff, the appellant did not take delivery and after issuing a notice under Section 80, Code of Civil Procedure, he instituted the suit for recovery of a sum of Rs. 6, 002.82 made up of Rs. 4, 002.82 being the value of the tobacco seized and Rs. 2, 000 the estimated loss of profit. THE appellant in the plaint contended that the action of the authorities in seizing the tobacco was illegal, malafide and in excess of the powers given under the rules and regulations. THE suit was resisted by the respondents on several grounds which are reflected in the following issues framed by Trial Court.

(2.) I am not going into in detail the findings of the learned trial judge on the different issues for the simple reason that I am agreeing with his conclusion that the suit instituted by the appellant is liable to be dismissed because of the bar of limitation provided for in Section 40(2) of the Central Excises and Salt Act, 1944 hereinafter referred to as the Act. I have already referred to the fact that the seizure took place on 25-5-1966 and the actual order directing the release of the tobacco was passed on 28-7-1966. The suit was instituted on 11-2-1967. Section 40 of the Central Excises and Salt Act, at the relevant time, consisted of two sub-sections :Sub-section (1) was:

(3.) APPLYING the reasoning of the above judgment, it clearly follows that so long as the appropriate authority takes an action or passes an order under the provisions of the Act, section 40(2) of the Act will be immediately attracted and whether that act or action is right or wrong or illegal will not be germane to the applicability of section 40(2) as such. As a matter of fact if the expression "anything done or ordered to be done under this Act" means only "anything legally, properly or correctly done or ordered to be done under the Act" * , then the question of instituting any suit, prosecution or other legal proceeding for such legal, proper or correct act or order cannot possibly arise and therefore section 40(2) itself will be devoid of any meaning or incapable of application since such legal, proper or correct act or order cannot be complained of, as contemplated by the statutory provision.