M. NAZIR HUSSAIN AND COMPANY Vs. THE ASSISTANT COLLECTOR OF CUSTOMS, APPRAISING DEPT, CUSTOM HOUSE, MADRAS AND OTHERS

JUDGEMENT

(1.) The writ appeal is directed against an order of Kailasam, J. declining to quash an order of the Assistant Collector of Customs calling upon the appellant to pay a sum of Rs. 52,768 -98 as customs duty under S. 28 (1) of the Customs Act. It appears that the demand was subsequently reduced to Rs. 25,837 -88. The appellant exported goat hair in 4 consignments which were covered by shipping bills dated 8th and 9th June and 2nd July, 1966. The proper officer gave clearance certificates in respect of the consignments on 9th Jane, 1966 and 2nd July, 1966 on the view that the goat hair exported was not raw wool within the meaning of item 12 of Sch. II to the Indian Customs Tariff. Later, on receipt of a communication from the Government of India, the proper officer apparently changed his view, and acting under S. 28 (1) of the Customs Act, 1962, made the demand. In fact in the notices served upon the appellant by which he was called upon to pay the duty, reference was made to the communication of the Government of India. That communication sought to clarify for purposes of export duty that raw wool included goat hair also. This order was impugned before Kailasam, J. on the ground (i) that the entry did not include goat hair; and (ii) that is any case, the proper officer having once taken a contrary view, and permitted export without duty, he had no further authority to revise his view later and impose duty. The learned Judge rejected the grounds and dismissed the petition. He was of the view that the clarification by the Government of India had not been shown to be wrong. The other objection was disposed of by reference to the powers of the proper officer under S. 28(1).

(2.) The appellant has taken a fresh ground in the appeal not dealt with by the learned Judge but said to have been argued before him, that the proper officer's order having been solely guided by the direction of the Government of Indian as to the scope of item 12 of Sch. II is, by that very fact, vitiated. This ground is undoubtedly well founded. A similar point was considered by the Supreme Court in C.A. Nos. 659 to 664 of 1965 and was held to vitiate an order of a Central Excise Officer acting in his quasi judicial capacity. The actual issue was whether M.G. Poster paper manufactured by the appellant in that case could be classified as printing and writing paper chargeable to duty under item 17 (3) or chargeable to duty as packing and wrapping paper under item 17 (4) of the first Schedule to the Central Excise and Salt Act, 1944. Initially the department treated M.G. poster and printing and writing paper but subsequently as packing and wrapping paper. This shift would appear to have been due to a clarificatory direction issued by the Central Board of Revenue, which formed the basis of the demand for duty under item 17 (4) and rejection of the appeal and revision arising thereout. The Supreme Court allowed the appeals by special leave against the orders solely on the ground that where administrative officers were vested with quasi judicial powers, they should function and exercise those powers by application of their own minds entirely uncontrolled and unguided by any direction issued by any superior officer up in the hierarchy of the administrative set up, and therefore, where it is shown that an order of a quasi -judicial authority was rested solely on such direction from higher administrative authority, it would be illegal. The Supreme Court observed :

(3.) There is no doubt ex facie the order of the proper officer in this case that he considered the clarification of item 12 by the Central Board of Revenue as decisive. That being the case, the principle of the judgment of the Supreme Court directly applies. On that ground the impugned order should be quashed.