DEPUTY COLLECTOR OF CUSTOMS Vs. RAMCHAND JAGADISH CHAND

JUDGEMENT

(1.) THIS is an appeal from an order of Ray, J. dated the 4th May, 1961 by which a Rule Nisi issued under Article 226 of the Constitution was made absolute and an Order of the Deputy Collector of Customs of confiscation of goods under section 167 (37), of the Sea Customs Act and imposition of personal penalty was quashed and a sum of Rs. 20,818. 25 np. was directed to be refunded. The respondent carries on business at No. 47 and 82, Khangraputty Street, Calcutta, as dealer inter alia in woollen piece goods. In course of such business the respondent on or about the 22nd May. 1959 placed an order for supply of 8 cases of woollen fabrics with Messrs. K. Jos Otten of Germany through a firm, Messrs. T. S. Narang, carrying on business at 34, Western India House, Sir Phiroze Shah Mehta Road, Bombay. The said order was placed under an import licence which the respondent had obtained from the appropriate authorities of the Government: of India, and the price at which the goods are alleged to have been purchased was 20 shillings per yard. The goods arrived at the Port of Calcutta on or about 28th August, 1959 and were landed at the Port under rotation No. 1159/59, Line No. 142. On 5th September, 1959 the respondent through its clearing agents Messrs. S. C. Sanyal and Sons of New Customs House, Calcutta, submitted to the Assistant Collector of Customs for Appraisement a bill of entry along with certain other documents declaring the total value of the goods as Rs. 22,893. 73 np. calculated at the rate of 20 shillings per yard. On 12/13tth February, 1960 the respondent received from the Assistant Collector of Customs for Appraisement, a memorandum stating that on examination of the goods it was found that the correct C. I. F. value of the goods should be 24 shillings per yard and the respondent was called upon to show cause why the goods should not be confiscated and penalty imposed upon the respondent under the relevant provisions of the Sea Customs Act for mis-declaration of value. On 18th February 1960 the respondent wrote a letter to the Assistant Collector of Customs enquiring the basis of the conclusion of the Assistant Collector of Customs that the price of the goods was 24 shillings per yard and stating that on receipt cf the information asked for the respondent would reply to the memorandum dated 12th February 1960 issued by the Assistant Collector. On 20th February, 1960 the respondent wrote another letter to the Assistant Collector giving notice that the respondent desired to be heard in person. On 14th March, 1960 the Assistant Collector addressed another memorandum to the respondent in which it was alleged that on further enquiries it had been found that the correct assessable value of the goods was Rs. 33,728/- calculated at the rate of 29 shillings 6 pence per yard and it was further stated in the memorandum that the basis of the said valuation was contained in four documents three of which were annexures 'a', 'b' and 'c' to the memorandum. By this memorandum the respondent was called upon to show cause why confiscation and penalty should not be ordered under the relevant provisions of the Sea Customs Act mentioned in the memorandum. The respondent was also asked to submit its replies with all necessary supporting documents within a fortnight from the date. On 22nd March 1960 the respondent submitted its reply to the notice to show cause and in this reply the respondent dealt with the annexures 'a', 'b' and 'c' to the memorandum dated the 14th March, 1960 and pointed out that no reliance could be placed on such annexures. On 31st March, 1960 personal hearing was granted to the respondent by the Assistant Collector of Customs for Appraisement. At the hearing one of the partners of the respondent firm was present along with an authorised representative and submissions were made on behalf of the respondent firm. On the 20th April, 1960 the Deputy Collector of Customs by an order made on that date held that correct C. I. F. value of the goods imported was 29 shillings 6 pence per yard and the Real Value of the goods as per section 30 (b) of the Sea Customs Act was Rs. 33,728/ -. It was further held that the goods were deliberately mis-declared in the bill of entry as regards value with a view to defraud the Government of revenue and the Deputy Collector directed that the goods be confiscated under section 167 (37) of the Sea Customs Act but he gave the respondent option to redeem the goods on payment of a fine of Rs. 9,890/ - within four months from date or such other extension of time as may be given on good cause being shown and he also imposed a personal penalty of Rs. 1,000/- on the respondent as person concerned in the offence under section 167 (37) of the Sea Customs Act. The penalty was directed to be paid forthwith. No separate action was taken under section 167 (8) of the Sea Customs Act. On 10th May, 1960 the respondent paid the duty and penalty amounting in all to Rs. 41,708. 29 np. without prejudice to its right, and contentions and took delivery of the goods. On 13th May, 1960, the respondent moved this Court under Article 226 of the Constitution and a Rule Nisi was issued by Sinha, J. This Rule came up for hearing before Ray, J. and by his judgment dated the 4th May, 1961 the learned Judge made the Rule absolute and quashed the order of the Deputy Collector of Customs dated 20th April, 1960 arid directed refund of the sum of Rs. 20,815. 25 np. within six weeks from the date. It is against this order that the present appeal has been preferred.

(2.) AT the hearing before the learned trial Judge the counsel on behalf of the respondent firm raised two contentions, first, that the customs authorities had no jurisdiction to apply section 30 (b) of the Sea Customs Act without exhausting the provisions contained in section 30 (a) of the Act and, therefore, the order of the customs authorities was illegal. The second contention was that the hearing was given by the Assistant Collector of Customs, but it is the Deputy Collector of Customs who actually passed the order of confiscation and penalty and as such the order was bad. It appears that on behalf of the customs authorities it was contended before the learned trial Judge that the order dated the 20th April, 1960 was one in assessment and was therefore not justiciable under Article 226 of the Constitution. The learned Judge has found that the provisions of section 30 (b) cannot be invoked without exhausting the provisions of section 30 (a) of the Act and he has also found that the order of the Deputy Collector of Customs is bad on the ground that the hearing had been given by the Assistant Collector of Customs and the order was made by the Deputy Collector. With regard to the contention of the counsel for the customs authorities that the order was administrative in nature, the learned Judge has found that the order of confiscation and penalty having been made in exercise of the power contained in section 182 of the Sea Customs Act the order was quasi-judicial in character and so amenable to a writ of certiorari. The learned Judge has further found that even assuming that the assessing authority was discharging administrative function still such authority was not above the law and it was bound to assess customs duty in accordance with law and the very basis of assessment being illegal a writ of mandamus could issue commanding the authority to forbear from enforcing the illegal order. It appears that before the learned Judge there was also some controversy with regard to the question whether the Court in a proceeding under Article 226 of the Constitution can direct refund of the duty or penalty paid and it was held by the learned Judge that the Court had power to make such an order of refund.

(3.) AT the hearing of this appeal all the points raised before the learned trial Judge have also been canvassed before this Court; but the principal points on which stress has been laid by the learned counsel for the appellant is that the finding of the learned trial Judge as to the true construction to be placed on the provisions of section 30 of the Sea Customs Act and the finding that the real value is to be assessed at the rate of 20 shillings per yard is not correct. Mr. G. P. Kar, the learned Counsel appearing for the appellants, has contended that the procedure adopted by the customs authorities far ascertainment or determination of the real value of the goods is perfectly in accordance with the provisions of the Sea Customs Act and for that purpose he has referred to the relevant provisions in the Act. The first section which may be considered is section 29 which provides inter alia that upon importation of any goods the owner of such goods is under an obligation to state in his bill of entry the real value, quantity and description of such goods to the best of his knowledge and belief, and he has to subscribe a declaration of the truth of such statement at the foot of such bill of entry. If the Customs Collector feels any doubt he may require the owner or any other person in possession of any invoice, broker's note or policy of insurance or other document whereby the real value, quantity or description of the goods can be ascertained, to produce the same and to furnish any information relating to such value, quantity or description which it is in his power to furnish, and thereupon such person is obliged to produce such document and furnish such information. Section 30 of the Act defines "real value" and is as follows: