LAWS(PVC)-1934-2-63

GAJADHAR PRASAD RAMNATH Vs. LADO RAM GAJANAND

Decided On February 01, 1934
GAJADHAR PRASAD RAMNATH Appellant
V/S
LADO RAM GAJANAND Respondents

JUDGEMENT

(1.) This is a defendants appeal arising out of a suit for recovery of damages for breach of a contract. On 6 February 1933, the defendants entered into a contract with the plaintiff firm, who are carrying on the business of commission agents, to purchase five bars of silver from the plaintiff to be delivered at Calcutta on 31 March 1930 at the rate of Rs. 47-5.0 per bar. In the written contract there was no mention of any liability to pay customs duty. Between the date of the contract and the date of delivery the customs duty on imported silver was raised by Government by the amount of Rs. 9-6-0 per 100 tolas. When the due date was arriving, the plaintiff demanded from the defendants the payment of the price but the defendants paid no heed to it. As the amount was not paid, the plaintiff firm instructed their agents in Calcutta to resell the goods which were sold at Rs. 45 plus Rs. 9-6-0, that is, at Rs. 54-6. The plaintiff demanded from the defendants the difference between this amount and the total of Rs. 47-5-0 and Rs. 9-6-0, that is to say, 2.5-0 per 100 tolas. The defendants decline to pay this amount with the result that the plaintiff brought the present suit for recovery of an amount due on a previous transaction with which we are not now concerned and also for the recovery of Rs. 346-14-0 as the amount of loss suffered by the plaintiff in respect of five bars of silver on account of the breach of contract of the defendants with Rs. 5-4-0 for telegram expenses and interest amounting to Rs. 16.14.6, in all Rs. 369.0-6. Both the Courts below have decreed the claim holding that the burden of the increase of the customs duty should fall on the defendant-purchasers under Section 10, Tariff Act. The only question before us is whether the defendants are liable to pay the amount equivalent to the enhanced duty on imported silver.

(2.) In the Preamble to the Indian Tariff Act (Act 8 of 1894) it is made clear that it was intended to amend the law relating to the duties of customs on goods imported and exported by sea, and to provide for the levy of duties on goods imported into or exported from British India by land. It is not intended to affect goods which are already in existence in India, except so far as the provisions relating to the imposition of excise duty can be applicable to the goods produced in India. Section 10 lays down that in the event of any duty of customs...on any article being increased...after the making of any contract for the sale of such article...duty paid, where duty was chargeable at that, (a) if such...increase so takes effect that the...increased duty...is paid, the seller may add so much to the contract price as will be equivalent to the amount paid in respect of such...increase of duty....

(3.) In the first place it is to be noticed that the increase of duty referred to in the section is on any article and not necessarily on any class of article. The amount which the seller is entitled to recover in addition to the contract price is the amount of duty paid by him, which must obviously mean actually paid to Government when the goods are imported. The section cannot be applicable to cases where goods were already in existence in India prior to the increase of duty and on which no enhanced duty whatsoever had been paid to Government.