1991 (7) TMI 203 - HC - Customs

Summary

Issues Involved:
1. Definition of "plants" and "seeds" under the Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989.
2. Authority of the Central Government to levy inspection fees under Section 3 of the Destructive Insects and Pests Act, 1914.
3. Validity of Clauses 3(12) and 12 of the Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989.
4. Refund and discharge of inspection fees and guarantees.

Detailed Analysis:

1. Definition of "plants" and "seeds" under the Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989:
The petitioners contested that timber logs and pulses do not fall within the definitions of "plants" and "seeds" under Clauses 2(i) and 2(1) of the said Order. The Supreme Court in Sarda Plywood Ltd. v. Union of India held that timber logs fall within the definition of "plant" under Clause 2(i) of the said Order. Consequently, the petitioners did not press their contention regarding timber logs. However, it was argued that pulses do not fall within the definition of "seeds." The court referred to the Oxford English Dictionary, which defines "pulse" as "The edible seeds of leguminous plants cultivated for food," and concluded that pulses are indeed seeds of agricultural or horticultural crops within the meaning of Clause 2(1) of the said Order.

2. Authority of the Central Government to levy inspection fees under Section 3 of the Destructive Insects and Pests Act, 1914:
The petitioners argued that the Destructive Insects and Pests Act, 1914, does not expressly empower the Central Government to levy inspection fees. Section 3(1) of the Act allows the Central Government to prohibit or regulate the import of articles likely to cause infection to crops but does not include the power to levy fees. The court referred to the Supreme Court's decision in Veitkata Siibbarao v. State of A.P., which held that the power to regulate does not include the power to levy a tax or a fee. The court also cited the Municipal Corporation of Greater Bombay v. Noshir Shapurji Dhabbar, which reiterated that no tax or fee can be recovered without the authority of law, and the power to levy fees must be expressly conferred.

3. Validity of Clauses 3(12) and 12 of the Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989:
The court examined whether the Central Government's power to regulate or prohibit imports under Section 3(1) of the Act includes the power to levy fees. It concluded that the power to regulate does not imply the power to levy fees or taxes. The court also considered the argument that Section 3(1) lacks guidelines for imposing taxes or fees, making any delegation of such power arbitrary and excessive, thus violating Article 14 of the Constitution. The court held that the Central Government's imposition of inspection fees was ultra vires the powers conferred under Section 3(1) of the Act.

4. Refund and discharge of inspection fees and guarantees:
The court directed the respondents to refrain from levying and collecting inspection fees on consignments of pulses and timber logs. Specifically, in Writ Petition No. 1810 of 1990, the respondents were ordered to refund Rs. 31,840/- paid as inspection fees and any subsequent fees paid by the petitioners. In Writ Petition Nos. 30 of 1990 and 1483 of 1991, the bank guarantees and bonds given by the petitioners were to be discharged.

Conclusion:
The court allowed the petitions, striking down Clauses 3(12) and 12 of the Plants, Fruits and Seeds (Regulation of Import into India) Order, 1989, as ultra vires the powers conferred on the Central Government under Section 3(1) of the Destructive Insects and Pests Act, 1914. The respondents were directed to refrain from levying inspection fees and to refund the fees already collected. The operation of the order was stayed for eight weeks at the respondents' request.