1958 (9) TMI 108 - HC - Customs

Summary

Issues Involved:
1. Constitutionality of Section 52A of the Sea Customs Act, 1878, and Section 167 (12A) concerning Article 19(1)(g) and Article 14 of the Constitution.
2. Error by the Additional Collector of Customs regarding the consideration of mitigating circumstances.
3. Legality of the imposition of a fine of four lakhs in lieu of confiscation.

Detailed Analysis:

1. Constitutionality of Section 52A of the Sea Customs Act, 1878, and Section 167 (12A) concerning Article 19(1)(g) and Article 14 of the Constitution:

The petitioner argued that Section 52A of the Sea Customs Act, 1878, read with Section 167 (12A), which renders a vessel liable to confiscation, constitutes an unreasonable restriction on the right of shipowners to carry on their trade and business, infringing Articles 19(1)(g) and 14 of the Constitution. The judgment clarified that Article 19 rights are available only to Indian citizens, and since the petitioner company is incorporated outside India, it cannot invoke Article 19. Regarding Article 14, the judgment noted that no specific ground of discrimination was alleged in the petition. The court further observed that even if Article 19 applied, the restriction would be considered reasonable due to the widespread smuggling issues necessitating firm measures.

2. Error by the Additional Collector of Customs regarding the consideration of mitigating circumstances:

The court emphasized the distinction between the commission of an offense and the imposition of a penalty. It was clarified that the intention or complicity of the owners is immaterial in determining whether the vessel is a "tainted vessel" under Section 52A. However, for the imposition of a penalty, mitigating circumstances, such as the owners' lack of knowledge or complicity, are relevant and should be considered. The Additional Collector of Customs erred by not considering these mitigating circumstances and by holding that only the physical condition of the vessel was relevant. The judgment cited English law and previous cases to support the view that mitigating circumstances should be considered when imposing penalties.

3. Legality of the imposition of a fine of four lakhs in lieu of confiscation:

The petitioner argued that under Section 183, an option to pay a fine in lieu of confiscation can only be given in the case of confiscation of "goods," and a vessel cannot be considered "goods." The court rejected this argument, stating that the word "goods" in Section 183 includes a vessel when it is the subject of confiscation. The court noted that the petitioner had already availed itself of the benefits of Section 183 by paying the fine and removing the ship from the harbor. It would be inequitable to order a refund without the ship being brought back to the port.

Conclusion:

The court issued a writ of Certiorari quashing the order of the Additional Collector of Customs dated 5-9-1957 concerning the confiscation of the ship and the fine imposed in lieu thereof. The matter was directed to be reconsidered in accordance with the law, considering the relevant mitigating circumstances. The petitioner was restrained from seeking a refund of the fine pending the reconsideration by the Customs authorities within a reasonable time, not exceeding six months. The confiscation of the gold was not challenged and remained unaffected by this order.