9911796707
TMI Blog1987 (1) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... tions, if any, as may be allowed by the Reserve Bank, or is delayed to such extent as aforesaid : Provided that no proceedings in respect of any contravention of this sub-section shall be instituted unless the prescribed period has expired and payment for the goods representing the full amount as aforesaid has not been made in the prescribed manner.") of the Foreign Exchange Regulation Act of 1947 ("Act") designed to prevent wholesale or partial evasion of repatriation of earnings from export of goods covers only sale proceeds of goods exported "for sale" as held by the High Court of Calcutta by the judgment under appeal, or to sale proceeds of goods exported "on sale" in the context of sales completed before export also, as held by the Madras High Court in R. Venkatasubbu v. Director of Enforcement, Enforcement Directorate, New Delhi ILR [1968] 3 Mad. 18, and as contended by the appellants is the problem. The learned single judge of the Calcutta High Court dismissed a writ petition instituted by the respondent-company and refused to quash two show-cause notices dated November 5, 1966, issued under section 12(2) of the Act, as it stood at the material time, on taking the view canva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vent abuse in the context of "exports for sale" only. The expression is meaningful, relevant, and can co-exist in the context of abuse arising from "exports on sale" from completed transactions as well. The expression "no person entitled to sell, or procure the sale of, the said goods" is merely descriptive of the person who is accountable under the said provision as has been held by the Madras High Court in R. Venkatasubbu's case, ILR [1968] 3 Mad 18, which has made a correct, meaningful and purposeful approach with which we unhesitatingly agree. The whole purpose is to "identify" the accountable persons to prevent malpractices and ensure compliance. It is conceivable that the exports might be made in the name of, or through the agency of, a person other than the " owner of the goods" or the person entitled to sell the goods arising out of an "export on sale ". In our view, Anantaraman C.J., who spoke for the Madras High Court in Venkaiasubbu's case, ILR [1968] 3 Mad 18, was right in taking the view that the words "no person entitled to sell, or procure the sale of, the goods " are descriptive words which refer to the person in the capacity of the seller of the goods or the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exporter cannot be allowed to syphon away a part of the foreign exchange or to deprive the nation of the foreign exchange earned by the exports. Such is the philosophy of section 12. To take the view that the legitimate national interest in the sphere of preservation of foreign exchange has relevance only in the context of transactions of exports for sales and that the Legislature exhibited total unconcern for the foreign exchange earned in the context of transactions of completed sales or consignment sales, is to attribute to the Legislature irrationality, and to impute to the Legislature that it did not know its job inasmuch as it has tackled the problem only partially without any rational basis for excluding the transactions of completed sales from the purview of the legislation which would substantially erode or defeat the purpose of the legislation. When it is equally possible to take the view which would be conducive to the conclusion that there is no lacuna in the legislation, it would be unreasonable to take the view that the Legislature has left a lacuna either by negligence or by lack of foresight or because it did not know its job. In order to escape from the clutches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein. The entire subject of foreign exchange earnings relatable to export of goods has been specifically and specially dealt with in section 12. It would, therefore, be futile to search for an alibi in section 10 merely in order to support the plea that section 12 does not take within its fold the foreign exchange earnings relatable to transactions of completed sales. Pray what is the reason or the purpose for doing, so? Why take care to deal with "all" matters pertaining to export of goods and foreign exchange earnings therefrom in section 12, but even so exclude foreign exchange earnings arising out of completed transactions of sale from its scope and ambit? When there is a specific provision which can. Reasonably be interpreted to cover this aspect of foreign exchange earnings also, as embodied in section 12, which appears to us to be a complete code in itself, why leave this important vital matter of no less importance to be dealt with by section 10 which essentially deals with foreign exchange receivable from individuals and has nothing to do with export of goods? On a plain reading of section 10, the matter pertaining to the foreign exchange earned by exports in the context ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts or merits of the case or in regard to incidental matters. We issue this direction having regard to the fact that it was in the first instance for the competent authority to form an opinion on merits on the basis of the relevant material in so far as the factual aspect was concerned. Since the High Court was quashing the notice on a jurisdictional issue, there was no occasion for making any observation touching on the facts of the case or the merits of the other contentions incidental thereto. We also wish to make it clear that the question regarding the validity or otherwise of the views expressed by the High Court in regard to points other than the aforesaid point regarding the applicability of section 12(2) have been kept open for decision in future as and when an occasion arises. We should not be understood as having pronounced on these matters one way or the other.
We, therefore, allow this appeal set aside the order passed by the High Court and dismiss the writ petition instituted by the respondents, with liberty to the parties to raise all contentions on facts and law barring the contention that section 12(2) of the Act is not attracted. No order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
|
