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TMI Blog1962 (5) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of that question, however, depends on certain statutory provisions and the facts of the case to which, therefore, I shall immediately turn. 2. Sub-section (1) of Section 3 of the Imports and Exports (Control) Act, 1947 provides that the Government may by order prohibit, restrict or otherwise control the import of goods. By Notification No. 23 I.T.C./43 issued under Rule 84 of the Defence of India Rules which by virtue of Section 4 of the Act of 1947 is to be deemed to have been issued under that Act, it was ordered that on electrical instrument could be brought into India except under a licence. By another order made under Section 3 of the Act and contained in Notification No. 2-ITC/48, dated March 6, 1948, it was provided that the licence to import electrical instruments might be issued subject to the condition that the goods would not be disposed of or otherwise dealt with without the written permission of the licensing authority. 3. The first appellant is a company and the second appellant, one of its directors. On October 8, 1948, a licence was granted to the appellants to import from the U.S.A. a large quantity of electrical instruments, namely, fluorescent tubes an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed by the High Court at Calcutta on March 3, 1955. Sen, J., who delivered the judgment of the High Court said that it was difficult to hold that a condition of the licence amounted to an order under the Act and unless the Penal section included the contravention of the condition as an offence. It could not be held that such a contravention amounted to an offence under the section. 7. While these proceedings were pending an order was made by the High Court on January 16, 1953 directing the seized goods to be sold and the sale proceeds kept with the Chief Presidency Magistrate, Calcutta. Pursuant to this order the goods were sold for a sum of Rs. 4,15,000 and the sale proceeds have since been lying with the Chief Presidency Magistrate. 8. After the aforesaid proceedings had come to an end, the Collector of Customs Calcutta on August 28, 1955 served a notice on the appellants to show cause why the moneys lying with the Chief Presidency Magistrate representing the imported goods should not be confiscated under Section 167(8) of the Sea Customs Act read with Section 3(2) of the Act of 1947 and why further penalty should not be imposed on them under these provisions. It is this no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of learned counsel for the appellant is that under Section 167(8) of the Sea Customs Act read with Section 182 of that Act under which the Collector of Customs is proceeding, he has jurisdiction only to decide whether goods have been imported contrary to the prohibition or restriction imposed by an order made under Section 3(1) of the Act of 1947 but he has no jurisdiction under these sections to decide any question of confiscation of goods for breach of a condition of a licence issued under such an order. It is said that it appeared from the notice served by the Collector that he was proceeding to decide whether the goods were liable to confiscation because they had been disposed of in breach of the condition of the licence under which they had been imported which he has no jurisdiction to do and hence the appellants were entitled to a writ of prohibition which they sought. For the purpose of this argument the appellants proceed on the assumption that there has been a breach of the condition but this they do not, of course, admit. 12. The basis of the appellants' contention is the proposition that a breach of the conditions of a licence is not a breach of the order under whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only show that the licence had not been fraudulently procured and cannot affect the Collector's jurisdiction in any way. 14. It is also said that the decision of a High Court on a point of law is binding on all inferior Tribunals within its territorial jurisdiction. It is, therefore, contended that the Collector is bound by the decision of Sen,J, to which I have earlier referred that a breach of a condition of a licence is not a breach of the order under which the licence was issued and the condition imposed. As at present advised I am not prepared to subscribe to the view that the decision of a High Court is so binding. But it seems to me that the question does not arise, for even if the decision of the High Court was binding on the Collector, that would not affect his jurisdiction. All that it would establish is that the Collector would have, while exercising his jurisdiction, to hold that the breach of a condition of the licence is not a breach of an order. Its only effect would be that the appellants would not have to establish independently as a proposition of law that a breach of a condition of a licence is not the breach of an order under which it had been issued but might ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the legislature for otherwise the efficacy of the Act of 1947 would be largely destroyed. That Act was intended to preserve and advance the economy of the State on which the welfare of the people depended. In such a statute large powers have to be given to the Government and they were undoubtedly so given in the present case. The statute clearly intended and it should be so read that these powers could be effectively exercised. Therefore the breach of a condition of a licence legitimately imposed in exercise of that power has to be read as a breach of the order by which the power was exercised and the condition imposed. It follows that the Collector has jurisdiction to decide whether there has been a breach of a condition of a licence and whether, therefore, confiscation should be ordered under Section 167(8) of the Sea Customs Act and further penalty imposed. 18. I observe that Sen,J., in dealing with the argument advanced on behalf of the Customs authorities that a breach of a condition of a licence imposed under an order issued under the Act would be a breach of that order said that there might be some substance in it in the present case, if Notification No. 23-ITC/43 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gency Powers (Defence) Act, 1939 enables an authority to make regulations, a regulation which is validly made under the Act, i.e. which is intra vires of the regulation making authority, should be regarded as though it were itself an enactment." I think these observations fully apply to an Act like the Imports and Exports (Control) Act. Then I find that in our country too the same view has been taken. Thus in Emperor v. Abdul Hamid, AIR 1923 Pat I, Mullick,J., observed. "When a notification is issued by an executive authority in exercise of a power conferred by statute that notification is as much a part of the law as if it had been incorporated within the body of the statute at the time of its enactment." It has, therefore, to be held that where an order passed under the Act authorises the imposition of a condition, a breach of the condition would be punishable as a breach of the order under the Act. 20. I might now notice another argument. It was this : Under Section 167(8) of the Sea Customs Act, it was the import in contravention of the restriction that was an offence. The contention was that once the goods had been imported validly, that is to say, once they had been allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its origin in the year 1948. To appreciate the contentions of the parties it is necessary to survey broadly the events covering a long period. The appellants are Messrs East India Commercial Co. Ltd., a company having its registered office in Calcutta and the Director of that Company. On September 27, 1948 the appellant-Company filed an application with the Chief Controller of Imports, New Delhi for the grant of a licence to import 20,000 fluorescent tubes and 2,000 fluorescent fixtures from the United States of America. The application was accompanied by a covering letter. In the application it was mentioned that the goods were required for the Company's own use as industrial raw material or accessories; but in the covering letter it was stated that the goods were required primarily for their mills at Ellore in the Madras Presidency where they were planning to arrange for an up-to-date lighting system. The Chief Controller of Imports issued a special licence to the appellants on October 8, 1948. The licence granted was in respect of fluorescent tubes and fixtures of the approximate CIF value of Rs. 3,33,333 equivalent to $ 100,000 and the shipment was to be made within one year fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having sold a portion of the stock of fluorescent tubes and fixtures in contravention of the terms of the licence and the same was registered as Case No. C. 120 of 1951. On June 28, 1951 the learned Presidency Magistrate discharged all the accused in both the cases under Section 253 of the Code of Criminal Procedure after holding that no prima facie case had been made out against any of them. Two revisions were filed against that order in the High Court one by the State and the other by the Customs Authorities. Chunder, J. : who heard the revisions, set aside the orders of discharge made by the Presidency Magistrate and remanded the cases for fresh disposal. On June 8, 1952, the appellants filed an application before the Chief Presidency Magistrate for the release of the seized goods on the ground that they were deteriorating, but that was dismissed. But in a revision against that order, the High Court on January 16, 1953 directed the goods to be sold by the Presidency Magistrate and the sale proceeds to be kept in his custody. The goods were sold accordingly and they fetched a sum of Rs. 4,15,000 and the money has since then been in the custody of the said court. After remand, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the application on the ground that departmental proceedings were pending against the appellants. On May 9, 1955, the appellants filed a revision in the High Court, presumably, against the order adjourning the application and the said revision was numbered as Revision Case No. 582 of 1955 and it was adjourned from time to time at the request of the respondent. On May 28, 1955, the respondent started a proceeding purported to be under Section 167(8) of the Sea Customs Act, read with Section 3(2) of the Act and called upon the appellants by notice to show cause within seven days from the date thereof why the said proceeds, namely, Rs. 4,15,000 should not be confiscated and also why penal action should not be taken against them. It was stated in the notice that the special licence was issued on the express condition that the goods covered by the said licence should be utilised for consumption as raw material or accessories in the factory of the licence holder and that no part thereof should be sold or permitted to be utilised by any other party, that the appellants sold a portion of the goods imported under the said licence to others in breach of the said condition and that, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued an order in the nature of a writ of prohibition restraining him from proceeding with the said inquiry. (2) A Division Bench of the High Court of Calcutta in Criminal Revision No. 1124 of 1953, to which the respondent was a party, declared the law on the construction of the provisions of Section 5 of the Act, read with Section 3(2) thereof, viz., that it penalizes only a contravention of an order made or deemed to have been made under the Act and not a contravention of a condition imposed by the licence issued under the Act or issued under a statutory order made under the act; and after that declaration, which is binding on all the authorities and tribunals within the territorial jurisdiction of that court, the respondent has no jurisdiction to ignore the said order and proceed with a fresh inquiry in direct contravention of the law so declared. (3) That apart, the proposition so laid down by the said Division Bench is sound and, if so, the respondent could not initiate proceedings under Section 167(8) of the Sea customs Act in respect of a contravention of a condition of the licence, as it is neither a part of an order nor a condition laid down by the Order within the meaning o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscate goods after they have left the customs barrier, and, as the money in deposit in court is the proceeds of the sale directed to be held by the High Court in the interest of both the parties. It represents the said goods, and, in any view, as the order of the High Court is binding on both the parties, it is not to the appellants to plead that the goods are not represented by the said money. 26. The first question is whether the petition filed by the appellants under Article 226 of the Constitution for the issue of a writ in the nature of prohibition is maintainable in the circumstances of the case. A writ of prohibition is an order directed to an inferior Tribunal forbidding it from continuing with a proceeding therein on the ground that the proceeding is without or in excess of jurisdiction or contrary to the laws of the land, statutory or otherwise : Mackonochie v. Lord Penzance, 1881 AC 424 and, Halsbury's Laws of England, Vol. 2,3rd Edn. 27. The argument of learned counsel for the appellants is that on the face of the notice dated 28-5-1955 issued by the respondent, the latter has no jurisdiction to initiate proceedings under Section 167(8) of the Sea Customs Act, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Official Gazette make provisions for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as made by or under the order :- (a) the import, export, carriage coast-wise or shipment as ship stores of goods of any specified description. (b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance in which they are being carried. (2) All goods to which an order under sub-section (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under Section 19 of the Sea Customs Act, 1878 (VIII of 1878) and all the provisions of that Act shall have effect accordingly, except that Section 183 thereof shall have effect as if for the world "shall" therein the word "may" were substituted. Section 5 Penalty. - If any person contravenes or attempts to contravene, or abets a contravention of, any order made or deemed to have been made under this Act, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act shall be liable to be confiscated. But the section does not expressly or by necessary implication empower the authority concerned to confiscate the goods imported under a valid licence on the ground that a condition of the licence not imposed by the order is infringed or violated. If that be the true construction of the said provisions, the question arises whether in the instant case the allegations made in the notice bring the goods imported within the scope of the provisions of Section 167(8) of the Sea Customs Act. We shall now proceed to deal with that question. 29. As we have already noticed in the earlier stage of the judgment, the notice issued by the respondent charges the appellants thus : "One of the conditions of the special licence was that the goods would be utilized for consumption as raw material or accessories in the factory of the licence-holder and no part thereof would be sold to other parties, but in contravention of that condition the appellants sold a part of the goods imported to a third party; and as the goods had been caused to be issued by fraudulent misrepresentation, they were liable to be confiscated under Section 167(8) of the Sea Cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly lays down that all goods to which an order under sub-section (1) thereof applies, shall be deemed to be goods of which the export or import has been prohibited or restricted under Section 19 of the Sea Customs Act. Therefore, Section 167(8) of the Sea Customs Act can be attracted only if there was a contravention of the order issued under Section 5 of the Act. Does any order so issued by its own force impose such a condition? The Import Trade Control Notification dated July 1, 1943, reads thus : "The notification of the Government of India in the late Department of Commerce No. 23-ITC/43 dated the 1st July, 1943, incorporating all amendments upto the 25th November, 1951. In exercise of the powers conferred by sub-rule (3) of Rule 84 of the Defence of India Rules, the Central Government is pleased.......to prohibit the bringing into British India by sea, land or air from any place outside India of any goods of the descriptions specified in the Schedule hereto annexed except the following namely : (xiii) any goods of the descriptions specified in the Schedule which are covered by a special licence issued by any officer specially authorised in this behalf by the Central Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and that the order directs the imposition of a condition not to sell to a third party the goods permitted to be imported and that condition was contravened. The public notice dated July 26, 1948, was published in the Gazette on July 29, 1948. The relevant part of it reads : "Government of India MINISTRY OF COMMERCE PUBLIC NOTICES New Delhi, the 26th July, 1948 Subject :- Principles governing the issue of import licences for the period July-December, 1948. No. 1 (13)-ITC/47 (i). - The following decisions made by the Government of India governing the issue of import licences for goods falling under Parts II to V of the Import Trade Control Schedule for the licensing period July-December, 1948 are hereby published for general information. These decisions do not apply to goods falling under Capital Goods and H.E.P. Licensing procedure which has been prescribed in the Public Notice issued on 10th April, 1948". 31. Under paragraph 5, importers are requested to study the Appendix carefully and avoid making applications for import licences for articles which will not be licensed; para 7 prescribes the form of applications; para 8 says that in the case of articles which are subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as "public notices", while the notifications under Section 3 of the Act regulate the rights of parties, the public notices give information to the public regarding the principles governing the issue of import licences for specified periods. It is also clear that the orders issued under Section 3 of the Act, having statutory force, have to be repealed, if the new order in any manner modifies or supersedes the provisions of an earlier order; public notices are issued periodically without repealing or modifying the earlier notices or notifications. For instance, on December 7, 1955, the Central Government in exercise of the power conferred by Sections 3 and 4-A of the Act made an order under Clause 12 thereof the orders contained in Schedule IV were repealed; Schedule IV only mentioned five notifications issued under Section 3 of the Act, but no public notice was included in that list. To put it differently, orders made under Section 3 of the Act have statutory force, whereas public notices are policy statements administratively made by the Government for public information. The foreword to the Import Trade Control Hand-book of Rules and Procedure, 1952, under the signature of the Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly or through misleading statement on the part of the importer concerned; or (ii) when it is found that the licensee has not complied with any one or more of the conditions subject to which the licence may have been issued. SCHEDULE Clauses Licencing authority Cancelling authority Clause (xiii) Any officer authorizes by the Central Government. Chief Controller of Imports and/or Govt. of India." This order, therefore, authorised the Government of India or the Chief Controller of Imports to cancel such licences and make them ineffective. The specified authority has not cancelled the licence issued in this case on the ground that the condition has been infringed. We need not consider the question whether the Chief Controller of Imports or the Government of India, as the case may be, can cancel a licence after the term of the licence has expired, for no such cancellation has been made in this case. In the circumstances, we must hold that when the goods were imported, they were imported under a valid licence and therefore it is not possible to say that the goods imported were those prohibited or restricted by or under Chapter IV of the Act within the me ..... X X X X Extracts X X X X X X X X Extracts X X X X
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