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TMI Blog1959 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... is also provided and both these remedies the petitioner availed himself of. The argument of unreasonable restriction because of this ground must also fail. The Collector was acting within his powers if he asked for the deposit of cash security of ₹ 10,000. This is not a matter with which we can, in the circumstances of this case,' interfere. Appeal dismissed. - - - - - Dated:- 2-12-1959 - J.L. Kapur, Syed Jaffer Imam, S. K. Das and A. K. Sarkar, JJ. JUDGMENT The petitioner was a wholesale and retail dealer in tobacco at Banaras and also owned a private bonded warehouse for tobacco and held licences for the same. In this petition he challenges the legality of certain orders passed by the Collector of Excise, Allahabad, which on appeal were confirmed and revisions against those orders were dismissed by the Central Government. The petitioner's warehouse was checked by Inspector Das who on finding some irregularity sealed the warehouse on December 8, 1953, and subsequently took possession of all the registers and stock cards. On December22,1953, 11 1/2 bags of kandi i.e. stems of tobacco . which were found in the petitioner's warehouse, were removed fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue which was dissmissed. The petitioner also filed a petition under Art. 226 in the Punjab High Court which was also dismissed and a revision against the order of the Deputy Collector making the licence inoperative was dismissed by the Central Board of Revenue on December 20, 1956. This is the second order which is challenged. The present petition was filed on January 21, 1957, in which the petitioner prayed (1) that the provisions of ss. 6, 8, 9 and 10 of the Central Excises and Salt Act, 1944, Act 1 of 1944 (which for the sake of convenience will hereinafter be termed the Act) and the rr. 140 to 148, 150, 171 to 181, 215 and 226 of the Central Excise Rules made under the Act be declared ultra vires and to issue a writ of certiorari or any other writ to quash the orders passed by the Collector as confirmed on appeal and revision by the Central Board of Revenue and the Central Government respectively. These orders have already been referred to. (2) For a writ of mandamus directing the respondents not to interfere with the fundamental right of the petitioner to carry on trade in tobacco or to store tobacco; (3) directing the respondents to return the goods confiscated by them. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at any one-time by such a person. Section 9 deals with offences and penalties. Section 10 gives to the court the power to order forfeiture. Section 11 makes provision for recovery of duties due to Government. Chapter VI deals with adjudication of confiscation and penalties specifying the powers of the Collector of Central Excise and appeals against such orders and revision to the Central Government. Chapter VII contains supplementary provisions; s. 37 therein empowers the Central Government to make rules and in the Schedule the rates or duties leviable on each class of goods are given and tobacco falls in item 9. The question is, as to whether the Act falls within item No. 45 of List 1 read with s. 100 of the Government of India Act. It was contended on behalf of the petitioner that even though the imposition of excise duties may fall under item No. 45 of List 1 of the Constitution Act it is a serious encroachment on the territory covered by items 27 and 29 of List 11 of that Act. The argument raised was that although the Act imposes duty of excise within item 45 of List 1 and, that was one of its objects, it also regulates trade or commerce and therefore falls within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with s. 109 or with s. 116 of the Indian Penal Code). (2)............................ (3).............................. Counsel then drew our attention to r. 182 which relates to matches Only but which places limitation on the issue of licences for the manufacture of matches. The next set of Rules which were relied upon were rr. 140 to 148 in regard to warehousing and then our attention was drawn to rr. 210 to 215 relating to penalties, confiscation and appeals. In regard to the latter set of Rules it was submitted that they laid down no procedure and did not make any provision for issuing of notice to licensees or hearing them or their witnesses before imposing penalties. From all this the conclusion which counsel wished us to draw was that the Act read with Rules shows that the pith and substance is not merely levying an excise duty but the possession of and trade in tobacco was also regulated and therefore the subject matter of the Act did not fall exclusively in the legislative field covered by List 1 but it trenched upon the provincial field of legislation and must be held to fall under List 11 also. In every case where the legislative competence of a legislatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in pith and substance, relate to duties of excise on tobacco as contained in item 45 or it falls within the boundaries of items 27 and 29 of the provincial list and if it falls within the former, is its validity affected by its incidental trespass into the territory reserved for provincial legislation. In the interpretation of the scope of these items the widest possible amplitude must be given to the words used and each general word must be held to extend to ancillary or subsidiary matters which can fairly be said to be comprehended in it. United Provinces v.Mst. Atiqa Begum Ors. ([1940] F.C.R. 111.); Navinchandra Mafatlal v.The Commissioner of Incometax ([1955] 1 S.C.R. 829, 833, 836); The State of Madras v. Gannon Dunkerley Co. ([1959] S.C.R. 379, 391, 393). In Subramanyan Chettiar v. Muthuswamy Goundan ([1940] F.C.R. 188, 201.) Sir Maurice Gwyer, C.J., dealing with items in the Lists observed: It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that blind adherence to a strictly verbal i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factured tobacco and how that is to be kept in warehouses. Similarly at every stage whether the tobacco is in unmanufactured stage or manufactured stage provisions have been made in the Rules to keep a watch over the movement of tobacco. All these Rules show that the object of the Act is to make collection of excise duties on tobacco effective and the levying of fees is only a collection of money for the upkeep of supervision over the movement of tobacco for the purpose of excise duty. The system of licensing of bonded warehouses was always considered to be a part of effective control of evasion of tax in England and Parliament must be deemed to have contemplated the inclusion of this power. Besides, the levying of licence fees is itself a form of taxation. Cooverji B. Bharucha v. The Excise Commissioner of Ajmer ([1954] S.C.R. 873, 877, 822) and would in this case be within the legislative competence of the Central legislature whose powers of taxation should not be restricted so as to exclude the raising of revenue by imposing licensing fees. In the State of Madras v. Gannon Dunkerley Co. ([1959] S.C.R. 379, 391, 393) the following passage from the Broken Hill South Ltd. v. Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision made for notice or the taking of evidence and power of confiscation was given to persons who could not be termed unbiased. If the tribunal is to act judicially it must confirm to the principles of natural justice of audi alteram partem and there is no dispute that in the instant case there was no breach of this rule. Not only this, there is a right of appeal and a revision is also provided and both these remedies the petitioner availed himself of. The argument of unreasonable restriction because of this ground must also fail. Lastly, it was contended that the two main orders passed were ultra vires because in the first case the petitioner was asked to deposit the penalty before his appeal or revision could be heard and reliance was placed on Himmatlal Harilal Mehta v. The State of Madhya Pradesh ([1954] S.C.R. 1122). But it is difficult to see how that case applies. There was no illegal imposition on the petitioner nor is it shown that anything was threatened to be realised without the authority of law. In regard to the second order Mohammad Satar had ceased to be the petitioner's surety and therefore in terms of the proviso to r. 140 of the Excise Rules which was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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