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TMI Blog1966 (6) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant-plaintiff is a licensed tobacco trader in Guntur. He had entered into a contract on 1-6-1965 with a Japan Monopoly through the Tokyo Food Products Ltd., for supply of 500 bales of tobacco from 1955 crop and 250 bales of 1954 crop both for CPL variety, IAC, without butts. As the said variety was not available in Guntur and Krishna Districts, he purchased from one G. Bhavani Prasad of Hyderabad on 13-10-1955, 199 packages of I. A. C. Tobacco, partly at ₹ 100 and partly at ₹ 72-8-0. The consignor (seller) applied for a permit in AR. 3 form for transport of the said packages by a lorry from Hyderabad to Guntur and was given a T. P. 2 permit on 13-10-1955 for transport of the same between 4-30 p.m. on 13-10-1955 and 5-00 p.m. on 15-10-1955. The marks and numbers of the 119 bundles were stated in the A. R. 3 form and also when T. P. 2 permit was issued, by the consignor and his men, during the absence of the plaintiff at Hyderabad. It may be stated that T. P. 2 form permitted the consignee of the plaintiff at Hyderabad. It may be stated that T. P. 2 form permitted the e consignee one the consignee's bond and the goods were thereafter transported and reached V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any reasons. Thereafter the plaintiff paid the penalty of ₹ 1,000 under protest and redeemed to the tobacco after paying ₹ 1,200. The plaintiff averred that, as the transport of the tobacco was at the instance of the consignor and on his bond, he could not be held responsible on his bond and even on merits, he contended that the finding of the Collector was based on suspicion. A declaration was, therefore, prayed for that the order of the Collector, dated 12-7-1956, is illegal, arbitrary and ultra vires. 3. The defendant, Union of India, stated that the averment of the plaintiff that the goods were transported of the responsibility of the consignor is wholly incorrect: that the goods were moved under the bond of the plaintiff and that the present stand taken by the plaintiff that they were moved on the consignor's bond was never before raised or urged in the earlier proceedings and is untenable. The consignment, even as per the plaintiff's contention, reached to Vijayawada in the early hours of 14-10-1955. That consignment totally disappeared and the plaintiff who was bound to account for the same, failed to do so and the duty and penalty were properly levied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Salt Act, 1944? (5) To what relief is the plaintiff entitled. 5. The Subordinate Judge held that the contention that the tobacco was moved out of Hyderabad not on the consignee's bond but on the consignor's application and on his bond, and as such the plaintiff could not be held liable, was not maintainable, because it was not specified in the suit notice under Section 80, C.P.C. In so far as the merits are concerned, that the marks were different, that the weight of the goods permitted to be transported and the goods seized are not the same, that the tobacco purchased at Bhavanagiri, was not held to have been established. On the only other point namely, whether the tobacco seized was not the same as that permitted to be transported, the Subordinate Judge relying on the expert's opinion of the Senior Marketing Development Officer, Exs B-29, and B-30 held that the tobacco on the samples taken from the seized tobacco was different and hence the order of the Collector was not illegal. On issues 3 and 4, he held on the interpretation of Section 40 of the Central Excises and Salt Act, 1944 (hereinafter called 'the Act') that a civil suit was maintainable, but h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a civil suit challenging the orders of assessment, etc., could not provisions of appeals and revisions and the injunctions that the appeal shall be final be construed as a prohibition?. 10. In our view, where the Legislature has expressly or by necessary intendment or implication prohibited a civil suit, even in such cases, Courts have felt free to examine the question whether those hierarchy of tribunals have been vested with power to determine facts, the determination of which would vest in them the power to affirm or negative their jurisdiction. Beginning from the case of Raleigh Investment Co. Ltd. V. G. G. In Council, AIR 1947 PC 78, to the latest case of Kamala Mills v. State of Bombay [1965] 57 ITR 643(SC) , these matters have been considered. But before we examine these questions, it will be necessary first to consider the scope and ambit of Section 40 of the Act. We will now give Section 40 in juxtaposition with Section 18 of the Madras General Sales Tax Act for a comparison of the language and for a proper appreciation of the several decisions to which we will soon be referring. 11. Sec. 40 of the Central Excises and Salt Act:- (1) No suit shall lie against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act, the language of which is similar to Sec. 18 of the Sales Tax Act. In Province of Madras v. Satyanarayanamurthy. AIR 1952 Mad 273 , a further question, namely whether having regard to the provisions of the Act, is the jurisdiction of the ordinary civil Courts ousted or should remedy be found under the Act, was considered, and after discussing the relevant cases on this point, it was held that the Act with its subsequent amendments had not ousted the jurisdiction of the ordinary Courts. This matter also came up for consideration before a Bench of this Court consisting of Subba Rao, C.J. (as he then was), and one of us, in Chunilal v. State of Madras (now Andhra Pradesh), AIR 1958 A P 670 (675). In that case, after referring to the above decisions, it was observed at p. 675 thus:- There can be no doubt that an assessee who is called on to pay a tax has a right to seek his remedy in a Court of Law by challenging the legality of that order. This he is entitled to do unless that right has been barred or taken away statutorily. The fact that there is under the taxing statute a right of appeal or revision against assessment is not by itself sufficient to take away the right o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended to be done under this Act. Sec. 18A of the Sales Act:- No suit or other proceeding shall, except as expressly provided in this Act, be instituted in any Court to set aside or modify any assessment made under this Act. 15. Where Civil Court's jurisdiction is barred by any statute, or for that matter where it is not expressly barred, is a remedy still open to an assessee to challenge an illegal order made thereunder an if so, under what circumstances? In a case where it is not expressly barred the question whether it is impliedly barred would depend upon the machinery provided in the statute for appeals and revisions for taking evidence, and for determining questions of fact arising in those proceedings. Even where Civil Court's jurisdiction is expressly barred or for that matter impliedly barred the jurisdiction of Civil Courts is nonetheless not held to be barred in certain circumstances, namely absence of an adequate remedy or where fundamental rules of procedure have been violated. In AIR 1947 PC 78 (supra), an assessee paid under protest the tax the following relief: (a) a declaration that certain provisions of the Income Tax Act on which the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the question of ultra vires being debated, fell within the competence of the legislature. In their Lordship's view it is clear that the Income Tax Act, 1922, as it stood at the relevant date did give the assessee the right effectively to raise in relation to an assessment made upon him the question whether or not a provision in the Act was ultra vires. 16. These observations under the Income Tax Act, where the jurisdiction was expressly barred, emphasise the need for having recourse to the machinery provided under the Act for a construction of the section which denies an alternative jurisdiction to enquire into the same subject-matter. Even there, the presence of such a machinery was held to be by no means conclusive but the absence of such a machinery would greatly assist and particularly, precluding a court in its ordinary civil jurisdiction from considering the question of ultra vires, would indicate that it is not so barred. In so far as the provisions of the Income Tax Act are concerned, it was held that a machinery was provided not only ousting the alternative jurisdiction of the Civil Courts but also in determining the question whether a provision is ultra vires or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the assessing authority. But the jurisdiction can be exercised only according, as well as with reference, to the valid provisions of the Act. When, however, the authority travels beyond the valid provisions it must be regarded as acting in excess of its jurisdiction. To give too wide a construction to the expression under the Act 'may lead to the serious consequence of attributing to the legislature, which owes its existence itself to the Constitution, the intention of affording protection to unconstitutional activities by limiting challenge to them only by resort to the special machinery provided by it in place of the normal remedies available under the Code of Civil Procedure, that is, to a machinery which cannot be as efficacious as the one provided by the general law. Such a construction might necessitate the consideration of the very constitutionality of the provisions which contains this expression. This aspect of the matter does not appear to have been considered in Releigh Investment Co.'s case, AIR 1947 PC 78. It was further submitted that in Firm of Illuri Subbayya Chetty Sons v. State of Andhra Pradesh. [1963] 50 ITR 93(SC) , the Supreme Court made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is expressly provided for, the consideration as to the scheme of the statute in question and the adequacy or the sufficiency of the remedies provided for by it may be relevant but cannot be decisive. If it appears that a stature creates a special right or a liability and provides for a determination of the specially constituted in that behalf, and it further lays down that all be determined by the tribunals so constituted, it becomes pertinent to enquiry whether remedies normally associated with actions in Civil Courts are prescribed by the said statute or not. The relevance of this enquiry was accepted by the Privy Council in dealing with Sec. 67 of the Income Tax Act in Raleigh Investment Co.'s case, AIR 1947 PC 78, and that is the test which is usual applied by all Civil Courts It is, therefore clear that what the Courts have to decide is whether the remedy provided by the statute is an adequate remedy. What is an adequate remedy depends in each case upon the statutory provisions. In that case, the question was whether an assessment made under the Bombay Sales Tax Act, 1946, even if erroneously made and based on incorrect evidence of fact, is an order of assessment wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the relevant words on which the controversy between the parties as to the competency of the suit in that case had to be resolved, were not as emphatic as they are in Sec. 20 and yet, the Privy Council upheld the plea that the suit was barred. It may however be pointed out that Lord Thankerton in the Mask's case, observed at p. 110:- It is settled law that the exclusion of the jurisdiction of the Civil Courts is not to be readily inferred, but that such exclusion must either be explicitly expressed or clearly implied. It is also well settled that even if jurisdiction is so excluded, the Civil Courts have jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. Gajendragadkar. C. J. While referring to this passage in Kamala Mills' case, [1965] 57 ITR 643 (SC) , stated that in that case their Lordships were not called upon to consider the merits of those observations or their scope and effect. Nonetheless. It cannot be said that the above observations were disapproved. To our mind, they are in consonance with the gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, it may, by necessary implication bar the maintainability of a civil suit in respect of the said liability. A statute may also confer exclusive jurisdiction on the authorities constituting the said machinery to decide finally a jurisdictional fact thereby excluding by necessary implication the jurisdiction of a Civil Court in that regard. But an authority created by a statute cannot question the vires of that statute or any of the provisions thereof whereunder it functions. It must act under the Act and not outside it. If it acts on the basis of a provision of the statute, which is ultra vires to that extent it would be acting outside the Act. In that event, a suit t question the validity of such an order made outside the Act would certainly lie in a Civil Court. 21. To sum up, the position as gleaned by these authorities is as follows:- Whether there is an express prohibition or not, the alternative remedy provided by the Act must be taken into consideration. Where elaborate provisions are made in the statute for alternative and adequate remedies, including provision for recording evidence and for determining facts. Civil Court's jurisdiction is barred. Where however ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Court, inasmuch as the finality of the appeal is in respect of the remedy provided under the Act and not otherwise. Further, in cases where such an appeal is subject to the payment of the entire tax, as in this case under the rules a right of appeal is only given under those circumstances the plaintiff cannot be said to have an adequate remedy and thereto the suit is not maintainable. 23. In order to test the validity of these rival contentions, it is necessary to examine the provisions of the Act and the rules, Sec.3 which is the charging section imposes duties, empowers the levy and collection in such manner as may be prescribed, duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into any part of India, as and at the rates, set forth in the first schedule. Sub-section (2) empowers the Central Government by notification to fix for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the first schedule as chargeable with duty ad valorem and after any tariff values for the time being in force. Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome cases the amount of deposit may be so heavy that the petitioner may not be in a position to deposit the same. It would in such cases amount to taking away the right of appeal by another process, namely, imposing a condition for the deposit of the amount. In Himmatlal v. State of M. P. [1954] 1 SCR 1122 , their Lordships of the Supreme Court also expressed a similar view. In that case, their Lordships were considering the provisions of the Central Provinces and Berar Sales Tax Act as amended by the Act 15 of 1949. Mahajan, C. J. At page. 406 said: The finality that statute conferred upon orders of assessment, subject, however to appeal, and revision was a finality for the purposes of the Act. It did not make valid an action which was not unwarranted by the Act, as for example, the levy of tax on a commodity which was not taxed at all or was exempt. These observations further reinforce the conclusion that under the Central Excise and Salt Act and rules adequate remedy has not been provided for when it made the appeal subject to the payment of the entire duty levied. In this view, we hold that the suit is maintainable. 25. In so far as the question of limitation is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such special rule either in the Evidence Act or under the Act. In Palaniappa v. Bombay Life Assurance Co., Ltd., AIR 1948 Mad 298 at p. 299, a Bench of the Madras High Court was considering the admissibility of a questionnaire and its answers by the doctor were admitted in evidence without the doctor being examined. It was held that these were not admissible in evidence. The facts spoken to in them which were relevant issues in the suit could be proved only by giving oral evidence of them in Court. The doctor could and should have been examined by the defendant and the statements made by him in the correspondence with the Company are certainly no evidence of the correctness of the allegations made therein. The contention in that case that the documents were properly admitted in evidence because the plaintiffs permitted them to be marked by consent, was held not to make any difference to the non-admissibility of those documents Horwill, J., observed: Permitting a document to be marked by consent only means that party consenting is willing to waive his right to have the document in question proved, i.e. the plaintiffs were prepared to admit that Ex. D7C was what it purported to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence, which course was said to be not opposed to public policy and was in consonance with the parties both in England and in this country and which practice was given legal validity because it would save time and expense and in itself is neither inconvenient nor unjust. That is not the case here. In Lim Yam Hong Co v. Lam Choon Co., evidence of Cheng Kee, a clerk or broker employed by the plaintiffs as to the existence of the contract which required corroboration, was corroborated by his statement made in the absence of the defendant that a confirmation slip of the contract was prepared in the plaintiff's office and was given by Cheng Kee into the defendant's own hand. But there was no evidence of the defendant being present. In those circumstances, the omission by the defendant's advocate to object to the confirmation slip was held not to alter the character of the testimony so as to convert it into corroborative evidence that which the law regards as merely fit for rejection as hearsay. Moreover, it was impossible to treat statements of Cheng Kee as corroborating his own evidence itself. In Parwat v. Sukdev AIR 1956 Bom 617 . Gajendragadkar, J. (As he then was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion relating to cause of action must not be construed in a narrow sense. The object of the section is merely to inform the defendants the substance of the ground of complaint. In Bhagchand Dagadusa v. Secy. of State. their Lordships of the Privy Council observed at pages 184 and 185 that Sec. 80 is express, explicit and mandatory and admits of no implications or exceptions. But the mere fact that some additional facts were not stated which gives an alternative cause of action does not mean that the provisions of the statute have not been complied with. The fact that there is a variation in the suit notice and the plaint does not necessarily amount to the provisions of the section not being complied with. The phrase cause of action was defined by Lord Esher, M. R., in Read v. Brown. (1888) 22 QBD 128, to mean: Every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary in prove each fact, but every fact which is necessary to be proved. As Lord Watson puts it in Mst. Chand Kour v. Partab Singh, (1887-88) 15 Ind. App 156 (PC) it refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efendant is alleged to have entered into the alleged agreement for the payment of godown rent or interest thereon. As such, it was contended that the notice did not fulfill the requirements of Sec. 80. It was found that, throughout the notice, the claim was described as Godown rent and not damages for use and occupation of the godown. Therefore the claim, prima facie, appeared to be founded on a contract. The arrangement for payment of godown rent was only incidental to the contract supply of the goods, and it is not unreasonable to infer that that arrangement was also made by and through the 2nd defendant acting for the first defendant. The relief claimed was that the Madras Government should pay up the amount claimed and if it does not pay or the failure is found to be due to the officer of the Madras Government then the officer concerned should be held responsible which indicates that the transaction was through some officer and the officer concerned in that case can be no other than the Assistant Marketing Officer through whom the goods were supplied as stated in paragraph 3 of the notice. It was held that on a fair reading of the notice it may be said that the fact of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... val of the goods the consignor shall produce before the proper officer a certificate in the proper form stating the particulars of the Central Excise licence held by the consignor and the bonds, if any, executed by him. The general bond that the consignor, or the consignee has to enter into in Form No. B-1 (Gen-Sur) which binds the obligor in a sum of money payable to the President for being permitted to remove from time to time conditional on the provisions of the Central Excise Rules, 1944, being observed, without payment of duty from the bonded warehouse or licensed factory for exportation, and if the goods are duly removed and exported within such time as the Collector of Central Excise directs, the obligation shall be void, and that for breach or failure in the performance of any part of the conditions, the same shall be in full force and they will be bound under the Excise Rules. 33. These being the Rules applicable, it is contended that the primary responsibility is on the consignor and it on his hand bond that the goods have to be removed when he makes an application for such removal. Mr. Chinnappa Reddy contends that in Ex. B-11, Notification No. 2/53, dated 9-1-1953, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because it is what D.W. 3 has written. The plaintiff says the suit consignment was not moved under his bond that he never authorised anybody even A. Ramaiah, to move the goods on his bond and that he does not hold a power on his behalf. 34. While this evidence may be inconclusive, Mr. Ramachandra Rao contends that there was no statement that the goods were not transported on the plaintiff's bond. In this letter (Ex. B-16) the plaintiff merely stated that the tobacco belonging to them was seized by the Central Excise Officer at Vijayawada while it was being transported under a proper T.P. 2 permit from the warehouse of Bhawani Prasad at Hyerabad to their godowns at Guntur. His contention was that the goods removed from the godowns were the goods seized and complained that for slight irregularities the Central Excise Authorities had seized the goods. It is however stated that in reply to the show-cause notice asking him why duty was no leviable on 14,198 Ibs of I.A.C. tobacco removed by him from the warehouse of Bhawani Prasad in terms of the bond executed by him under Rule 154, the plaintiff says he had raised the objection but this reply has not been produced. In the plaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndles Nos. 768 to 895 to 930. Of these bundles, 768 to 850 and 895 to 930, i.e. 119 bundles were transported under Ex. B-4, Ex. B-4(a) being the list attached to Ex B-4(b) the permit recovered from the possession of the consignee, the plaintiff. The markings on the goods seized admittedly did not contain the Nos. 768 to 850 to 930 on the packages but the packages that were seized only had chits serial Nos. 1 to 119 attached to them. Further it is not denied that, of these packages, 838, 820 and 829 were cleared from the seller's godown as per Ex. B-9, stockard on 26-4-1955. The witness, D.W. 3 further stated that unless they existed on packages he would never issue T.P. 2; that warehouse Nos. Are given on the packages as soon as the packages were received in the warehouse and these Nos. Are entered in the weighment register and Part 1 warehouse Register. These entries were initialled by the Excise Officials after due verification after check weighment. It is those warehouse Nos. That are put in ABC, 3 and in the slip attached to T.P. 2. T.P. 2 was issued after verification. In cross-examination, he admitted that as per Hyderabad practice, chits are stitched to packages noting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l serial numbers 1 to 83 have been given by him by mistake. He also says that the suit consignments do not refer to Nos. 818, 820 and 829. It would appear from this evidence that at any rate, chits bearing serial numbers 1 to 119 were stitched to the packages which were handed over to the consignee. Whether the godown register Nos. Were on the packages or not the assertion of D.W. 3 that he verified the Nos. On the packages at the time of giving the permit does not appear to be substantiated , particularly having regard to the mention of the three packages which were cleared and which, even according to the witness, should have borne new numbers. In these circumstances, the finding of the learned Subordinate Judge that he cannot hold that the consignment was different from Ex. B-4 consignment by reason of packages not containing marks and warehouse Nos. B.P. 768 to 850 and 895 to 930 cannot be held to be unjustified or unwarranted. Apart from this, now that Ex. B-29 and Ex. B-30 are held to be inadmissible, there is no evidence. The only difference in the weight between the consignment delivered to the consignee and that seized from the wharf was 22 Ibs. In a consignment of a total ..... X X X X Extracts X X X X X X X X Extracts X X X X
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