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PETITIONER: F. N. ROY

       Vs.

RESPONDENT: COLLECTOR OF CUSTOMS, CALCUTTA.

DATE OF JUDGMENT: 16/05/1957

BENCH: SARKAR, A.K. BENCH: SARKAR, A.K. DAS, SUDHI RANJAN (CJ) IMAM, SYED JAFFER DAS, S.K. MENON, P. GOVINDA

CITATION:  1957 AIR  648            1957 SCR 1151

ACT: Sea    Customs-Import   without   licence-Confiscation    of goods--Validity of Order-Discretion of  Customs-authorities- Validity of Enactment--Sea Customs Act, 1878 (VIII of 1878), ss.  167(8),  183 Imports and Exports  (Control)  Act,  1947 (XVIII Of 1947), S. 3(1) (2)-Constitution of India, Art. 14.

HEADNOTE: Section 167, item 8, of the Sea Customs Act, 1878,  provides that  if any goods the importation of which is for the  time being  prohibited or restricted by or under Ch.  IV  of  the Act,  which Chapter includes s. 19, be imported  into  India contrary  to  such prohibition or  restriction,  such  goods shall be liable to confiscation and any person concerned  in such importation shall be liable to a penalty not  exceeding three  times  the value of the goods or  not  exceeding  one thousand  rupees.   By s. 183 of this Act it  is  provided:" Whenever confiscation is authorised by this Act, the officer adjudging it shall give the owner of the goods an option  to pay in lieu of confiscation such fine as the officer  thinks fit.  " The Imports and Exports (Control) Act, 1947,  by  s. 3(1)  empowers  the Central Government by an order  to  make provision   for  prohibiting,  restricting,   or   otherwise controlling,  the  import, export,  carriage  coast-wise  or shipment  as  ships’  stores  of  goods  of  any   specified description.  Sub-section (2) of that section provides  that all goods to which any order under sub-s. (1) applies, shall be deemed to be goods of which the import or export has been prohibited or restricted under s. 19 of the Sea Customs Act, 1878,  and all the provisions of that Act shall have  effect accordingly, 1152 except  that s. 183 thereof shall have effect as if for  the word ’shall’ the word ’may’ are substituted. The  petitioner imported certain goods the import  of  which had been prohibited by the Central Government under S.  3(1) Of  the Imports and Exports (Control) Act.  By an  order  of the Collector of Customs, made under s. 167, item 8, of  the Sea Customs Act, these goods were confiscated and a  penalty

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of Rs. 1,000, was imposed on the petitioner.  The petitioner challenged the validity of this order. Held-: (1) Section 3(2) of the Imports and Exports (Control) Act, 1947, does not offend Art. 14 of the Constitution.   It does  not  by  its  own force give  any  discretion  to  the Customs-authorities at all, and its only effect is to  apply the Sea Customs Act, 1878,. to certain cases. (2)  Section  183  Of the Sea Customs Act,  1878,  does  not authorise confiscation of goods.  It assumes that a power to confiscate under other provisions of the Act exists.  It  is not a statutory provision in two parts with regard to  which it may be said that one part offends Art. 14 while the other part  does  not.  The section contains  only  one  statutory provision. (3)  Section  167, item 8, of the Sea Customs  :’Act,  1878, does not offend Art. 14 of the Constitution.

JUDGMENT: ORIGINAL JURISDICTION: Petition No. 438 of 1955. Petition  under Article 32 of the Constitution of India  for enforcement of Fundamental Rights. H.   J. Umrigar and N. H. Hingorani, for the petitioner. Porus  A. Mehta, B. Ganapati Iyer and R. H. Dhebar, for  the respondents. 1957.  May 16.  The Judgment of the Court was delivered by SARKAR  J.-By  a  notification dated  March  16,  1953,  the Government  of India gave general permission to all  persons to import into India from certain countries any goods of any of the descriptions specified in the schedule annexed to the notification.   Among  the goods specified in  the  Schedule were the following: Iron and steel chains of all sorts assessable under item  63 (28)  of  the Indian Customs Tariff,  excluding  chains  for automobiles and cycles whether cut to length or in rolls. 1153 The  petitioner  is an importer of goods.   He  states  that relying  on  the notification mentioned above he  placed  an order with a company in Japan sometime in August, 1953,  for the supply of certain goods called in the trade, Zip Chains. The goods arrived in the port of Calcutta in due course  and the petitioner’s bank paid the price of the goods  amounting to  Rs. 11,051-4-0.  Before the goods could be cleared  from the   port   of   Calcutta,  the   petitioner   received   a communication  from the Assistant Collector of  Customs  for Appraisement, Calcutta, dated November 19, 1953, in which it was  stated that it had been found that the  petitioner  did not possess valid import licence for the goods and requiring him  to show cause why the goods should not  be  confiscated and  action taken against the petitioner under s. 167,  item 8, of the Sea Customs Act.  The communication also  enquired if  the  petitioner  wanted  to be  heard  in  person.   The petitioner submitted in answer a written explanation stating that the Zip Chains imported by him were chains of the  kind free import of which had been permitted by the  notification of  March 16, 1953, and therefore no licence to import  them was  necessary.   He  was  thereafter  again  asked  by  the Customs-authorities whether he wanted a personal hearing  to which  he replied that he did not.  Thereafter  on  December 25,   1953,   the  Collector  of  Customs  made   an   order confiscating  the goods and imposing a penalty of Rs.  1,000 on  the petitioner.  This order bore an endorsement that  it had  been despatched to the petitioner on February 1,  1954. It  reached him on February 3, 1954.  The order stated  that

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an  appeal  would  lie against it to the  Central  Board  of Revenue, New Delhi, within three months from the date of its despatch as noted on it.  The petitioner preferred an appeal and  posted  the memorandum of appeal on May 4,  1954.   The memorandum  reached the Central Board of Revenue on  May  6, 1954,  and  was  dismissed on the ground that  it  had  been preferred  after  the  expiry of the time  limited  for  the purpose.   The  petitioner then made an application  to  the Government of India for revision of the order of the Central Board of Revenue but this application was 148 1154 rejected.   The  petitioner thereafter applied to  the  High Court  of Punjab under Art. 226 of the Constitution  for  an appropriate  writ to quash the order confiscating his  goods and  imposing the fine on him but this application  too  was dismissed. The  petitioner has now applied to this Court under Art.  32 of  the Constitution challenging the validity of  the  order made  against him.  Learned counsel for the  petitioner  did not  challenge the decision of the Customs-authorities  that the goods were not covered by the notification of March  16, 1953.   He  conceded  that  he  could  not  do  so  in  this application.  Nor did he challenge the  Customs-authorities’ power  to  confiscate the goods.   Learned  counsel  however challenged the order of confiscation because it did not give the  petitioner  an  option  to  pay  a  fine  in  lieu   of confiscation.   This contention was based on s. 183  of  the Sea Customs Act which provides as follows: Whenever confiscation is authorised by this Act, the officer adjudging it shall give the owner of the goods an option  to pay in lieu of confiscation such fine as the officer  thinks fit. This section undoubtedly requires an option to pay a fine in lieu of confiscation, to be given and this was not done.   A difficulty however is caused in the way of this argument  by s.  3 of the Imports and Exports (Control) Act,  1947.   The relevant portion of s. 3 is set out below: 3.   (1)  The Central Government may, by order published  in the  official  Gazette,  make  provision  for   prohibiting, restricting  or  otherwise controlling, in all cases  or  in specified classes of cases, and subject to such  exceptions, if any, as may be made by or under the order,- (a)  the  import, export, carriage coastwise or shipment  as ships’ stores of goods of any specified description ; (b)............................... (2)  All  goods  to  which any order  under  subsection  (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 1155 of  1878),  and all the provisions of that  Act  &hall  have effect  accordingly, except that section 183  thereof  shall have  effect  as if for the word "shall"  therein  the  word "may" were substituted. It  is admitted that the Imports and Exports  (Control)  Act applies to the goods with which we are concerned and in this case  the action that was taken was by virtue of  this  Act. That  being  so,  s.  183 of  the  Sea  Customs  Act  became applicable because of the Imports and Exports (Control)  Act and it could hence be applied only as modified by the latter Act.   So applied the section did not make it obligatory  on the Customsauthorities when ordering confiscation, ’to  give an option to the owner to pay a fine in lieu of confiscation but  gave  them a discretion whether to do so or  not.   The

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order  of confiscation was not therefore bad even though  it had not given the petitioner an option to pay a fine in lieu of  confiscation.  Learned Counsel for the  petitioner  then contended  that  the portion of s. 3(2) of the Act  of  1947 which  read  "except  that section 183  thereof  shall  have effect as if for the word " shall " therein the word " may " were, substituted ", left an uncontrolled discretion in  the Customs-authorities to give or not to give an option to  pay a  fine  in lieu of compensation and  consequently  offended Art.  14 of the Constitution.  He therefore said  that  this portion of the section should be struck out of it.  He  said that after the offending portion was deleted from s. 3(2) of the  Act of 1947 it would require s. 183 of the Sea  Customs Act  to  be  applied without any  modification  at  all  and therefore it would be obligatory on the  Customs-authorities when  making an order of confiscation to give an  option  to the  petitioner to pay a fine in lieu of  compensation  even where the Act of 1947 applied.  Learned counsel said that as this  had not been done, the order of confiscation  made  in this case was bad. This  argument is based on the contention that a portion  of s. 3(2) of the Act of 1947 offends Art. 14 and has therefore to be deleted.  This contention is wrong.  By its own  force no  part of s. 3(2) purports to give any discretion  to  the Customs-authorities at all.  There 1156 is  nothing  in it therefore to offend Art.  14.   The  only effect of s. 3(2) is to apply the Sea Customs Act to certain cases.   It is impossible to say that a statute  which  only makes  another statute applicable to certain cases,  offends Art.  14.  Such a statute has obviously nothing to  do  with Art.  14.  It is true that s. 3(2) of the Act of 1947  makes s.   183   of  the  Sea  Customs  Act  applicable   with   a modification.   It was said that s. 183 so modified  offends Art. 14.  Assume that s. 183 as modified infringes Art.  14. What  then?  Clearly on this assumption s. 183  as  modified becomes  ultra  vires  and illegal and it goes  out  of  the statute book.  But that does not affect the question  before us  at  all.   It does not make the  order  of  confiscation without  an option to pay a fine in lieu thereof  bad.   The confiscation  is  not made under s. 183.  It is  made  under another section of the Sea Customs Act, namely, s. 167, item 8, which so far as is relevant is in these terms: 167.  The  offences  mentioned in the first  column  of  the following  schedule  shall  be  punishable  to  the   extent mentioned in the third column of the same with reference  to such offences respectively:                       Sections of the Act to      Penalties      Offences          Wich offence has                          reference 8, If any goods, thei     8 & 19          Such goods shall importation or expor-                     be liable to con- tatipn of which is for                    fication; and any the time being prohi-                     such offence shall bited or restricted by                    be liable to a pe- or under Chapter IV of                    nalty not exceed- this Act, be imported                     ing theree times into or exported from                     the value of the Indiacontrary to such                     goods, or not exc- prohibition or restric-                   eeding one thousa- tion.                                     nd rupees. Chapter IV of the Sea Customs Act contains s. 19.  It has to be  remembered that s. 3(2) of the Act of 1947  states  that all goods to which any order under sub.s. (1) applies  shall be  deemed  to  be  goods  of  which  the  import  has  been

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prohibited  under s. 19 of the Sea Customs Act.   Admittedly sub-s.  (1) of s. 3 of the Act of 1947 applies to the  goods with which this case is concerned.  Under s. 3(2) of the Act of 1947 the import 1157 of these goods is to be deemed to have been prohibited under s. 19 of the Sea Customs Act.  It follows that action  under s.  167,  item  8, of the Sea Customs Act can  be  taken  in respect  of these goods and they can be confiscated and  the person  concerned  in the illegal import made  liable  to  a penalty.   Resort  to s. 183 of the Sea Customs Act  is  not necessary to justify the order of confiscation made in  this case at all.  Indeed s. 183 does not authorise confiscation. It assumes a confiscation authorised by other provisions  of the  Sea  Customs Act and provides that  on  a  confiscation being adjudged, an option to pay a fine in lieu of it  shall be given.  It cannot therefore be said, even on the  assump- tion  that learned counsel was right in his contention  that s.  183  as  modified  offends Art. 14  that  the  order  of confiscation  is  bad.   As to  whether  the  contention  of learned  counsel is right or not we decide nothing as it  is not necessary to do so. It  was  then contended that the effect of Art.  14  of  the Constitution  on s. 183 of the Sea Customs Act, as  modified by  the  Act  of 1947, was not to make  the  entire  s.  183 illegal but to invalidate the amendment in it as it was this amendment alone which offended Art. 14, so that s. 183 as it stands in the Sea Customs Act had to be applied to this case and  therefore  again  it was  obligatory  on  the  Customs- authorities  to  give an option to the petitioner to  pay  a fine  in lieu of confiscation.  To accept this  argument  we would  have  to say that s. 3(2) of the Act of  1947  itself offends  Art.  14, and it cannot modify s. 183  of  the  Sea Customs  Act  as it purports to do.  We are  unable  to  say this.   In order to say that a statutory  provision  offends Art.  14, we have to examine that provision.  We  have  here two statutory provisions.  One is s. 3(2) of the Act of 1947 and that does not offend Art. 14.  The reasons for this view we  have  stated earlier.  The other is s. 183  of  the  Sea Customs Act as modified by the Act of 1947.  As so  modified we have for the present purpose assumed that it offends Art. 14.  If it does it goes out as a whole.  It is not really  a statutory  provision  in two parts with regard to  which  it might  have been possible to say that one part offends  Art. 14 1158 while the other part does not.  Section 183 with or  without the modification really contains one statutory provision and therefore  it must go out of the statute book as a whole  or not  at  all.  This contention on behalf of  the  petitioner must therefore fail. Learned counsel said that s. 183 was bad also for the reason that  it  left  it to the  uncontrolled  discretion  of  the Customs-authorities to decide the quantum of the’ fine to be imposed in lieu of confiscation.  On the facts of this case, it is an academic argument.  Even if it was right the entire s. 183 would have to be ignored but that would not have  the effect  of making the order of confiscation passed in,  this case invalid.  All that the petitioner is concerned with  is to show that the order of confiscation was bad.  The present argument  does not touch that point and therefore it is  not necessary  to consider it at all.  Another similar  argument was  that  s.  167, item 8, of the Sea  Customs  Act  itself offended  Art.  14  in  that it  left  to  the  uncontrolled discretion  of the Customs-authorities to decide the  amount

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of  the penalty to be imposed.  The section makes  it  clear that  the maximum penalty that might be imposed under it  is Rs.  1,000.  The discretion that the section gives  must  be exercised  within  the  limit  so fixed.   This  is  not  an uncontrolled  or unreasonable discretion.  Furthermore,  the discretion is vested in high Customs officers and there  are appeals  from  their order.  The imposition of the  fine  is really a quasijudicial act and the test of the quantum of it is in the gravity of the offence.  The object of the Act  is to  prevent  unauthorised  importation  of  goods  and   the discretion has to be exercised with that object in view. Learned   counsel   then  contended  that   the   order   of confiscation  had been made mala fide.  It was said that  it had  been  passed  ex-parte.  This is not  correct  for  the petitioner had been asked before the order was made  whether he wanted a personal hearing and he had stated in reply that he did not and had ample confidence in the authorities.   It is  not therefore open to the petitioner to contend that  he had  no opportunity of being heard before the order  against him was 1159 passed.   He  had  been given an  opportunity  and  had  not availed himself of it.  It was also stated that in  deciding not  to give the petitioner an option to pay a fine in  lieu of confiscation the Customs-authority had gone into  certain other   transactions  without  giving  any  notice  to   the petitioner  that this would be done.  It was said  that  the petitioner  was not given an opportunity of being  heard  in respect  of  these  transactions.   The  notice  which   the Customs-authorities gave to the petitioner to show cause why the  goods  should  not be  confiscated  also  informed  him necessarily  that  an order for confiscation might  be  made without  an  option to pay a fine in  lieu  of  confiscation being  given  and therefore it was his fault if he  did  not appear  at  the hearing and showed cause why  the  order  of confiscation  should not be absolute but should give him  an option  to  pay a fine.  It was also said that he  had  been deprived  of  the  option because of  the  differences  that existed between him and the Public Relations Officer of  the Customs  Department  in Calcutta.  This point  of  view  was sought  to  be supported by citing the cases  of  two  other persons who had imported similar goods at or about the  same time, and who had been given the option.  The facts of these other cases were however substantially different.  There was nothing  to  show in these that goods had been  imported  in deliberate violation of the order of the Government while in the case of the petitioner there are materials on which such a  view could be formed.  It appears that the petitioner  as the  Manager  of a firm called Federal Clearing  Agency  had received  a  communication from the  Customs-authorities  on July  30,  1953,  that Zip Chains were not  covered  by  the notification  of March 16, 1953, and within a  fortnight  of that  communication he had placed the orders  for  identical goods which he now claims to be within the notification.  It was  not unreasonable for the Customs authorities  to  think that  the petitioner had deliberately imported the goods  in breach  of the order of the Government and without  specific licence  for  that purpose, and on that ground to  think  it proper not to give him the option.  This would be so even if it was 1160 assumed  that  in  the dispute  with  the  Public  Relations Officer the petitioner was in the right. It  was then stated that the petitioner had not  been  given personal  hearing  of the appeal that he  preferred  to  the

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Central Board of Revenue and the application in revision  to the  Government.   But there is no rule of  natural  justice that  at  every  stage a person is entitled  to  a  personal hearing.   Furthermore,  the appeal was out  of  time.   The memorandum  of  appeal to the Central Board of  Revenue  was posted  on  May  4,  1954.  The time  to  file  the  appeal, however, expired on May 1, 1954, so that even if the date of the  posting  is  taken  as  the  date  of  the  appeal  the petitioner  was out of time.  The petitioner states that  he received  the  order of confiscation on  February  3,  1954. Even  so, on May 4, 1954, he would not be within time.   The memorandum  of  appeal however was received by  the  Central Board  of Revenue on May 6, 1954.  That must be taken to  be the  date when the appeal was filed, and that being  so  the appeal must be taken to have been filed clearly out of time. The   petitioner   stated  that  the   Customs   authorities wrongfully  and  maliciously procured his arrest on  May  1, 1954,  and he obtained his release on May 2, 1954.   It  was suggested that this arrest was procured in order to  prevent him  from  filing his appeal in time.   This  contention  is entirely  idle.   Admittedly, the petitioner had  time  from February  3, 1954, till May 1, 1954, to file his appeal  but he  did not take advantage of this long period.   He  waited till  the  end for filing the appeal.  There is  nothing  to show that the arrest was wrongful or that at the date of the arrest  the Customs-authorities had any knowledge  that  the petitioner  had not filed his appeal.  The contentions  that the order complained of was malafide or that the appeal  had not been filed out of time are entirely untenable. The  result  is  that  this  application  fails  and  it  is dismissed with costs.                                      Petition dismissed. 1161