(1) This judgment will dispose of both the writpetitions. Apart from some details on facts on their own most of the main points are common. I shall take the facts from Cw 4037 of 1982 as counsel for the petitioner argued from this petition.
(2) This petition challenges the impugned order dated20-12-1982 passed by the Collector, Customs and Central Excise, Ahmedabad under Section 111(d) of the Customs Act.By the said order he directed the confiscation of 3002.557 MT of Refined Industrial Coconut oil imported by the petitioner,He gave, however, an option to the petitioner petititoner to redeem the goods on payment of a fine of Rs.two crores in terms of Section 125 of the Customs Act.
(3) Section 11 of the Customs Act, 1962 empowers theCentral Government that it may by notification, in the official gazette prohibit either absolutely or subject to such conditions as may be specified the import or export of goods of any specified description. Section 111(d) of the Customs Act says that any goods which are imported contrary to any prohibition imposed by or under this Act or any other law for the lime being in force shall be liable to contiscation. Section 112 provides penalty for importation of goods which are liable to confiscation and says that such a person shall be liable also to a penalty not exceeding five times the value of goods or Rs. 1000/whichever is greater. Section 125 permits the officer ordering confiscation to give to the owner of goods an option to pay in lieu of confiscation such fine as the said officer things fit.Section 12(1) of the Customs Act lays down that duties of customs shall be levied at such rates as may be specified under'the Customs Tariff Act. Section 2 of the Customs Tariff Act lays down the rates at which duties of customs shall be levied under the Customs Act.
(4) Serial No. 15.07 in Schedule I of the Customs Tariff Act,1975 reads as under :-Heading Sub-heading No. Rate o duty DurationNo. A description of Standard-Preference when rates article tial of duty Areas areproductive15.07 Fixed vegetable oilsfluid, or solid,crude refined orourified(1) Not elsewhere specified 200% 190%(2) Soyabean oil 200% 190%(3) Palm oil 200% 200%184It is a common case that the petitioner is liable to pay duty on the import of coconut oil under the above .entry subject to any notification that maybe issued under Section 25 of the Customs Act.
(5) Section 3(1) of the Import and Export Control Act,1947 as amended empowers the Central Government that it may by order published in the official gazette make provisions for prohibiting restricting or otherwise controlling the import or export of goods of any specified description. Sub-section (2)of Section 3 further provides that all goods to which arty order under Sub-section (1) applies shall be deemed to be goods of which import or export has been prohibited under Section 11 of the Customs Act and all the provisions of that Act shall have effect accordingly,
(6) In exercise of the powers conferred by Section 3 of the Import Act the Central Government has issued an order , Import Control Order 1955. Clause 3 lays down that no person shall import any goods of the description specified in Schedule I and except under and in accordance with a license granted by the Central Government. Schedule I makes a note that each heading number corresponds to the respective chapter and heading number of the first schedule to the Customs Tariff Act. Entry 15.07 reads as under :-Fixed vegetable oils, fluid, or solid, crude refined or purified It is common case that import of coconut oil, . whether edible or industrial would be governed by this entry. Thus theimport of items mentioned in Schedule I is prohibited except inaccordance with a license or an Open General license issued by the Central Government.
(7) The Government of India issued an Import Policy 1980-8 1/04/1980 to March, 1981). The impugned licenses were issued during this period (through revalidated subsequently).
(8) Appendix 9 para 5 (April 19/03/1981) provides that in the case of the various items mentioned therein import will be made only by the State Trading Corporation of India on the basis of foreign exchange released by the Government in itsfavor. The items mentioned therein are
1. Coconut oil.2. Copra.3. Groundnut oil/seeds.4. Palm oil (all types including palm olein). , Rapeseed oil/secds.6. Safflower oil-seeds7. Soyabean oil/seeds and8. Sunflower oil/secds.Appendix 10 to the said policy enumerates the items allowed to be imported by the actual users (industrial) under the Open General license (OGL) and the conditions mentioned therein.
(9) Item No. 1 reads : Raw material, components or consumables (non-iron and steel items) other than those included in the Appendix 9.
(10) The petitioner holds a letter of authority from an exporthouse. The export housed are entitled to additional licenses in terms as mentioned in Para 177 of the Import Policy. Interims of para 177(5) of the Import Policy, the additional licenses will also be valid for import of raw material components and spares (excluding those covered by Appendix 5) which have been placed on Open General license for actual users (industrial).
(11) The petitioners M/s. Jain Exports (P) Ltd., imported a consignment of 3007.557 MTof refined industrial coconut oil,Its Cif value was shown ' af 1,63,67.050. The goods arrived at Kandla port in September, 1982 from Colombo. The petitioner filed the various documents for clearance of this consignment claming it to be and which is admitted to be refined industrial coconut oil.
(12) The petitioners claim that the goods imported by the marc not edible coconut oil which alone falls within Appendix 9,Para 5, but that they fall within Appendix 10, Item 1 and being Open General license have been validly imported.
(13) The Collector, however, has taken the view that the item coconut oil whether edible or industrial is covered within Appendix 9, Para 5(1) of the Import Policy for 1980-81 and thus being a canalised item of S.T.C. could not at al3 be imported by a private parly like the petitioner.
(14) Hence the above impugned order of confiscation. The petitioners being aggrieved have come up by way of writ petition impugning the said order.
(15) It is not disputed by Mr. Sen and Mr. Rana, the learned counsel for the petitioner that in terms of Appendix 9, Para5, Stc is the canalised agents for the import of coconut oil But it is maintained that this entry of coconut oil should be restricted to only that variety of coconut oil which is edible and as admittedly the petitioner had imported non-edible or industrial coconut oil the same was not prohibited and would be permissible to import it under Ogl in terms of Appendix10 Item No. 1 of Import Policy (April 19/03/1981) as being a raw material which is used by the soap manufacturers.
(16) The matter has been argued from various facts and I shall deal with each of the points arising therein.
1.Does the entry of coconut oil in Appendix 9 para5 of Import Policy 1980-81 cover only the edible variety of coconut oil or does it also include both edible and non-edible or industrial variety of coconut oil
2.Even if the word coconut oil in the above entry in the 1980-81 policy is to be taken to cover only the edible variety of coconut oil, could the same have still been validly imported in July-September,1982 when admittedly Import Policies for 1981-82& 1982-83 both edible and non-edible variety ofcoconut oil were canalised items and could only be imported by the STC.
3.Was the order of Collector passed under extraneous influence and at the instigation of an. outside authority ?
4.Was the Collector bound to decide in accordance with the order of the Central Government dated 31/03/1981, if so can the petitioner insist on writ of mandamus being issued compelling the Collector to apply the law laid down by the Central Government even if this Court holds a view contrary to the view taken by the Central Government.In this connection would not the objection of alternative remedy be a total bar to the seeking of this remedy of mandamus or Certiorari ?
5.ISthe petition not maintainable on the ground of alternative remedy and lack of territorial jurisdiction ?
(17) Now 'coconut oil" does not as such find mention. In the Schedule to the Customs Tariff Act or in Schedule to theImport Control Order. But it is not disputed that coconut oil is covered by Entry 15.07 of Schedule Customs Tariff Act and schedule to the Import control Order. In Import. Policy 198081. Appendix 9Para 5 the items which can be imported by STCalone, amongst other oils coconut oil as such is mentioned. Thereis, however, no suggestion or qualification whatsoever whether the item coconut oil excludes any variety of coconut oil i.e.whether edible or industrial. Looking at the entry by itself it is not understandable on what basis the argument is raised that coconut oil in .import policy must be understood as to berestricted only to the edible variety. As the word 'coconut oil'is not defined it is,eyident that this must be understood and more especially in taxing statutes where revenue is derived, not in any technical sense but as understood in common parlance, being a word of every day use it must be construed in its popular sense meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it.
(18) The rationale in giving the ordinarily understood meaning to the words to be found in tax statute was expressed very aptly in King V. Planters Nut and Chocolate Company Limited,1951 C.L.R. 122(1), while dealing with the meaning of the term ''vegetable in an Excise Act, the Court said :"Now the statute affects nearly everyone, the producer or manufarturer, the importer, wholesaler andretailer, and finally, the consumer who, in the lasaniysis, pays the tax. Parliament would not suppose in an Act of this character that manufacturers,producers, importers, consumers and others who would be affected by the Act, would be botanists.Botanically, oranges and lemons are barriers, but otherwise no one would consider them as such".These observations have the concurrence of the Supreme Court(Ramavatar Budhaiprasad etc. v. Assistant Sales Tax Officer,Akola and another, 1961 Sc 1325(2) and Dunlop India Ltd.Madras Rubber Factory Ltd. v. Union of India and others, 1977SC(597)(3).
(19) Reference may profitably be made to The commissioner of Sales Tax, Madhya Pradesh, Indore v. M/s. JaswantSingh Charan Singh,1967 .SC 1454 (4). In that case the question arose whether the charcoal could be included under the entry coal or should it be included under the residual article.The State had urged that coal and charcoal are different products, coal being mineral and the charcoal being prepared by wood and other articles by human agency. The Supreme Court though accepting that coal is technically understood as a mineral while charcoal is manufactured by human agency byproducts like wood and other things but it cautioned that in interpreting item in a statue like Sales Tax Act resort should be had not to the scientific or technical meaning of such terms but to their popular meaning or the meaning attached to it by those dealing in them. It then went on to observe :"Viewed from that angle both a merchant dealing in coal and a consumer wanting to purchase it would regard coal not in Its geological sense but in the sense as ordinarily understood and would include charcoal in the term 'coal'. It is only when the question of the kind or variety of coal would arise that a distinction would be made between coal andcharcoal; otherwise, both of them would in ordinary parlance as also in their commercial sense bespoken as cole'
(20) Dunlop India Ltd. v. Union of India and others (AJ.R.1977 Sc 597) to which reference was made by counsel for .the petitioner is of no avail. There the goods imported was V. P.Latex by the appellant who were manufacturer of automotivetyres. The Central Government held that the V. P. Latex was synthetic resin and was to be classified accordingly, while the petitioner's case was that it was liable to duty under item No. 39under rubber raw. The Supreme Court on a reference to the various relevant books and other publications came to the conclusion that no one can come to the conclusion that latex would not come under rubber raw simply because the authorities those to treat it as resin because of the end result which consideration was irrelevant.
(21) Reference by the petitioner to M/s. Health ways Dairy Products Co. v. The Union of India, (5),is equally of no avail.
(22) The assessed for some time paid the excise duty both on condensed milk as well as condensed skimmed milk manufactured by it. Later on it objected to the payment of duty on the condensed skimmed milk on the ground that this was covered within exemption notification of milk preparation. The HighCourt disagreed with the assessed and dismissed the writ petition,The Supreme Court allowed the appeal holding that condensed skimmed milk and condensed milk are two different items of milk preparation, that in common parlance the milk meant full cream milk and skimmed , means without -fat that is when fat is extracted from the milk. The skimmed milk which can be called a form of preparation of milk is known as separate and can be used for preparation if other milk products.
(23) The Supreme Court, 'therefore, held that the CentralGovernment when it mentioned condensed milk only meant to exclude from exemption condensed milk and full cream milk and not the conidensed skimmed milk. Therefore the levy of excise duty on condensed skimmed milk was not Justifiable.
(24) The analogy has no applicability. Ordinarily when a person goes to purchase milk, it is always understood as referring to full cream milk. Though in loose sense condensed milk and condensed skimmed milk may appear to be covered under condensed milk, yet no one in trade nor any consumer is. to equate the both as the same. Use in our country of milk and condensedskimmed milk is so different, that to lump them under the same heading condensed milk is to fly in the face of the understanding of the ordinary person. That the condensed skimmed- milk issued only on health ground or for special taste and must be ask for by a purchaser specially-milk would exclude skimmed milk.That case is distinguishable. The test being to find the meaning as ordinarily understood, I am not able to appreciate by what logic is the word coconut oil mentioned in the import policy being sought to be restricted to merely edible variety of coconutoil.
(25) Reference to H. R. Syiem v. P. S. Lulla (LXXII 1969Bombay Law Reporter 534) (6) is a case in which it was held that black Insulating Tapes' which are included in 'electric insulations' in column 2 of entry No. 38 cannot be held to be adhesive tape in column 6 of the same entry by the mere fact that they have adhesive capacity notwithstanding that the use of the said tape was for electrical insulation. It would be seen that the use of the electric insulation tape was taken to be the determining factor for giving a meaning to the word. In State of U.P. and others v. M/s. Indian Hume Pipe Co. Ltd. the question raised was whether "Hume pipes" amount to sanitary fittings. The Supreme Court held that sanitary fittings would only be such as pipes or materials as are used in lavatories,urinals, or bath rooms of private houses or public buildings. Ithowever, accepted that even where hume pipe is used for carrying the excreted material from the commode to the septic tank maybe treated as sanitary fittings. It is important to note thatthe mere fact that it was "hume pipe" was not considered sufficient to exclude it from the sanitary fittings; rather it was heldthat the hume pipe can be included in sanitary fittings if it was so put to particular use. On the parity of same reasoning the coconut oil as such would include both edible and non-edible industrial coconut oil because the same is not qualified in Import Policy by any particular use to which it is put.
(26) It may be noted that the production of coconut oil for83-84 is about 1.69 lakhs tons only. The requirement in the country of vanaspati in terms of oil has been assessed by the Government about a million ton only. The requirement is met from the indigenous and import of the main traditional edible oils like ground nuts mustards, rapeseed which are the major one and also from the minor oils like sunflower and saw-flower. It has been calculated that 64 per cent of the total coconut production in the country does not come to the milling as copra indeed they meet the fat and oil needs of the people indirectly as it forms part and parcel of those states where this crop is grown. It is well known that the coconut oil is .not at all used as an edibleoil in a very large part of our country. Almost all the part of India up to Vindhyas do not use coconut oil as edible medrum.Even in rest of the country though it is in use extensively in home part its use in most of the other part is small. So ordinarily if aperson was to go to the market and ask for coconut oil, the normal question he would be asked will be whether he needs it as hair oil or Shampoo. No one normally will understand coconut oil to mean only edible variety because such is not the normal major use. persoa would have to specifically clarify that by asking for coconut oil he is asking for edible variety in order to make his intention clear. Thus by itself and in ordinary parlance coconut oil in the import policy would be understood to include both edible variety and industrial variety of coconut oil.If only one variety of coconu.t oil was meant to be covered, it would be more consistent to hold that it is industrial variety considering the overwhelming use of coconut oil for non-edible purpose. But an entry could never be restricted only to edible variety of coconut oil. In the trade circles coconut oil when used also is meant to include both edible and industrial variety. Thus Para O.2 of the Indian Standard Specifications for coconut oil(Second Revision) shows the use of coconut oil both for edible and non-edible purpose, like in the manufacture of cosmetics,toilets. "The requirements for various grades are suitable for the foregoing purposes.^ Para I.I prescribes the standard which is the requirement for test of coconut oil used for edible and industrial purposes. Types and grades are mentioned and shows refined grade and raw grade Ia and Ib are suitable for direct edible consumption while raw grade 2 and other two grades are suitable for industrial uses and not for direct edible consumption.Thus as per specification "coconut oil" standing by itself would include both edible and industrial variety of coconut oil. The specifications by Indian Standard Institution has been accepted as furnishing very strong and uncontrovertible support as to how an article is known to the consumers and commercial community(See Union Of India and another Vs. Delhi Cloth and GeneralMills' Co. Ltd. 1963 Sc 791 (Para 10) (8).
(27) Mr. Sen's objection that the reference to specification of Standard Institution is not permissible as no warning was given by the Collector that he may refer to it and thus principles of natural justice have been violated is an argument of despair. Surely no notice is necessary for making any reference to the standard publication of undisputed authenticity. Here is not some material privately collected and used behind the back of the petitioner.This attempt at excluding the above definition must, therefore, fail. It may be noted that groundnut is the primary oilseed crop in India accounting for 70 per cent of total oil seedproduction. Vanaspati industry also produces natural hardened oil which is now used to meet the requirements of fast expanding non-power soap industry. Oil for edible and inedible purposes is extracted from sunflower oil. Soyabean oil for edible purposes was completely unknown in the country prior to 1960. Even now it contributes to less than 2 per cent domestic edible oil.All this shows that coconut oil whether of edible or industrial variety is in common parlance always referred to and described as "coconut oil". In that context it is not permissible to carve out an exception by seeking to exclude die industrial variety from the word "coconut oil" used in the import policy. The justification pleaded by the petitioner for giving the narrow meaning is by seeking to rely on correspondence exchanged between the petitioner and the State Trading Corporation. These are the two letters dated 25/10/1980 addressed by the petitioner to the Stc and the second a reply dated 30/10/1980addressed by the Chief Marketing Manager of the Stc to the petitioner. The same were not placed on record earlier. We had asked these documentsaccourting during the hearing and I am placing them on record by marking 'X" and 'Y" respectively. The communication by the petitioner is a query made from the Stc thatthe petitioners are in need of about 100 Mt of coconut oil forthe manufacture of soap in their factory and that raw material required is industrial oil and requesting for allocating 100 MTof industrial coconut oil. The State Trading Corporation replied that it was not importing industrial coconut oil for manufacture of soaps, and that it was importing edible oils for Vanaspatiindustry. It also added the sentence which in fact is the main plank of the petitioners defense, that 'industrial coconut oil' is not under our preview and is not canalised with us.
(28) From this it is argued by Mr. Sen that the Stc is a very big trader and as it has stated that the industrial coconut oil was not canalised with it, it must be accepted that the word "coconut oil" in 1980-81 Import Policy was restricted only to the ediblevariety. I do not agree. No importance can be attached to a suggestion in this letter that industrial coconut oil is not canalised with Stc for more than one weighty reason. The authority of Chief Marketing Manager to speak for Stc in an authoritative manner is not shown. Moreover, Stc is not the authority at all for giving any interpretation about what items are canalised.Thus in .Chapter 20 of Import Policy 1980-81 dealing with classification and interpretation of the policy Para 202 specifically provides that in all other matters relating to actual users enquiries emanating from other persons i.e. Export Houses, sellingagents, traders etc., as well as interpretation of the policy proper and the procedure, the person concerned may address the Chief Controller of Imports and Exports for necessary advice.Any interpretation of the Import Policy given ill any other manner will not be binding o
THE scope of any item in Appendices 1. 2, 9 and 10
ANY doubt whether a particular item required by him is raw material.. ....banned for import under Appendix 10.
(29) New Appendix 9 of policy covers items which are canalised ard if the petitioners who are to import items holding a letter of authority on behalf of the Export House it is evident that the query should have been to the Chief Controller of 1mports and Exports. Reference to an unauthorised agency likeS.T.C. could not furnish any justification to the petitioner to plead that he was misled into thinking that only variety of edible coconut oil was canalised. A specific authority having beennamed, in case of any doubt reference must be made to that very authority. It is also interesting to note the circumstances in which this letter from the Stc was received. It would appear that one M/s. Jain Shudh Vanaspati, another concern closely connected to the petitioner imported a consignment of industriala coconut oil valued at over 2 crores. As a matter of fact the petitioner had letter of authority in favor of M/s. Jain Shudh Vanaspati to import it. It claimed the right to import it under OGL.The Collector was examining the matter when this letter of31-10-1980 was produced. It will thus he seen that it was not as if the petitioner were importing the industrial coconut oil only on the strength of letter from the S.T.C. This letter was rather used as evidence after the import had been made. In any case the S.T.C. is not competent authority and opinion given by it cannot be used as a total plank on which to found the argument about the validity of the import.
(30) Another, reason mentioned by the Central Government'sorder dated 31-3-1981 holding that coconut oil in Appendix 9para 5 should be read only as referring to the edible variety, isby referring to Entry Palm Oil in Appendix 9 para 5 where it is described that 'all type", while no such specification is given with regard to the coconut oil, the argument being that this would indicate that it is the edible variety which alone was canalised. In my view the Central Government by invoking this reason has clearly mis-directed itself. The entry in Appendix 9 describes palm oil (of .types including Palm oliene and Palm Stearine) because there are various kinds of Palm oils some of which are likely to be mis-understood asnot being included in the generalitem. Palm oil e.g. Palm oliene is product resulting from breaking up the palm oil. Palm oil is refined. The liquid operation after refining is palm oliene, while the solid part is palm stearine.In that view it was evidently necessary to mention that the palmoliene will also be included in Entry Palm Oil. That palm oliene and palm stearine are different commodities has been up-held bya special board of Central Customs dated 28-5-82 wherein it noted that the Central Government had also held that palmoliene had to be considered different from palm oil and it was for this reason that it was found necessary- to qualify the entry of palm oil by specifying of all types including palm oliene. The same situation does not apply to coconut oil because it is thesame name, only the purpose is edible or industrial. The goods being known as coconut oil only.
(31) Another reason given by the board in as order 'of23-1-1981 for purporting to hold that coconut oil may be restricted to the industrial variety is by suggesting that a few years back the prime quality of stainless steel was canalised while defective stainless steel was outside the canalisation. I do not see relevance. Rather this illustration will show that where the Controller of Imports wants to specify a particular quality of the same goods to be kept out of canalisation it is so stated. As the Entry stainless steel would include prime as well as defectivequality, it was necessary to mention prime quality as the intention was only to canalise the prime quality. On the same reasoning, therefore, if in the present case only edible variety ofcoconut oil was to be canalised the entry should have read coconutoil (edible variety). In the absence of any qualification theentry of coconut oil is only consistent with the fact that both the varieties that is edible and industrial are covered with it. Itmay, however, be mentioned that for the purpose of paying customs duty on imports a bench of this court saw no justification to restrict the meaning of entry of stainless steel to cover only of prime quality of stainless steel, the bench rather held that both the prime as well as defective stainless steel were covered under the Entry of "stainless steel" (See Super Traders and another Vs. Union of India and others 1983 Elt 258) (9).
(32) The petitioner himself has not made any distinction between an entry of coconut oil (refined) as being restricted only to edible variety. The Government of India had issued a notification dated 1/11/1976 under Section 25 of the Customs Act exempting goods when imported from Lanka andothers from payment of duty in excess of 40 per cent in respect of coconut oil (refined). It is common case that the petitioner has paid concessional customs duty in terms of 1/11/1976 notification. The notification used the word refined coconut. oil". Not having specified that it was for non-edible or edibleevarietv, the petitioner took the advantage by treating it as concerning both the varieties and. therefore, paid confessional custom duty. But surprisingly when the same entry is found in Appendix 9 para 5 it is sought to be urged that the use ofthe word coconut oil must always be restricted to the ediblevariety. Such a strange and involved logic is difficult to appreciate. If this very entry of coconut oil is accepted to include both edible and industrial variety it is not understandable by what process of reasoning the same entry to be found in theImport Policy 1980-81 is sought to be restricted to only the edible variety. The argument of the petitioner has no force.Another argument in support of this contention was by relying on Import Policy for 1981-82, 1982-83, whereby the entry inAppendix 9 para 5 was to the effect In the case of the followingitems, whether edible or non-edible, import will be made only by the State Trading Corporation.... . . . . .(i) coconut oil'. The suggestion of Mr. Sen and Mr. Rana is that because the words whether edible or non-edible' are not to be found in the earlier policy of 1980-81 it necessarily means that the words 'coconutoil used in 1980-81 policy was restricted only to edible variety.I cannot agree. It is equally possible to say that as edible has been specifically mentioned in 1981-82 policy, the earlier Entryof 1980-81, was restricted to non-edible variety only. So this argument of seeking to exclude edible variety from 1980-81can be equally utilised by the respondents to urge to the contrary. I cannot accept such an exclusion of industrial variety,when there is nothing in support of such exclusion.
(33) The reference to the Government of India's import policy would rather go to show that the understanding of the Government of India was that reference to any "oil" without specifying whether it is for edible or industrial purposes would inevitably include both the said purposes. That is why whenever it wanted to specify with reference to any oil in the import policy that it is to be limited to industrial or edible purposes it so statedspecifically. In the absence of any specification the Government of India's import policy always meant to include any oil as including both for edible and for industrial purposes. Thus in the1978-79 import policy Appendix 8 included list of items import of which was canalised through public sector agencies. Thus item 45 namely copra and item 53 namely Soyabean oil for use in Vanaspati industry and other industrial purposes were included. Item No. 51 was palm oil excluding refined bleach or deordarised. Item 43 refers to coconut oil without any specification.Appendix 10 referred to import of various items under the Open General license. Item 8 was headed as '-edible oils and amongst others mentioned copra, soyabean oil and refined and deodorised palm oil; coconut was not mentioned therein. Thus in 1978-79 policy "coconut oil" whether for edible or for industrial purposes could only have been imported by the STC. It was not an item included under the Ogl in Appendix 10. Also though copra and soyabean oil were both mentioned in Appendices 8 and 10, but for industrial purposes the said oils were canalised through the STC; it was only the edible variety of copra or the soyabean oils that could be imported under theOGL. Coconut, even of industrial variety was importable only under Appendix 8, and by Stc only. These illustrations make it clear that whenever the Government of India wanted to qualify an oil as an edible one it so clarified it as such. In 1979-80import policy Appendix 8 containing the list of items importof which was canalised through public sector agencies included at item 57 heading "oils". Amongst them 8 oils are mentioned including the coconut oil. copra, soyabean. Item 57 does not have the Qualification of edible or industrial nurposes. Thus in1979-80 all oils including coconut oil whether of industrial or edible variety were canalised items through STC. Appendix 10which dealt with import of items under Ogl had no entry of oils at all. Entry No. 1 Appendix 10 was broadly similar as was to be found in the import policy of 1980-81 namely rawmaterials, components other than those included in the Appendices 3, 5, 8 and 9. It is clean thus that under 1979-80 policy coconut oil even for industrial purposes could not have been imported under Appendix 10 because the history of coconut oil shows that it was a canalised item both for edible as well as industrial purposes right from 1978-79 policy and it also figures as such amongst the canalised items in 1979-80. Soyabean oil and copra which in 1978-79 had been divided into industrial and edible purposes by being mentioned specifically in Appendices 8 and 10 respectively had ceased to be so included separately and were now included amongst the canalised items inAppendix 8. It is significant to note that deodorised palm oil is excluded from Entry 51 in Appendix 8 (1978-79) of industrial purpose evidently because deodorised palm oil is for edible purposes and included in Item 8 Appendix 10 (1978-79). Similarly for 1978-79 entry No. 8 Clause 3 is of soyabean oil seeds and edible variety is under Ogl (Appendix 10) while for industrial purposes soyabean oil is also included at Entry 53 inAppendix 8 as being a canalised agency. A comparison of Appendices 8 and 9 (1978-79) will thus show that oUs which are edible are covered under the Open General license in Appendix 10 while the oils for industrial purposes are included inAppendix 8 being canalised items. The inevitable result is that whereas in 1978-79 policy oils for industrial purposes werecanalised in Appendix 8 and for edible purposes inAppendix 10 under OGL. This distinction between industrial and edible variety of oils which existed in 1978-79 policy was done away with in 1979-80 policy. It Is important to note that the word 'edible oil seeds' which was mentioned in Appendix 10 in1978-79 policy is not to be found in 1979-80; similarly 1980-81policy has also the heading of oils. The deliberate omission ofthe word 'edible' clearly shows that the Government of India'spolicy was to include both edible and non-edible variety of oils in 1979-80 and 1980-81 policies as amongst the canalised items.In. that view there could be no scope for argument that in 198081 policy coconut oil which continues to be included amongst the canalised items and without any qualification o edible or industrial variety right from 1978-79 policy should suddenly and without any reason be taken to have been split up and that only edible variety should be held to be included in Appendix 9, when there is no qualification of the variety of coconut oil in the policy.The raw-materials which can be imported are those which are not included in Appendices 8 and 9. The coconut oil has always been so included amongst canalised items and, therefore,it was an item which would not be permissible to be imported under the Open General license under Appendix 10 of 1980-81policy. Though this position was clear nevertheless disputes'seems to have been raised by the importers by alleging that in1980-81 the edible variety of coconut oil was not canalised and that is why it was considered necessary to clarify the same in subsequent policies of 1981-82, 1982-83 by qualifying Appendix 9 in para 5 under the heading of oils that it included whether edible or non-edible. That this clarification was not without any background is clear from the fact that during 1980-81large imports of non-edible oil had been made by the privateparties.
(34) In the case of another concern the Collector had rejected the plea of the petitioner that coconut oil of industrial variety was outside the purview of canalisation and has imposed apenalty of 25 lakhs. The Central Board had, however, taken a different view by its order of 23/01/1981 and had set aside the order and held that coconut oil of industrial variety wasnot canalised through STC. The Central Government has noted in its order dated 31/03/1981 that the Joint Chief Controller of Imports and Exports in the office of Chief Controller of Imports and Exports in his letter of 28/02/1981addressed to the Director of Customs had pointed out that the information given by the Stc that industrial crude coconut oil was not canalised was not correct. Thus as a doubt had been cast and more so in view of the decision of the Central Board dated 23/01/1981, the Government naturally considered it proper to remove any doubt considered it proper to clarify that coconut oil always meant to include both edible andindustrial variety and that is why it out of abundant caution clarified the same in the immediately next import policy of 1981-82.Thus there was a pressing need to clarify the position. It isnot correct, as the counsel for the petitioner sought to urge that non-edible type of coconut oil was being added in the canalised item for the first time in 1980-81 import policy. On the contrary the same was always included and only because ofthe doubt cast this further clarification was though necessary to be introduced by the Government.
(35) That even amendment made in the Sea Customs Act was held to by way of abundant caution even though the intention to permit prosecution under that Customs Act was always to be found under the unamended law (see ). This is a common practice as observed in
Chandrakant Saha and others v. Union of India and others , A rice huller challenged the Rice Milling Industry (Regulations) Act on the ground that the definition of milling rice in Section 3 does not include rice hullers. The Act had been amended to introduce Section 3 (a) which stated that the provisions of this Act shall also apply to rice hullers.The petitioners had argued that the introduction of Section3(a) shows that definition under Section 3(d) and (g) did not include rice hullers. The Supreme Court repelling this argument observed :'Thus on a true interpretation of Section 3(d) clauses(i) and (ii) and (gg) there can be absolutely no doubt that the Section includes tile operation carried out by the rice hullers. In view of this interpretation it was not necessary for the Legislature to have added Section 3A but this was done in order to put the matter beyond doubt or controversy.
(36) As a result of above I had no manner of doubt thatthe Collector took the correct view in holding that coconut oil whether of Industrial or edible variety was an item falling under Appendix 9 para 5(1) of the Import Policy Am 1980-81.As the items in Appendix 9 could only be imported by the STC the same could not be treated as an item covered by Appendix 10 Open General license. The import, by the petitioner, was rightly held to be prohibited in terms of theimport policy and in violation of the Import Control Act and the Customs Act and the same would evidently invite the penalty of confiscation. Point No. 1 is answered against the petitioners.
(37) Point No. 2Mr. Iyer, the learned counsel for the Union of India had argued in the alternative, that even if it is held that in 1980-81Import Policy industrial 'coconut oil' was not covered byAppendix 9 Para 5, the same could not be have been imported bythe petitioner in July/September, 1982 because it is common case that from 1981-82 onwards Appendix 9 Para 5 covers'coconut oil" whether of edible or industrial variety.
(38) The petitioner is a holder of a letter of authority in respect of the licenses on which the coconut oil has been imported. The licenses were issued to certain Export houses.They were originally issued on 4/11/1980, 23/01/1981 and 15/01/1981. The petitioner was appointed the letter of authority holder of the said licenses by the authorisation letter of 24/02/1981, 14th February,1981 and 18 18/12/1981. The licenses were issued tothe Export Houses. All the licenses have an endorsement namely licensing period AM-1981. These licenses have a further endorsement on the face of the license to the following effect :"This license is granted under the Government of India order dated 17-9-1975 as subsequently amended issued under the Import and Export Act, 1947 and is without prejudice to the application of any other prohibition or regulations affecting the importation of goods which may be in force at the time of their arrival."
(39) The licenses also bears an endorsement in Column 3on description of goods that the; "license is valid for import of items appearing in Appendices 5 and 7 excluding, however, the items appearing in Appendix 26 of 1980-81 policy subject tothe conditions laid down in Para .177(3)(5)(6) and (7) of AM1980-81. In the first instance the licenses were valid for a period of one year. The latest revalidation for six months was made in January, 1982. The same was subject to the condition be valid :"This license will also not bevalid for import of items appearing ii Appendix 26 of Import Policy 1982-83during the extended period of validity.''It was also subject to further conditions appearing in Para22211, 12 and 14 of Import Policy A?-82(1981-82). The restrictions contained as per para 185(3) of AM-81-82 shall also apply.
(40) Now the goods which could be) imported in terms ofthe license are those mentioned in Appendices 5 and 7 of ImportPolicy 1980-81. Coconut is admittedly not included in theseappendices. It is to be found in Appendix 9, or even in a rawmaterial, which the petitioners claim to have imported as foundin Appendix 10. So by itself the petitioners would not be able to import even any items mentioned in Appendix 10. But Export Houses have been granted certain import facilities under the Policy including additional licenses as provided (Para 174(iv)Policy 1980-81) value of additional license is provided-Para177(ii). Para 177(5) makes the additional licenses valid forthe import of raw materials, components and spares (excluding those covered by Appendix 5) which have been placed on OpenGeneral license for Actual Users (Industrial). It is because of this Para 177(5) that the petitioners claim to import coconutoil as falling within Item I of Appendix 10(A80-81M Policy).Of course on my finding on Point No. 1, this plea would not evenarise. But even assuming that under 1980-81 Policy the petitioner could-have imported industrial coconut oil as a raw-material, the same could not have been imported in July/September1982, when the goods arrived because admittedly industrial variety of coconut oil was a canalised item both in 1981-82; 1982-83policy and, therefore, there was a prohibition regarding the importation of goods (namely coconut oil) at the time of theirarrival, as specifically provided by endorsement in terms of the issue of license. This license was valid for import of goods if they were not prohibited at the time of their arrival. the petitioner cannot rely for import of coconut oil in a license which prohibits the particular item of goods. The effect of this endorsement is to make it as if there's no license for the import on lit oil in September, 1982. It is not as if the petitioner could import coconut oil in September 1982 but subject to certain conditions-in fact he had no license to import coconut oil at all when the goods arrived. It would be a case of import without any license.
(41) The same result follows from a 'perusal of Open General license No. 1180, 1181, 1182 issued in 19/04/1981 and1982 issued by the Central Government in exercise of the powers conferred by Section 3 of Imports Exports (Control)Act, 1947, by which it gave general permission to import into India from any country raw materials, components consumables by Actual Users (industrial), subject amongst others to the following conditions :Condition No. 1 : The items to be imported are not covered by Appendices 3, 5, 6, 7, 8, 9 and 15 ofthe Import Policy, 1980-81;Condition No. 15 : Such goods are shipped on through consignment to India on or before 31/03/1981 or on before 30-6-1981 against firm orders for which irrevocable letters of credit are opened on or before 28-2-1981, without any grace periodwhatsoever;Condition No. 16 : Nothing in this license shall affect the application to any goods, of any other prohibition or regulation affecting the import thereof,in force at the time when such goods are imported.The same conditions are to be found in 1982, 1983 Ogl order,while the dates correspondingly changed to the year in question. It is clear that in view of Ogl order actual users (industrial) though assuming that they could have imported coconut oil during the currency of 1980-81 policy, the same could not have been imported from 1^81-82 policy onwards because admittedly the same was a canalised item. But what is urged by Mr. Sen is that prohibition does not apply to the present case where the goods are being imported on Additional license.If this argument is accepted position would be that actual users(industrial) 'itself would not be eligible to import coconut oil inSeptember, 1982 but the Export House would be competent to do so. This is an unacceptable anamoly. The whole object of Additional licenses being allowed to be utilised for import of raw-materials is that the same may be supplied to Actual users)off the shelf (See para 175) of (A80-M81 Policy). Raw materials and Components imported against Additional license shall be dispose of only to Actual Users [Para 177(7)]. To accept the argument of Mr. Sen would result in absurd situation that whereas the actual user for whose use and benefit raw material is supposed to be imported would be incompetent to import it under Ogl, an agent like Export House who can only sell it to Actual user would be entitled to import a canalised item.The logic of such a situation eludes me When Para 177(5) permits import of raw-material placed on Ogl for Actual Users(Industrial) the same must be subject to the same restrictions and prohibition as the Actual Users (Industrial). Agent cannothave better rights than the Principal. The suggestion of Mr. Rana that Ogl order has only to be referred for the purpose of finding out which items can be imported is an effort at splitting up the object of Ogl order without any justification. When OGL order gives a general permission to import some items it gives it subject to certain restrictions. Petitioner cannot ask forthe benefit of Ogl order to import certain items but claims to be free from the fetters laid down in that very order. Rights under Para 177(5) to import kind of good, must be under thesame constraint as that of an actual user (industrial). As the actual user (Industrial) itself could not import the coconut oil even of industrial variety from 1981-82 onwards because ofthe prohibition under Ogl order issued under Section 3 of theImport and Exports Act, the petitioner as a holder of the additional license could stand on no higher footing.
(42) It was sought to be urged that the Ogl order is merely a general permission but is not a prohibition. I cannot agree.Section 3 of the Import and Exports Act empower the CentralGovernment to prohibit or restrict imports. An Ogl order passed under the said Section by which it gives general permission to import certain items but subject to certain conditions in effect prohibits the imports of these items unless the condition mentioned in the said order are complied. Thus notwithstanding that even if during the currency of 1-980-81import policy industrial coconut oil could be imported, thesame were prohibited in terms of 1981-82 policy, 1982-83policy at the time of arrival of goods in July I September, 1982as by then these goods were canalised and no longer on OpenGeneral license. On another ground also the goods imported in July/jSeptembcr, 1982 would be held to be invalid. Revalidation was in January, 1982. Condition No. 18 of OGLorder dated 3/04/1981 provides by which shipment of goods should have been received by 31/03/1982 or by 30/06/1982 and for which irrevocable' letter of credit had been opened on or before 28/02/1982. In the present case the goods arrived in September, 1982. Thus even interms of Condition No. 18 of Ogl order of 1981 the goods could not have been imported validly. This is another reason for holding the imports to be invalid.
(43) Mr. Sen then argued that there was a vested right inthe petitioners to import the items which were in Ogl under1980-81 policy even though they may be canalised in subsequent years. Stress is laid on the fact that license issued in1980-81 must continue to govern the requirement of import and the purpose of revalidation under Para 191 read with Para 199 is only to extend the period or validity for the shipment permissible for the goods. Thus whereas previously thegoods could be imported within a year of the issue of license they may be imported later on. But this arrival date can have no relevance to the items which could be imported. The argument is misconceived. It assumes a certain vested right to import certain items and denies power to the Union of India to change that policy subsequently. Such an argument was repelled in a Division Bench judgment of this Court in Super Traders and another Vs. Union of India and others 1983E.L.T. 258, wherein it was observed :The whole stress of this argument seems to be as if during the financial year, the rate of duty of excise or custom or the list of goods which can be imported or exported as indicated either in the Import Policy or in the schedule is immutable.These arguments proceed on misunderstanding of the role .and importance of Import and Export Policies of a State. In the matter of import and export no party can claim any vested right to compel theGovernment or the legislature to refrain from making any changes during the financial year.(page 270)."Policies of imports or exports are fashioned not only with reference to internal or international trade but also on monetary policy, the development of agriculture and industries and even on the political policies of the country but rival theories and views may be held on such policies. If the government decides an economic policy that import or export should be by a selected channel or through selected agencies the court would proceed on the assumption that the decision is in the interest of the general public unless the contrary is shown-- (See 1973SC 2711 & 2716).The same view against holding of any vested right in the importer or invoking the plea of promissory estoppel has been accepted in Full Bench of this Court in Bar. sal Exports (P) Ltd.and others Vs. Uoi & Others, 1983, Delhi 445(JPr. 8, 10, 11).Reference may with advantage be made to The Deputy Assistant Iron and Steel Controller, Madras and another Vs. L.Manickchand Proprietor, Katralla Metal Corporation. Madras1972 Sc 935. In that case appellant applied in 1968 for license for stainless steel in December, 1968. But by the time it came to be considered in 1970. The item had become canalised.The High Court had granted the writ applying the import policy at the time of the application. The Supreme Court allowed the Union appeal and refused to issue a mandamus to consider the application in terms of 1968-69 policy. It observed :"An applicant has no absolute vested right to an import license in terms of the policy in force at the time of his application because from the very nature of things at the time of granting the license the authority concerned may often be in a better position to have a clearer overall picture of the various factors having an important impact on the final decision on the allotment of import quota to the variousapplicants.Mr. Sen next sought to contend that the effect of revalidation is to keep the old license intact and only 1980-81 policy will be applicable to imports. I cannot agree. Revalidation only permits the import of goods at a later period which it would not be at all possible, if revalidity was not granted. That is the only significance of revalidation. But as to what goods can be imported cannot be determined by revalidation it has no relevance to thisaspect. Only these goods can be imported under Ogl, which continue to be included in Ogl right up to the date of arrival of the goods. Their inclusion in the import policy of earlier period would not authorise the importer if since then they have been canalised. As a matter of fact the government itself has dealt specifically in Para 222 on this matter of Additional licenses issued to Export Houses. Para 222(1) provides that Additional licenses for 1980-81 will cease to be valid for import ofitems which do not appear in Appendix 5 and 7 of ImportPolicy 1981-82. Para 222(2) however, gives a benefit by providing that such license for 1980-81 will be valid for importof items appearing in 1981-82 policy, even though such items were not eligible for import as per Import Policy 1980-81. Now the additional license of the petitioner is to import goods only in Appendix 5 and 7 of 1980-81. Revalidation is in terms, of Para 222(1) (2) (4). The result is that petitioners license issued in 1980-81 can only operate for these items included in 1981-82policy. It may be that he may not be able toe to import some goods,or it may be that the list has increased by inclusion in later Import Policy of 1981-82. The significance is that goods if not imported under license issued under 1980-81 policy can onlybe imported if they are permitted under 1981-82 policy. If the main license cannot authorise of import items not included inAppendix 5 and 7 of 1981-82 policy, even if they were included in 1980-81 policy, by what logic can coconut oil even if read with Para 177(5) and Appendix 10 item No. 1 of 1980-81policy be imported in September, 1982 when from 1981-82policy onward it had been included as a canalised item. Consistency demands that item must be importable at the time of arrival not that they were importable in the previous policy.Export Houses are not to be given a bonanza by being permitted to import item which is prohibited to Actual Users (Industrial) for whose benefit the whole exercise of importation isdone.
(44) It will thus be clear that industrial coconut oil couldnot have been imported in September, 1982 even though it was in persuance of a revalidated license issued during 1980-81 because of the prohibition provided in the Ogl order of 1980 that nothing in that license shall effect the prohibition affecting theimport thereof at the time when such goods are imported. Asin September, 1982 coconut oil of all variety edible or industrial was a canalised item it was a prohibited item. By virtue of subsection (2) of Section 3 of Import & Exports Act all such prohibited goods shall be deemed to be goods of which import is prohibited under Section 11 of the Customs Act which gives power to the Central Government to prohibit importation or exportation of goods. In that view Section 111(d) of the Customs Act will immediately be attracted because coconut oil will be goods which have been imported contrary to the prohibition imposed under the Act and, therefore, shall be liable to confiscation.
(45) On the above finding it is really not necessary to discuss in detail another objection raised by the counsel for the petitioners to one of the findings of the Collector. It win be seen that the Collector has also found that as the goods were imported in September, 1982 it was in violation of Para 185(3) of1981-82 policy read with public notice dated 25th February,1982 subject to which the license of the, petitioner had been revalidated and which required that shipment of goods shall fake place by 31/03/1982. Counsel for the petitioner had contended that even assuming that this condition was breached the same will not permit the confiscation of goods became the breach of a condition of a license does not authorise confiscation. The counsel referred to M/s. East India Commercial Co.Ltd. Calcutta and another V. Collector of Customs, Calcutta1962 Sc 1893 (12) and Additional Collector of Customs, Calcutta and another Vs. M/s. Best & Co. 1971 Sc 170(13). Inthe former case license had been issued for the import of tubes.It also had a condition that goods will be utilised only for consumption for the license holders factory and no portion will besold. The importer, it was found, had, however, sold the goods.It was in that context that the Supreme Court found that the Imports & Exports Act did not permit a condition to be imposed that after the import of the goods will not be sold. It also found that under Section 167(8) Sea Customs Act, 1878 goods couldnot be confiscated imported under a valid license on the ground that a condition of license had been breached. Similarly in 1971SC 170 (Supra) a license was granted to import certain machinery for a maximum Cif value of Rs. 45,000/-. Later on it transpired that the value of the machinery imported was Rs.45,179. On that ground the authorities wanted to confiscate the goods. The court held that even if it was a breach of thecondition of license it was open to the authorities to direct prosecution but no order for confiscation of goods could be made.These cases are clearly distinguishable. In the present case even if we ignore the violation of Para 185(3) of policy, the petitioner would still have defaulted in terms of Condition No. 18of Ogl order of 3-4-81 which required the consignment to be shipped by 31/03/1982 and a irrevocable letter of creditto have been opened in February. 1982, because the goods i.e.industrial coconut oil was imported in September, 1982 and letter of credit opened in July, 1982. The present is not a case where the import of coconut oil could be validly imported inSeptember, 1982 but certain conditions had been imposed forthe import and those conditions had been breached, like in the above Supreme Court decisions, which have no applicability.The present is a case where import of coconut oil of all variety is prohibited in September, 1982. The confiscation has been ordered because import has been made in contravention of a statutory prohibition. The analogy of the breach of conditions of a license cannot apply. It can only apply where there is a valid license to import the goods but certain other ancillary conditions are breached. Here the very goods i.e. coconut oil could not be validly imported. The import was, therefore, prohibited and a penalty of confiscation is permissible in terms ofSection 111(d) of Customs Act.
(46) Point No. 2 is, therefore, decided against the petitioners and it is held that the import of industrial coconut oil being a prohibited item could not have been imported by the petitioners.
(47) Point No. 3 : The next contention of Mr. Rana was thatthe impugned order of the Collector dated 20/12/1982was in any case liable to be quashed irrespective of the fact whether on merits it is held that coconut oil was a canalised item under Appendix 9 item 5 of Policy, on the sole groundthat the order of Collector was passed at the instance of a senior officer and was not his independent decision. Now it is correct that the order of the custom authority imposing confiscation and penalty under the Customs Act is quasi judicial (See M/s.Pioneer Traders v. Chief Controller of Imports and Exports,Pondicherry and others, 1963 Sc 734 Para 14)(14). It is equally well settled that the powers exercised by the Collector is quasi-judicial power and cannot be controlled by the directions issued by an outside authority (See : Orient Paper Mills Ltd. v.Union of India 1969 Sc 48) (15). Here the proceedings by theCollector were initiated by the issue of show cause notice dated 24/11/1982 to the petitioners in respect of the consignment in dispute. Attention is drawn to the copy of show cause having been sent to one Mr. Takhat Ram, Jt. Chief Controller Of Imports & Exports, New Delhi, to build an argument of extraneous influence. It appears that Mr. Takhat Ram had addressed a letter dated 4/09/1982 to Collectorates of Bombay, Calcutta, Madras and Cochin wherein it was pointed out that it has been reported to the Commerce Secretary that huge quantities of coconut oil are on their way and pointing out that coconut oil both edible, and non-edible is canalised through Stc and asking that before any consignment is cleared,the matter should be brought to the notice of the government.On 11/10/1982 Mr. L. Prashad, Deputy Chief Controller for Exports, on behalf of Chief Controller of, Imports/Exports sent a copy of Mr. Takhat Ram's letter dated 4/09/1982 (which had obviously not been sent to Collector,Ahmedabad) and also stating that clearance of imports made by the petitioner should not be made without getting prior clearance from the office of Chief Controller of Imports and Exports.Obviously in persuance of these queries one Mr. Nagpal, Director of Customs, Ministry of Finance & Customs by his letter dated 25/10/1982 wrote to Mr. Takhat Ram pointing out that it was not very clear whether the import by the petitioner would be covered by revalidated Additional license and asking that matter be treated as most urgent as the goods had arrived at Kandla and were awaiting clearance. It is in this background that it is urged that the impugned order of the Collector must have been passed on the direction of Mr. Takhat Ram without applying his own mind. In support of the supposed influence of Mr. Takhat Ram reference is also made to the fact that the impugned order of the Collector dated 17/12/1982 was also endorsed to Mr. Takhat Ram, JointCCI&E. In my opinion too much is being read in this ordinary communication sent by Mr. Takhat Ram. A reference to the letter of 4/09/1982 would show that the government apparently was worried that large quantities of coconut oil wasbeing imported by private parties though it was a canaliseditem. This was a normal administrative caution to the Collectors to be careful in the matter of such imports. It is wrong to magnify Mr. Takhat Ram's role. The communication was on behalf of Chief Controller of Imports & Exports. Mr. Prashad and Mr. Nagpal were also associate with such enquiry. Of course the letter written by Mr. L. Prashad on 11/10/1982 making a specific reference to the import made by the present petitioners and also directing that clearance should not be allowed without getting prior clearance from the office of CCI was in a manner of technically speaking unfortunate. But it cannot be treated with suspicion and as conspirational as was the suggestion of Mr. Rana. Nor is it a communication from an intermeddler. In the counter affidavit it has been specifically stated :"Respondent No. 3 as duty bound, has independently exercised his quasi-judicial powers and decided the matter in light of the interpretation that he considered necessary to adopt in accordance with law.The Stc is not the constituted authority to interpret the Import Policy."Issue of any secret instructions issued to respondent No. 3 havebeen denied in the section. The Collector of Central ExciseMr. Kumar also has filed his reply denying any extraneous influence in the matter of his decision making. He has specifically stated that he gave his decision independently and without being influenced in any manner by any correspondence or direction. That this matter was agitating the department is clear from the order of the Central Government dated 31/03/1981 when hearing revision petition, where it held that industrial coconut oil was not a canalised item. The order itself shows the Joint CCI&E had himself written to the government by his letter of 28/02/1981 pointing out that interpretation given by the Stc that industrial coconut oil was not canalised with them was not correct and that in any case Stc was not a competent authority to give this classification. The matter thus was being examined at the level of the Central Government and no motive can be attributed to the Collector simply because he gave a decision adverse to the petitioners. It is correct thatthe collector's order unfortunately in the discussion makes no reference to the order of the Central Government dated 31stMarch, 1981. But it is significant to note that the Collector does notice the order of the Central Board dated 23/01/1981, the very order which was affirmed by the Central Government on 31/03/1981. No oblique motive can be attributed on this account. There was no intention to ignore a contrary decision because in terms of hierarchy the Collector is as much a subordinate authority to the Central Board as to theCentral Government. For the reasons that the Collector could and did not follow the view of the Central Board were equally valid for not following the decision of the Central Government,as it had only affirmed the Board's view. No advantage was gained by the collector by the inadvertant omission to mention Central Government's order. Mr. Rana still insists that these facts are sufficient to prove that the Collector's order is motivated. He says that in matters of malafide acts of public officials,onus of proof of malafide is not to be proved beyond reasonable doubt as held in Mis. Pannalal Binjraj and others v. Union ofIndia and others, 1957 Sc 397(16). But the Court nowhere laid down that the more ipso dixit of malafide allegation made against the public officials discharges the onus and it is for the official to prove the negative. It is correct that It is obviously difficult to establish the state of mans mind. but it must be remembered that making charges without any sound basis isnot enough and that the charge of bad or ill will is not to beheld established except on clear proof thereof, and "doubtless,he who seeks to invalidate or nullify any act or order must establish the charge of bad faith, an abuse or a misuse by Government of its powers. (See: 1964 Sc 72). Now in the present case there is no suggestion that the Collector Mr. Kumar or Mr.Takhat Ram had any hostility or had motive against the petitioner. Nothing is stated that these officers acted under the instructions of any of their particular superiors. Resort to the bald allegation of secret instructions, which have been categorically denied, cannot advance the petitioners case. The allegation of malafide and extraneous influence acting on the decision of the Collector is an empty rhetoric behest of any materal. I must repel such an allegation. Point No. 3 is decided against the petitioners.
(48) Point No. 4 :As mentioned above Central Government exercising thepowers under Section 131(3) of the Customs Act, 1962 in another case, by its order dated 31/03/1981 has held thatthe commodity coconut oil mentioned in Appendix 9Para 5 of1980-81 policy only covered the edible variety and, therefore,the non-edible variety of coconut oil was not a canalised item.Mr. Rana says that this interpretation is binding on a subordinate authority like the Collector of Customs who had no jurisdiction but to hold accordingly and, therefore, must be compelled to do so by this Court issuing the necessary, writ and direction.
(49) This argument of Mr Sen & Mr. Rana rests on the fallacious assumption that the principles of resjudicata or estoppel prohibit the taxing authorities from taking a different view of law once a higher hierarchical statutory authority has taken a particularview. According to them until the High Court or the Supreme Court takes a different view, a decision once given by the highest revisional authority or say under the Customs Act must continue to govern a decision on the same point even in the case of another party or for different period. It is relevant to note that the view of the Central Government in its order dated 31/03/1981 was not taken in the case of the presentpetitioners. Their case relate to another party. So that even technically speaking resjudicata as such cannot apply because the parties are different. That is why emphasis was on estoppel by urging that the Collector is estopped from taking a view contrary to that taken by the Central Government. This argument which seeks to apply the principle of estoppel in revenue matters runs counter to the well established principles of law that there is no estoppel in the matter of tax laws which would also include proceedings under the Excise and Customs Act.In Palkhiwala Law and Practice of Income Tax 7th Edition at Page 854 and 855, a series of decision have been summarised,the purport of which is :
(A)that the doctrine of res judicata or estoppel by record does not apply to the decision of assessing officer;
(B)a finding or decision by income tax in one year may be departed in a subsequent year; and
(C)If a department wrongly arrived at a certain finding in a past year and assessed accepted it or if the department failed to protest against a wrong departure from the regular method of accounting in a prior year that can give the assessed no claim to have the mistake repeated in a subsequent year in hisfavor.
(50) In Commissioner of Income Tax v. Brij Lal Lohia and Mahabir Prasad Khemka, 1972 Itr 273 Vol. 84(17), the facts were that assessed had made a gift to Ins brother and in his earlier assessments the Income Tax Authorities had held that they were not genuine gifts. In assesseds appeal the High Court and Supreme. Court refused to interfere with the finding of theTribunal. This very question, namely whether these gifts were genuine or not again came up for consideration before the authorities in subsequent years. The Tribunal took into account some new facts and came to the conclusion that gifts in question were genuine gifts. The Revenue pleaded before the Supreme Court that it was not open to the Tribunal to take adifferent view of the matter. This plea was rejected by the Supreme Court by observing :"The fact that in the earlier proceedings the Tribunal took a different view of those deeds seeing a conclusive circumstance. The decision of the Tribunal reached during those proceedings does not operate as a resjudicata."This case shows with rolling example that the very same transaction of gift was held to be not genuine in the previous assessment year but was held to be genuine gift in the subsequent years by the Income-tax authorities and yet no plea of estoppel was allowed to be raised. Mr. Rana in support of his contention that the Collector can be compelled to refund the tax collected only on the short ground that the view of law taken byhim is contrary to the view taken by the Central Government,refers us to Bharat Carpets Ltd. v. Union of India, 1978 E.L.T.(III). In that case the plaintiff company had brought a suit for refuse of even Rs. 7 lakhs. In that case the plaintiff wasthe manufacturer of woollen stuffed carpets which he claims were not excisable goods and hence no excise duty could be levied.His plea was, however, rejected by the Collector of Excise, andin pursuance to the assessment he paid an amount of Rs. 7lakhs as excise duty by 20-4-72. But the plaintiff had also challenged the earlier assessment in revision, which was accepted by Central Government and it was held therein that the woollen carpets manufactured by the plaintiff were not excisableg
(51) A very elaborate discussion on there being no estoppel or resjudicata in the matter of tax matter is to be found in Mohammed Falil Abdul Gaffoor and Others, the Trustees of the Abdul Gaffoor Trust Vs. Commissioner of Income Tax. Colombo1961 Ac 584(22). In that case exemption was claimed on the ground that the income was that of trust of a public character established solely for charitable purposes.The Commissioner of Income Tax sought to deny the assessed for the year 1950-51 to 1954-55 an exemption which it had been held entitled to under 1949-50 under the orders of Appellate Board of Review. The assessed set up the plea of estoppel in seeking to reopen the question decided earlier that the trust was set up solely for charitable purposes. The privy Council rejectedthe plea and affirmed the view of Courts below and held thatthe trust is not a trust of public character solely for charitablepurposes. It emphatically held that the plea of estoppel was not open by observing.The critical thing is that the dispute which alone canbe determined by any decision given in the course of these proceedings is limited to one subject only.the amount of the assessable income for the year inwhich the assessment is challenged.To a similar argument like raised by Mr. Rana that the question whether industrial coconut oil was canalised in 1980-81policy having been decided by Central Government this question of law cannot be reopened even in some other subsequent proceedings I may quote what was said in "Gaffoor" case :"Although, of course, the process of arriving at the necessary decision is likely to involve the consideration of questions of law, turning upon the construction ofthe Ordinance or of other statutes or upon the general law, and the tribunal will have to form Its view on those questions, all these questions have to be treated as collateral or incidental to what is the only issue that is truly submitted to determination."To invoke the principle of natural justice, estoppel in tax matters is thus inapposite. The lament of Mr. Rana that such a course would open up serious dislocating unusual possibilities canbe satisfactorily quietened by what was said in Gaffoor's case(Supra) to a similar complaint, namely:"It may be that the principles applied in these cases forma somewhat anomalous branch of the general law of estoppel per resjudicata and are not easily derived from or transferred to other branches of litigation in which such estoppels have to be considered; but in their Lordships' opinion, they are well established in their own field, and it is not by any means to be assumed that the result is one that should be regretted in the public interest", (para 599).The contention to deny jurisdiction to the Collector to pass an independent order on its own must be rejected. I must also note that the Collector has given sufficient additional angle to justify consideration of the matter afresh, notwithstanding the earlier decision by the Central Government.
(52) But even had I held that the Collector was bound by the decision of the Central Government dated 31/03/1981, it could only have resulted in the matter being remitted to theCustom authorities for a fresh decision according to law, a course strongly opposed by Mr. Sen and Mr. Rana their plea was that if the binding compulsive nature of the decision of the CentralGovernment is accepted the only inevitable course for this Court is to quash the Collector's order and direct the refund of redemption fine. I cannot agree. Had I agreed with the view of theCentral Government on merits as put forth by the petitioner they would have been no difficulty in quashing the impugned order ofthe Collector and setting aside the whole proceedings taken against the petitioner for confiscation. But as mentioned above.I agree with the Collector. In my opinion the view of the CentralGovt. holding that industrial coconut oil was not canalised it is plainly untenable. In view of this by what principle or logic can I still be asked to issue a writ of certiorari quashing the order of the Collector (which I consider to be correct in law)and set aside the proceedings taken for confiscation by applying the decision of the Central Government which I consider untenable. Can anything be more absurd? Proceedings under Article 226 are in the nature of a high prerogative writ. It is well settled that a writ of certiorari is not a matter of course but is discretionary. It is issued in order to prevent manifest injustice. If the court comes to the conclusion that a view of law taken by the lower authority is unsustainable and there is injustice it may inexercise of its discretion quash the offending order. But what Mr.Rana asks is that notwithstanding on merits that I agree with the view of the Collector, the same should nevertheless be set aside only on the sole ground that the Central Government had takena contrary view (which view I hold to be erroneous). So I must exercise my discretion in enforcing a patently erroneous view ofthe Central Government. Reference by Mr. Rana to 1965(2)R.Vs. Paddington Valuation Officer and another Aer 836(23)rather goes against him. Lord Denning only affirmed his view,namely that "if a Tribunal bases its decision on extraneous circumstances which it ought not to have taken into account or fails to take into account the vital consideration which it ought tohave taken into account then its decision may be quashed on acertiorari, and a mandamus issued for it to hear the case afresh."(page 842). In view of my findings on merits being against the petitioner I am not persuaded to issue a writ quashing the order of the Collector, which I consider, has given a correct interpretation of the policy. Another course can be only unjust and anamalous. More so and especially in view of the preliminary objection taken by the respondents that this petition should not be entertained because a perfectly good remedy of an alternative remedy of appeal being available to the petitioners. In the present casethe decision of the Collector was given on 20/12/1962.By that time the amendments made by Section 50 and 5thSchedule of the Finance Act No. 211980 providing for a appellate tribunal had come into force. The petitioner thus could have filed an appeal under section 129A to the Appellate Tribunal, which would have been free either to agree with the reasoning of order of Central Government of 31/03/1981; itcould as well take a contrary view and affirm the Collector'sorder. It could not have been urged by the petitioner if he had filed an appeal that the Appellate Tribunal was bound by theearlier view of the Central Government dated 31/03/1981because being an independent quasi judicial body there was no compulsion on it to agree with the earlier view of Central Government. Even if the amendment Act had not come into force the Central Government hearing a revision under old Section 131 being a coordinated authority could take a different view from the one taken by it earlier on 31/03/1981, more so as the parties are; different and which power was so clearly recognised in J. K. Synthetic case. If thereafter the petitioners had followed the normal remedy provided under the Act there was a possibility that the Appellate Tribunal may take a different view from the one' taken by Central Government on 31stMarch, 1981 and indeed affirm the Collector's order. If thereafter the petitioners had come in writ petition they could only succeed if they persuaded us on merits to agree with them. No argument would have been available to urge that the Collector'sorder should be quashed only on the short ground of not having followed the earlier Revisional authority order 31-3-1981.In fact in such a situation this plea would be plainly unarguable.But by not availing of the normal remedy of appeal, the petitioner seeks to in yoke the discretionary Jurisdiction of this Court to compel the Custom authorities to follow and apply the view ofthe earlier Central Government's Revisional order, but without giving any opportunity to the Collector to persuade Appellate Tribunal to take a different view. This course would close and prompt all avenues to obtain a correct interpretation of importpolicy, even when we find that the Joint CCI&E and even the Commerce Secretary, Government of India were quite perturbed at the large scale imports of coconut oil which were being made apparently because of earlier decision of Central Government'sorder of 31/03/1981. This Court cannot allow itself to fall in this trap which apart from being against all principles and precedent will result in perpetuation) of wrong interpretation.by denying the authorities under the Customs Act to have thematter examined fresh by the Appellate Tribunal but and later,if necessary by High Court and even the Supreme Court. This course which will make the Court an instrument to Perpetuation justice must be repelled. The plea of the petitioner is thusrejected. Point No. 4 has to be held against the petitioner.
(53) Mr. Iyer in his forefront of the arguments raised preliminary objection to the maintainability of the writ petition on the ground of :
(A)alternative remedy by way of appeal being maintainable;
(B)order having been passed by Collector, Ahmedabad,which is outside the territorial jurisdiction of thisCourt.
(54) By Section 50 read with Fifth Schedule of Finance Act (No. 2) of 1980, Chapter 15 has been substituted in Customs Act, 1962. It came into force with effect from 11-10-1982.Section 129 of Customs Act has constituted on Appellate Tribunal to be called the Customs Excise and Gold (AppellateTribunal). It is headed by a retired Judge of this Court. Section 129A provides for an appeal against a decision or order passed by the Collector of Customs. In the present case show cause was issued on 24-11-82. As such appeal undoubtedly lay to the Appellate Tribunal-it is so even conceded by the petitioner.Section 130 also provides for a question of law to be referred to the High Court throw any question of law. arising out of the order passed by Tribunal in appeal. Section 130E also provides for an appeal to the Supreme Court against any judgment of High Court delivered by a reference by it. This undoubtedly a regular appeal to an independent Tribunal being available THE petition should be held incompetent for it is well settled :"It is well settled that when an alternative 'and equally efficacious remedy is open to a litigant he shouldbe required to pursue that remedy and not invoice special Jurisdiction of the High Court to issue a prerogative writ. It is true that the existence of another remedy does not affect the jurisdiction ofthe court to issue awrit, but as observed by this Court in Rashid Ahmad v. Municipal Board, Kairana (AIR 1950 Sc 161) the exigency of an adequate legal remedy is a thing to be taken into consideration:in the matter of granting writs vide also K.S. Rashid and Son v. Income Tax Investigation Commission , and where such remedy exists it will be a sound
exercise of discretion to refuse to interfere in a petition under Art. 226 unless there are good grounds therefore, (see Union of India v.T.R. Varma, ). This position was accepted in A. V.
Venkateswaran v. Ramchand Sobha Wadhwani and another ." See Super Traders & another vs. UOi401, 1983 Elt
258 at 276).
(55) Reference is also made by Mr. Iyer to N. T. Veluswami Thevar v. Raja Nainar & Others, , A. Narayanan and another v.
Commissioner of Income Tax, and Bhopal Sugar
Industries vs. D. P.Dube, Air 1967 Sc 549(26) in support of his contention. TheSupreme Court depreciation the attempt of party not availing of the normal remedies of appeal, revision reference provided under the Income Tax Act or thei Sales Tax Act and to approach the High Court direct against the action of first officer. (See Champalal Binani vs. The Commissioner of Income Tax, .
(56) The latest trend also is to discourage the filing of the writ petitions direct on the ground that the petitioner have an efficacious alternative: remedy available by way of appeal (See Titaghar Paper Mills Co. Ltd. v. State of Orissa, . In the present
case the main part of issue is whether coconut oil (industrial) is covered by a particular entry. TheCollector has undoubted jurisdiction to decide it. though he may come to erroneous finding. But that does not made his order without jurisdiction for he has jurisdiction to decide rightly or wrongly and the aggrieved party can only have that order cancelled by way of remedy provided under the Statute. The other objection that the Collector should have followed the CentralGovernment Order of 31-3-81 is rather an argument against the petitioner. For if he feels that a higher authority has taken the view being propounded by the petitioner, it is best to approach that authority. Of course, it will be open if it so feels,for that coordinate authority (now the Tribunal) to take a contrary view from that being urged by the petitioner. The petitioner thus by not going in appeal, and at the same time urging,as noticed earlier that the Court should issue writ quashing the proceeding initiated by the Collector on the sole ground of its decision being contrary to Central Government (without agreeing to examining the merits by us or either remitting it to Collector for reconsideration) is obviously taking the impermissible course of not availing a normal remedy of appeal and at thesame time asking for quashing the proceedings without examination on merits at any froum. This portion itself shows how inequitable and improper has it been to entertain this petitiondirect. The decision of State of U.P. v. Mohd. Nooh Atr 195SC 86(29), has no relevance. The petitioner was given fullhearing. The argument that in the order of Collector reference is made to the meaning of coconut oil as given in Indian Standard Specification (which Mr. Sen says was not mentioned during the hearing) is an argument of despair. Reference by theCollector to the various publication for the meaning to be given to a word does not involve absence of hearing resulting in the order being a nullity as in Nooh case (supra). That was a case of total lack of jurisdiction as explained in Titaghar Paper case(Supra). I can thus find no plausible much less convincing reason why the petitioner should not have failed of proper effective remedy of appeal. I am, therefore, of the opinion that the present case is one where it would have been a proper exercise of discretion to also dismiss the petition on the ground that the petitioners have not availed of the alternative remedy availableto them under the Customs Act [See Super Traders (supra)].
(57) In this context I must also caution against permitting the hurdled of alternative remedy being crossed in many an instance by the petitioner just putting forth the argument of a challenge on the ground of unconstitutionality. Of course. I accept thatthe statutory Tribunals are incompetent to decide the questionof unconstitutionality or ultra vires as they are creatures of thestatute. But then when petition is sought to be maintained on this ground it should be a real challenge say to the validity of some provision of the Act. And in such, a case admission should also be restricted to this limited challenge and not be allowed to encompass argument on merits. The result then would be thatif challenge of ultra vires does not prevail the petition would be dismissed without the court giving any decision on merits. Unless this course is adopted the stratagem of a sham challenge of ultra vires or invalidity may be evolved to avoid resort to alternative remedy under the statute. In the present case, even the alleged challenge to the validity of any provision to the Statute is missing. Nor does the alleged objection of public novice of2-2-1982 having been issued by the govt. is of any avail after the constitution of an independent Tribunal, whereby the administrative and quasi judicial functions have been separated atthe highest and the Tribunal could give its independent interpretation to the public notice, uninfluenced by any administrative considerations [See Khandelwal Metal and Engg. v. Union ofIndia & others, 1983 Elt 292(30), Para 41]. In the present case the challenge is only on merits and in the normal course I would have been inclined to reject this petition on this preliminary objection.But on peculiar facts of this case I do not intend to do so.That is why I have gone into the merits of the whole matter and have given my findings accordingly. In this context I have kept in view the fact that the Division Bench entertained' this petition in 1983 (after the Amendment Act had come into force)and did not dismiss it On that ground at that stage, Subsequently this matter was heard by learned Single Judge for days andthe matter referred to a larger Bench. Earlier to the matter being heard by a Division Bench, the Supreme Court though inthe first instance transferred the case to Rajasthan High Court for the expeditious hearing later on stayed the order by its orderdated 23-7-84 as it found that the matter was listed before Division Bench for regular hearing. Thereafter the Division Bench referred it to Full Bench. We heard the whole matter on merits as well. In that view it would serve no one's purpose if we were not to decide the whole matter but were to dismiss the writ petition on the ground of alternative remedy not having been availed. In my view these special circumstances disincline me to dismiss this petition, on preliminary objection, though I must emphasise that but for these special facts of this particularcase, I would be strongly against entertaining any petition where party has not availed of the alternative remedy. I would, therefore, caution against this case being treated in any way as a precedent rather would emphasise that this court decline to entertain a writ petition unless the party has first exhausted the remedy available under the Statute'.I feel prima facie substance in the objection that thisCourt lacks territorial jurisdiction to quash an order passed at Ahmedabad (within the jurisdiction of Gujarat High Court)But Mr. Sen says this court has jurisdiction under Article 226(1A) of the Constitution as part of cause of action has arisen at Delhi for the reasons that the impugned order was received atDelhi; that one of the license was issued at Delhi and that its impact was felt at Delhi and has acted large number of authorities in support thereof. I am doubtful whether such extraneous circumstances can confer jurisdiction at Delhi where the event which has occasioned the filing of the petition order was passed at Ahmedabad. But I do not propose to give any decision on this aspect as already mentioned above. We heard arguments on merits and I corner it proper in this case to deal with all the aspects in the petition.
(58) Quantum of redemption fine The last argument by Mr. Sen was that the redemption fine of two crores was extremely unconscientionable and this court should even on adverse finding on merit against the petitioner convert it into a mere warning or at the best a tokenfine. Now Section 125 of the Customs Act empower collector to give to the owner of the goods an option to pay in lieu of confiscation such fine as shall not exceed the market price ofthe goods confiscated, less in the case of imported goods the duty chargeable thereon. As mentioned above the C.I.F price of the imported coconut oil is Rs. 1,63,67050/-. There is no discussion in the Collectors order as to how and on what basis the redemption fine of two crores has been imposed. Some inkling seems to have been suggested in the reply affidavit where it is stated that the market value of the indigenous coconut oilat that time was Rs. 19,000/- per metric tonne with the result that the equivalent value of the goods would be more thanRs. 5.7 crores and that the petitioner had made huge profit even after the payment of redemption fine. The petitioner, however,repudiated this assessment of value. According to them the market value at the relevant time was Rs. 14,5001- per M. Tonne.They also claim to have undergone huge storage charges, bank interest for a period of three months before the goods were gotreleased. The petitioner claim to have sold these goods at that rate to M[s. Hindustan Lever etc. it is denied that the petitioners made huge profits. Counsel for the petitioner pressed us to consider various circumstances which according to him showed the bonafide belief of the petitioners that he was importing goods validly with a view to ultimately persuading us to hold that it was not necessary to order confiscation, at all andthat a more warning or token fine would have sufficied. Now, Ido not think that it is permissible for this Court under Article 226 to interfere in the quantum of fine, as this Court is not sitting as a Court of appeal. Even the Supreme Court in Indo China Steam Navigation Co. Ltd. Vs. Jasjit Singh, Addl Collector, Air 1964 Sc 114(31), refused to interfere under Article 136 of the Constitution by observing that no question of principle or law is involved. It is relevant to note that in that case gold worth Rs. 23 lakhs was illegally imported in a ship. Thecustom authorities confiscated the whole gold. it also confiscated the ship though gave an option to the owner of the ship to payRs. 25 lakhs in lieu thereof. The gold seized was of the value of Rs. 23 lakhs. Fine of Rs. 25 lakhs was imposed and yet the Supreme Court refused to interfere. M/s. South India Coir Mill Poockakkal V. The Additional Collector of Customs and Central Excise and another, 1976 Sc 1527(32) is clearly distinguishable. In that case it was found that goods were sought to be exported contrary to the prohibition under Section 11 ofthe Customs Act and they thus became liable to confiscation under Section 113(A) of the Customs Act and the person also became liable to pay penalty under Section 114 of that Act. But as the Court found that the law on amended Section 12 of Foreign Exchange Regulation Act was not very clear it reduced the penalty imposed from Rs. 25,000 to Rs. 10,0001- while at thesame time maintaining the amount of fine in lieu of confiscation of goods. In the present case, no proceedings have been taken at all by the Collector for penalty under the comparative Section 112 of the Act which deals with personal penalty for improper importation of goods. The facts were thus totally different. It nevertheless significantly gave a warning which need to be remembered, namely "in cases of economic offences after especially in relation to the law of Foreign Exchange no leniency in the quantum of punishment is warranted."(Para 12).
(59) In M/s. Hindustan Steel Ltd. V. The State of Orissa , facts were that the company had supplied building
material to its contractors at agreed rates. The Company did not register itself on the interpretation that it was nota dealer under the Act. The authorities under the Act heldthat the coy was liable to pay sales tax and in addition directed penalty to be imposed. In appeal the Supreme Court remitted the ca.se for supplementary statement. With regard to imposition of penalty for failure to register the' Court observed thatthe liability to pay penalty does not arise merely upon proof of default in registering as a dealer and that penalty will not ordinarily be imposed unless the party obliged acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation and thatthe authority competent to impose the penalty will be Justified in refusing to impose penalty when there is a technical or venial breach of the provisions of the Act. The Supreme Court held in these circumstances of the case that the company a public sector organisation acted in the honest belief that the company was not a dealer, hence no case for imposition of penalty wasmade out. That case has no relevance here where what is complained is the breach of prohibition to import items in violation of the provision of an economic legislation like the. CustomsAct.
(60) In this connection one must make a distinction between proceedings for confiscation under Section 111(d) of the Act asin the present case and independent proceedings for penalty under Section 112 of the Act which have not been started againstthe petitioner. Question of bonafide belief and means read are irrelevant in proceedings under Section 111(d) of the Act, while they may have relevancy in proceedings for imposition of personal penalty under Section 112 of the Act, which may be described as quasi criminal. Confiscation proceedings under old Section 167(8) of Sea Customs Act 1878 (corresponding to Section 111(d) of the Act) provides for two kinds of penalties when contraband goods are imported into or exported from India;one is confiscation of the goods which is an order in rem andthe other is a penalty on the person concerned in any suchoffence. Proceedings under the Sea Customs Act in connection with an article resulting in the confiscation of that article are proceedings in rem. If gold is smuggled and if is traced in the hands of any party, however, innocent, the same is liable to be seized and confiscated (See Senpujanraj Indrassnaraj Ltd. Vs.Collector of Customs and others, .
(61) The distinction between proceedings under Section 112 and Section 111 of the Act are totally ignored by the petitioner'scounsel when various factors tending to show the bonafide belief of the petitioner that industrial coconut oil was validly importable are pressed as aid to challenge the proceedings taken against.them under Section 111(d) of the Customs Act. But the law makes a very sharp distinction in proceedings under these twoprovisions. Thus whereas confiscation can be ordered irrespective of knowledge of the person in whose possession goods arefound, the imposition of penalty requires deliberate action and knowledge (See Charan Das Malhotra V. Assistant Collector ofCustoms, ). Section relating to seizure,under
Section 112 of the Act is independent of Section 125 (SeeR. S. Kalyanaraman V. The Collector of Customs 1978 Tax Law Review 1735x36). As proceedings under Section 111 are taken in the interest of national economy and conservation offoreign exchange, goods having been prohibited from importation no one can be allowed to argue that he bonafide believed he could import these goods or that he genuinely was led into a misinterpretation of Statute. These contentions may have relevance, if at all, when question of imposing personal penaltyunder section 112 or being prosecuted under Section 135 ofthe Customs Act are being taken. Liability under Section 111 of the Act is absolute. There is no scope for importing the rule of means read at all. Either goods are prohibited or not. If theyare, they are liable to be confiscated. No one can be permitted to make profits or take benefit by importing goods which are prohibited in the interest of national economy. No alleged ruleof literal construction of a statute can be invoked for no citizen has a right to sabotage the national economy in enactments like the Foreign Exchange Act (Sikri, J. in The Union of India andothers V. M/s. Rai Bahadur Shreeram Durga Prasad (P) Ltd.and others 1970 Sc 1597(37) para 13) or for that matter on thesame analogy under the Customs Act.
(62) It is indisputable that the proper implementation of theImports and Exports Act is of immense signification to the national economy. Any loose or half hearted opening which may permit the provision of the Act to be violated can spell disaster for national economy. In such sensitive and other similar legislations Parliament inevitably make the liability absolute,for not to do so would gravely harm public interest. Thus contravention of Hire Purchase and credit sale agreement was held to be an offence even though the act was innocently done. Donovan, J. put it succinctly, 'There would be little point in enacting that no one should breach the defenses against a flood and atthe same time excusing anyone who did it innocently' (See Maxwell Interpretation of Statutes, 12th Ed. P. 127(96). Similarly the possession of a drug under Drug Regulation is an absoluteoffence. The regulation was said by Lord Parker, CJ. to be a'public welfare provision. If one considered the mischief aimed at alone, there was every reason for treating a provision such as this as a provision imposing absolute liability (P. 129).
(63) In Pyarali K. Tejani V. Mahadeo Ram Chandra Dange and others the court found that the supari was included within
the meaning of food. The dealer however urged that he entered in good faith that there was no cyclamate is substance sold by him and he did not know saccharin was contraband. Rejecting the plea for leniency the Court observed that 'It is trite law that in food offences strict liability is the rule not merely under the Indian Act but all the worldover'...... .'the intention to commit a breach of statute need not be shown. The breach in fact is enough........Section 7 casts an absolute obligation regardless of scienter, bad faith and means rea. If you have sold any article of food contrary to any of the sub-section of Section 7 you are guilty. There is no more argument about if. The Court also approved the observations made in American Jurisprudence (2nd Vol. 35, page864), namely the distribution of impure or adulterated food for consumption is an act perilous to human life and health, hence,a dangerous act, and cannot be made innocent and harmless bythe want of knowledge or by the good faith of the seller, it isthe fact itself, not the intent, that determines the guilt.'
(64) It is also significant to note the provision like Section 138A of the Customs Act which raises a presumption of culpable mental State even in any prosecution for an offence under theAct which requires a culpable mental state on the part of the accused. Thus the accused has to prove absence of culpable nature state. In that context any attempt to avoid the order ofconfiscation even when the imported goods are found to havebeen imported contrary to the prohibition under the law by bringing to aid the plea of means rea, bonafide belief, genuine understanding of the import policy, are irrelevant and misconceived pleas, for the liability to confiscation on the finding of import being found to be' prohibited is absolute.
(65) I must, therefore, dispel the assumption that even if thegoods, as in the present case, are found to have been imported,contrary to the prohibition under the law it is discretionary onthe Collector to take any action or not. That is an impermissible suggestion Liability for importing prohibited goods is absolute.On it being proved that the goods have been illegally imported an order of confiscation must be passed under Section 111(d) ofthe Act. It is only thereafter that Section 125 of the Act permits the Collector to give to the owner of the goods a-n option to pay in lieu of confiscation such fine as the said officer thingsfit. But this section does not make it obligatory on the Customs authorities when ordering confiscation, to give an option to the owner to pay a fine in lieu of confiscation but give them a discretion whether to do so or not. The order of confiscation would not therefore, be bad even though it had not given the petitioner an option to pay a fine in lieu of confiscation. Section167(8) corresponds to Section 111(d.) of the Act while Section 183 of old Act corresponds to present Section 125 of the Act the Supreme Court in F.N. Roy V, Collector of Customs, has also laid down :"Resort to S. 183 of the .Sea Customs Act is not necessary at all to justify the order of confiscation madein such a case. Indeed S. 183 does not authoriseconfiscation. 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."
(66) An effort by the counsel for the petitioner to arouse sympathy for the petitioner by contending that as the provisions results in confiscation, it should be restricted construed laws leaves me rather cold for there no equity about tax. Thus if the person sought to be taxed comes- within the letter of the law he must be taxed. however, great the hardship may appear to the Judicial mind to be'. I may in this connection reiterate what was said by a Division Bench of this Court in Hindustan Aluminum Corporation Ltd. V. The Superintendent Central Excise &others, 1981 Elt 642(40) to equate the law for imposition of fax or excise duty as equivalent to penal provision is to hark back to the exploded laissez fame theory of 19th century and to refuse to accept the compulsions of 20th century Welfare State which necessarily postulate the imposition of taxes and duties of excise and custom for carrying out its multifarious special welfare activities.' (P. 652).
(67) Mr. Sen had in support of the bonafide belief of the petitioner that industrial coconut oil was not a canalised item referred to various instances such as :
(1)Order of Central Government dated 31/03/1981;
(2)A consignment of industrial coconut oil imported bythe petitioner in July, 1981, which was allowed tobe imported without objection;
(3)Bombay and Calcutta Customs have allowed clearance of industrial coconut oil-May, 1981 and January,1982 against licenses issued in 1979-80 and 1980-81 policies. And also some consignments cleared inJanuary, 1983.
(68) On the above instances effort made to invoke Article 14 is plainly untenable. The more fact that some collectorate has allowed the consignment does not mean that another Collector must allow it to be cleared even, if he is of the view as is thepresent case that the import is illegal. Each import is a separate event and there is no scope of invoking Article 14. Such an argument would put in jeopardy the whole policy of imports,and exports at the whim of one Collectorate. Each importer has to meet a case put against him, he may invoke the material purporting to support him, but that is about all-he cannot insist that the decision must no be of he Collector dealing with In case but of some other Collector of different Port. I may in this connection refer to coromandel Fertilisers Ltd. V. Union ofIndia and others . In that case the plea of the writ petition
was that in terms of the particular notification issued by the Government of India the petitioner was entitled to claim exemption from the excise duty on the article manufactured by him which it was claimed was mixed fertilizer.The High Court however held that the petitioner was not manufacturing the) mixed fertilizer and was not entitled to claim anyexemption. The said finding was up-held in the Supreme Court.However during the course of the argument, an argument was raised that another rival company had been given the benefit of exemption notification for manufacturing the very same article as was manufactured by the writ petition and therefore not to give the same benefit to the petitioner would work injustice Repelling this argument the Supreme Court observed :'Mr. Setalvad made a grievance that the authorities concerned had allowed the benefit of the Notification under similar circumstances to a rival company. If the grievance of the appellant is true, the appellant may no do but have reasons to feel sore about it. We have however to point out that the grievance of the appellant even if it is well founded, does not entitle the appellant to claim the benefit of the Notification.A wrong decision in favor of any particular party does not entitle any other pay to claim the benefit on the basis of the wrong decision.'The infraction alleged of Article 14 is completely unarguable,
(69) I may incidentally note. that the petitioners overwhelming emphasis on the bona fide belief being based on the letter of STC dated 25/10/1980 would need to be examined rather critically by Appellate Tribunal to whom I intend remitting but only on the question of redemption fine. It is to be noted that licenses were originally issued in November, 1980, and January,1981. Two letter of authority were obtained in February, 1981and 3rd one in December, 1981. Now Stc prima facia view could only have had, if at all any relevancy for 1980-81 policy during the currency of policy. But the import was made in September, 1982. Could it not be said by the respondents that import was made because of the market condition. That a deliberate calculated chance risk was taken knowing fully well that by September, 1982 industrial coconut oil had become a canalised item.But I need not pursue it any further, as the Tribunal will no doubt examine this aspect.
(70) It should also be noted that once it is found as I have athat the goods were illegally imported, the same became liable toconfiscation. Of course the Collector has given option to pay fine in lieu of confiscation. In that context it seems to me thatthe authorities have to examine various circumstances, details of facts whic
(71) As a result of above I would find against the petitioner and hold that the order of confiscation passed by the Collector dated 20-12-1982 was justified and in accordance with law.However as mentioned above only on the redemption fine thematter has to be remitted to the authorities under the CustomAct, I am no inclined to send it back to the Collector for the reason that had the petitioner availed of the remedy of appeal this matter would have been heard by the Appellate Tribunal. Iwould, in the circumstances, remit the matter to the Appellate Tribunal but only on the question of .consideration of quantum of redemption fine. The Appellate Tribunal would hear and dispose of this matter as if it was hearing an appeal filed by the petitioner but only on the question of quantum of redemptionfine. I having held that the order of confiscation passed by theCollector was legal, there is no question of that point or other points being re-opened before the Appellate Tribunal. It will only hear and decide the question of quantum of redemption fine. Of course, it will be open to the petitioner and the Collector to place before the Appellate Tribunal any relevant material offacts necessary for this purpose so as to enable to decide this question in accordance with law.As a result, all the contentions of the petitioners, fail, except for the matter being remitted to the Appellate Tribunal on the limited point mentioned above. The writ petition is disposed ofas above. There will be no order as to costs.S. B. Wad, J.-1 have read the judgments of Sachar andKhanna, JJ.With utmost respect, I am unable to agree withthem. I hold that the import in question was lawful and wasmade under a valid license. The impugned show cause notice and confiscation orders are illegal and deserve to be if set aside.Some dissent was as if anticipated by Anand, J. who had heard the matter for 14 days. After detailing several import questions arising in these petitions Anand, J. observed:"These are some of the questions that arise in the repetitions and were canvassed at the trial. These are important, as indeed, difficult questions. Thereare decisions either way on some of these questions,while some of them represent a grey area and different and even conflicting views may be likely".With these observations, the learned Judge referred thematter to Hon'ble the Chief Justice for constitution of a largerBench. It would have been very helpful if Anand, J. was also with us, as he has passed a detailed referring Order. Indeed,the statutory Rules and Order of the Punjab High Court,Vol, V. as applicable to Delhi High Court, make the following provision in this regard.Vol. V.-Chapter 3-B-Part B-Jurisdiction of a single Judge and of Benches of the Court :Rule 8-Judge or Judges who refer a case shall ordinarily sit on the Bench which considers the referrence. "The Judge or Judges of a Bench by whom any question or case is referred shall ordinarily be members of the Division Bench or FullBench, as the case may be, appointed to consider such question or case."
(72) The petitioners, as an export house, had imported industrial coconut oil on additional licenses with letters of authority. It is a raw material for manufacture of soap, shampoo etc.Admittedly, "coconut oil", simplicitor, was a canalised item of import through S.T.C. in A.M. 1980-81. The principal question in these petitions is whether in the relevant year1980-81 it was the policy of the Government of India to canalise import of industrial coconut oil also ? Various decisions of the quasi-judicial authorities under the Act (including theCentral Government in revision) and other Government agencies connected with this policy, have taken a view that industrial oil was not canalised. Collector of Customs, Ahmedabadhas, thereafter, taken a contrary view. A serious doubt is raised whether the Government knew its mind. One is reminded ofa cartoon by R. K. Luxman a few years ago, in Times ofIndia. It is depicted in the cartoon that a Minister is sitting in the office of the Commerce Department answering the difficulties of the trade representatives, regarding import policy fora particular year. To the much harassed and frustrated trade representatives the Minister tells : "Patience, gentlemen, patience We have announced our policy a few days ago-give us sometime to understand it."
(73) But it is not only the policy-puzzle that makes this case unique. The other facts are also startling. On 10-9-1982petitioners' consignment of ''industrial coconut oil" of theC.I.F. value Rs. 1,63,67,0501- arrived in Kandla Port (Gujarat).The oil was imported from Colombo, Sri Lanka. The import was made on the basis of the letter of authority in favor ofthe petitioners against eight licenses in the name of thirdparties. The licenses were twice re-validated. The Chemical examiner of the government examined the coconut oil and gave a certificate that the oil in question was not "edible oil". TheCollector of Customs, however, did not allow the clearance ofthe consignment. A year earlier, i.e. in July, 1981 the petitioners had imported industrial coconut oil at Kandia. This was cleared by the Collector of Customs for Kandla without any objection. Why was it that this consignment not cleared by the Collector of Customs ?1. The background :
(74) A little background of this action of the Collector of Customs will clarify it. In October, 1980 M/s. Jain Shudh Vanaspati Limited, a sister concern of the petitioners, wanted toimport industrial coconut oil. The oil was to be imported on the licenses in favor of these netitioners. Thinking that under theimport policy for A.M. 1980-81 S.T.C. might be an agency for its import, the said M/s. J.S.V. Limited placed a requisition for industrial coconut oil on the S.T.C. In the said letter of 25-10-1980 it was written ''we wish to advise you that. we are holding industrial license for the manufacture of soap in our factory, situated at Ghaziabad. One of the raw materials which is required for the manufacture of soap in our factory is industrial coconut oil. Presently we are in need of about100 M.T. of coconut oil and will appreciate in case you are kind enough to allocate 100 M.T. of industrial coconut oil in ourfavor. The S.T.C. replied as follows, on 30th of October,1980--"Subject : Import release of industrial coconut oil,we are in receipt of your letter dated 25-10-1 1980in connection with your requirement of about 100M.T. of Industrial Coconut Oil for the manufacture of soap in your factory.In this connection we would like to inform you thatS.T.C. is not importing coconut, oil for manufacture of soap. Industrial Coconut Oil is not under our purview and is not canalised with us. We are importing and distributing edible oils for Vanaspati industries as well as for public
distributionscheme."Central Government's order in revision
(75) It reafter the said sister concern imported industrial coconut oil C.I.P. value of nearly two crops. Collector of Customs, Bombay did not clear the consignment out confiscatedit. On payment of redemption fine of Rs. 25 lacs in lieu ofconfiscation the goods were allowed to be cleared. The said concern referred an appeal against the said order to the Central Board of Excise and Customs under Section 128 of theCustoms Act. The Board allowed the appeal and held that the "industrial coconut oil" was not a canalised item under theimport policy of 1980-81. This order was passed by the Board on 23/01/1981. On 28/02/1981 Shri Takhat Ram, Joint Chief Controller of Imports and Exports in the office of the Chief Controller of Imports and Exports, expressed his disagreement with the order of the Board in his letter to theCentral Government. In view of the said letter fro mthe officeof the Chief Controller of Imports & Exports, the CentralGovernment suo moto took up the revision under Section 131(3) of the Customs Act, 1962. The said concern had also independently taken up the matter with the Central Government.
(76) The contentions- of the Chief Controller of Imports &Exports before the Central Government were as follows:
"1.Coconut Oil specified in para 1 of Appendix (ix)of the Import Policy, 1980-81 as a canalised item includes industrial coconut oil also. The words 'coconut oil would include all types of coconut oils whether edible or industrail.
2.S.T.C. has no authority to interpret the policy as interpretation of the policy can be done by theChief Controlled of Imports and Exports only as per para 202 of the Import Policy 1980-81.
3.Collector ought not to have fixed a very nominal amount of fine in lieu of confiscation."
(77) The counsel for J.S.V. Ltd, however contended thatit was not incumbent for an importer to necessarily consultC.C.I. & E. unless he felts any doubt. But he did not feel so and acted on his own judgment. That by itself cannot be held against him. He urged that it was not, the intention of theGovernment to canalise import of industrial oil. In trade parlance coconut oil meant edible coconut oil. Since the canalised agency is the S.T.C. they approached the S.T.C. to find out whether the industrial grade of coconut oil was also canalised with them. It was really question of fact that they wanted to know from the S.T.C. and not as a question of interpretation of policy. On these rival contentions and on the "careful" consideration, the Central Government held "the commodity 'coconut oil' as is commonly understood in common parlance or amongst the trading circles refers to the ediblecoconut oil. Industrial grade of coconut oil is an inferiortype. If the industrial grade of coconut oil is to be traded, it is described as industrial coconut oil. On the other hand, if the ordinary edible variety is traded, it is describe das coconut oil "The Government in revision further held: "It is to be considered that when the question is as to what is canalised, there is no better source for getting the information than the canalising agency itself. In the case of a canalised item, if one has to find out what is meant by the term coconut oil, no source is better than the biggest, trading agency i.e. theS.T.C." The Central Government in revision, on this finding,confirmed the Appellate order of the Board and set aside the order confiscation. The copy of bus order dated 31/03/1981 was forwarded by the Special Secretary. Government ofIndia to Collector of Customs, Bombay, to the Board and theChief Controller of Imports and Exports with an endorsement "with reference to Shri Takhat Ram's O.C. No. XPC/3/11/80/5790 dated 20/02/1981."
(78) I have quoted the order of the Central Government insome details because, inspite of the ruling of the Central Government itself, the question regarding the policy an dthe law on the point, was debated and disputed during the course ofthe arguments on behalf of the Central Government. The orderof the Central Government dated 31/03/1981 was acted upon by the Collector of Customs. Bombay when he cleared importation of industrial coconut oil imported by the present petitioners in May, 1981 without any objection. So also the Collector of Customs for kindly permitted importion of Industrial coconut oil in July, 1981. It must be noted the these imports in May and July, 1981 were during the subsequent year viz. A.M.1981-82 where industril oil had been expressly made canalised item.
(79) Order of the Special Bench of Board of Excise andCustoms:In regard to the import policy A.M. 1980-81 and particularly in regard to another oil namely 'palm oil' conflicting decisions were taken by Collector of Madras, Cochin and Bombay. The specific question was whether "palm stearine" is covered by the entry "Palm oil, all types". If is was so covered private import was not permissible as "palm oil, all types," as canalisedthrough the S.T.C. in the relevant year. It was an agreed position that 'palm stearine", under the law in force, could not be used for edible purposes. A special bench of the Board of Excise and Customs was constituted under Sections 120 and 130 of theCustoms Act, 1963 to resolve this conflict. On behalf of the importers several public notices between 7-1-1973 to 2-12-1978were cited to show that the policy of the Government all along had been to regulate importation of edible oil only. The Board noted that these notices were of an earlier period but it held it may be true that the policy during the particular period does not necessarily have the binding effect on the subject policyperiod. But the Board observes that in this case the position is somewhat different inasmuch there has been numerous changes in the policy over a considerable period, sometime excluding avariety, another it time including the same or other varieties,but all with a view directed towards regulating the flow of edibleoil into the country. There is, therefore, a reasonable inference that the provisions in Appendix (9) are concerned with theedible variety of oil only", . The Board also held that so far as the decision of the Government of India onthe classification of palmolein for custom purposes is concerned, there is no doubt that the decision is binding on thecustoms authorities. The intention of the government to include palm olein palm seeds in the entry "palm oil.all types" makes it clear that it was not the intention to include "palm stearine" in Appendix-9. The Board also held (on the basis of the evidence led before it) that there has been sufficient scope for confusion about the true meaning of the expression "palm oil, alltypes. includin palm olein" and even the different Customs Houses were following different practices. On these grounds the Board held that the goods in all these cases shouldbe treated as raw materials not canalised or prohibited. the order was pronounced by the Board on 28/05/1982. It maybe noted thathat the decision of the Central Government in revision under Section 131(3) of the Customs Act dated 31-3-1981holding that the entry coconut oil, did not include industrial coconut oil, was also brought to the notice of the Special Bench of the Board.Directions from the office of Chief Controller, Exports andImports:
(80) Inspite of the decision of the Central Government andthe Special Bench of the Board, the Joint Chief Controller of Imports and Exports (Shri Takhat Ram, on whose letter theCentral Government had exercised the suo moto power in revision) wrote a confidential D.O. to Collectors of Customs atBombay, Calcutta, Madras and Cochin to report import of coconut oil both edible and non-edible with full details before theclearance. He also informed them that import of coconut oil bothedible and non-edible was canalised through S.T.C. The confidential D.O. was written on 4-9-1982. After the petitioners goods arrived in Kandla Port the Collector sent a telegram on5-10-1982 to the Chief Controller of Imports and Exports. NewDelhi, informing that the petitioners' consignment had arrived.On 11-10-1982, a letter was sent by Deputy Chief Controllerof Import and Export for CCI&E, to Collector for Kandla.""You are also requested to intimate the details of import made by M/s. Jain Exports, to us, so that we can show to the senior officers. It is also requested thatthe clearance of the goods should not be allowed,without getting prior clearance from this office".The Deputy Chief Controller also sent a copy of the letterof Shri Takhat Ram, Joint Chief Controller of Imports and Exports addressed to Collectors of Customs. Bombay, Calcutta,Madras and Cochin. On 12-10-1982, the Collector of Customs.Ahmedabad wrote a letter to the Director of Customs. New Delhi requesting for final instructions in the matter. The letter referred to the fact that the photostat copies of the documents submitted by the importer (petitioners) were already sent to the Director on 8-10-1982. The Collector, however, pointed out that neither his office nor Kandla office had received the copy of the D.O. letter of Shri Takhat Ram, Joint Chief Controllerof Imports and Exports dated 4-9-1982. The Collector, therefore, requested the Director of Customs to take up the question of ''obtaining prior concurrence" from the Chief Controllerof Imports and Exports direct. On this letter, the Director ofCustoms on 25-10-1982 wrote to Shri Takhat Ram, Joint Chief Controller of Imports and Exports, New Delhi. He referred tothe confidential D.O. letter dated 4-9-1982 issued by the said Joint Chief Controller of Imports and Exports. In the said letter he further wrote, "it is, therefore, not clear whether said import (of M/s. J. Exports (P) Ltd., New Delhi) would be covered by Shri re-validated additional licenses produced by theimporter who has contended that the import policy of 1980-81,against which these licenses were issued would apply to theseimports. A copy of the letter submitted by the importer explaining their view points is also enclosed. It is also not clear whether in revalidating the licenses the fact that some of the items like coconut oil, etc. had since been canalised, have been taken into account. As the issue is not free from doubt and as your office has already advised the Customs Houses to furnish details of such import before Chief Controller of Imports and Exports for such action as considered necessary at their end and also for issue of appropriate advice to the Collector of Customs and Central Excise, Ahemdabad, as to the course of action regarding eligibility of the said import. Reference has also been made in the Chief Controller of Imports and Exports letterdated 4-9-1982 to certain reports that huge quantity of coconutoil are necessary underway from Singapore and Philippines. Theimporter in this case, however, has claimed the goods to be of Shri Lanka origin and has thereby claimed clearance at concessional rate of duty under notification No. 431-013. dt. 1-11-1976.The Collector has been asked to fully satisfy himself asto the origin of goods having regard to the requirements of theBangkok. Agreement on the basis of such other enquiries as considered necessary, before permitting clearance. Since the goods have already arrived at Kandla Port and are awaiting clearance,the matter may be treated as "Most Urgent". After this letter of25-10-1982, the Collector of Customs and Central Excise,Ahmedabad, issued a show cause notice to the petitioners on25-11-1982. The petitioners replied to this notice on 30-11-1982. On 17120-12-1982 the impugned order was passed by theCollector after personal hearing to the petitioners.The impugned order of Collector of Customs, Ahmedabad :
(81) In his order, the Collector has noted that the Government Chemical Analyser at Kandla had certified that the oil in question did not conform to the requirement of "edibleoil". He noted the order of the Board in appeal dt 23-1-1981 .but did not note or deal with the order of the CentralGovernment in revision dated 31-3-1981, a copy of which wa.sannexed by the petitioners to his reply to the show causenotice. The Collector also completely ignored the decision of special Bench of the Central Board dated 28-5-1982 in which the Bench had held that Appendix 9 covers only edible oil andthat the consistent policy of the Government of India was to regulate import of edible oil only. The Collector noted the tact.that from the same port at Kandla similar consignment of the petitioners was cleared in July, 1981 but did not deal with this aspect at all. The Collector held that according to para 202 ofthe import policy A.M. 1980-81 and para 211 of the ImportPolicy A.M. 1981-82 it is the Chief Controller of Imports andExports who is the proper authority to interpret import policy and the opinion of any other authority was not binding on him or in law. He held that the provisions of the said two paras of the said Import Policy was a statutory provision. The letterof the S.T.C. "was not sustainable in the light of the law relating to the interpretation of statute cited above". The Collector then relied upon the Indian Standard Specification for coconutoil. 11th revision, I.S. 454-1968 and re-affirmed in 1976. The others Collector further went on to say, that I.S. Specification was laid down by the Oil & Oil Seeds Sessional Committee comprised of eminent persons and therefore deserved acceptance. Here lied upon . The Collector then held :"In view of the above, I am of the firm opinion thatthe word "coconut oil" as it appeared in AM1980-81 import policy Appendix 9 para 51 would cover refined industrial coconut oil whether it isedible or not." The Collector then stated that theimport policy Am 1981-82 wherein edible and non-edible varieties were specifically canalised goes to prove that non-edible variety was canalised during 1980-81 as Am 1981-82. "This amplification was brought to make it abundantly clear and to remove doubts, if any, that oil whether edibleor not can be imported only by canalised agencies. To interpret, that this clarification or amplification automatically imply, a contrary interpretation is uncalled for, and not sustainable in the light of the law of the interpretation of statute."He thereafter examined different licenses. The first license was dated 4-11-1980 revalidated on 28-6-1982 for a further period of six months. The Collector held that according to the conditions for revalidation, import policy for 1982-83, inwhich non-edible oil was covered by Appendix 9 and was alsocanalised, was applicable. As regards the additional license dated 23-1-1981 revalidation on 23-1-19P2 for a period of six months till 23-7-1982, the Collector held that the shipment was subject to the condition in para 222(1), (2) and (4) ofImports Policy 1981-82. He also held that the restriction contained in para 185(3) of Import Policy 1981-82 shallapply. 2 The Collector also held that the public noticeNo. ll/ITC(PL)/82 dated 25-2-1982 was a clarificatory notice to the effect that the conditions of import of the subsequent import policy were applicable to all imports of O.G.L. Items by Export Houses. He further held that the said public notice hada retrospective effect from 3-4-1981 when import policy for AM 1981-82 was announced. He equated the public notice with the statutory provisions and on the basis of the rulings of the Supreme Court applicable to the
statutory powers, further held that the retrospective application of the public notice was valid. Similar reasoning was employed by the Collector in regard to other six licenses. He heldthat the importation of oil on all the licenses was beyond the permissible time limit and were not covered by the import licenses. He then held that importation was in violation of section 30 of the Imports and Exports (Control) Order, 1947 as amended and read with Section 11 of the Customs Act, 1962.The Collector did not consider whether on the facts and circumstances of the case the goods should be confiscated or not but straight away passed the order of confiscation of the goods.He imposed a fine of Rs. 2 crores and 3 crores respectively holding that the provisions of law were "deliberately flouted" bythe petitioner. He, however, did not impost any personal fine.The Collector further held that if the importer exercised his option to redeem the goods on payment of fine imposed they could clear the goods on payment of duty at preferential rate applicable to goods of Sri Lanka origin. The Collector sent the copy of the order to Shri Takhat Ram, Joint Chief Controller of Imports and Exports, New Delhi.
(82) To complete the naration, the petitioner paid the redemption fine and got the goods released. This he did during the pendency of the writ petition in this Court, as the stay was refused by this Court. The admitting Bench on 1 8/01/1983 directed that the writ petition should be listed on 21/02/1983 as No. 1 subject to part-heard. It is.pointed out by the petitioner that on 12/01/1983 i.e.after the import policy of 1982-83 was already annonunced, theCollector of Customs at Calcutta, allowed M/s. Jayant Oil Mills Pvt. Ltd., Bombay and Metro Exporters, Bombay to clear industrial coconut oil of 5000 MT. each without any show cause notice or any punitive or penal action. This fact was not denied by the counsel for the respondents during the hearing.
(83) -SCOPE of enquiry by this Court.Before going to the various grounds of challenge raised bythe petitioner, the scope of our enquiry must be clearly delineated. The order of the Controller in question must be treated absolutely in the sense that it must stand or fall on its own.In early fifties the Supreme Court laid-down in Commissioner of Police Bombay v. Gordhandas Bhanji that :"Public
orders publicly made. in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in hismind. or what he intended to do. Public orders made by public authorities are meant to. have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself."
(84) The same principle was followed by the Supreme Courtin Mohinder Singh Gill's case . Validity of public order has to be judged on the basis of the reasons given by the authority concerned and not by an external aid.
(85) Further, we are not sitting as a Court of Appeal over the order of the Collector of Customs. We cannot by external aid or reasoning or otherwise make up the deficiencies and infirmities. Certiorari writ limits our powers to quash the order if it cannot be sustained on the basis of the evidence and reasoning of the Tribunal and to pass consequential directions. If engineers certify that a house is so dilapidated as to be unlit for human habitation, we cannot by judicial reasoning say thatit is not so or construct a new house in its place.
(86) III-PRELIMINARY objections :The respondents have raised two preliminary objections.It is submitted that the petitioner has an elective alternative remedy under the Customs Act, particularly with regard to thefact that the Act has now established that is called Customs Excise & Gold Control Tribunal. It is claimed that by resorting to the writ petition, the petitioner is depriving the respondent the statutory right of justifying the order on other ground.It is then submitted that this Court has no territorial jurisdiction as the importation of oil was at Kandla (Gujarat). I agree with Sachar, J. & Khanna J. that these preliminary objections should be over-ruled. I have of course, my additional reasons for doing so. I will deal with the at a later stage.
(87) IV-MERITS:ON merits several contentions were raised by the petitioner and by the respondents. I will first deal with those contentions of the petitioner, factual position of which was not contested or even demurred by the counsel for the respondents. Mr.Rana, counsel for the petitioner has submitted that the Collector has committed a grave error of law in completely ignoring the order of the Central Government in revision passed on 31stof March, 1981 and also the order of the Social Bench of theCentral Board of Excise dated 28/05/1983. The error,according to the petitioner, is an eror of law, apparent onthe face of the record and going to the root of the jurisdiction of the Collector to decide the matter. Before going into this submission we must examine the nature and the importof the said two orders. The order of the Central Government was passed under the old Section 131(3) of the CustomsAct. This is a revisional power. The Central Government had a final power under the Act to examine legality, propriety and compliance of policy by all the customs authorities subordinate to it under the Act. The Act gives finality to the decision of the Central Government. Since the Central Government itself lays down the policy and regulates import and export of the cojntry, it must be presumed that the Central Government's decision correctly reflects the policy and national considerations involved in the implementation of export and importpolicy. All import and export policy statements published inthe form of public notice every year expressly state that the trade and business interest and consulted and taken into consideration while framing the policy. It is, therefore, to be presumed that the decision of the Central Government in revision chose the trade practices and understanding. The Customs Act provides Central Government as a quasi Judicial apex Tribunal.The intention of the Legislature in this regard is quite clear.The Central Government in its executive function is free to lay down any policy as regards imports and exports. Central Government can also make policy changes even during the particular import export year. But once a dispute regarding thepolicy or its implementation is raised, finality dues not rest with Central Government acting in its executive capacity but Central Government in its quasi-judicial capacity. So long as the decision is not set aside by High Court or by SupremeCourt, all subordinate Tribunals in the hierarchy are bound to follow it. In this case the Central Government did. not feel it necessary to get it judicially tested before the Supreme Court.It is a disobedience of the statute to completely ignore the decision of the Central Government in revision. The powers ofthe Collector and the duty to act judicially are creatures of thestatute. Would the Collector be able to ignore the direction of the Central Government acting in his executive capacity ?Does the Act of Parliament, while recognising the necessity of resolving disputes under the Act by a judicial method and also creating hierarchy of the quasi-judicial Tribunals intend that the Tribunals at the lower ladder should ignore the decision of theTribunal at the apex ? The frontiers of public law are now so extended as to create a legal duty for the administration to act fairly. Here is a quasi-judicial Tribunal throwing all cannone of statutory, administrative and Judicial discipline towinds.
(88) There is another interesting angle to this question. The Joint Chief Controller, Export and Imports, Shri Takhat Ram,who was not satisfied with the decision of the Board (holding that industrial coconut oil was not covered by Appendix-9 ofthe Customs Act) took up the matter with the Central Government. The Central Government in revision has noted all the contentions and objections of the Joint Controller of Imports and Experts. They were expressly over-ruled by the CentralGovernment. Can it not be said that after such a full hearing and debate, of the point of view of Central Government onpolicy, law and national interest in export and import, all doubts were set at rest. Strangely enough the Collector obediently followed the subsequent administrative instructions issued bythe Joint Controller and passed an order contrary to superior Judicial Tribunals. What is true about the order of the CentralGovernment is equally true about the order of the Special Bench of the Board. Why was the Special Board constituted ?Because, there was a conflict of decisions amongst three different Collectors. The Special Bench clarified the law and thepolicy. Constituting a larger Bench and a Special Bench is a well-known judicial method to create constancy and discipline in interpretation of law and administration of justice. Will it be possible to say that after the Special Bench had clarified both the policy and the law. any Collector of Customs could take a decision in conflict with the policy and the law so decided. the order of the Central Government in revision and the SpecialBench of the Board are orders/judgments in rem. They are the order laying down law and policy for all for future cases.
(89) The counsel for the respondents submitted that the principles of estoppel and aes judicata are not applicable. He has relied upon Abdul Gafoor's case (1961 A.C. 584) in support of his submission. He has also submitted that a Collector ofCustoms is not bound to follow a decision of the Central Government in revision or of the Special Bench of the Board. The counsel for the petitioner has, however, submitted that his objection was not properly answered by the respondents. According to him, there will be chaos and disaster in the administration, (and particularly the administration of justice through quasiJudicial Tribunals) if the subordinate Tribunals are left free to disregard the judgments and orders of superior Tribunal. Thecounsel then submitted that the orders of the Tribunals particularly the apex Tribunals are pronounced' and published forthe benefit of the citizens engaged in trade and business also.The traders and the businessmen shape and adjust their trading activities legitimately believing that the apex authorities alone lay down the policy and law and the lower authorities implementthem.
(90) To my mind the principles of estoppel and res judicature not directly involved in the present case. But apart from this I do not agree that the nature of subject matters in taxation matters and customs matters are alike. The non-application of doctrine of estoppel and res judicata in tax matters is based on another principle of public law. Assessment for each year is distinct and separate for the reason that the Finance Act which alone supports the assessment, is sanctioned only for a particular year by the Legislature. There can be no taxation without an authority of law. That, the assessment in tax matters are different in different years, is an incidence of the Finance Act passed each year. It is thus a requirement of the Statute and not any principle of equity. So also the principle of estoppel does notoperate against the statute and hence has no application in taxation cases. In the other hand, within the broad framework ofthe Customs Act and the statutory control orders, Government is free to lay down the export and import policy and benefits or burdens can be carried forward to subsequent years unless thereis a legal bar. Import policy statements, published every year in the form of public notice, are non-statutory in character and are nothing more than administrative instructions.CASE Law On Estoppel & Res JUDICATA
(91) Even in tax matters principles of equity akin to estoppel and res judicata, are made applicable on the ground of naturaljustice, finality of decision, avoidable inconvenience and harassment to an assessed. In Sankaralinga Nader v. Commissioner of Income Tax (2nd 53Madras 420(44), the Full Bench of the Madras High Courtobserved :"If fresh facts come to light which on an investigation would entitle the Income-tax Officer to come to adifferent conclusion from that of his predecessor, we think he is entitled to reopen the question. But if there are no fresh facts it is difficult to see how he can arbitrarily go behind the facts of finding of hispredecessor. The same principles of natural justice or judicial dealing, which Courts impose upon Income-tax Officers, would prevent them capriciously setting aside the orders of their predecessors based onenquiry.
(92) Chagla, C. J. writing an opinion for the Division Benchof the Bombay High Court in N.A. Shah and Co. v. Commissioner or Income-tax (1956-30 Itr 618x45) posed the question "Can it be said that in the subsequent year when that very question arises it is open to the Income-tax Authorities at their sweet will to come to a conclusion which is contrary to the one arrived at in the earlier assessment"? The learned Judge then observed :"Even though the principle of res judicata may not apply,even though there may be no estoppel by record,it is very desirable that there should be finality and certainty in all litigations including litigations arising out of Income-tax Act. It is not a very satisfactory thing that an assessed should feel a grievance that one Tribunal came to one conclusion and another Tribunal came to a different conclusion and thatthe two conclusions are entirety inconsistent with one another. Therefore the second Tribunal must be satisfied that the circumstances are such asto justify it in departing from the ordinary principles which apply to all Tribunals to try and give as faras possible a finality and a conclusiveness to thedecision arrived at. We should also like to lay down a further limitation upon the power of the Tribunalto revise the decision given earlier by that veryTribunal. The effect of revising this decision should not lead to injustice and the court must always be anxious to avoid in justice being done to theassessed".
(93) These dicta are subsequently followed in number of decisions of the superior courts. The Supreme Court has also hold that finding of fact in one year would be "good and cogent evidence of the nature of the transaction" in subsequent years(Dalhousie Investment Trust Co. v. Commissioner of Income Tax . (1968-68 Itr 487(46),(SC). In Investment Ltd. v. Commissioner of Income Tax . (1970- 77 Itr 533 SC(47).The respondent has, however, relied upon Abdul Gafoor's case(1961 Appeal Cases 584) (48). In J. K. Synthetics Ltd. and another v. Union of India and others (1981 Elt 328 Del) (49).Rangnathan, J. (with Prakash Narain, CJ.) has reviewed AbdulGafoor' case and the other English decisions. He has also considered the Supreme Court decisions mentioned above. He has then adverted to the High Court decisions. After reviewing all the decisions, he has come to a conclusion thar there is a distinct line of authority in India enunciating this limitation on departmental action in tax matters. J.K. Synthetics' case concerned with payment of Excise Duty Ranghanathan, J. has further held:"The matter is looked at from this larger perspective,we think it will be clear that there can be only one answer to this question viz. that the department should not be permitted to take different stands unless there is any good or cogent reason for the change in view. For example, if the facts are different or if further and fresh facts are brought on record or if the process of manufacture has changed or if the relevant entries in the tariff have undergone a modification or if, subsequent to the earlier decision there has been the pronouncement of a HighCourt or the Supreme Court which necessitates reconsideration of the issue, it can hardly be doubted that the department; can take a different view and have the matter agitated right up to the SupremeCour, if necessary. But when there is no change atall and when the position is exactly the same, legally and factually, as it was on the earlier occasion then we think that the department should be restrained from capriciously changing its stand and inflicting unnecessary proceedings and hardship upon assesseds "The learned Judge further observed :Thus, where the original decision is taken by an assessing authority, it is open to the higher authorities,who may consider it a wrong decision, to exercise their powers of revision or review under the Act andto set out the correct position. But if this has not been done or. if in a revisional proceeding for an earlier year, the ultimate revisional authority has taken a view in favor of the assesseds, fresh proceedings cannot be launched against the assessed merely because the department later thinks that the previous view is untenable or that the matter shouldbe agitated and a fresh decision obtained"."If eventually the High Court or Supreme Court approves its views, that would enable the department to apply these views even in cases where a different view was taken earlier by it. The rule will thus not really prejudice the interests of the department in any way. It is indeed a harmonious reconciliation between two well-established positions : on the onehand. that the matter of levy of tax in respect of each occasion is a separate and independent subject matterand that. generally speaking, there can be no reason why the authorities as well as the. assessed couldnot approach the matter from different stand points on different occasions and the practical necessity,on the other, that there should be a finality to all litigation even in tax matters and that it should notbe open to the department to change the pattern of assessments at its whim and an assessec to avoidable inconvenience and harassment".Following J. K. Synthetics, the new Appellate Tribunal underthe Act has quashed the order of the Collector for ignoring the orders of Central Government in revision-Sec Mukand Engg Works vs. Collector of Central Excise (1983 EI.T 816x50). With respect I agree that this is the correct enunciation of law on this question.
(94) But even the authorities cited by the respondents do not subscribe to a proposition that the Collector can completely ignore the orders of the apex Tribunals where their orders have become final. The Collector has simply refused to look at them.He has not even attempted to distinguish them, (Assuming thatthe Collector could do so). Even after accepting the order of theCentral Government he was still free-to examine the question,of fact, after taking appropriate evidence as to whether the imported oil was, as a matter of fact an "edible oil". But he did not follow this course. The Collector has distinguished thedecision of the Board dated 23/01/1981 (which was confirmed by the Central Government in revision). The Collectorhas refused to follow it on the untenable ground that the Board has not noticed some of the decisions of higher courts. It is an elementary judicial norm, not to ignore the decisions of the superior authorities on this ground. If there are errors of law and the decisions of the superior courts are not considerably an intermediate superior authority, the Statute provides for the rectification of mistakes by the apex Tribunal. This principle of judicial administration is recognised by the Act since it has created hierarchy of Tribunals under the Customs Act
(95) But principle of estoppel, res judicata or stare decisions are old and traditional methods of ensuring justice and fair play in their application to administrative law. The higher judiciary inthe democratic countries, where rule of law prevails, have now invented more direct and officious methods of securing fair playin the administration. Extension of the principle of promissory estoppel in public law. the new contents put in the doctrine of locus standi; the extended frontiers of natural justice principle and the public interest litigation are efforts in this direction.This is the recent achievement of the Supreme Court through several land mark decisions. Res judicata and estoppel arelike traditional and long winding routes to Mount Everest. The new developments provide more direct and ensile accessableroutes. Testing in the light of these new illuminating principles of public law. it must be held that the action of the Collector ignoring the decisions of the Central Government and the SpecialBench of the Board affect the very roots of his jurisdiction andis patently arbitrary.
(96) Counsel for the respondent has relied on the decision or.Supreme Court- liberty Oil Mills and others v. Union of India &others . In support of his submission thatthe Collector is
not bound to follow the decision of the CentralGovernment in revision. The. decision concerns only with interim orders under clause 8A & 88 (advance orders). Arvind Exports & Jayanti Mills had succeeded in appeal and review before tribunals under the Customs Act. Argument of theCentral Government was that those decisions were not binding on the authorities functioning under the Imports (Control)Order. The Supreme Court held, "We consider that this is nota. matter for the Court to decide at this stage in a petition under Article 226 of the Constitution or under Article 32 of the Constitution questioning an ad interim order under clause 88.:(cmphasis supplied)." But even on facts the position in thetwo cases is different. In Liberty case the Central Government was distinguishing the decisions of subordinate tribunals on question of law. In our case, the lowest of the quasi-judicial tribunal a Collector-completely ignored the decision of the Apex Tribunal-Central Government in revision. The decision does not support the respondent.
(97) We have seen that on no judicial
(98) Brother Sachar has observed that the Central Government in revision has misdirected itself because it did not correctly, appreciate as to why words "all type" were subsequently added to the original entry "Palm Oil". Brother Khanna has held that Shri Abrol, Additional Secretary, who passed the order for theCentral Government, was "over zealous" to hold in favor ofthe petitioner by providing ostensible legal competence to CentralGovernment's order in revision. According to the learned Judge.the revisional power under section 131(3) can be used only to "annual" or "modify" the order of the Board but not to uphold or affirm it. The learned Judge has also referred to the fact that Shri Abrol, Additional Secretray, passed the said order, on the last day of his retirement. It is difficult for me to agree with either of my brethren.
(99) In Bhopal Sugar Industries v. Income Tax Officer, the Supreme Court has ruled on the competence of the High Court in a similar situation. Judicial Commissioner of Bhopal, in that case,had upheld the order ofthe Income Tax Officer on the ground that the order of the Appellate Tribunal (which the officer had refused to follow) was illegal. The Supreme Court found that the order of the Tribunal had become final. The Court then held :"The Judicial Commissioner was not sitting in appeal over the Tribunal and we do not think, in the circumstances of the case, it is open to him to say that the order of the Tribunal was wrong and, therefore, therewas no injustice in disregarding that order."The Court further held :"Such refusal (by the Officer) is in effect a denial of justice and is further more destructive of one of the basic principles in administration of justice based as it isin this country on hierarchy of courts . . . . . the result would be chaos in the administration of justice."
(100) Further, Section 131(3) is a general revisional power except that the exercise is suo moto. It is a judicial power.Asine qua non of judicial determination is, it is neutral about the result. To restrict the power to "annul" or "modify" to take away the essence of a judicial power. There is nothing odd in passing an order on the last day. Shri Sen, the learned Counsel for the petitioner has pointed out that number of judgments are delivered in the Supreme Court on the last day of the retirement of a Judge.
(101) Natural justice:The second submission of the petitioner is that the Collector's order is in breach of the principle of natural justice and,therefore, a nullity. The submission is based on two facts. TheCollector has relied upon the Isi specifications without disclosing them either in the show cause notice or at the personal hearing. Thus the petitioner was denied an opportunity to show thatno reliance could be placed on Isi specifications. The fact that ISI specifications were not disclosed to the petitioner was notdenied by the counsel for the respondent. In fact, this ground of the challenge was not even argued by the counsel for therespondent. The submission of the petitioner has, therefore, tobe accepted. It was not the requirement of the statutory orderor the Import Policy that imported oil must comply with thespecifications of the ISI. But the Collector holds that the specifications are laid down by eminent experts and, therefore, they should be accepted. In a similar situation Industrial Injuries Commissioner considered the report of the Medical Expert without notifying the same to the parties. It was held that fair opportunity to defend was denied to the party as he was unableto comment on the report. (R. V. City of West minister Assessment Committee, 1941, 1. K. B. 53 & R. V. Deputy Industrial Industries Commissioner ex p. Jones (1962) 2 Q. B. 677x51).But a direct authority, where order was quashed for non-disclosure of I.S.I, specifications is the order of the new AppellateTribunal under the Act-in Mukund Engineering Works v.Collector of Central Excise (1983 EL.T. 816). The respondent has replied upon, Union of India v. Delhi Cloth and General Mill
wherein an excise matter the I.S.I.specifications were relied upon. In that case Respondent's expert had filed an affidavit that .manufacturers and traders call edibleoil as 'refined oil only after deodorisation. He had filed 18affidavits of concerns marketing refined, oil in his support. I.S.I.specificationtions were attached, which supported trade practice.No evidence was produced by Appellant. They only relied on scientific books. The Isi specifications Were disclosed in theaffidavit. The petitioners were not taken by surprise. It must be noted that the burden,of proving that the requirements ofnatural justice, are followed, is the Government. The Board ofHigh School V. K.Chittra Srivastava . It may be further noted that
the Collector had not collected any independent evidence of trade practice or otherwise but had merely relied upon the Isi specifications in coming to the conclusion that industrial oil was covered by Appendix Ix, I, therefore, hold that the impugned order of the Collector is a nullity and non-est for violation of principles of naturaljustice
(102) The second limb of the argument is that the impugned decision of the Collector is not his own but is taken at the dictate and behest of the Joint Controller and his office. The submission is that a decision of a quasi-judicial tribunal is bad in law when he surrenders his judicial power in favor of the external executive agencies. In administrative law this amounts to violation of principle of natural justice. This submission ofthe petitioner was also not reversed by the respondents. No attempt was made to deny the factual positions or the legal interferences flowing from them. Confidential instructions were issued by Joint Chief Controller of Imports and Exports (Shri Takhat Ram) on 4-9-1982 to various Collectors of Customs directing them that before the clearance of the imported oil report should be made to him. After the goods were imported at Kandla port a telegram was sent on 5-10-192S bythe Collector according to the said secret D.O. The Deputy Chief Controller, on the instructions of the Joint Chief Controller asked for details of the import made by the petitioner and also directed that the clearance of the goods should not be allowed,without getting prior clearance "from this office". The. Collector sent all photo-stat copies of all the documents of the petitionerto the Joint Controller and withheld clearance of the goods. TheCollector wrote to Director of Customs on 25-10-1982 to fake up the matter with Shri Takhat Ram, Joint Controller. TheDirector of Customs accordingly took up the matter with ShriTakhat Ram expressing some of his doubts. He sought early instructions to the Collector direct "since the goods have already arrived at Kandla port and are awaiting clearance". He requested that "the matter may be treated as must urgent". Thereafter, the show cause notice was issued by the Collector on 25-11-1982.None of these facts are denied by the respondent. Seeing these facts and dates, in their junta position, it is elementary logic that the Collector has mechanically followed the directions of his administrative superiors and nut exercised his independent judicial mind to ome to a judicial finding. The Director of Customs has specifically referred to "Confidential D.O.letter dated 4-9-1982". It is total surrender of the judicial functions and duty by the Collector to act according to these directions. If any authority is necessary to hold that the order of theCollector is totally invalid and non-est as it is not his order,one can refer to Puntaspur co. v. Cane Commissioner . Some other aspects of the matter are alsonoteworthy. The confidential instructions, rot to clear the goods, were issued by Shri Takhat Ram, Joint Controller after he failed to pursuade the Central Government, while deciding the revision proceeding under section 131. The said confidential D.O.issued on 4-9-1982 was issued after the Am 81-82 and AM82-83 Import Policy public notices were issued. By the date thesaid confidential d.o. was issued, industrial oil was already made a canalised item. Therefore, there was no occasion to issue such instructions. Further, the purported basis of his confidentiald.o. was the large scale imports from Singapore and Phillipines.Admittedly, in the present case, the import was from Sri Lanka and not from Singapore or Phillipines. IV. was the duty of theCollector of Customs, to address himself to these aspects of the administrative instructions. If he had discharged his judicial duty judiciously he would have discovered that the said administrative instructions were not applicable and were irrelevant, apart from the fact that they were legally impermissible. I have, therefore,no hesitation in declaring the Impugned Order bad in law andnon-est. The Collector in his affidavit has stated that he hastaken independent decision. On the admitted facts stated above,it can only be said that the affidavit is bold but not truthful.
(103) Preverse Order '.Let us probe this matter further. Has the Collector taken independent decision on the evidence before him ? The submission of the petitioner is that the Collector's decision is perverse because it is not based on any evidence. Now, it is an admitted position that the department had neither collected any independent evidence nor produced any before the Collector. The evidence as produced by the petitioner was as follows;
(104) As traders the petitioner and their sister concern had understood that industrial coconut oil was not a canalised item.The Collector of Customs at Bombay and Kandla understoodthe, policy in the same way and cleared the imports in May, 1981,and July, 1981 respectively. When the Bombay Collector, earlier,did not clear the goods the Central Government in revision cleared them and set aside confiscation and redemption fine. In similar circumstances, where there was a conflict of decisions ofthe Collector of Madras, Cochin and Bombay the conflict was resolved by the special bench of the board and industrial oil was cleared as a raw material falling under Appendix X. The State Trading Corporation gave a certificate that it was importing onlyedible oil and, therefore, industrial oil could not be imported through them. This was strong evidence of not only the trade practices and understanding of the relevant import policy but of admission on behalf of the various agencies of the Government of the claim of the petitioner. It may be noted that the Central Government is itself the biggest trader. It trades through its departments, statutory corporations and Government companies. It has a power to do so under Article 298 of the Constitution. It has an unchallengeable power to establish monopoly of trade under Article 19(6) of the Constitution. But it is not only a trader. It lays down import and export policy Before thepolicy is framed it consults the trade representatives. In every Import and Export Policy the Government asserts, (in the preface to the publications) that trade and business representatives are consulted. S.T.C. i.e. State Trading Corporation, is a Trading Corporation set up by the Central Government. It is not merelya canalising agency but it also looks after the distribution and pricing of imported goods. The Collector as staled earlier has completely ignored the Central Government and the Board. He turned a deaf ear to import of industrial oil cleared by the Collector of Customs, Bombay in May, 1981. The Kandla port had itself cleared industrial oil imported by the present petitioner himself in July, 1981. The Collector has not shown even the minimum Judicial discipline to distinguish between the July, 1981import of the petitioner and the present import. He simply didnot deal with it although the fact was brought to his notice. Hehas. also not referred to any decision of any Collector of Customs which had penalised the import of industrial oil, after the decision of the Central Government in revision. Thus the relevant evidence on the record produced by the petitioner was not considered in arriving at the principal finding of fact. The evidence of the S.T.C. is thrown overboard by The Collector of Customs on certain (unreasonable) grounds which no judicial officer will do. He has misunderstood the submission of the petitioner in this regard. The letter of the S.T.C. was not produced as correct interpratation of the relevant entry in the policy. It was only produced to establish a fact. S.T.C., as a trader and as the only canalising authority, was not importing industrial oil as a canalised item. Its understanding on this matter was a questionof fact. The Collector has referred to para 202 of the ImportPolicy A.M. 1980-81 and para 211 of the Import Policy A.M.1981-82 and has held that the proper authority to interpret thepolicy was the Chief Controller of Imports and Exports and opinion of the S.T.C. was not binding. Even on this question theCollector ignored the fact that the said paras of the ImportPolicy are in the nature of administrative directions. But under section 131 of the Customs Act it is the Central Government in Revision, which has the final authority to interpret theImport Policy and law. In the present case there was such adecision, and the same was by passed by the Collector. TheCollector has not found that the statement of the S.T.C. that they were not importing industrial oil as a canalised item, wasuntrue. He could have directed the Department to produce factual evidence from the S.T.C. that it was actually importing industrial oil. Such evidence would have been a complete answer to the claim of the petitioner. Similar question arose before theCentral Government while deciding the revision. Its order expressly states that no evidence of importation of industrial oil,in regard to impart policy A.M. 1980-81 was produced beforeit. Also, before the Special Bench of the Board, no notification or factual evidence was produced to show that the policy wasnot restricted to canalise importation of edible oil, only (as is laid by the Board).
(105) The absence of factual evidence, has been tried tobe made good by the Collector, by relying upon Isi specifications.These are various specifications of different types of coconut oil.The Collector relied upon it because the specifications are laid down by eminent persons and experts. But the general specifications, without actually testing the oil in question is no evidence as to which specification the oil in question belonged to. Therewas no such separate test in terms of the Isi specifications. IT is an admitted fact that the oil in question was examined by the Chemical Analyser of the Government, at Kandla. The Chemical Examiner certified that the oil was non-edible oil. TheCollector has not discussed the evidence of the Chemical Analyser. He has not stated why proper (literal) specifications ofI.S.I, was a better evidence than the actual Chemical examination done by Government Analyst'. The whole discussion of the Collector in this regard is utterly vague and confusing. He only looked to the word "refined" but overlooked the word "industrial". As stated earlier neither fhe statutory order nor the Import Policy notices require that the imported oil must answer anI.S.I. specification. Furthe,, the said publication of the ISI itself makes it clear that their object is to provide specifications for marketing and food adulteration purposes. Reference to1ST specification, by no stretch of imagination can be called anevidence. In any case. it was totally irrelevant for the enquiry before the Collector.
(106) To sum up the Collector has not considered the petitioner's evidence on record and the department did not produce any independent evidence to counter the petitioner's claim. The conclusions are such as no reasonable man would draw. The findings of fact and the Order of the Collector are preverse.They are, therefore, illegal and are set aside.Imposition of restrictions laid down by subsequent Policies Arbitrary
(107) But the respondent argued that the actual importation took place in September, 1982. By virtue of the endorsements on the licenses at the time of their revalidation and by virtue of the public notice dated 28-2-1982, petitioner's import wasillegal. In A.M. 1981-82 industrial coconut oil was also included in the canalised items, and the Collector held thatthe said public notice has a retrospective operation w.e.f.3-4-1981. Now, it is an admitted fact that the Collector of Bombay had in May, 1981 allowed import of industrial oildirect. Actual import took place after the policy of 1981-82came into operation, although the licenses were for the year1979-80. Petitioners own consignment was cleared at Kandla Port in July, 1981 i.e. after the 1981-82 policy came invogue. Here the licenses were of the year 1980-81. It is also an admitted fact that Collector of Customs, Calcutta, allowed importation of large quantity of 10,000 mt. tonnes of industrialcoconut oil in favor of M/s. Jain Oil Mills Pvt. Ltd., Bombay and Metro Exporters, Bombay on 12-1-1983. This importation was after the import policy of 1982-83 was brought in force. It may be further noted that in none of the three cases stated above the Department preferred any appeal. This can lead to two inferences. The Govt. did not have any policy to impose canalising on importation of industrial oil for thelicenses which were issued prior to A.M. 1981-82. In thealternative, it must be said that the Collector's decision was capricious and vagrant. The same vice of arbitrariness has percolated in the reasoning of the Collector in imposing subsequent policy on the licenses issued prior to the newpolicy. If the intention was to make the new policy applicable, the simple method was to cancel the existing licenses and issue fresh licenses. Another course open to the Govt. was not to revalidate the licenses. On the facts of this case I hold that the Collector was wrong in arbitrarily imposing a policy onthe petitioner and holding that importation by the petitioner was prohibited and culpable. The order of the Collector is also badin law for another reason. He has held that public notice of 28-2-1982 has a retrospective effect from 3-4-1981. It isa patent error of law on its face to equate the public noticewith a statutory provision. Import policy statement for each year and public notices clanlfying' the policy, are in the nature of administrative instructions. They are always prospective inoperation. Collector's reliance or is totally misconceived because the judgment deals
with thestatutory provisions and not with the executive instructions. Itmay be noted that the counsel for the respondent did not reply to the above contentions of the petitioner at the time of thehearing.III. Confiscation and Fine :We have so far seen how the Collector's order is vitiated due to arbitrariness in the implementation of the policy and for other reasons. Let us look at the final operative order now.The Collector has confiscated the goods but released them onfine of Rs. 5 crores. Imposition of confiscation and penalty is a quasi-judicial function. Therefore, the order confiscating thegoods should be a reasoned order. But the impugned order isnot a speaking order. While imposing the fine of Rs. 5 crores the Collector has held that the petitioner had "deliberately flouted" the provisions of law. Neither the law nor the peculiar facts of this case are even attempted to be discussed before taking an extreme step of confiscation and imposition of an excessively heavy penalty. Proviso to Section 125 lays down that the fine in lieu of confiscation shall not exceed the market price of thegoods confiscated, less, in case of the imported goods, the duty chargeable thereon. The Collector did not even investigate what was the market price of the goods imported. This is a clear failure of the statutory duty by the Collector. The Collector also overlooked that the confiscation and penalty are penal provisions of the Statute. Such provisions are to be strictly construed and exercised with judicial discretion. The language ofthe section is "such goods shall be liable to confiscation". THE language is not "such goods shall be confiscated". Two things are indicated by this difference. The first is, that principle of absolute liability is not applicable, in case of liability to confiscation. Secondly, whether the goods should be confiscated or not is a matter of discretion of the Collector. So also what penalty he should impose is also a matter of discretion. The proper legal approach is illustrated by the following cases :In Shah Rikhabdas Bharwanlal Vs. The Collector of Customs : (1961)(n) M.L.J. 443(53), identical facts situation was present. The goods of the appellants were confiscated while some other merchants for the same offences were let off with a warning. Raja Naimar C.J., speaking for the DivisionBench of Madras High Court, held : "It should not be overlooked that here we have the case of deprivation of property because confiscation is just that. It is idle to say it is not,because on payment of a fine which is equal to the value of thegoods, the importer can take delivery of the goods. It only means that the appellants having been deprived of their goods are given an offer to purchase such goods" (page 447). The learned Chief Justice, further observed "the language (of oldSection 167 of the Sea Customs Act does necessarily imply that there is a discretion because the language is not such good shall be confiscated'. On the other hand the language is 'suchgoods shall be liable to be confiscated". The Collector of Customs while enacting under Section 1.67 is obviously acting as a quasi-judicial Tribunal, such discretion must be exercised judicially and not arbitrarily. The Collector must decide in each particular case if there were circumstances which would call forthe drastic publishment of contiscation. If there was a case inwhich discretion should have been exercised in favor of theimporter, this was such a case...... ..... , The. Collector does not appear to have dealt with case as if he was vested with judicial discretion because he has not given any reason wily the drastic publishment of confiscation should have been imposed on the appellants whereas two other similar merchants who had committed the same offence had been let off with awarning. (Page 448). On these findings the High Court setaside the order of confiscation.
(108) M/S. Jagan Nath Aggarwal Vs. Sh. B. N. Dutta & others(C.A. No. 801 of 1964) (54) dated 10/01/1967, on identical facts, has emphasised on the penal aspect of Section 167 ofthe Sea Customs Act. There the question was whether, thelicense on true construction, authorised the import of camphorB.P. According to the Govemment, camphor B.P. was not covered by Sr. No. 109 of Part Iv of the I.T. Schedule but fell within Sr. No. 131 of Part Iv and its import was not permissible under the license. The facts of the case disclosed that other importers were allowed to import camphor B.P. under similarlicenses. The Supreme Court held; "assuming that there is a doubt in the construction of the license the appellant against whom the penal provisions of Section 167(8) of the Sea CustomsAct 1878 are sought to be enforced is entitled to the benefit ofthe doubt, It may be recalled that the Joint Chief Controllerof Imports and! Exports, the appropriate authority, for clarification of the Import Policy unequivocally stated in hisletter dated 5/06/1959 that Camphor B. P. should be imported under the license, and only on 13/07/1959 he cancelled this letter. Moreover, other importers who were allowed to import Camphor B. P. under similar licenses for the importof drugs and medicines. These facts show that even the Government 'authorities were in doubt about the proper import ofthe license" . . ... . The Assistant
Collectoc,of"Customsforappraisement on an erroneous construction of the license heldthat the .import of Camphor B.P; was 'not authorised by it and by such erroneous construction wrongfully assumed jurisdiction to confiscate the goods. The error appears on the face of the record and goes to the root of its jurisdiction". The order ofconfiscation was, therefore, quashed and set aside by the Supreme Court.
(109) On the similar grounds and identical facts, Bombay High Court has quashed confiscation order in Gujarat State Export Corporation Vs. U.O.I. (53) (55). The Court held "the petitioners
relied upon the long standing practice of the Bombay Customs House and effected the import and as the Customs House itself was in doubt asto whether the import was valid or not and was releasing theimport on previous occasions; including the import of identical items of the petitioners, it can not be said that the import was in contravention of the provision of Section 111(d) of theCustoms Act. In Hindustan Steel Ltd. v. State of Orissa, the Supreme Court has held that wherethe branch flows from the bona fide belief that the offender isnot liable to act in the manner prescribed in the statute, no penalty can be imposed, because these are quasi-criminal proceedings and penalty is a matter of discretion. It must be proved by the Department that the party acted in "deliberate defiance of law" or was "guilty of conduct contumacious or dishonest" or it acted "in conscious disregard of its obligation".
(110) Applying the; law laid down in the various decisions, it is clear that the Collector's order of confiscating the goods and imposition of penalty suffered from lack of jurisdiction or inany case failure to exercise jurisdiction judicially. It is a non speaking order and is, therefore, violative of the principles ofnatural justice.
(111) The Joint Controller of Imports and Exports (Shri Tirath Ram) had pleaded to the Central Government, while exercising the revisional power under Section 131 of the Act,that a fine of Rs. 25,00,000 imposed on the sister concern ofthe petitioner, was too nominal and heavy fine should have beenimposed. From the chronology of events and correspondence,I have already held that the Collector's order was not his own but was one passed at the behest of the Joint Controller. It is reasonable to infer that the extreme measure of confiscation and imposing heavy fine of Rs. 5 crores (the petitioner calls it a'savage' fine) was at the dictates of the Joint Controller, as no reasons whatsoever are assigned by the Collector. On this ground also the Collector's order has to be quashed.
(112) I must add that the requirements of law of exercising the discretion judicially, to discuss the evidence and to give a reasoned order, giving benefit of doubt to the importer in matters of confiscation and penalty, are procedural safeguards against an arbitrary order. This means that even if the order of theCollector, can be justified, as a valid order, on merits still the end result would be the invalidity of the order. In other words,once the order fails on the grounds stated above, it is not necessary to examine whether separately and independent of thesaid grounds of invalidity, the order survives. The contention of the petitioner to this effect, is valid and upheld.
(113) I have already noted that the Collector has describedthe action of the petitioners "as deliberate flouting" of the provisions of law, without staling any facts or reasons. Brother Sachar has, however, held that liability to confiscation is absolute liability in law and there is no question of means read involved inthe matter. He has 'also tried to draw a distinction between confiscation under section 111 and personal penalty under Section 112 of this ground. The learned Judge has also cited some decisions stating that the object of the Act is to prevent smuggling and illegal importation. It has also been held that the petitioner should not be allowed to make illegal monetary pains at the cost of national economy. With respect, I beg to differ. Section 111 and 112 fall under the same Chapter, Chapter Xiv, the heading 'confiscation of goods and conveyances andimposition of penalties'. All the provisions of Chapter XIV are penal provisions. The requirements of law for liability under Section 111 and Section 112 are not difierent. Order ofconfiscation under Section 111 is an order in rem. It means that it primarily operates on the goods. An order under Section 112 is an order which operates primarily on a person, and thatis why it is called a personal penalty. But beyond this distinction there is no difference between them. I have already notedthe observation (on section 167, Sea Customs Act) by 1961(II) M.L.J. 443. The words 'shall be liable' show that whetherthe liability arises or not is to be decided by the Court. It is a matter of judicial discretion not a case of absolute liability.The relevant principle of liability is one which is applicable in criminal law. I am also not impressed by generalisation suchas evil of smuggling or loss to national economy etc. In thiscase the Central Government, the Board under the Act, various Collectors of Customs and S.T.C. have taken a view that industrial coconut oil was not a canalised item. Can it be said thatall these agencies of the Government' were oblivious and complacent of smuggling and loss to national economy ? Can it be said that they connived at the illegal gains being made by the petitioner ? I would prefer to go by facts, the peculiar facts ofthis case. I would also like to follow some wellknown principles of judicial decisions. More caution should be exercised where the offence is serious or stakes are heavy. So also, more the publicity to a case greater is a need to have sharp focus onthe actual facts. Another principle of judicial discretion waslaid down by Lord Justice Scrutton in Rex Vs. Home .Secretary(1923). 92 LJ. K.B. 79l (56): "It is.indead, one test of belief in principles if you apply them to cases with which you have no sympathy at all." This principle was cited with approval by Vivin Bose, J. in S. Krishnan Vs. state of Madras . On the facts of this case. and, with these principles in view 1 hold that the Collectors order was bad in lawand should be set aside.
(114) Violation of Fundamental Rights The counsel for the petitioner has then submitted that theCollector's Order violates the fundamental right of the petitioner guaranteed by Article 14 and Article 19(l)(g) of the Constitution. H& has also submitted that the order has resulted into illegal deprivation of property which is violative of Article 300-A of the Constitution. I must note here that the counsel for the respondent did not make any attempt, at the time of The arguments, to meet this challenge. Brother Sachar has heldthat taxing events being different, in different cases of importation, no discrimination can be pleaded. It is now well settledthat violation or otherwise of fundamental rights is not to be decided by a text of an order or the letter of statute. It has tobe judged on the basis of the result and impact, on lawful expectations and existing rights of the citizens. I have already demonstrated how arbitrariness and caprice is writ large on the face of the impugned order. What is arbitrary is per se discriminatory Ramana Dayaram Shetty v. The International Airport Authority of India & Ors. Ajay Hasiaetc. v. Khalid
Mujib & Ors. etc. . TheCustoms Act, the Import and
Export Act and the Import Control Order assume that the benefits and burdens shall be equally and uniformly fastened on all the importers. If a Collector whimsically gives the benefit to some importers or in relation to some consignments only and denies it to others, the actions are both arbitrary and discriminatory. The impact of this whimsicality is that some importers are deprived of their property while the others are not. It has also an effect of permitting right to carry on trade guaranteed by article 19(l)(g) to some traders while it is denied to others. It-must ha noted that quasijudicial function is nothing else but a judicial function performed by an Administrator. Its object is to implement the policy of the state. Some judicial methods of ascertaining the facts and interpretation of law are observed by such a tribunal. Butprimarily, the object is, to translate the policy in action, bach event of importation is, of course, different. But if no attempt is made by the Collector to show how facts in each case are different and why some are entitled to benefit of policy andothers are not, the order of the Collector would be illegal andunconstitutional. The submission of the petitioner is accepted.The impugned order violates Articles 14, 19(l)(g) and Article 300-A of the Constitution.
(115) Interpretation of entry "Coconut Oil" The discussions so far should suffice to set aside the impugned order and the success of the writ petition. But the counselfor the respondent has tried to affirm the .impugned order on other grounds. It is submitted that para 5 of Appendix Ix ofImport Policy A.M. 1980-81 mentions "Coconut oil" (amongst other oils) as a canalised item through Stc It is submitted that the entry "Coconut oil" is not qualified or restricted by anywords. Therefore, the entry covers both edible and industrial verities of coconut oil for the purposes of canalisation. It is also submitted that the trade meaning of Coconut oil is not edible "Coconut oil" because only in small part of India "CoconutOil" is used as an edible oil. It is then submitted that even if two interpretations are permitted, the one accepted by the department should not be rejected by the court, exercising the jurisdiction under article 226 of the Constitution, unless theCourt .holds that the interpretation is so perverse as no reasonable man would , . In the
Counter-affidavit the respondent has pointed out that in the case of Palm oil after breaking up, the refined liquid is called palm oil' while the solid part is called 'PalmStearine. According to the counter affidavit "In such circumstances it must have become necessary to make it clear that'Palm Oil' enumerated at SI. No. 4 in para 5 covers all types including 'Palm Olein". It is submitted that this is not the case with Coconut oil.
(116) This was all that was argued by the counsel for therespondent. Brother Sachar has held that a common man uses coconut oil as Hair-Oil. Only a small minority in India usesCoconut Oil as an edible oil. According to the learned Judge the trade usage is in favor of treating Coconut oil as an Industrial Oil. According to him, the specific entry in the ImportPolicy A.M. 1981-82, covering industrial Coconut oil also wasa 'clarification' of the policy of 1980-81. The learned Judge has then commented that the Central Government while passing an order in contrasting the entry regarding Palm Oil with Coconut oil, and holding that industrial oil was not covered has misdirected itself. The learned Judge has also referred to the break-up of various entries concerning oil in the A.M.1978-79 and has come to a conclusion that Industrial Coconut OK was a canalised item right from 1978-79 and was continuedthereafter.
(117) To my mind this explanation of the impugned order is impermissible. The order of the Collector must stand on its own legs. Neither through the counter-affidavit, nor by arguments can the impugned order be saved or strengthened. We are concerned with the quasi judicial order. Even in case of administrative orders, external aids for supporting them areimpermissible. We have also a limitation of the jurisdiction of certiorari. Only in an appeal it is possible to explore whether the impugned order can be saved on other grounds. Inthis context it must be clearly noted that the Collector has not adverted to the common and trade meaning of "Coconut oil" at all. I find another difficulty also. How to enquire the meaning of the entry, do-hors the special facts of this case ? We arenot exploring a virgin continent. It has already been explored by several Government Agencies. I cannot ignore these milestones and land marks. Frankly, as Judges, we are no experts in the field an compared to these government agencies Liberty Oil Mill's case . I am also unableto held that the Central Government's order under section 131was mis-directed order. That order had become final both under the Act and for the reason that it was not judicially challenged. That order is not an impugned order before us. The reasoning as to why the words 'all types' were subsequently added to the entry 'Palm Oil' is not discussed by the Collectorate at all nor has he refused to follow the order of the CentralGovernment on this ground of alleged mis-direction. It is onlyin the counter-affidavit that a half-hearted explanation has beenjattempted. Half-hearted because, the counter-affidavit states It must have become necessary" not "that it was in fact necessary". But this vague assertion of the counter affidavit is alsonot correct. The special Bench of the Board has held that'Palm Stearine' is an Industrial Oil not covered by Appendix IX.It is not a "Solid" as stated in the counter-affidavit.
(118) NOW. it is a settled law that the such entries in the Tariffs are not to be interpreted on the basis of a scientific meaning or on Chemical formulate. That meaning is to be accepted which is commonly understood.It may be an understanding of a common man on the street insome cases but it is more often the sense or the practice of the traders that is dicisive. In case of violation of Food AdultrationAct, or Sales Tax Act or even an Excise Act, the understandingof the common man on the street may be taken into account.Because, a mis-branded article or goods would directly affect aman on the street. Not so in case of import of poods. Particularly. where the goods are industrial goods, meant as, raw material for producing non-edible goods by another industry.Common man in the North, uses. Coconut oil as a Hair Oil. But not so, in the several Coastal states of India where Coconut isgrown. It is very natural for the" people in these states to we the product which is cheaply and immediately available for using asa cooking medium. But what is more important is the trade usage and practice. Traders, and particularly the wholesalers,aim at an All India market. As compared to the western world,primary use of Oils in India, is edible use. In no part of the country Indian Food is cooked without Oil medium. The shortages and fluctuations In prices has become endemic in the lastdecade. Traders are naturally interested in dealing in any variety of edible oil which at a given time will give them maximum profit. Large scale importation of edible oil in India started from 1977 primarily because shortage of oil seed production and to keep the prices of edible oils within the reasonable limits.Can it be assumed that the Government was more concerned with soap and shampoo than a cooking medium used every day in every Indian Kitchen Therefore, when oil is mentioned simpliciter, it would be understood in common trading parlance as an edible oil and not .as an industrial oil. Indeed, as would be shownlater, this is the only sense, in which the Government has iteslf understood and has laid down the policy accordingly.
(119) Cases On CLASSIFICATION In Ramavatar Budhaiprasad. v. Asstl. Sales Tax Officer the question was whether "betel
leaves" were "vegetables" for the purpose of exemption from salesfax. Items of exemption were specifically enumerated. The rest of the items were liable to sales-tax. Earlier, both the above itemswere enumerated for exemption. But there was an amendment in the Act and words "betel leaves" were deleted. The SupremeCourt held that the legislative intent was not to exempt the betelleaves. The court held that the word "vegetable" must be understood in the popular sense as understood in common language.
(120) Sales Tax Commissioner, Indore v. Jaswant Singh, (A.I.R. 1967, S.C. 1457x61) dealt with the question as to whether coal includes 'charcoal'. The court held that both are used as fuel and the traders and consumers do not make any distinction between them. The court observed:"It is only when the question of the kind or variety of coal would arise that a distinction would be made between coal and charcoal".Black insulating tapes used in electric insulations are not "adhesive tapes" and the import was not banned, was held by the Bombay High Court in H. R. Syiem v. P. S. Lulla (72, BombayL.R. 534). Adhesiveness is only a secondary characteristic ofthe insulating tape. In Dunlop India Ltd. v. Union of India, (AIR 1977 S.C. 597) the Supreme Court held that V. P.Latex, as known to trade and commerce in India and abroad,is raw rubber falling under item 39 I.C.T. and not under residuary entry 82(3) and did not attract higher customs duty under the residuary entry. The court further held that on the evidence before the revisional authority (Central Government)v) reasonable man could have come to a different conclusion.End-use test applied by the revisional authority was found to be irrelevant in the context. Hume Pipes which are generally laid underground and are extremely heavy are not used in private or public lavatories, urinals and bath-rooms, and hence are net sanitary fittings" in the popular sense. There was no evidence that they are used as "sanitary fittings". The Supreme Court held that Hume Pipes were not liable to sales-tax as "sanitary fittings" under U.P. Sales Tax Act-State of U.P. v. Indian Hume Pipe Co. .
(121) These cases illustrate that mere textual interpretation(and absence of restrictive or limiting words)--was not acceptedas. decisive by the superior courts. Courts have always insisted on evidence. If the grounds for classification are not supported by evidence and the based on irrelevant considerations, the classification is held to be preverse. In our case, the Collector lid not collect any evidence of trade or commercial practice.He ignored the petitioner's evidence. He also did not bring on record material, in the possession of the Department,explaining the necessity of canalisation of edible oil only. Thepresent interpretation (unsupported by the quasi-judicial authorities under the Act) of the Department is perverse arid untenable. Functional test may go a long way to understand the tradepractice and meaning but is not always conclusive.
(122) In Maharaja Book Depot v. State of Gujarat , the question was whether ''Paper" includes "Exercise Book" as an 'essential article' for regulation under Gujarat Essential Articles Dealers (Regulation) Order, 1971.Supreme Court accepted the description of word paper (in dictionaries) to mean "any substance in sheets or leave used forveiling, printing etc" The court held that by pinning and sticking into an exercise book, paper does not lose its identity.
(123) But the learned counsel for the Responden'.s. has submitted that this court has no jurisdiction to interfere with the classification of items made by the Department It is submitted that where two interpretations are possible, one favoring the Department should be preferred by the court unless it is found to be peiverse. Some decisions are cited in support ofthis. In Collector of Customs v. V. K. Ganga shetty , the respondent had imported what are
called "Feed-oats" without license. The question was Whether "feed-oats" were "fodder" under Item 42 (Part IV---Import Trade Control Schedule) which required no license or the same full under Item 32 "Grains" requiring license. The Supreme Courtheld that the Department's interpretation that the feed-oats were grains falling under Item 32 was not perverse and. therefore,should be accepted. The Supreme Court also relied upon onVenkateswaran, v. Wadhwani . The
decision in Ganga Shetty was allowed by the Supreme Court inV. V. Iyer v. Jasjit Siagh . In that case also there was an
apparent conflict between the two items/entries in Part V, Schedule I to Import (Control) Order, 1955.Item 74 (vi) related to spare parts in power driven agricultural machinery (parts of sprayers). Item 74(x) was a specific entry regarding sprayers. The Department's contention that thegoods in question fell under Item 74(x) was upheld by theSupreme Court on the same principle. Similar question of conflict between the entries fell for consideration in Super Traders v.Union of India, 1983, E.L.T. 258 (Delhi) (66), where theabove decisions of the Supreme Court were relied upon
(124) It may be noted that all these cases relate to the conflict of entries/items under different statutory orders. Secondly,there was no dispute as to the meaning of a particular entry.These cases are not relevant for resolving the problem posed inour case. Here the question is whether "coconut oil" simplicitor, as an item of canalisation, would also cover non-edible industrial oil. There is no conflict of two entries. So also canalisation of edible oil has long history. Besides this, in the present case the higher quasi-judicial authorities, namely, the Central Board and the Central Government in revision had ruled thatnon-edible oils were not covered by canalisation order, but theCollector had refused to follow these orders. Even if the principle laid down by these decisions is to be applied in cases where there is no conflict of entries, ours is a case where the CentralGovernment itself had not found that two interpretations arepossible. The present stand of the Department conflicts withthe earlier stand of the Central Govrnment. The new stand of the Department on the interpretation of the entry is perverse because the evidence is to the contrary.
(125) Relying on the decision of the Supreme Court in Liberty Oil Mills v. Union of india . IT is submitted that this court is incompetent to adjudge thematter because we lack expertise in public and political,national and international economy and the broad policy considerations in the import trade. This to my mind is misreading the decision of the Supreme Court, What the SupremeCourt has said is that because of the lack of expertise in thesaid matters the court is "incompetent to pass judgment on the appropriateness or adequacy of a particular import policy." This is a well known principle in regard to foreign trade policiesof the Government. For example, the commercial journal soften assert that import policy at a given rime is framed for political considerations and for party gains. This criticism is usually directed where the goods are available in plenty in local markets or where the goods are luxury goods. Courts cannot normally go into these considerations to judge the wisdom ofimport policy on such general allegations. However, the implementation of policies must always be done within the framework of law. Therefore, the courts have power to examine in each case whether the findings are based on evidence, whether principles of fair-play and natural justice are followed and whether the fundamental rights are breached or not. I do not think that the Liberty Oil Mills case helps the respondents.
(126) But by merely concentrating on the Tariff entry, the respondent is missing the real substance. The question for thedecision is not what "Coconut oil" means. The real question for the decision is whether Industrial Oil was also a canaliseditem? In other words, how the trading community has understood entries in para 5 of the Appendix Ix, in A.M. 1980-81 ?The entry in Para 5 reads as under:(1) Coconut oil.(2) Copra.(3) Groundnut oil/seeds.(4) Palm Oil (all types including palm .olein)Palmseeds.(5) Rapeseed Oil/seeds.(6) Safflower Oil/seeds.(7) Soyabean Oil/seeds, and(8) Sunflower Oil/seeds.
(127) Coconut oil, ground nut oil, mustard oil, and til oil are traditionally used as edible oils in India.It is only because of the shortage of seeds of these oils in Indiathat new varieties of edible oil such as Palm Oil. Rapeseed Oil,Sunflower Oil, Soyabean Oil and Safflower Oil are being used now a days as substitute of these traditional varieties of edible oil. Now, when these new varieties of Oil are Mentioned along with the traditional varieties for canalisation, how wouldthe trading community understand, para 5? They are familiar with the shortages of edible oil and the consequent high prices.Is it not natural for them to. think that only edible oils are canalised ? Para 5 further mention copra and seeds of all the oils.What does it indicate ? It is a matter of common knowledge that even now, .Indians prefer Oil procured by traditional method of crushing oil seeds. This is a method of crushing oil seeds by wooden crushers operated by bullocks. This, is popularly called a Ghani. Such oil is even hygienically preferred because it is more easily digested and it is free from Chemicals. When seeds are mentioned Along with the .oils in para 5 it can lead tono other conclusion except that edible oils are alone covered bythat,para , Traders dealing in oil seeds arid oils can not understand the entries differently. I have already pointed out thatthe Collector has not collected any independent evidence to show that Stc was in fact importing industrial oil Along with theedible oil. Even the counter affidavit is blissfully silent. At the time of the argument we directed the counsel for the respondent to produce the data. No such material was produced. Such new evidence could not have been considered at the stage of arguments for supporting the impugned order. But if the material was produced it would have atleast helped the court to proceed on the correct lines. Instead, what is produced is an abstract of quantities of Coconut oil imported from 1973-74, onwards,without any effort to clarify as to what percentage was of edible oil as against the industrial oil. What the respondent wants is to interpret a cold entry in the Tariff but not to produceany factual evidence. It relies on logic because there is no factual evidence to support its conclusion.
(128) Brother Sachar has referred to several entries in Appendix 'A' of Import Policy 1978-79 & 1979-80, and has held that entry I in Appendix X of A.M. 1980-81 does not permit importation of industrial oil as raw materials. I do not agree with this interpretation. If it was so why the so called clarification was made only in 1981-82 policy ? Can it be imagined that Government would permit alleged illegal importation of Industrial oil in large quantities when it has a power to change thepolicy even in the middle of an import policy year ? Almost similar pleas of the change in the entries in the relevant appendices was made before the Special bench of the Central Board which pronounced its decision on 28-5-1982. But the Board observed "It may be true that the policy during the particular period does not necessarily have the binding effect on the subject policy period. But in this case the position is somowhatdifferent, inasmuch as there has been numerous changes in thepolicy over a considerable period, sometime excluding a variety,another time including the game or other varieties, state but all with a view directed towards regulating the low of edible oil into The country. There is, therefore, reasonable inference that the provision in Appendix Ix are concerned with the edible variety of oil only". These findings are recorded because of conflict of opinion between various Collectors. Board was thus fully aware of the experience of importation of oil in this country, and doubts expressed by som's collectors. I would prefer the considerd opinion of the Board, (which regularly deals with suchmatters), to a mere textual interpretation.
(129) 1 am not satisfied with bare statements, unsupportedby any factual material, in the counter affidavit. The Board on the other hand, had asserted that the consistent policy throughout was canalisation of edible oils only. I have, therefora, looked to the Annual Reports submitted by the Ministry of Commerce to Parliament from 1977 to 1983. They are within the special knowledge of the respondent. These annual reports give comprehensive data of major items of import eachyear and supplies explanation as to why imports of major items increased or decreased in a given year. The reports also put before the Parliament, export position and explains the adverse balance of trade position. The Reports also provides data ofimport and export trade handled by state agencies such asSTC.
(130) What is remarkable and unique in all these Reports is this. None of the Reports mention 'industrial oil as a major item of importation at all. Wherever there is a reference to oil,it is expressly made as an 'edible' oil only.
(131) Annual Report for 1976-77 states "The Corporation(STC) at a' short notice arranged import of large quantity ofedible oil for meeting 75 per cent requirements of the Vanaspati Industry. Against the sale of 70,000 metric tons during1975-76, the Corporation sold 2.7 lakhs metric tones edibleoils during 1976-77, and helped in keeping the domestic price line under control" (Page 156). The Annual Report for 1977-78states that the imports were particularly heavy in case of edibleoils (Page X). Of all the major items of import, 'edible oils'topped the list namely 549 per cent increase. (Page 16). As regards STC performance the report states "Edible Oils : The Corporation has programme for the import of a large quantum of edible! oils in the current year to supplement the domestic production and to maintain the internal price level. As of date,the Corporation has signed the contracts for import of 6.9 lakh tonnes out of which 4.5 lakh tonnes have already been shipped.Sales of total oils to-date were 4.3 lakh Mt Sales in the corresponding period of last year were 1.8 lakh M.T. thereby indicating a substantial step-up in the supply of imported edible oils.The imported edible oils are distributed to Vanaspati units allover the country at economic and pre-determined prices so thatthe end-product prices are maintained. The Corporation is also supplying through State Govts. edible oils for direct consumption. In order to meet the timely requirements of the Vanaspatiindustry, the Corporation, besides stepping up the over-all storage capacity, has created a number of new distribution points.The total storage capacity has been expanded from 87,000 MT in the beginning of the year to 2.21 lakh Mt (as of date) andin the Northern Zone storage capacity has been expanded from5,000 Mt in the beginning of the year to 32,000 Mt (as ofdate). The Corporation is presently meeting 75 per cent of the requirements of the vanaspati industry in the country. The prices which were fixed on 1/11/1977, are still being maintained for the vanaspati industry.' in spite of a rise in the domestic oil prices with a view to keeping a check on edible oilprices. Similarly, rapeseed oil prices for direct consumption through State Governments have been. reduced by Rs. 1,000/PMT since 25/08/1977 and the same price is being maintained. The Corporation has, at present, a significant stock of one lakh Mt at different distribution centres." (page 120).
(132) Annual Report for the year 1978-79 expressly states that import of edible oil has been. canalised through Stc and/the reasons for doing so. The report states, there was an increase in imports following the liberalisation of import policyand a need for augmenting the local availability of certain mass consumption items which were in short supply......................Subsequent quantities of edible oils had also to be imported to keep domestic prices under control. Steps have been initiated to reduce progressively the dependence on imported oils. One such measure was to canalise fhe import of edible oils through the STC". (Page VIII). As to fhe import performance of theSTC the report adds, "Edible Oils" the Corporation maintains supplies of edible oils both to the vanaspati industry and for direct consumption through the public distribution system. Imports of edible oils have been canalised through the STC" (Page83).
(133) The annual Report for the year 1980-81 shows widening gap in the international trade adversely affecting the balance of trade. "There was also substantial rise in imports of vegetable oils (edible) in terms of both volume and value, which duringApril-September, 1980 stood higher at 6.42 lacs tons valued at Rs. 348.63 crores as against imports of the order of 2.78 lac tons at Rs. 166.24 crores in the same period last year" (Page22). Regarding the performance of Stc in importing the canalised items of edible oil "Import turnover at Rs. 894crore during April-December, 1980 was much higher than theimport sales of Rs. 603 crore during the corresponding period last year. This increase is mainly due to edible oils fromRs. 426 crore to Rs. 582 crore, newsprint from Rs. 69 crore tors. 96 crore and cement from Rs. 33 crore to Rs. 59 crore.Sugar imports also contributed to the increased import sales tothe tune of Rs. 91 crore.
(134) Edible oils : During the current financial year, oil worth about Rs. 402 crore have arrived (till Dec. 80). However duringthe oil year ended 31-10-80, the total imports were 11.49 lakhMT.
(135) In line with Government policy supplies of higher quantities of edible oils are being made under Public DistributionSystem. To facilitate movement and distribution of Rbd PalmOil, the Corporation entered into finding operations at PortTowns.
(136) To meet the varied demand. of States arising out of lean and festival season and availability of indigenous oils, theCorporation maintained two months' buffer stock of edible oilsin almost all the States. By this, the prices of edible' oils were kept under control". (Page 109).These reports provide following outline on canalisation :
1.To meet the domestic shortage the, premier foreign-trading organisation-S.T.C. started imports of large quantities ofedible oil, particularly from 1976-77.
2.For converting S.T.C. into more effective instrument of bringing about socio-economic changes, canalisation policy was required to be reviewed-Indian Institute of Management,Ahmedabad was entrusted with the task of studying and suggesting new directions in canalisation and for achieving the objectives of Government in relation to price support, price stability etc.The report was submitted. (Report, 1977-78, page xii).
3.The Report was accepted by the Government and S.T.C.was given a new role in price support and buffer-stock operations designed to achieve price stability of essential items. (Report,1978-79, p. 84).Steps have been initiated to reduce progressively the dependence on imported edible oil. One such measure was to canalise the import of edible oils through the State Trading Corporation. (Report, 1978-79, p. viii).
4.Pursuant to canalisation for the new socio-economic goal the S.T.C. started maintaining buffer stocks, additional storing arrangement and distribution centres all over India. Prices ofedible oil were kept under control. 90 per cent of the requirement of the Vanaspati industry was met by S.T.C. (Report1980-81, p. 109).
5.Huge quantities of edible oil was imported in spite of adverse balance of trade only because of shortage of edible oilin domestic market.
6.There is not even a whisper of canalisation of non-edibleoils in any of the Reports.
7.The Respondent failed to produce any evidence before theCourt. In fairness, the Government was expected to produce the Report of the Indian Institute of Management and the reports of the Monitoring Committee on canalisation. These documents are within the exclusive knowledge and possession ofthe Government.
8.The Special Bench of the Board had observed that onlyedible oil was canalised. The S.T.C. had certified that they were importing only edible oil as a canalised item (and not industrial oil). Both these statements were factually correct and are supported by the Annual Reports.
9.In the light of this factual data, Collector's order holdingthat industrial (refined) oil was canalised through Stc is arbitrary and violative of Article 14 of the Constitution-GlassCIAU, Association v. Union of India, .
(137) In the light of this evidence I will now refer to the history of entries from A.M. 1978-79, traced by Sachar, J. Respondent first assumes that entry 'coconut oil' in Appendix 8 of1978-79 Policy includes edible as well as industrial oil. This assumption has no basis. In support of this assumption reference is made to Soyabean Oil and Palm Oil and Copra in thatappendix. Then absence of 'coconut oil' in Appendix 10 where other 'edible oils' are mentioned is also cited a coroborativeevidence. Appendix 8 lays down items which are canalised.Appendix 10 is a list of items which can be imported as O.G.L.Copra in its use in Vanaspati and industrial use is alone canalised.According to Respondent 'Copra' is used only for industrial-non-ediblepurposes. How is then used for Vanaspati ?Soyabean oil is also canalised for the use of Vanaspati and industrial purpose. If Government was aware of industrial use ofcoconut oil why did it not expressly mention the same in relation to coconut oil? This failure cannot be made good by referring to other entries which are in positive and clear language.Absence of 'coconut oil in O.G.L. items is of no significance.It only shows that a license is necessary and nothing more. The leading 'Edible Oils' in App. 10-OGL-does not signify much.If Respondent's logic is to be pursued it would mean that 'coconut oil' is not an edible oil at all. This is contrary to the general submission of the Respondent. Palm Oil of all types is mentioned in O.G.L. items. But its refined variety and palm olein even for edible purposes is excluded from canalisation list. This shows that neither App. 8 nor 10 have any scientific or logicalbasis. The reasoning of the Respondent completely breaks down if we refer to entry 57-Appendix 8 in 1979-80 Policy.All oils, now mentioned as canalised and Ogl in our case, find place in that entry. They are mentioned simplicitor without mention of edible or industrial use as in A.M. 1978-79 Policy.It shows that there is no consistent or continuing policy in regard to canalisation. Significantly, none of the oils are mentioned in O.G.L. item in 1979-80 Policy. Here also the Respondent's reasoning fails. But a third pattern emerges inour relevant year A.M. 1980-81. Now, all the said oils are omitted from Appendix 8 or Appendix 10. They are includedin Appendix 9. And the entry speaks of canalisation throughS.T.C. as O.G.L. item. The only conclusion from these diverse patterns in regard to coconut oil is this--In 1978-79 it was notan O.G.L. item while many other oils were-In 1979-80 none of the oils, including coconut oil, was on O.G.L. List while in1980-81, all oils including coconut oil came on O.G.L. list. By no legal inference can entry "coconut oil" be interpreted to mean industrial coconut oil in any of these years.
(138) Now if the Respondents reasoning is correct, why inA.M. 1981-82-words "edible-and non-edible" are used. Thisis not done only in regard to coconut oil but all oils. "Abundant caution" is an after thought. The reason appears to be that in the earlier years the edible and industrial varieties were indiscriminately mentioned. Perhaps, it was also realised by the Authorities that non-edible industrial oil was being imported insufficient quantities and the canalising agency. S.T.C. would earn additional revenue if non-edible varieties are also canalised. Government has appointed Special Monetary Committee for canalisation and its review. It was, therefore.. the duty of the Respondent to produce the relevant data and the findings of the Monitoring Committee on canalisation. It was also necessaryto produce such evidence because of a definite reason for canalisation of edible oil only, furnished by the Government to Parliament in the Annual Reports. In stead of doing so, the Respondent has half-heartedly tried to justify its plea by textual interpretation of the policy statements. It is half-hearted because this plea was taken only in the written submissions of the respondent submitted before Justice Anand, when he was hearing these petitions. No argument on this basis was advanced before us by the counsel for the respondent. Naturally, the petitioner did not have any opportunity to meet the above submissions ofthe respondent. Before us, only petitioner has filed his writtensubmissions. None wers filed by the Respondent.
(139) Prohibitions imposed by subsequent policies :an alternate argument it is submitted by the respondent That the importation by the petitioner was illegal because of breach of conditions imposed in the license in terms of subsequent policies. Petitioner held letters of authority for valid licenses under Section 3 of the Order issued for A.M. 80-81.Petitioner is an export house and is, therefore, entitled to import facilities available to Export Houses under para 174 of A.M.80-81./l74(iii) entitles the petitioner to "Imports of items on Open General licenses in the manner set down here-under."Para 174(iv) allows "Additional licenses as provided hereunder". Under para 177(5) Additional licenses are given further facilities as under :"The Additional licenses will also be valid for import ofraw materials. component, spares (excluding those covered by App. 5) which have been placed under Open General licenses."Raw Materials, components and spires are the exact items ofApp. X, item 1. Thus by virtue of para 174(iii) read with para177(5), petitioners were entitled to import raw material in thiscase industrial coconut oil- -which is a raw material for manufacture of soap, shampoo etc. The source of entitlement isthe said paras and App. X of policy for Am 1980-81 itself andno other. These continued in 1981-82 and -1982-83.
(140) The .licenses in favor of the petitioner were revalidated twice-but each time for six months only. Letters of credit were opened on 31-7-1982. The goods arrived in KandlaPort on 10-9-1982. If policy of Am 1980-81 alone is to beapplied, importation is within the revalidation period plus grace period of two months:
(141) According to the Collector, however, by virtue of public notice dated 25-2-1982-"Import of O.G.L. Item by export houses shall be subject to condition that the shipment of goods shall take place within the validity of Open Generallicense, i.e., 31/03/1982 or within the validity period of license itself (without any grace period)whichever date is earlier."This condition is applicable to all licenses including Additional licenses. The Collector held that petitioner's importwas admittedly after 31/03/1982 and was, therefore, aprohibited import. The public notice "clarified" that para185(3) of 1981-82 was applicable to Additional licenses forthe first time. Para 185(3) of Am 1981-82 put the above condition of importation (prior to 31/03/1982) on thelicenses issued prior to 1-4-1981. There was no such provision in 1980 Policy.
(142) Now, in terms, para 185(3) is not applicable in thepresent case. Para 185 speaks of replenishment licenses, similar to para 176 of the 1980-81 policy. Sub-pan (3) to para185 is an amendment to the earlier provisions, which had only two paras. Para 185 is not applicable to Additional licenses.Provision applicable to Additional licenses in para
186. This corresponds to Para 177 in 1980-81 Policy. Permission to import raw material as on Ogl item was given to the petitioner under para 177(5) of 1980-81 policy. Exactly identical provision, without any change, is made para 186(7) of the 198182 policy. Assuming the condition to be applicable, it can operate only prospectively viz. for licenses issued after 1/04/1981 and not before. Export Policy is an administrativeinstruction and it cannot be given retrospective effect as in caseof a statute. As a condition of revalidation, para 185(3) would amount to amendment of the license issued under the statutory provisions of Section 3 of Import (Control) Order, 1955. Section 7 of the Import (Control) Order 1955, permits an amendment of a license only to "make such license conform to the provisions of the Act or this Order", and not to destroy or capitulate it. There is another serious objection. The Collectorhas held that public notice which made para 185(3) applicableto additional licenses has retrospective operation. He has treated it as statutory provision. This is a grave error of lawon the face of the record. Public notices are executive instructions and they cannot be given retrospective effect. The said conditions and restrictions were imposed at. the time of revalidation in the present case. The period of validity means the period of shipment/ dispatch permissible for goods concerned.Export Houses are required to keep the period of shipment flexible. They have no control on the circumstance abroad. Shipments may be delayed because of short supply, strike etc. Para199 of the Hand Book of Import Export procedure 1980-81lays down that if revalidation is for a period not exceeding sixmonths no conditions can be imposed on revalidation. Petitioner had requested revalidation for period of six months and not fora longer period at any time of revalidation. They were in fact validated for six months each time. Imposition of conditions was contrary to para 199, also. 1979-80 Hand Book (para 70 of chapter vi) permitted revalidation on condition of conformity with current Import Policy. This provision was deleted in the1980-81 policy. Therefore, conditions of 1981-82 or 1982-83Policy cannot be imposed on license under 1980-81 Policy.
(143) Apart from these infirmities. the conditions of revalidation are arbitrary and unreasonable. In similar cases ofimportation, by petitioner himself and other traders, import wasnot held to be prohibited either by virtue of para 185(3) or Public Notices. So also to hold that in Am 1981-82 & Am 1982-83 industrial coconut oil was canalised and, therefore, in September, 1982 when the present import was made, is contrary to law and arbitrary. Conditions in revalidated licenses or subsequent Import Policies cannot create a prohibition for licenses issued earlier. It is arbitrary because no such prohibition was imposed on the importation in May, 1981, July 181 andJanuary, 1983 in regard to other imports.
(144) In Liberty Oil Mills, the Supreme Court has noted theprinciple followed by the Central Government and the CentralBoard of Excise and Customs (in re : Arvind Exports (P) Ltd.and Jayant Oil Mills (P) Ltd.) that the license issues during thepolicy period is governed by that policy as amended up to the date. of the issue of license and amendments made after thedate of issue do not have any application to the licenses. Thedecision of the Supreme Court in Hazari Lal's case does not derogate from this well
establishedprinciple. This is so, for the simple reason that subsequent import policy cannot have retrospective effect as they are non-statutory in character. I have already shown how even otherwise the import policies of A.M. 1981-82 and 1982-83 had not created any prohibition for the import of raw material imported by the petitioner on the basis of 1980-81 licenses.
(145) Same is the case with the public notice issued In February, 1982 whereby para 185(3) was made applicable to additional licenses for the first time, by the said public notice. In East India Commercial Company v. The Collector of Customs the Supreme Court has
laid down that the import control hand-book or the public notices are not statutory in character and, therefore, cannot impose any conditions on the license issued under section 3 of the Import ControlOrder. The same principle was reiterated by the Supreme Courtin J.C.C. of Imports and Exports v. M/s. Amin chand . It was held that the prohibition imposed by subsequent policy change is no prohibition because it is not issued under section 3 of the Imports andExports (Control) Act of 1947. The principle was further recognised by the Supreme Court in M/s. Oswal Woollen MillsLtd. v. Union of India .
(146) It was further held by the Supreme Court that theconditions subsequently imposed on the license, being non-statutory, cannot be treated as prohibitions imposed by theImport and Export (Control) Act, 1947 and Customs Act therefore, confiscation orders are without jurisdiction. East India Commercial Co. . This
principle was reiterated by the Supreme Court in Civil Appeal No. 801of 1964 decided; on 10/01/1967 in the case of M/s. Jagannath Agarawal v. Shri B.N. Dutta & Ors. See also Additional Collector Customs v. Sen & Co. . A distinction has been attempted by the
Respondent between the conditions imposing restrictions rendering the license (itself) invalid for their breach and conditions which put restrictions on the disposal of goods after their valid importation. It is argued that in the present case the license itself was rendered invalid for importation in question and thus there was a breach of Section 111(d) of the Customs Act, 1962. To my mind, the distinctions ought to be made by the Respondent cannot be read in section 111(d) of the said Act. Section 111(d) reads-"The following goods brought from a place outside India shall be liable for confiscation :-(d) Any goods which are imported or attempted to be imported or are brought within the Indian Customs Waters for the purpose of being imported, contrary to any prohibition imposed by or under this Actor any other law for the time being in force."The Section speaks of "prohibitions". All conditions imposedon a license amount to prohibition if it is shown that they are imposed by or under the Act. There is no further classifications of prohibitions envisaged by the said sub-section. The SupremeCourt Cases cited above also do not make any distinction between the conditions as suggested by the Respondent.
(147) The petitioner had argued that it had vested right toimport the goods which are not prohibited on valid licenses.The respondents have countered this argument by relying uponDy. Assistant I&S Controller v. K. M. Corporation . I do not think that the said
decision is of any assistance to the Respondents. In that case the question was whether the Government could refuse grant of license tothe Respondents even after the filing of the application and sponsored by a sponsoring authority under Import & Export Control Act. The Supreme Court held that there is a statutory power in clause 6(1) of the Import Control Order to refuse to grant a license. The Court also found that delay in the disposal of the application was not unreasonable. thus it maybe seen that the ratio of the case has no application to the facts of the present case. The petitioner already held valid licenses,and they were validated twice. The licenses were granted under section 3 of the Import Control Order. The petitioner had,therefore, a vested right to import the goods on the said licenses,unless there were statutory provisions to the contrary. In SuperTraders (1983 E.L.T. 258) this Court held that there is no vested right in importation because Government is free to make statutory and policy changes even during the currency (if Import year. The real question is this. Where no statutory or Policy change is made in a given Import Year or period, whether in importer has no right to expect that the goods for which he holds a valid license can be imported? And whether such aright can be denied by applying subsequent policy or publicnotice ? The decision does not render any assistance to therespondent.The Collector has then referred to para 222(1), 222(2) and224(4), mentioned in the revalidated license to show that therewas a prohibition to import industrial oil as raw material. Thereis no discussion or analysis of these provisions in the Collector'sorder. We are concerned with importation of raw material by virtue of para 177(5.) import Policy turn Am 1980-81 and corresponding provisions in Am 1981-82 Policy. It may be noted that para 222(3) is not mentioned on the licenses and, therefore, out of way. That sub-para creates a general embargo on importationof O.G.L. items which were applicable in 1980-81 but not continued in para 1981-82. Sub-paras (1) & (2) speak of items mentioned in App. 5, 7 and 26. Sub-para (1) states that only items mentioned in said paras and continued in 1981-82 can be imported. Sub-para (2) gives additional benefit of new items added tothe said appendices in 1981-82. Para 222(4) is an exception to para 222(1). Prohibition on items otherwise than mentioned inthe said appendices is released in case of raw materials, components etc. Para 222(4) reads "Additional licenses is issued to export houses during1980-81 will also be valid within their overall value,for import of raw materials, components, consumables and spares (excluding the items covered by App.5)which can be imported under Open General license by Actual Users (lndustrial) under Import Policy1981-82."
(148) "THUS to say that there was prohibition to import industrial oil as a raw material is wrong and contrary to the policy.Provisions of sub-paras of Para 222 contemplate different contingencies and lumping them together, as is done in the presentlicenses, is a mindless exercise. Para 222(1) docs not control para222(4).Statutory O.G.L. Order
(149) Faced with the difficulty that the alleged conditions inthe licenses, including those created by the said public notice, are non-statutory and would not amountto breach of section 3 of the Imports and Exports (Control) Act,1947. the counsel for the Respondent made a novel argument.He argued that the statutory O.G.L. Order No. 7180 dated 1 5/04/1980 (and similar orders issued in subsequent years)imposed prohibition on Imports, as regards items anil period ofimportation. The said order gave general permission to import into India any raw materials, components arid consumables by Actual Users (Industry), subject to the following conditions:
(1).The items to be imported are not covered by Appendices 3, 5, 6, 7, 8, 9 and 15 of the Import Policy,1980-81:
(15).Such goods are shipped on through consignment toIndia on or before 31/03/1981 or on or before30-6-1981 against firm orders for which irrevocable letters of credit are opened on or before 28-2-1981,without any grace period what-so-ever;.
(16).Nothing in this license shall affect the application to any gods, or any other prohibition or regular on affecting the import thereof, in force at the time when such goods are imported.
(150) A condition similar to Condition 15 was imposed byO.G.L. Order I of 1981 dated 3-4-1981. The said condition required that importation should be made before 31/03/1982or before 30th of June, 1982, without any grace period.
(151) It must be pointed out that the said statutory O.G.L.Orders were not relied upon by the Department before the Collector, nor the Collector, in the impugned order, has held that import in question was illegal for the violation of the said orders.The argument of the respondent is that all prohibitions imposed by the said orders on Actual Users are applicable to exporthouses because they are also required to sell the imported goods to actual Users. Now, bare reading of Import Policy Publication will show that Actual Users and export houses are treated as distinct and separate classes for the purposes of facilities ofimport. It is the chief anchor of foreign trade probably to vigorously promote exports and to have a favorable balance oftrade. Chapter 18 of A.M. 1980-81 makes special provisions.for Export Houses. Para 164 slates that special facilites are given to Export Houses to strengthen their capacity in foreign trade and to build up a more enduring relationship between the mend their supporting manufacturers. Para 174, amongst otherthings, include replenishment licenses, (REP), additional licenses and special permission for "import of items placed on the "OpenGeneral license" as special facilities for Export Houses. Para177(5) permits additional licenses for importation of raw materials, which have been placed on Open General license for Actual Users (Industrial). It may be noted that such importation of rawmaterial is not fettered by any conditions. As against this. Chapter Vi of the said policy makes separate provisions for importof raw material, components, consumables and spares by ActualUsers (Industrial). Para 23(1) in the slid Chapter speaks of importation on Open General licenses. It is stated that the Actual Users "will be allowed to import under Open Generallicense, subject to specified conditions applicable thereto". Thesaid para 23(1) makes it further clear that the statutory O.G.L.Orders are applicable only to the Actual Users because conditions can be prescribed only for the Actual Users. A longer period of validity of imports and their shipment period is necessary for the Export Houses, because of the trade difficulties inthe foreign countries and in India, which are beyond the control of the Export Houses. If import policy is subjected to frequent changes and they are imposed on licenses already issued, it will be difficult for the foreign exporters and importers to make any firm commitments either in supply or prices. This will not strengthen the negotiating capacity in foreign trade but will weakenit. It would also the enduring relationship of durable trade between the Indian traders and their counter-part in. the foreigncountries. In fact, the re-validation of licenses to subsequent periods of import policy are done with these objects. Sale by an export house to an Actual User is one side of the coin. The other is the export promotion made by the Export House. One cannot be separated from another. Importers, including ActualUsers, actually spend the limited foreign exchange. An ExportHouse, on the other hand earns additional foreign exchange! forthe national economy. This is the rationale in treating them as distinct classes. It is thus clear that the prohibitions, if any, inthe O.G.L. Orders are not applicable to Export Houses using additional licenses. There is another reason for this conclusion.O.G.L. is a general permission. It is not subjected to normal licensing requirements and procedures. Naturally, the conditions are required to be imposed in the statutory order itself. Thereis no license (in the normal sense) on which the conditions canbe imposed. As against this, Export Houses are required to obtain licenses such as Rep license or additional license. THE language of 174(3), 176 and 177(5) is very clear. It is stated thatthe import can be made of the items placed on the Open General licenses or raw materials. Which have been placed on theOpen General license for Actual Users. The said provisions do not say that raw materials can be imported subject to the conditions mentioned in the statutory O.G.L. Oders. A reference to statutory O.G.L. Orders is only for the purposes of finding out what items are placed in the list of O.G.L. Condition No. 1 andNo. 15 quoted above do not, as such, impose any prohibition.It is a general permission in regard to items not covered by certain appendices and the period within which import' should bemade. I have already held that Industrial Coconut Oil did not fall within Appendix
9. It falls under Appendix 10. ConditionNo. 15 is obviously not applicable to revalidation done-subsequent to the dates mentioned therin. If statutory O.G.L. Orders were applicable in the present case, there was no necessity to refer to conditions imposed on revalidated licenses, or invoking Para 185(3) of the said public notice to read prohibition, asis done by the Collector. The submission of the Respondentthat the import in present case was contrary to statutoryO.G.L. Orders is untenable in law.
(152) A license is subject to the import policy of the year of issue and not subsequent policies and unless there are statutory orders to the contrary O.G.L. statutory order, are not applicable in the present case, and prohibitions, if any, mentioned in it are applicable only to the Actual Users and not to the petitioner.Imposition of conditions or prohibitions not in conformity withthe Import Control Order or the Act are illegal and should heignored. Special Bench of the Board had cleared the goods evenafter the 1982 O.G.L. Order was issued. None of the authorities under the Act, including the Collector in the present case, had applied the statutory O.G.L. orders to Export Houses and to additional licenses. There was a valid importation under a validlicense. Show cause notice and confiscation, orders are contraryto law and illegal. They are, therefore, set aside.
(153) The counsel for the Respondent, however, submits thatthe petitioner has availed of the exemption of duty under notification issued by the Central Government under sub-section (1) ofSection 25 of the Customs Act, 1962, on 1.11.1976. The exemption is from the tarrif mentioned in para 15.07 of the Customs Tariff Act, 1975. The duty payable under the said Notification is 40 per cent ad valorem on "coconut oil (refined)". BrotherSachar has held that claiming benefit of the said notification bythe petitioner amounts to his acceptance of the fact that industrial coconut oil is also covered by the expression "coconut oil".With respect, it is difficult to agree with this conclusion. The said notification was issued to give statutory affect to Bangkok Agreement on Trade Negotiations among developing countries of theESCAP. The Agreement had become operative from 17/06/1976. One of the' principle objects of the Bangkok Agreement was to give tarrif concessions for imports from five countries, namely,Bangladesh, Laos, Republic of Korea and Sri Lanka on reciprocal basis between the States (Annual Report 1976-77. Governmentof India, Ministry of Commerce-Page 102). It may be noted that imports in the present case were made from Sri Lanka. Any importer who imported the goods from Sri Lanka was entitled tothe said exemption. No special exemption was given to the petitioner. Apart from this, the entry in the exemption notificationis coconut oil (refined). The petitioner claimed exemption as are fined coconut oil because he had disclosed in the bill of entry that the imported oil was "refined industrial coconut oil". Theentry in the exemption notification merely refers to coconutoil similar to the relevant O.G.L. entry in the present case.When the entry in the exemption notification refers to the refined oil, it only means that non-refined or raw oil would notbe entitled to exemption. The meaning of entries does not change by acceptance or rejection of it by any private party or even by Government. What is more important is not the textual meaning of coconut oil but the question of fact as to which variety was canalised in a given import year. This question of fact depends upon the evidence. What tariff is payable by an item has no relevance to the question whether the item was canalised or not. So also broad description of an itemin Tariff, such as 1507, has a different purpose. In taxing statute the Legislature uses as general language as possible, because there can be no taxation without law. Questions regarding importation and canalisation are decided on policy consideration at a given time. The submission of the respondent is rejected.
(154) Preliminary objections :I will now deal with the two preliminary further consideredobjections. The first is that this court has no territorial jurisdiction. as importation of oil in question was at Kandla Port, Gujarat. The other objection is that there is an equally efficacious remedy by way of an appeal to the appellate tribunal established under Section 129 of the Customs Act. That Act was amended by Finance Act 2 of 1980 whereby a separate procedure of appeals and reference has been created. The appellate tribunal was established on 11-10-1982. A connected submission of the Respondent is, that by resorting to the writ remedy the petitionerhas deprived the Respondent of its statutory right to support theCollector's order on other grounds in an appeal under section 129(A). Brother Sachar has rejected these preliminary objections.I agree with him. But there are some additional reasons why the preliminary objections are to be rejected.
(155) Territorial Jurisdiction :Apart from the fact that the policy is framed by the Ministryof Commerce at Delhi, the office of the Chief Controller ofImports and Exports is at Delhi. The confidential D.O. issued bythe Joint Controller in September, 1982 was from Delhi. Subsequent instructions including withholding of the clearance ofthe consignment were issued from Delhi. I have already heldthat the impugned order is not the order of the Collector,Ahmedabad. It was passed .it the dictates and behest of the Joint Controller and his office which is at Delhi. The public notice in question was also issued from Delhi. This court has, therefore,territorial jurisdiction to hear the writ petition.
(156) Alternate remedy :Writ jurisdiction in certiorari is a constitutional jurisdiction.Amendments to Customs Act by Finance Act No. 2 of 1980would not oust the jurisdiction. I have already held that the Collector's order was without jurisdiction, was perverse and contraryto the principles of natural justice. I have also held that the said order violates Fundamental Rights of the petitioner under Articles 14 and 19(l)(g) of the Constitution. A more appropriateremedy, therefore, is the Extraordinary remedy of writs'. Preference for alternate remedy is a rule of discretion and convenience, not on effecting jurisdiction. The Writ Petition was admitted on 18-1-1983 and final hearing was expedited. It was heard by one Judge for five days and by another for fourteendays. The matter was taken to Supreme Court for the transfer of these petitions. The Supreme Court initially transferred thesepetitions to Rajasthan High Court so that they could be disposed of expeditiously. After learning that tha writ petitions were already set for final hearing before our Bench, the Supreme Court recalled the earlier order. One reason for early disposal was that heavy fine of Rs. 5 crores has been imposed upon the petitioner.But by the time we could hear the matter, about two years haveelapsed. The petitioner cannot now be sent to the AppellateTribunal where the remedy of appeal is barred by limitation.For all these reasons the discretion has to be exercised in favor of the petitioner. The preliminary objections are, therefore,rejected.
(157) There is no merit in the Respondent's submission that they are deprived of some right, allegedly traceable to section 129(A). I have held that the Collector's finding is without anyevidence. The Department had not produced any data before theCollector or even before this Court to show that industrial oilwas also being imported by S.T.C. as a canalised item or that there was any such policy. Respondents cannot be permitted to create new evidence and support the order of the Collector. The violation of natural justice, particularly the surrender of the judicial decision-making by the Collector, in favor of the Joint Controller and his office, cannot also be cured in appeal. So is thecase with breaches of Fundamental Rights. The Joint Controller issued the Confidential instructions and suspended the release ofpetitioner's consignment in September, 1982. He and his office,know that the Appellate Tribunal was being set up shortly. Perhaps, the office of the Chief Controller of Imports and Exports,itself fixed 11/10/1982 as an appointed date for the establishment of the Appellate Tribunal. The ostensible reasonfor the confidential directions issued by the Joint Controller was large scale import of oil from Singapore. The petitioner had notimported oil from Singapore but from Sri Lanka. If the petitioner submits that the Joint Controller gave these directions to nullify the effect of the order of the Central Government passed under section 131 of the Act, can it be held to be too unreasonable?The counsel for the Respondents read out to us the statement ofthe Finance Minister to explain why the Appellate Tribunal wasbeing set up. It was said by the Finance Minister that thepresent authorities under the Act were working objectively,but it is necessary that justice must not only be done but seen to have been done. If the Appellate Tribunal is to faithfully live up to the expectation of the Government. I do not think that it will be able to come to a conclusion different from that of the Central Government and the special Full Bench of theBoard, I do not think that the respondent can complain of any loss of right of appeal. It is asserted by the petitioner that in caseof M/s. Jain Oil Mills and Metro Exporters, whose consignments of industrial oil of 5000 M.T. each, were cleared by theCollector of Customs on 12-1-1983, no appeal was preferred bythe Department. This assertion was not contradicted by the respondents at the time of the arguments. The appellate tribunalhad already come into existence by that date.
(158) The Respondent has accused the petitioner of deliberately preferring the writ remedy so as to disable it from fully availing its right of appeal before the Appellate Tribunal. Thisargument has impressed by my two brother Judges. On thecontrary the petitioner accuses the Respondent of a deliberate design to by pass the order of the Central Government and to avail of the new forum to improve upon its original case. I donot think that the question of the Jurisdiction of this court (andthe alternate remedy) can be and should be resolved by these mutual accusations. The Respondent has contended that they are deprived of the right to show on merits that the order of theCentral Government in revision was wrong. They also say :"The petitioners had sought to preclude the respondents from contending such questions as were not decided by the Collector."I think that these contentions are contrary to law and are based on misunderstanding of the powers and functions of thenew tribunal. It is preposterous to say that the Government should be given an opportunity before an Appellate Tribunalto contend the questions which were not even decided by theCollector. So also the order of the Central Government in revision, which has acquired finality in law, cannot be re-opened even before the new Tribunal. The new Appellate Tribunal has been established not only to ensure objectivity and impartiality but to demonstrate through its actions that it was doing justice and fair-play. I he Tribunal consists of the judicial Members which are drawn from toe Judicial and Legal Service.There are also Experts called the Technical Members. Objectivity and rationality are the mam characteristics of any expertopinion. The Technical Members should enrich the Judicialtribunal) with their experience in diverse fields and the scientific methods of analysis. Thus, powers and functions of the Appellate Tribunal is a combination of scientific objectivity and judicial impartiality. But the technical experts, while judging the matters must, follow the common trade meaning and practices.Both the Judicial Members and the Technical Members must work in unison to ensure fair-play in the final determination.That should apply even to the Benches that are constituted for deciding various matters by the Tribunal. Where data is more technical and factually complex, there should be more representation of Technical Members on the Bench. But where it isnot so and particularly where legal interpretation is involved,the Benches should have larger number of Judicial Members.Why is it necessary ? By its action and conduct the Tribunalmust demonstrate to lay public that fairplay is ensured and justice is done. To the extent the litigating public would he able to see the fairplay in action, the public confidence wouldincrease. The object of the amending Act, in constituting theTribunal, is not to take away the judicial control of the High Courts but to make the Tribunal itself a pronouncedly judicialbody, in which litigating public can repose confidence as incase of High Courts.
(159) The Appellate Tribunal is very young has just completed two years. Some of the judgments of the Tribunal raise a strong hope that it will succeed in creating confidence amongstthe litigant public. In Atma Steels (P) Ltd. v. Collector of Central Excise (1984, Elt, page 331) (71). one of the questions was whether the President ofthe Tribunal has legal competence to constitute a large Bench of five members for resolving conflicting views/decisions of different Benches of theTribunal. The Tribunal asserted that it will follow the judicial practice of the superior courts, such as High Courts and Supreme Court. It was held :"The scheme of the Act as indicated by sub-section 3of Section 129, unmistakably is to ensure a unified and -integrated approach in matters relating to classification as well as rate of duty and valuation, which need has been felt because of different Collectors working in separate jurisdictions and because of the importance of these matters both to the assessed as well as revenue. Removal of uncertainties has tobe the guiding principle, for every judicial or quasijudicial system, which approach is reflected in the practice in the Supreme Court as well as HighCourts, of reference of general matters of importance to larger Benches, which procedure is extended to cases of conflicting decisions also."The Tribunal relied upon J. D. Patel v. Union of India(1978 & Elt page 540) (72), a decision of the Division Benchof Gujarat High Court. It may be noted that the order of theCentral Government in revision and the Special Bench of the Board in our case precisely achieved the same purpose of, unified, and integrated approach and removal of uncertainties.
(160) Reliance on J. D. Patel v. Union of India, is important for another reason. Because, that decision endorses the principle of judicial discretion laid down by the Bombay High Courtand Madras High Court. The learned Judges of the Gujarat High Court held "As a matter of law the earliest decision of the DivisionBench of the Bombay High Court in Manek Lal Chunnilal (1953, 24 Itr, page 375) is binding onus. Apart from it, we are in respectful agreement with the salutary practice and the policy that in taxation matters. ................. . . ........ . . . . ....In the interest of uniformity and consistency in matters of application of taxing statute so as to avoid the challenge of discrimination in application and administration of tax matters."In Manek Lal's case the Bombay High Court had held :"Whatever our own view may be, we must accept theview taken by another High Court (Madras) onthe interpretation of the section of a statute whichis an all-India statute."This rule for the exercise of judicial discretion by authorities of co-equal powers, is directly applicable to the decision ofthe Central Government in revision and the new AppellateTribunal.
(161) But Mukund Engineering Works v. Collector of Central Excise, Ahmedabad (1983) E.L.T. page 816), a decision ofthe three-members Special Bench of the Tribunal, hits the nail on the head.
(162) The question for the decision of the Tribunal was whether the Collector of Central Excise, Ahmedabad, was right in imposing additional duty on the appellant by classifying Jockey Pulleys under Item 49 of the Central Excise Tariff. In similarcases, the Central Government in the revision had held thatthe goods are covered by item 68 of the tariff. A show causenotice was issued by the Superintendent, Central Excise. surrender Nagar, to the appellant as to why additional duty on the basis of item 49 of the Tariff (Rolling Bearings) should not becharged. The Assistant Collector accepted the appellant's explanation that the proper classification was under Item 68 and dropped the proceedings. B. V. Kumar, the Collector of Central Excise, Ahmedabad, reviewed the order of the AssistantCollector, purporting to act under Section 35A. The Collector relied upon certain Trade Notices and Tariff Advices. TheCollector set aside the order of the Assistant Collector and imposed additional duty on the appellant. On that basis further additional demands were raised by the Superintendent, CentralExcise. The appellant filed a writ petition in the Gujarat HighCourt challenging the order of the Collector and further additional demands. The High Court directed the appellants to prefer revision to the Central Government and granted interim stay of recovery. The appellant preferred a revision application.When the revision was pending before the Central Government the present Tribunal came into being on 11-10-1982. The revision application was, therefore, transferred to the Tribunal fordecision. A three member special bench of the Tribunal heardthe matter. The Tribunal found that the Trade Notices andthe Tariff Advices, referred to by the Collector, had no application and the Collector was not right in classifying the goods under Item 49 of the Central Excise Act. The Tribunal alsoheld that the Collector was wrong in relying upon I.S.I. specifications for the said classification. The Tribunal observed :"For determining whether Jockey Pulleys are bearings for the purpose of levy of excise duty reference to ISI definitions may not be strictly justifiable. Besides, in the show cause notice given to the petitioners, there was no reference to Isi definitions, therefore, Collector could not base his decision on ISIdefinitions."The Tribunal then held :"The Collector's findings that Jockey Pulleys are known as bearings in the trade is not supported by anyevidence; on the other hand, the appellants had placed sufficient evidence before the Collector as mentioned above which we find no reason todisbelieve.................... (The finding of) the Collector must be and is hereby set aside."
(163) The Tribunal then referred to the decisions of theCentral Government in revision in case of M/s. Scientific Mechanic Works and M/s. Zenit Engineering Works where it was heldthat spindle inspires could not be classified under item No. 49.A decision of the Central Government in revision in M/s. Shree Krishna Cast & Iron Brass Works where it was held that to top rollers do not fall under Item 49, is also referred. The Tribunalhas referred to Central Government's order in M/s. Jain Bros.,New Delhi, where also a similar view was taken. The Tribunal then held :"The above would show that jockey pulleys earlier werenot classified under Item No. 49 of the Central Excise Tariff but were classified under Item No. 68of the Central Excise Tariff, both on the strength of the earlier Trade notice as also subsequent decisions of the Government in similar cases. In J.K.Synthetics Ltd. and Another v. Union of India andothers, 1981, E.L.T. p. 328 (Delhi) it has beenheld as under :"If the matter is looked at from this larger perspective we think it will be clear that there can be only one answer to this question viz. that the department should not be permitted to take different stands unless there is any good or cogent reasonfor the change in view. For example, if the facts are different or if further and fresh facts are brought on record or if the process of manufacture has changed or if the relevant entries in the tariff have undergone a modification or if subsequent to the earlier decision there has been the pronouncement of a High Court or the SupremeCourt which necessitated reconsideration of theissue, it can hardly be doubted that the Government ran take a different view and have thematter agitated right up to Supreme Court, ifnecessary. But when there is no change at all and when the position is exactly the same, legallyand factualty, as it was on the earlier occasion then we think that the department should be restrained from capriciously changing its stand and inflicting unnecessary proceedings and hardship upon assesses.Any authority can depart from a finding arrived at in an earlier year only for cogentreasons. There should be either fresh facts or a change of law or at least a suggestion that while arriving at the conclusion of the earlier year certain material facts or provisions had not been considered and that if they had been considered adifferent view might have been taken. But for no reason at all there can be no departure from the view taken in an earlier year."It is not suggested that there were either fresh facts,change in law, change in process of manufacture orin the entries of the tariff. Applying the ration of above decision, it would appear that the Collector was not justified in changing the stand and holdingthat jockey pulleys are classifiable under Item No.49 of the Central Excise Tariff".
(164) The decision of the Appellate Fribunal in Mukund Engineering Works, is a complete answer not only to the questionof alternative remedy but the entire case of the respondent before us, for the following reasons :
1.The Collector's finding on the trade practice was without any evidence and evidence of the petitioner was ignored.
2.I.S.I. specifications do not determine classifications.They cannot be relied upon when they were not disclosed in the show cause notice.
3.The Collector is bound by the decision of theCentral Government in revision. Indeed, the Tribunal itself felt bound by the said decisions of theCentral Government in revision.
4.Subsequent trade notices and tariff advises were held to be irrelevant for classification of jockey pulleys as falling under Item No. 49.
5.The Division Bench decision of this Court in J.K.Synthetics on the question of estoppel res judicata and binding precedents in tax matters was not only approved but relied upon by the Tribunal.
6.Incidently, it may be noted that it is the same Collector of Customs and Central Excise Ahmedabad Shri B. V. Kumar-who has refused to follow thedecision of the Central Government in revision, hasnot produced any evidence of trade practice and relying purely on ISI. specifications (without disclosing them to the petitioner) imposed penalties in Mukund Engineering as well as. our present case.
7.Having taken the decision on the above grounds in Mukund Engineering by the Special Bench of theTribunal, it would be impossible for the Tribunalto take a different decision in the present case If the Tribunal follows the principles of certainty, and unified judicial approach enunciated by it in Atma Steels Pvt. Ltd. (ibid).
(165) The decision of the Tribunal in Mukund Engineering is in line with the decision of this Court in Bharat Carpets Ltd.v. Union of India, 1978 E.L.T. 111(119) (73) F. S. Gill, J.(who is now the President of the New Appellate Tribunal) asa Judge of this Court held :"I have already observed that after the passing of the order of Government of India on 14-4-1972 (Section 36 of the Central Excise and Salt Act 1944)no change in the process of manufacturing the goods or even in the law has taken place. The AssistantCollector, a subordinate authority, is therefore bound by the decision of the Government of India."
(166) The above decisions would amply demonstrate that IT is futile to direct the petitioners to prefer an appeal to theappellate tribunal. But it is also fertile to remit the matter tothe Tribunal on the question of penalty as is done by two of my brethren. On identical facts the special bench of the Tribunal in Structural and Machineries (Bokaro) Pvt. Ltd., v.Collector of Central Excise, Patna, 1984 (17) E.L.T. 127(74),has held that penalty could not be imposed on the appellants in that case. The question before the Tribunal was whether theappellants, who carried out fabrication work in the year1979-80 without obtaining a Central Excise license were entitled to the benefit of Notification No. 89/79-CE, dated 1-3-1979.The Collector held that the appellants were not so entitled tothe benefit of the said notification and imposed a fine ofRs. 5,000. Setting aside the order of penalty the Tribunal held:"As to the question of penalty, it does nor appear thatthere was any attempt on the part of the appellants to evade payment of duty. The appellants had informed the excise authorities of their activity and themselves voluntarily furnished necessary figures which constitute the basis of the present action. Besides, there was a decision of the Board in the caseof Hindustan Construction Co. Ltd., from which the appellants could reasonably believe that fabrication of structural did not constitute manufacture ofgoods. Considering all this, we do not think that imposition of penalty on the facts and circumstances of the case is justified."VI. Conclusions :
(167) The impugned show cause notice and confiscation order if a repeat performance by Collector of Ahmedabad Shri B. V.Kumar. In Mukund Iron Works the same Collector had ignoredthe earlier decisions of the Central Government in revision and had used I.S.I. specifications against the petitioner in that case without disclosing it in the show cause notice.The new Appellate Tribunal has held that the action ofthe Collector was illegal and his order was set aside. Similar illegalities are committed in the present case and many more.The Collector refused to see the order of the Central Government and the order of the Special Bench of the Court. He didnot hear the petitioner on I.S.I. specifications. "See no evil,hear no evil and speak no evil." The rule of administrative law is if you do not see the binding precedents and do not hear aparty, you shall not speak adversely against it I have alreadydemonstrated that the Collector's order is perverse and arbitrary. The order also violates fundamental rights. The Collector has abdicated his judicial functions. As a Constitutional Court exercising the writ jurisdiction we cannot overlook the illegalities which even the quasi-judicial tribunal has found to befatal. We have a further duty to strike down the order for theother serious grounds mentioned above. I further hold that the conditions imposed on the licenses at the time of the revalidation were bad in law and the licenses could be availed ofas if no such illegal conditions existed. There was no policy to canalise industrial coconut oil through S.T.C in the policy Year 1980-81. The trade meaning of coconut oil particularly for the purposes of canalisation (in the light of the history ofcanalisation) is edible coconut oil. The petitioner had importedthe oil in question as raw materials which was neither canalised nor prohibited. Therefore, there was no violation of Section of the Imports and Exports (Control) Order, 1947 read with Section 11 of the Customs Act, 1962. The confiscation orderpassed under section 111(d) of the Customs Act was illegal.The show cause notice and confiscation order are quashed. the petitioner is entitled to the refund of the amount of fine deposited by it in lieu of confiscation, in both the petitions. The writ petitioners are allowed. The rule is made absolute. The petitioner shall be entitled to Rs. 3,000 as costs for one set in boththe petitions. Per Khanna, J.-1 am in respectful agreement with the detailed and considered judgment of brother Sachar, J.
(168) The import policy of any country, particularly a developing country, has necessarily to be tuned to its general economic policy founded upon its constitutional goals, the requirements of its internal and international trade, its agricultural andindustrial development plans, its monetary and financial strategies and last but not the least the international political and diplomatic overtones depending on "friendship, neutrality or hostility with other countries". There must also be considerable number of other factors which go into the making of an importpolicy. Expertise in public and political, national and international economy is necessary before one may engage in the making or in the- criticism of an import policy. Courts do not possess the expertise and are consequently incompetent to pass Judgment on the appropriateness or the adequacy of a particular import policy. These observations of Chinnappa Reddy,J. in the decision of Liberty Oil Mills and others v. Union ofIndia and others [(1984) 3 S.C. 465] sufficiently bring outthat the formulation of an import and export policy is entirely within the domain of the State, and the courts cannot venture to question its propriety or give any directions.
(169) The approach that in a taxing statute, in case of any ambiguity or the matter being capable of two opinions, the benefit should essentially go to the subject does not hold good with regard to export and import matters or the levy of the customduty. It is primarily for the import control authorities to determine the head of entry in tariff schedule under which any particular commodity fell: but if in doing so, these .authorities adopted a construction which no reasonable person could adopti.e. if the construction is perverse, then it is a case in whichthe Court is competent to interfere. In other words, if there were two constructions which an entry could reasonably bear.and one of them was in favor of Revenue was adonted. theCourt has no jurisdiction to interfere merely because the other interpretation favorable to the subject appeals to the Court asthe better one to adopt. See in this regard the decision of theSupreme Court in Collector of Customs, Madras v. K. Ganga Shetty . This view was again approved in the case of V. V. Iyer of Bombay v. Jasjit Singh and it was observed that where two alternative interpretations are possible of the scope and applicability of Item74(vi) of Part V of schedule I to Imports (Control) Order,1955 made under Section 3(1) of the Imports and exports(Control) Act, 1947, and Customs authorities adopt a reasonable view relating thereto which is favorable to Revenue, such finding of the authorities cannot be interfered with by HighCourt under Article 226 even though another view contrary to one adopted is in favor of the subject.
(170) It is now also well settled that the Government of thecountry is well competent to make import policy of total prohibition or render the same under heavy customs barrier or entrust the same to selected agencies or channels in the interest ofthe public. Consequently the decision that import shall be canalised is per se a reasonable restriction, and is difficult to challenge courts (Glass Chatons Importers and Users Association and others v. Union of India and others, .
(171) This is next no gain saying that in the interpretation ofitems in taxing statutes what is understood in common parlance is the meaning which has to be attached to them. They have to be taken in the sense which people conversant with the subject matter with which the statute is dealing will take them tobe. However, the same item may be understood in different contexts depending upon whether he is a manufacturer, producer. importer or consumer. Even in different, sets of businesscommunity, the same may not have universal implication. Thus the term "spirit" may invite different response amongst dealers of medicines from those connected with paints, furniture etc.tne class may treat the same as having reference to denatured spirit and the other methylated spirit. A buyer going to a cycle market and seeking "pump" would naturally gat an, air pump while another seeking the same item in an electrical or sanitary market may have response of electrical or water pump. Cash million which has no element of wool in it would generally be found in shops selling wool and the house-wife would only permit as wool. Similarly it does not stand to reason that the item''coconut oil" must have relevance to that which is edible and not the non-edible or industrial variety. It is in the State of Kerala and some places adjoining the same that coconut oilis primarily used as a cooking medium. In the rest of thecountry it is understood and used for non-edible purposes like hair oil, constituent of soap industry and used in various otherproducts. In fact it is overwhelmingly used for purposes other than as cooking medium, as such it would be unwarranted to limit its meaning to edible coconut oil only. There are a number of grades and types of coconut oil. There is, therefore.no justification to hold that a particular type or grade only canbe treated as coconut oil and that the others are not. In fact the edible stage reaches after carrying out refinement of this oil.Thus a specie docs not loose its character and origin from thegenes.
(172) My learned brother Sachar, J. has rightly observed that it is difficult to appreciate by what logic the word coconutoil mentioned in the import policy can be restricted to merely edible variety of coconut oil. Rather it can as well he why not the non-edible and industrial variety which alone after some purification is rendered as edible.
(173) The licenses on the. basis of which the petitioner imported coconut oil in September, 1982 themselves made it clear that they were subject to the prohibition or regulation effecting the importation of the goods which might be in force at thetime of their arrival. The petitioner having chosen to act underothers.these licenses could not be heard to plead that this vital condition of import was not operative. In the year 1981-82 and 1982-83 no matter of doubt had been left when it was clarified that item coconut oil included both edible and industrial. This incorporation was plainly clarificatory in nature as it brought outwhat was always meant or understood to be. Thus the petitionerin any case was left with no misgivings whatsoever that in September 1982 when the import was effected it was prohibited in private hands and had to be canalised through the Slat Trading Corporation only. Even independent of this specific condition incorporated in those licenses, it is now well settledthat any restriction in the Import Trade Control Policy Book or Red Book would govern the license as one of the conditions upon which import could be made under the. licenses. See inthis regard the decision of the Supreme Court in Hazarimal K.Shah, v. Collector of Customs. Madras, .
(174) The scheme of revalidation of licenses enjoined revalidation for the first six months. On the same terms and conditions as mentioned in the license. However in case such revalidation has to be further obtained for a period after those six months the authorities are competent to impose such conditions as they may deem proper. The import thereafter can he elected subject to such conditions. It is for the license holder to not avail of the license if the conditions are not acceptable to him. If however he does so, he is bound by them andmust be held to be estopped from pleading later that he. wasnot covered by those conditions. In this record there is no gain saying that import licenses are issued every year keeping in view the country's requirements of that year. Normally such licenses should be availed of during the period for which they are issued. If they are allowed to lapse, the discretionrests. with the authorities to revalidate them or not. If they in this process choose to impose certain conditions, as they may consider appropriate considering the requirement of ensuingyears, no exception can be taken. The license holder who has already made a default in importing the goods in the relevant year turn which the license was issued can avail the license subject to such conditions only. Now in the present case. the revalidations plainly enjoined that the imports would be subject to the policy in force in the year 1982-83 when the in? port waseffected. By then the item coconut oil had been beyond any iota of controversy made clear as to include both edible andindustrial coconut oil.
(175) The petitioner has not disputed that against. the impugned Older of the Collector an appeal could be filed before theTribunal. This was not done and recourse to instead taken byway of the present writ petition. Normally we should have little hesitation in declining to exercise writ jurisdiction and required the petitioner to avail of the alternative remedy before the Tribunal. The High Court should be slow in encouraging parties to circumvent the special provisions made providing for appeals and revisions in respect of orders which they seek to challenge by writ petitions under Article 226. Moreover,the jurisdiction of the High Court in the exercise or writ petitions is limited. It cannot act as an appellate authority or embark upon fresh appraisement of facts or going into elaborate examination of evidence. See in this regard the decisions reported as S. Jagadeesan v. Ayya Nadar Janaki Ammal College and another, ; Thansingh
Nathmal and others v. The Superintendent of Taxes. Dhubti and others and The British India Stem Navigation Co. Ltd. v.
Jasjit Singh, Addl, Collector of Customs Calcutta and others .
(176) It, however, appears that this recourse to moving theHigh Court directly is not altogether an innocent and straightforward conduct. My learned brother Sachar .J. has rightly termed it as a sort of trap. This is apparent from the manner in which the decision of the Central Government dated 31-3-82is sought to be treated as the final word for the customs department, and this court is sought to require the customs authorities to abide by the same whatever view they or this court may hold about the meaning attachable to the item "coconut oil" and the implications of the terms and conditions of the licenses. It is not disputed that if an appeal had be in filed, theTribunal could have come to an independent decision and even differed with the said decision of the Central Government.That, however, the Tribunal has been shut out from doing so by being by-passed in the form of this writ, and when the department and this court want to go into the propriety of thatdecision, we are told to keep our hands off. I am in this regard unable to agree with the petitioner that the decision of theCentral Government is a binding precedent on the customsdepartment. It is the decisions of the Supreme Court and ofthe High Courts which can operate as precedents. Stare decisions applies only to the decision of the highest courts. The CentralGovernment was not a court. It is not even certain if the Special Secretary who gave that decision on behalf of the CentralGovernment was a law graduate. Subordinate courts, quasijudicial bodies or tribunals have not. enough judicial maturity,expetise, acumen and experience which can make their decisions as precedents having binding force. They can only bepersuasive. The decisions on which the petitioner has soughtto rely have been distinguished by learned Sachar J. and I neednot refer to them here again. However, there is one aspect which needs to be mentioned. Section 131(3) of the Customs Act asit existed before the subsequent amendment am' under whichMr. M. G. Abrol, Special Secretary of Ministry of Finance, Department of Revenue, Government of India, purported to acton behalf of the Central Government could be invoked by theCentral Government for the limited purpose of annulling or modifying any order passed under Section 120 or Section 130 of the Act. This was when it was exercising powers of its ownmotion. None of this was done in that case. No annual mentor modification of the order of Central Board was being madeby Mr. M. G. Abrol acting for the Central Government. As such once he had found that order did not require such fate he should have kept his hands off the order and lift is as it was and discharged the notice. Instead what he purported to do was to given a stamp of authenticity to the order passed by theCentral Board. This was none of his function under Section 131(3). The order, therefore, went beyond the powers available under Section 131(3). What made Mr. Abrol to make this order in his over-zealousness to provide authenticity to theCentral Board is difficult to say. The revenue has no doubt pointed out that it was his last working day and he was retiring on 31/03/1981. I should have been extremely reluctant to make these passing observations but for the magic want treatment that the petitioner has sought to attach to this order. Ithas. therefore, been felt necessary to bring out the inherent lack of competency of the Central Governmem to make such orderunder Section 131(3). It would be proper to reproduce thesame verbatim as under :--
(3)The Central Government may of St.- own motion annual or modify any order passed under Section 128 or Section 130.
(177) When such had been the strategically procedure adopted by the petitioner 1 should not have been inclined to require theTribunal to go into the propriety of the quantum of redamptionamount. This is veritably putting the petitioner in advantageous position as if he has actually filed an appeal before the Tribunal I would have felt more inclined to leave the petitioner to himself file the appeal and agitate the matter before the Tribunal and seek condensation of delay. The discretion in that regard would rest with the Tribunal and the same should not be fettered by us by requiring the Tribunal to treat the petitioner as if he hasalready filed an appeal before him.
(178) The redemption amounts levied in the two cases beforeus totalled Rs. 5 crores. These heavy amounts were still paid by the petitioner and the coconut oil got released. It has subsequently been marketed. The customs authorities have, Of course, referred to the prevailing market rates then and pointedout that the petitioner has still made substantial profits. the petitioner has, however, disputed that the market rate was asmentioned by the respondent and has pleaded that the same was much less. It has also been pointed out that the petitioner had to pay considerable interest to the banks from which loans were taken for payment of that large amount. Be that as itmay. brother Sachar J. has directed the consideration of the propriety of the quantum of redemption amount to the Tribunal.The circumstances and considerations which prevailed in doing so have been mentioned in my brother's judgment. It has been taken note that the present cases have taken considerable time to decide and passed through various stages. Requiring the petitioner to move appeal before the Tribunal against the orderof the Collector has been considered to be cumbersome and may further delay the matters. Moreover, this court in the exercise of the writ jurisdiction would not like to probe into and weigh the facts and circumstances relevant for determination of proper quantum of redemption amount. As such in the ultimate analysis I am inclined to concur with brother sachar .J. when he has referred the matter to the Tribunal
(179) The controversy involved in the Present case has beensimpliciter. viz. whether the term "coconut oil in its amplitude covers all varieties of oil which go with such name. or that it should be restricted to one variety, namely, edible A person inthe street, a house-wife, or those in business and industry, would answer its implication as to include all varieties. Even the petitioner, while describing non-edible or industrial oil did not leave the expression there, but added and affixed the basic character "coconut oil" with the same. Mere mention of non-edible orindustrial without the use of coconut oil would leave that entirely vague and indefinite as to which oil it has reference. In fact,when the Central Government purported to act under Section 131. it professed to resolve conflicting views taken by differentCollectors, whether the expression "coconut oil" included boththe varieties. It is, therefore, futile to say that this term has implication of edible variety only.
(180) It has been taken note by brother Wad, J. that thepropriety of importing edible coconut oil has been felt from time to time because of shortages in the internal market andto sustain the price level in the domestic consumer market. Non-edible coconut oil was not imported as production in the country adequately met the requirements. In the circumstances, if the State Trading Corporation was importing edible variety alone,that was as a fact only, and the letter obtained by the petitioner from that Corporation simply narrated what was in vogue orhappening. Simply because the requirements of the country at a given time did not compel the government to import industrialvariety, the same could not be taken to fall outside the canaliseditem of coconut oil. It still remained as such. The letter from the State Trading Corporation, therefore, could only clarify what was actually being canalised as a fact, and not what ought to be essentially canalised. The scheme of the Statute has in this regard conferred the exclusive power with the Chief Controller ofImports & Exports to give any authentic opinion in case of doubt on interpretation of any matters relating to import. If he therefore. gave such opinion, the same was in exercise of power available with him. and not that thereby he usurped in himself the quasi-judicial functions of the Collector or the Board. Of course.those authorities may still be inclined to ignore his interpretation if they find in compelling circumstances to not agree with thesame. However, mere faking into account his views does not render the order of the Collector or the Board as not theirs, and.therefore violative of well recognised judicial norms of independence.
(181) I am unable to accept that this writ petition is maintainable without exhausting the other remedies of appeals available under the Statute, in case it is sought to be urged that theCentral Government's order under Section 131 is binding for alltimes, and the Tribunal too could not have taken an independent contrary view. Much water has flown since the old concept adhered to by Judicial Committee of the Privy Council thata subsequent Bench could not differ with the legal view takenin an earlier decision. That infallibility of judicial mind has long been given a go-bye, and with changing concepts and values,highest courts have little hesitancy in modifying the approach where it is noticed that an error has crept in. The courts in India have taken divergent views on interpretation of laws at different times, and it is too late now to propound a theory of moratorium on interpretation of legal propositions. Even the Constitutional interpretations have occasionally fallen assunder.and most note able has been the case of L.C. Golak nath andothers v. State of Punjab and another, in the contact of Kesavananda Bharti
Sripadagalavaru,(1973) Supp. S.C.R. 1(80). The propriety of service of notice under Section 106 of the Transfer of Property Act in rent control cases has received different interpretations from the SupremeCourt. Similar were two cases under the Prevention of Food Adulteration cases of Municipal Corpora.tion of Delhi vs. TekChand Bhatia 1979(11) Fac 218(81) & Municipal Corporation of Delhi, V. Kacheroo Mal, 1975(11) Fac 223(82). Correction of judicial error does not necessarily amount to creating confusion in the minds 'of the public as to the position of law. It rather sets the things right and constitute? departure from erroneous persistency.
(182) It is also not unoften for a retiring judge to deliver judgments shortly before or on the date of retirement in matters which have been heard quite some time earlier. However, the position is different when the case itself is taken up by an officer on the last date involving stakes of high magnitude, and adjudicating upon them before laying the charge of the office. It wouldbe all the more so in view of the interpretation of the powers available as referred to by me above under Section 131(3) ofthe Customs Act.
(183) A number of decisions have been referred in which the courts have observed that the decisions of the highest Tribunal are binding on the subordinate authorities. Those were mostly cases in which remand orders had been made. There can be no possible dispute that decision of the highest Tribunal in a particular case is binding on all such authorities in that case. There can also be cases where the very nature of the decision would bind for future assessments as well, such as recognition of partition or bringing the property into the common hotchpotch ofthe Hindu undivided family. Such acts, take place once, and if their existence is recognised, naturally they are not open to purview differently in other years. However, principles of res judicata or binding character as precedent in another case is not operative in taxing statutes, much less of quasi-judicial bodies.They, of course, deserve utmost respect and have persuasivevalue.
(184) When a case is referred to larger Bench by a SingleJudge, the entire file, papers and written submissions made andthe file of the Single Judge go before the larger Bench. Those documents and submissions need not be, therefore, re-submitted.
(185) Brother Wad, J. has aptly observed that the new Appellate Tribunal has been established not only to ensure objectivity and impartiality but to demonstrate through its actions that it was doing justice and. fair-play. Why, therefore, the petitioner has chosen to by-pass the Tribunal and come straightaway in .this writ, is not understandable. There should be no reason to suppose that the Tribunal would not have given judicious independent decision.
(186) Before concluding, I may also refer to the cartoon about which reference has been made by brother Wad, J. It need hardly in this regard, be impressed that often a cartoon posrsa matter of momentary interest, or an aspect from certain point of view. It would be far fetched to interpret it as a sore analysis of the problem in all its facets. There should be no dearth of cartoons depicting powerful vested interests exerting their influences and pulling strings with the government or the authorities that be towards their own way of thinking or interests. In a big money owned press, not unoften view-points favorable to particular sections are high-lighted.
(187) As a result, I am unable to persuade myself to subscribe to the view taken by my learned brother Wad, J. I concur withthe judgment of brother Sachar, J.PER MAJORITY In view of the .decision by the majority, the result will be that the contentions of the petitioner fail excepting that the matter will be remitted to the Appellate Tribunal only on thelimited question of redemption fine. All other pleas raised by the petitioner fail. The writ petition is disposed of accordingly, but with no order as to costs.