A. vs. VENKATESWARAN, COLLECTOR OF CUSTOMS, BOMBAY versus RAMCHAND SOBHRAJ WADHWANI AND ANOTHER

CIVIL APPEAL No. 388/1956Supreme Court[1962] 1 S.C.R. 75304 March 1961Bench: 5 JudgesAuthor: P.B. GAJENDRAGADKAR, A.K. SARKAR, K.N. WANCHOO, K.C. DAS GUPTA, N. RAJAGOPALA AYYANGAR20 pages
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court, by a majority, held that the High Court was in error in its view that the time-barring of the statutory remedy was a sufficient ground to exercise discretion in granting relief. However, the majority also held that the consignment was liable only to a duty of 30% under item 45(3) of the Indian Tariff Act, 1934, as the tariff items were not reasonably capable of any other construction. The levy under item 61(8) was manifestly erroneous. The Court reasoned that the rule of exhausting alternative remedies is a matter of discretion, not a jurisdictional bar. The majority found that the High Court had not exercised its discretion improperly in entertaining the writ application given the manifest error in the levy. The dissenting opinion argued that item 61(8) was intended for all gold-plated articles except cutlery and surgical instruments, and item 45(3) was for fountain pens simpliciter, thus the gold-plated fountain pens were correctly assessed under item 61(8). The appeal was dismissed.

What were the facts?

The assessee imported Sheaffer fountain pens from Australia, which had gold-plated nibs, caps, and clips. The customs authorities assessed duty under item 61(8) of the Indian Tariff Act, 1934, for "Articles, other than cutlery and surgical instruments, plated with gold or silver," at 78.5% ad valorem. The assessee contended the pens fell under item 45(3) for "Fountain pens, complete," at 30% ad valorem. The assessee, aggrieved by the Collector of Customs' order upholding the higher duty, filed a writ petition in the Bombay High Court under Article 226 of the Constitution, bypassing the statutory revision remedy to the Central Government under Section 191 of the Sea Customs Act, 1878. The High Court initially granted relief, and on appeal, the appellate bench confirmed it, noting the statutory remedy had become time-barred.

What were the issues?

1. Whether the High Court erred in exercising its discretion to entertain the writ application under Article 226 of the Constitution, despite the assessee not exhausting the statutory remedy of revision to the Central Government under Section 191 of the Sea Customs Act, 1878, especially when the statutory remedy became time-barred by the date of the appeal hearing. Assessee's Contention (implied from High Court's reasoning and Supreme Court's majority): The High Court was justified in entertaining the writ petition because the levy was manifestly erroneous, and the statutory remedy had become time-barred, making it impractical. The rule of exhausting alternative remedies is a matter of discretion, not a bar to jurisdiction. Revenue's Contention (implied from Collector's resistance and Supreme Court's dissenting opinion): The assessee was disentitled to move the High Court under Article 226 as they had not availed the statutory remedy of revision to the Central Government. The assessment under item 61(8) was correct. 2. Whether the imported fountain pens, having gold-plated nibs, caps, and clips, were liable to duty under item 45(3) (Fountain pens, complete) or item 61(8) (Articles plated with gold or silver) of the First Schedule to the Indian Tariff Act, 1934. Assessee's Contention: The pens were "Fountain pens, complete" and thus fell under item 45(3) at 30% ad valorem. Revenue's Contention: The pens were "Articles plated with gold or silver" and thus fell under item 61(8) at 78.5% ad valorem.

Which sections of the Income-tax Act were involved?

Section 191,Section 5(1)(a),Section 10(2)(a)

AI-generated summary — verify with the full judgment below

' ' • .. 1'.lft '. """·. I S.C.R. SUPREME COURT REPORTS 753 A. V. VNNKATESWARAN, COLLECTOR OF CUSTOMS, BOMBAY v. RAMOHAND SOBHRAJ WADHW ANI AND ANOTHER (P. B. GAJENDRAGADKAR, A. K. SARKAR, K. N. WANOHOO, K. C. DAS GUPTA and N. RAJAGOPALA AYYANGAR, JJ.) Customs Duties-Fountain pens with nibs and caps plated with gold-Rate of duty-Indian Tariff Act, I934 (32 of r934), Sch. I, Items 45(3), 6r(8). Writ-Principles governing issue of-Alternative remedy time- barred-Application for writ, if lies-Constitution of India, Art.

226.

Under a licence granted for the import of fouutain pens at not less than Rs. 25 C.l.F. value, the respondent imported She- affer pens from Australia, which had nibs which were gold plated and also caps and clips of similar composition. The im- ported goods were assessed to duty by the customs authorities under item 61(8) of the First Schedule to the Indian Tariff Act, 1934, dealing with "Articles, other than cutlery and surgical instruments, plated with gold or silver" which provided for a duty of 78! per cent. ad valorem, while the respondent claimed that the goods fell within item 45(3) which related to the article described as "Founta

The order continues below.

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