F. N. ROY vs. COLLECTOR OF CUSTOMS, CALCUTTA.

WRIT PETITION (CIVIL) No. 438/1955Supreme Court[1957] 1 S.C.R. 115116 May 1957Bench: 5 JudgesAuthor: SUDHI RANJAN DAS, SYED JAFFER IMAM, S.K. DAS, P. GOVINDA MENON, A.K. SARKAR10 pages
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court held that Section 3(2) of the Imports and Exports (Control) Act, 1947, does not offend Article 14 of the Constitution. It merely applies the Sea Customs Act, 1878, to certain cases and does not grant discretion to Customs authorities. Regarding Section 183 of the Sea Customs Act, the Court found that it assumes a power to confiscate exists under other provisions and does not authorize confiscation itself. The Court noted that the Imports and Exports (Control) Act, 1947, by its Section 3(2), modifies Section 183 of the Sea Customs Act to make the option to pay a fine 'may' instead of 'shall', thus not mandating it. Therefore, the absence of an option to pay a fine did not invalidate the confiscation order. The Court also held that Section 167, item 8, of the Sea Customs Act, 1878, does not offend Article 14. The discretion to impose a penalty is within the maximum limit of Rs. 1,000, is exercised by high Customs officers, and is subject to appeals. The Court found no evidence of mala fide action, noting the petitioner was given an opportunity to be heard and did not avail it. The appeal was correctly held to be time-barred. The Court dismissed the petition.

What were the facts?

The petitioner, an importer, imported Zip Chains from Japan in August 1953, relying on a government notification granting general permission for import of certain goods. The goods arrived in Calcutta, and the petitioner's bank paid Rs. 11,051-4-0. Before clearance, the Assistant Collector of Customs informed the petitioner that he lacked a valid import license and asked him to show cause why the goods should not be confiscated under Section 167(8) of the Sea Customs Act, 1878. The petitioner argued the goods were covered by the notification and no license was needed. The Collector of Customs, on December 25, 1953, ordered confiscation and imposed a penalty of Rs. 1,000. The petitioner's appeal to the Central Board of Revenue was dismissed as time-barred. A subsequent revision application to the Government of India was also rejected. The petitioner's writ petition in the High Court of Punjab was dismissed, leading to the present application to the Supreme Court under Article 32 of the Constitution.

What were the issues?

1. Does Section 3(2) of the Imports and Exports (Control) Act, 1947, offend Article 14 of the Constitution by conferring uncontrolled discretion on Customs authorities? 2. Does Section 183 of the Sea Customs Act, 1878, which mandates giving an option to pay a fine in lieu of confiscation, apply in this case, and if not, does its absence render the confiscation order invalid? 3. Does Section 167, item 8, of the Sea Customs Act, 1878, offend Article 14 of the Constitution by allowing uncontrolled discretion in fixing penalties? Assessee's Arguments: The petitioner argued that the confiscation order was invalid because it did not offer an option to pay a fine in lieu of confiscation, as required by Section 183 of the Sea Customs Act. The petitioner also contended that Section 3(2) of the Imports and Exports (Control) Act, 1947, and Section 167, item 8, of the Sea Customs Act, 1878, were invalid as they offended Article 14 of the Constitution by granting uncontrolled discretion to Customs authorities. The petitioner further claimed the order was mala fide, passed ex parte, and that the appeal was not out of time, suggesting wrongful arrest prevented timely filing. Revenue's Arguments: The revenue implicitly argued that the provisions were valid and the confiscation order was justified. They contended that the petitioner had an opportunity to be heard and chose not to avail it. They also argued that the discretion under Section 167(8) was not uncontrolled, as it was exercised within statutory limits and subject to appeals. The revenue asserted that the petitioner's appeal was indeed time-barred and that the confiscation was justified due to the petitioner's deliberate violation of import restrictions, as evidenced by prior communication regarding similar goods.

Which sections of the Income-tax Act were involved?

Section 167(8),Section 183,Section 3(1),Section 3(2)

AI-generated summary — verify with the full judgment below

.- S.C.R. SUPREME COURT REPORTS 1151 the facts and circumstances as stated in the agreed statement of the case. We are of opinion that the answer was correctly given by the High Court of Bombay. The transaction in its· true legal character was a relinquishment of the managing agency and was neither a sale nor a transfer thereof. Therefore, the High Court correctly answered the question in the negative. In .the result, the appeal fails and is dismissed with costs. Appeal dismissed. F. N. ROY 'V. COLLECTOR OF CUSTOMS, CALCUTT A. (S. R.- DAS c. J., JAFER IMAM, s. K. DAS, GovrNDA MENON and A. K. SARKAR JJ.) ·sea Customs-Import without licence-Confiscation of goods- Validity of Order-Discretion of Customs-authorities-Validity of Enactment-Sea Customs Act, 1878 (Vlll of 1878), ss. 167(8), 183- Imports and Exports (Control) Act .. 1947 (XVIII of 1947), s. 3(1) (2)-Constitution of India, Art.

14.

Section 167, item 8, of the Sea Customs Act, 1878, provides that if any goods the importation of which is for the time being prohibited or restricted by or under Ch. IV of the Act, which Chapter includes s. 19, be imported into India contrary to such prohibition or

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