123 to 125 of 1957 and 118 of 1959
Petitions under Article 32 of the Constitution of India for enforcement of Fundamental Rights
N C Chatterjee and section C Mazumdar for the petitioners In Petns
Nos 123 to 125 of 1957
A V Viswanatha Sastri R Ganapathy Iyer and G Gopalakrishnan for the petitioners In Petn
No 118 of 1959
H J Umrigar B R L lyengar and T M Sen for the Respondents In all the petitions
Harnam Singh and Sadhu Singh for Intervener No 1 B section and Co 40 308 D B Prem and Sadhu Singh for Intervener No 2 French India Importing Corporation
August 23
The Judgment of B P Sinha C J Imam and Subba Rao JJ was delivered by Subba Rao J Sarkar J and Shah J delivered separate Judgments
SUBBA RAO J
These four petitions are filed under article 32 of the Constitution for quashing the orders of the Assistant Controller of Imports and Exports
the Collector of Customs and Central Excise Pondicherry the Board of Revenue and the Government of India and for an appropriate direction requiring the respondents to refund the amount realised from the petitioners
Messrs Universal Imports Agency and the proprietor of the agency are the petitioners in the first three petitions and Messrs Victory Traders are the petitioners in the last one
The Chief Controller of Imports and Exports Pondicherry the Collector of Customs and Central Excise Pondicherry the Central Board of Revenue and the Government of India are the respondents in all the petitions
Messrs French India Importing Corporation and Messrs B section  Co intervened in the Writ Petitions
Pondicherry was a French Possession in India
On October 21 1954 the Government of India and the Government of France entered into an agreement hereinafter called the Indo French Agreement whereunder there was a defacto transfer of the administration of the French Settlements to the Government of India hereinafter called the merger as and from November 1 1954
The de jure transfer was postponed
Messrs Universal Imports Agency are a proprietary concern registered with the Services Des Contribution Pondicherry having its principal place of business at Pondicherry
Sri Mohanlal B Gandhi is the proprietor of the said Agency
They are established importers and general merchants dealing in ball bearings mill stores porcelain ware glass marbles beltings and various other goods
They commenced their business at Pondicherry on or about April 14 1954 under 309  patente  No 70 of 1954 issued by the Controller of the Contributions Department of the French Government at Pondicherry
In the middle of August 1954 they placed 8 indents with Messrs Shimada Trading Co Ltd Osaka Japan for importing porcelain wares glass marbles and beltings and the total value thereof amounted to Rs 57418 12 0
About the end of August 1954 they opened three irrevocable Letters of Credit with Messrs Banque De L  Indo Chine in favour of the said suppliers
The bankers obtained authorization from the Bureau Des Affaires Econo mique Pondicherry for the requisite foreign exchange from the open market and sold the same to the petitioners for the amount involved in the Letters of Credit
The petitioners made full payment for the said foreign exchange and the said Bank kept the said foreign exchange and credit irrevocably available with their Overseas Agent at Japan for the benefit of the suppliers against full set of shipping documents
All the said Letters of Credit were valid for three months and under the agreement the suppliers were to ship the goods within the said time
On or about November 1 1954 the said goods were in different stages of shipment  in some cases they were in the course of shipment and in others awaiting shipment in a matter of a few days and indeed a large part of the goods had already been placed on board  section section Shillong  and  section section Cambodge  and the balance of the goods were in the course of being loaded in  section section Sunda 
In January and February 1955 and thereafter the goods arrived at the Port of Pondicherry
The Collector of Customs confiscated all the goods on the ground that they were imported without a licence and gave an option to the petitioners to pay in lieu of confiscation fine amounting to Rs 30390 
The petitioners took up the matter with the Government of India without any success and finally they paid the said penalty under protest and cleared the goods
On or about September 1954 the petitioners placed several indents with their overseas suppliers Messrs Shimada Trading Co Limited Osaka Japan and others and the total C I F value thereof amounted 310 to Rs 40470 14 0
They arranged for the full payment of eight cheques to the said suppliers of the value of the goods through the Banque De L  Indo Chine
Their bankers duly obtained authorization from the Bureau Des Affairs Economique Pondicherry for the requisite foreign exchange and sold the same to the petitioners for the amount involved in the cheques and the said foreign exchange was kept available to the suppliers
On or about November 1 1954 the goods ordered were in different stages of shipment and in some cases the goods were in the course of shipment and in others awaiting shipment in a matter of a few days
In January and February 1955 the goods arrived at the port of Pondicherry
The Collector of Customs treated the imports of the goods as unauthorized and confiscated the same and gave the petitioners an option to pay in lieu of confiscation a penalty amounting to Rs 20700 The petitioners carried the matter to the Government without any success
Ultimately the petitioners paid the penalty under protest and cleared the goods
The petitioners again in the middle of August 1954 placed several indents with their overseas suppliers for importing hair belting torches belt fasteners electric lighting torch bulbs and primus stoves and the total C I F value was Rs 52572 12 0
They opened irrevocable Letters of Credit and issued cheques against full advance remittance in favour of their suppliers through the said Banque De L  Indo Chine
Their bankers arranged through the Bureau Des Affairs Economique Pondicherry for the requisite foreign exchange from the open market and sold the same to the petitioners for the amount involved in the said Letters of Credit and cheques
The petitioners made full payment for the said foreign exchange and the said bank kept the said foreign exchange and the Letters of Credit irrevocably available with their overseas agents for the benefit of the suppliers against full set of shipping documents and the cheques issued by the bank on overseas banks were sent to the suppliers as full advance remittance against the contracts
In January and February 1955 the goods arrived at the 311 port of Pondicherry
The Collector of Customs confiscated the goods and gave the petitioners an option to pay in lieu of confiscation fine amounting to Rs 24210
Though the petitioners took up the matter with the Government of India nothing came out of it
They paid the penalty under protest and cleared the goods
Messrs Victory Traders the petitioners in Petition No 118 of 1959 are carrying on business of import and export and general merchandise in Pondicherry from the year 1949
The petitioners were importing into Pondicherry a number of articles from various countries under  patente  No 126 of 1954 granted by La Controleur Pondicherry
On August 20 1954 they applied to the Chief Bureau Economique Pondi cherry requesting them to grant permits to import goods from foreign countries
The said Bureau replied that no import licence was required for goods to enter the territory
Thereafter the petitioners placed orders with foreign dealers
In the middle of August 1954 and early in September 1954 they placed a number of indents with their principals in foreign countries for importing fan belts corn emery soda water bottles glass marbles etc of value pound 13870
The orders were backed by full payments in many cases and at least half the payments in others
These payments were made by demand drafts issued by the Banque De L  Indo Chine
In January and February 1955 and thereafter the goods arrived at the port of Pondicherry and they were confiscated by the Collector of Customs who gave the petitioners an option to pay in lieu of confiscation fine aggregating to Rs 91100
After filing appeals to the Central Board of Revenue and thereafter a revision to the Government of India with no success the petitioners cleared the goods after paying the penalty under protest
It is clear from the foregoing facts that the petitioners entered into before the merger firm contracts of sales by import with foreign sellers made available foreign exchange either under Letters of Credit or otherwise and the goods were shipped either before or after the merger though they reached their destination 312 after the merger
The said goods were confiscated by the Collector of Customs under the following circumstances
Under the Indo French Agreement the entire administration of the French Settlements was vested with the Government of India from November 1 1954 though de jure transfer had been postponed
In pursuance of the Indo French Agreement the Ministry of External Affairs published a Notification No section R O 3315 dated October 30 1954 purporting to be under section 4 of the  and called the French Establishments  Application of Laws Order 1954 hereinafter referred to as the Order
Under paragraph 3 of the said Order the Sea Customs Act 1879 the  the Imports  Exports Trade Control Act 1947 the Foreign Exchange Regulation Act 1947 and the Indian Tariff Act 1934 were extended to Pondicherry
On November 1 1954 the Government of India appointed a Controller of Imports  Exports for the French Establishments and paragraph 4 of the same notification gave the following information and guidance to the public   As regards orders placed outside the Establishments and finalised through the grant of licence by the competent French Authorities in accordance with the Laws and Regulations in force prior to 1st November 1954 licence holders are advised to apply to the Controller of Imports  Exports for validation of licences held by them
No fees will be charged for these applications
The applications should be accompanied by the original licence and should give particulars about   Licence holders are advised not to arrange for shipments of goods until the licences held by them have been validated by the Controller of Imports and Exports at Pondicherry
 The petitioners by way of abundant caution applied to the Chief Controller of Imports  Exports for licences for clearance of goods but they were all rejected and the petitioners were told that their goods would be treated as unauthorized imports and they were advised to approach the Collector of Customs and Central Excise 313 for conditions regarding their release
As stated supra after the goods arrived at the port of Pondicherry the Collector of Customs and Central Excise made the various orders confiscating the goods and giving the petitioners option to pay penalties in lieu of confiscation
 All of them paid the penalties under protest and cleared the goods
The appeals filed to the Central Board of Revenue were dismissed and the revisions filed against the orders of the Central Board of Revenue to the Government of India were also dismissed
The petitioners filed the petitions under article 32 of the Constitution questioning the validity of the orders of confiscation
The respondents in their counter affidavits claim that the orders made by them are valid and in accordance with law
Learned counsel for the petitioners raised many contentions in support of their petitions
It is not necessary to enumerate them as the petitions can effectively be disposed of on the basis of one of the contentions
The said contention may briefly be stated thus The petitioners have the fundamental right to hold and to carry on their import trade and that the Notification No section R O 3315 dated October 30 1954 on the basis of which the orders of confiscation were issued has a saving clause which excludes the operation of the said Notification in respect of transactions whereunder the confiscated goods were purchased and imported
The said saving clause embodied in paragraph 6 of the Order reads  Unless otherwise specifically provided in the Schedule all laws in force in the French Establishments immediately before the commencement of the Order which correspond to enactments specified in the Schedule shall cease to have effect save as respect things done or omitted to be done before such commencement 
Relying on this paragraph it is contended that the transactions entered into by the petitioners with the foreign dealers were  things done  within the meaning of this paragraph and therefore they were saved from the operation of this Order
For the respondents 314 it is argued that as the confiscated goods were brought into India after the commencement of the Order the goods confiscated were outside the pale of the saving clause
The question raised falls to be decided on a true interpretation of the terms of paragraph 6 of the said Order
In order to apply the said paragraph 6 to the present case the following facts have to be ascertained  1 What are the laws specified in the Schedule  2 What were the laws in force in the French Establishments before the commencement of the Order corresponding to the enactments so specified  3 What were the  things done  or omitted to be done under the said laws It is not necessary to enter into any elaborate survey of the laws specified in the Schedule
Broadly stated the Imports  Exports Trade Control Act enables the Central Government to make an order making provisions for prohibiting restricting or otherwise controlling the import or export of goods of any specified description
It makes the infringement of such restrictions an offence and a person contravening the same is punishable with imprisonment for a term which may extend to one year or with fine or with both
The Act further says that the goods imported in violation of the restrictions shall be deemed to be goods the import of which has been prohibited or restricted under section 19 of the Sea Customs Act
In exercise of the powers conferred by section 3 and section 4A of the Imports  Exports Trade Control Act the Central Government made an order dated December 7 1955
Under section 3 of that order no person shall import any goods of the description specified in Schedule 1 except and in accordance with a licence or a customs clearance permit granted by the Central Government or by any authority specified in Schedule 2 to that order
There are also provisions prescribing the procedure for obtaining licences the conditions of the licences and for their cancellation or modification
It is therefore clear that under the said Act no goods can be imported into India without a licence obtained in the prescribed manner from the prescribed 315 authorities
The Sea Customs Act provides for the levy of sea customs duty imposes prohibitions and restrictions on imports and exports in respect of certain goods and imposes punishment for infringement of the provisions of the Act
Under section 1678 of the said Act read with section 32 of the Imports and Exports Trade Control Act 1947 if any goods the importation or exportation of which is prohibited or restricted are imported into or exported out of India contrary to such restrictions or prohibitions the goods concerned are liable to be confiscated and the persons involved are also liable to penalty
The Foreign Exchange Regulation Act 1947 provides for the regulation of payments dealings in foreign exchange and securities and the import and export of currency and bullion
It prohibits dealings in foreign exchange except by persons authorized to deal in the same and it further provides penalties for contravention of any of the provisions of the Act
Briefly stated the Indian law as disclosed by the aforesaid Acts is that imports into India without a licence are prohibited the goods so imported in contravention of the restrictions imposed are liable to be confiscated and that foreign exchange cannot be obtained otherwise than under the provi sions of the Act
Persons infringing the laws are liable to prosecution in addition to confiscation of the goods involved
What was the pre existing law in Pondicherry corresponding to the enactments specified in the Schedule Neither the Acts governing the imports nor any authoritative text books disclosing the relevant law have been placed before us
But from the affidavits filed in the case the state of law corresponding to the relevant Acts referred to in para
3 of the Order can easily be ascertained
Pondicherry had been a free port there being no restrictions on imports except on a few items like gold rock salt etc
For effecting payment for the imports the importers of Pondicherry could acquire foreign exchange either at the official rate or at the open market rate whichever might be conveniently available both methods being recognised 41 316 by the French Government as valid
In the counter affidavit filed by the State the manner of acquiring the foreign exchange for imports has been clearly stated two kinds of permits for obtaining official exchange by importers were issued by the Chief Commissioner in Pondicherry which were known as authorization and attestation respectively
They were signed by the Governor General of the French Indian Establishments himself or by his Secretary General
The Government of France used to make an overall allotment of foreign exchange to the French territories
Apart form that allotment it made other currency allotments in the light of trade agreements entered into by France with other countries
Authorizations were issued in respect of goods imported from countries with which France had entered into trade agreements and attestations in respect of goods imported from France and other French colonies
Further in respect of other transactions exchange was arranged by importers through banks dealing in foreign exchange
The Department of Affaires of Economics used to authorize the banks in respect of such transactions
Shortly stated Pondicherry was a free port without any restrictions on imports except on a few items and the importers could acquire foreign exchange either at the official rate in respect of some transactions or at the open market in respect of others
What were the  things done  by the petitioners under the Pondicherry law  The petitioners in the course of their import trade having obtained authorization for the foreign exchange through their bankers entered into firm contracts with foreign dealers on C I F terms
In some cases irrevocable Letters of Credit were opened and in others bank drafts were sent towards the contracts  Under the terms of the contracts the sellers had to ship the goods from various foreign ports and the buyers were to have physical delivery of the goods after they had crossed the customs barrier in India
Pursuant to the terms of the contracts the sellers placed the goods on board the various ships some before and others after the merger and the goods arrived at Pondicherry port 317 after its merger with India
The prices for the goods were paid in full to the foreign sellers and the goods were taken delivery of by the buyers after examining them on arrival
Before the merger if the Customs Authorities had imposed any restrictions not authorized by law the affected parties could have enforced the free entry of the goods in a court of law
On the said facts a short question arises whether paragraph 6 of the Order protects the petitioners
While learned counsel for the petitioners contends that  things done  take in not only things done but also their legal consequences learned counsel for the State contends that as the goods were not brought into India before the merger it was not a thing done before the merger and therefore would be governed by the enactments specified in the Schedule
It is not necessary to consider in this case whether the concept of import not only takes in the factual bringing of goods into India but also the entire process of import commencing from the date of the application for permission to import and ending with the crossing of the customs barrier in India
The words  things done  in paragraph 6 must be reasonably interpreted and if so interpreted they can mean not only things done but also the legal consequences flowing therefrom
If the interpretation suggested by the learned counsel for the respondents be accepted the saving clause would become unnecessary
If what it saves is only the executed contracts ie the contracts whereunder the goods have been imported and received by the buyer before the merger no further protection is necessary as ordinarily no question of enforcement of the contracts under the pre existing law would arise
The phraseology used is not an innovation but is copied from other statutory clauses
Section 6 of the General Clauses Act X of 1897 says that unless a different intention appears the repeal of an Act shall not affect anything duly done or suffered thereunder
So too the Public Health Act of 1875 38  39 Vict c 55 which repealed the Public Health Act of 1848 contained a proviso to section 343 to the effect that the repeal  shall not affect anything duly done or suffered under the enactment 318 hereby repealed 
This proviso came under judicial scrutiny in The Queen vs Justices of the West Riding of Yorkshire1
There notice was given by a local board of health of intention to make a rate under the Public Health Act 1848 and amending Acts
Before the notice had expired these Acts were repealed by the Public Health Act 1875 which contained a saving of  anything duly done  under the repealed enactments and gave power to make a similar rate upon giving a similar notice
The board in ignorance of the repeal made a rate purporting to be made under the repealed Acts
It was contended that as the rate was made after the repealing Act the notice given under the repealed Act was not valid
The learned Judges held that as the notice was given before the Act the making of the rate was also saved by the words  anything duly done  under the repealed enactments
This case illustrates the point that it is not necessary that an impugned thing in itself should have been done before the Act was repealed but it would be enough if it was integrally connected with and was a legal consequence of a thing done before the said repeal
Under similar circumstances Lindley L J in Heston and Isleworth Urban District Council vs Grout 2 confirmed the validity of the rate made pursuant to a notice issued prior to the repeal
Adverting to the saving clause the learned Judge tersely states the principle thus at p 313  That to my mind preserves that notice and the effect of it 
On that principle the Court of Appeal held that the rate which was the effect of the notice was good
It is suggested that the phraseology of the saving clause of the English Statutes and of the General Clauses Act of 1897 are of wider import than that of paragraph 6 of the Order and therefore the English decisions are not of any assistance in considering the scope of the saving clause of the Order
It is further stated that the English decisions apply only to a saving clause of an Act which repeals another but preserves the right created by the latter
We do not see any reason why the same construction cannot be 1 2 319 placed upon the wording of paragraph 6 of the Order which is practically similar in terms as those found in the relevant saving clause of the English Statute and that of the General Clauses Act
Nor can we find any justification for the second criticism
In the instant case the legal position is exactly the same
By reason of the Indo French Agreement the Government of India made the Order under the applying the Indian laws to Pondicherry
The effect of that Order was that the French laws were repealed by the application of the Indian laws in the same field occupied by the French laws subject to a saving clause
The position is analogous to that of a statute repealing another with a saving clause
If the English decisions apply to the latter situation we do not see how they do not apply to the former
In both the cases the pre existing law continues to govern the things done before a particular date
We therefore hold that the words  things done  in paragraph 6 of the Order are comprehensive enough to take in a transaction effected before the merger though some of its legal effects and consequences projected into the post merger period
Now what was the inter relation between the said things done  and the act of import or bringing of the goods into India  The effect of the contracts under the pre existing law was that the terms thereof could have been implemented without any customs bar placed against the import
This Court had in the context of article 2861b of the Constitution to consider the connotation of the words  in the course of export or import  in State of Travancore Cochin vs The Bombay Co Ltd 1
Patanjali Sastri C J described the nature of export sale thus at p 1118 Such sales must of necessity be put through by transporting the goods by rail or ship or both out of the territory of India that is to say by employing the machinery of export
A sale by export thus involves a series of integrated activities commencing from the agreement of sale with a foreign buyer and ending with the delivery of the goods to a common carrier for 1  320 transport out of the country by land or sea
Such a sale cannot be dissociated from the export without which it cannot be effectuated and the sale and resultant export form parts of a single transaction
 The same principle has been restated by the learned Chief Justice in State of Travancore
Cochin vs Shanmugha Vilas Cashew Nut Factory 1
The learned Chief Justice stated at p 63 thus  The phrase  integrated activities  was used in the previous decision to denote that a sale that is a sale which occasions the export cannot be dissociated from the export without which it cannot be effectuated and the sale and resultant export form parts of a single transaction
Applying the said principles to an import sale it may be stated that a purchase by import involves a series of integrated activities commencing from the contract of purchase with a foreign firm and ending with the bringing of the goods into the importing country and that the purchase and resultant import form parts of a same transaction
If so in the present case the bringing of the goods into India and the relevant contracts entered into by the petitioners with the foreign dealers form parts of a same transaction
The imports therefore were the effect or the legal consequence of the  things done  ie the contracts entered into by the petitioners with the foreign dealers
This conclusion is also reinforced by the terms of the Indo French Agreement
It is common case that the terms of the said Agreement cannot be enforced in a municipal court in India
We are only referring to it as the terms thereof throw some light on the proper understanding of the saving clause
By article 17 of the Agreement in so far as material for our purpose all orders placed outside the Establishments and finalised through the grant of a licence by competent authorities in accordance with laws and regulations in force prior to the date of the de facto transfer were to be fulfilled by the Government of India and the necessary foreign exchange granted if the goods were imported 1  321 within the period of validity of the relevant licences subject to payment of customs duty and other taxes normally leviable at Indian ports
That is orders placed outside the Establishments and finalised through the grant of a licence were to be honoured by the Government of India
The word  licence  in this Article may be construed rather widely to take in a permit or an authorization  otherwise it would lead to s the anomaly that when a licence strictly so called is required for a transaction and therefore obtained the transaction is protected by the Article whereas the transaction which requires only a permit is excluded therefrom
It may be recalled that the petitioners obtained authorizations of the Economics Department in respect of their orders
This Article indicates the intention of the two Governments that the orders so placed outside the Establishments should be honoured
If paragraph 6 of the Order is construed in the manner suggested by the State we would be imputing to the framers of the Order a conscious breach of the terms of the Agreement between the two countries for even the orders covered by article 17 of the Agreement would be excluded from the operation of the saving clause
We would therefore hold that paragraph 6 of the Order saves the transactions entered into by the petitioners and that the respondents had no right to confiscate their goods on the ground that they were imported without licence
In this view no other question arises for consideration
In the result the orders of the respondents 2 3 and 4 are quashed and they are directed to refund to the petitioners the amounts illegally collected from them
The petitioners in all the petitions will have their costs
SARKAR J
I think that these petitions should fail
Sometime in the latter half of 1954 the petitioners had in Pondicherry then a French establishment in India entered into certain agreements with foreign suppliers for the import into Pondicherry of diverse goods
It is said that at that time licences were not 322 required for such imports from the French authorities
It appears however that these authorities granted a certain amount of foreign exchange for the imports
The importers who failed to secure an allotment of foreign exchange from the French authorities often obtained it from the open market through banks
The French authorities however prohibited the banks in Pondicherry with effect from July 1 1954 from acquiring without their permission foreign exchange in the open market for their constituents for financing imports
The petitioners had with the consent of the French authorities obtained through the banks foreign exchange from the open market to finance their imports and had with the foreign exchange so acquired opened irrevocable letters of credit in favour of their foreign suppliers on account of the price of the goods to be supplied
They did this shortly prior to the transfer of administration of Pondicherry and other French establishments in India on November 1 1954 to India pursuant to an agreement made on October 21 1954 between the Governments of France and India
The goods covered by the aforesaid imports were shipped and arrived in Pondicherry port after November 1 1954 and were confiscated by the Government of India who had by that time taken over the administration of Pondicherry
The orders of confiscation gave an option to the petitioners to obtain a release of the goods by payment of a fine which option was availed of by them
These petitions have been filed under article 32 of the Constitution challenging the validity of the confiscation and claiming a refund of the fine paid on the ground that the confiscation was an illegal violation of the petitioners  rights under the Constitution to hold property and to carry on business
The orders of confiscation had been made under section 1678 of the 
That section authorised the confiscation of goods imported in contravention of orders prohibiting imports made under s19 of the same Act
Section 3 of the Imports and Exports Control Act 1947 also authorised the Central Government to prohibit by orders made by it 323 imports of goods of any specified description and provided that the goods to which the orders applied would be deemed to be goods of which the import had been prohibited under section 19 of the and that the provisions of the latter Act would have effect accordingly
Section 4 of the Imports and Exports Control Act provided that all orders made under r 84 of the Defence of India Rules and in force immediately before the commencement of the Act would be deemed to have been made under the Act There was an order made by the Government of India under r 84 of the Defence of India Rules by Notification of the Department of Commerce No dated July 1 1943 which prohibited the import of the goods which the petitioners had imported
The orders of confiscation would be unexceptionable if the statutes and Order mentioned in the preceding paragraph applied to these imports
That they applied to Pondicherry as from November 1 1954 would seem to be plain from the Order passed by the Government of India on October 30 1954 under the  to take effect from the date of the transfer of administration namely November 1 1954 called the French Establishments Application of Laws Order and being Ministry of External Affairs Notification No SRO 3315
This Order had been passed in view of the Indo French agreement and the transfer of administration provided thereby
Its validity is not challenged
Paragraph 3 of the Order provided that the enactments mentioned in the Schedule to it and all Orders made under those enactments and in force on November 1 1954 would apply to the French Establishments subject to the subsequent provisions of the Order
The enactments mentioned in the Schedule included the and the Imports and Exports Control Act
It is not in dispute that the Order under the Defence of India Rules mentioned earlier was in force on this date
The Application of Laws Order therefore made the 42 324  the Imports and Exports Control Act and the Order made under the Defence of India Rules applicable to Pondicherry as from November 1 1954
The petitioners have however contended for reasons which I will examine presently that the Order made under the Defence of India Rules had not been applied to the French Establishments by the Application of Laws Order but they have not disputed that the and the Imports and Exports Control Act were applied to Pondicherry
The petitioners rested their case mainly on the saving clause contained in paragraph 6 of the Application of Laws Order which so far as material was in these terms  All laws in force in the French Establishments immediately before the commencement of this Order which correspond to the enactments in the Schedule shall cease to have effect save as respect things done or omitted to be done before such commencement 
The petitioners have raised three points two of which can be disposed of at once
It is said that the Order made under the Defence of India Rules did not apply to the French Establishments for only Orders made under the enactments mentioned in the Schedule were applied to them by paragraph 3 of the Application of Laws Order and the Defence of India Act and Rules were not enactments mentioned in the Schedule
It is true that the Defence of India Act and Rules are not mentioned in the Schedule
But as already stated under section 4 of the Imports and Exports Control Act Orders made under r 84 of the Defence of India Rules are to be deemed to have been made under that Act
I am unable to accept the contention that an Order which has to be deemed to be made under the Imports and Exports Control Act is not an Order made under the Act for the purposes of paragraph 3 of the Application of Laws Order
It seems to me that when an Order is required to be deemed to have been made under an enactments it is as good as an Order made under the enactment
If it were not so the deeming provision would lose much of 325 its value
That being so para
3 would make the Order applicable to Pondicherry
Then it is said that the imports were made before the commencement of the Application of Laws Order because the contracts in respect of them had been concluded and the letters of credit opened before then though the goods had not been taken across the customs barrier at Pondicherry by that time
Therefore it is said the imports by the petitioners would be within the saving clause in paragraph 6 as things done before the commencement of the Application of Laws Order to which the  the Imports and Exports Control Act and the Order made under the Defence of India Rules would riot apply
This argument also seems to me to be ill founded
These Acts and the Order were applied to Pondicherry as from November 1 1954
The effect of that was to prohibit imports thereafter and to render the goods imported in contravention of that prohibition liable to confiscation
What is an import and this is what was prohibited has therefore to be decided by reference to these Acts and the Order
They defined import as bringing goods into India which in the present case would include the French Establishments by virtue of paragraph 4 of the Application of Laws Order
Therefore goods brought across the customs  barrier into Pondicherry would be goods imported into Pondicherry
To the goods so brought into Pondicherry after November 1 1954 the Acts and the Order made under the Defence of India Rules must apply irrespective of whether the goods were brought under contracts concluded and letters of credit opened before that date
It is not in my view permissible to ascertain the meaning of the word import  for the purpose of this case by reference to other statutes or notions and to contend that there has been an import by the making of the contract and the opening of the letter of credit without the bringing of the goods into Pondicherry as the learned counsel for the petitioners sought to do
The main argument on behalf of the petitioners is however that the words save as respects things done 326 or omitted to be done  in paragraph 6 of the Application of Laws Order saved not only the things done prior to the commencement of the Order that is the placing of the indents and the opening of the letters of credit but also the effect thereof and the rights accrued therefrom
It is said that the indents had been legally placed and the letters of credit legally opened with foreign exchange acquired with the express per
mission of the French Administration which foreign exchange could not have been acquired without such provision
It is contended that the saving clause would make the French laws applicable to the imports which were the effect of these things done before November 1 1954 and also protect the rights acquired from the things so done from the operation of the Indian laws
So it is said that the Confiscations Under the Indian laws were wholly illegal
Now it has to be noted that the saving clause does not say that the French laws would apply to the effect of things earlier done or protect rights accrued therefrom
I see no warrant in the absence of the necessary words to extend the application of the French laws to the effect of things done or rights acquired from the doing of them
It was said that otherwise the saving clause would be idle
I am unable to agree
If any question as to anything earlier done arose after the transfer that question would under the saving clause have to be decided by the French laws
In the absence of the saving clause it would have been open to argument what the effect of the transfer was with regard to things previously done
I may also point out that section 6 of the General Clauses Act provides that when one enactment is repealed by another then in the absence of a different intention the repeal shall not affect anything duly done or suffered under the repealed enactment nor any right accrued thereunder
It strikes me that if the saving of a thing done under the repealed enactMent also necessarily saved what is called the effect of it or rights acquired from it it would not have been necessary to expressly provide also for the saving of the rights acquired under the repealed enactment
327 Therefore it seems to me that the saving of things done does not automatically save the effect of them or rights acquired therefrom
The argument that the saving clause operated to protect the imports was based on two English cases namely The Queen vs Justices of the West Riding of Yorkshire 1 and Heston and Isleworth Urban District Council vs Grout 2
These cases considered the terms of statutes analogous to section 6 of our General Clauses Act providing that a repeal of one enactment by another shall not affect anything duly done or suffered under the repealed enactment or any right acquired thereunder
These provisions were therefore materially different from the saving clause now before us as they expressly saved rights acquired under a repealed statute
The first mentioned case held that as the two statutes were substantially for the same purpose namely making a rate the notice to make a rate tinder the repealed Act should have effect after the repeal in view of the saving clause as it could have been given under the repealing Act for the same purpose
It would be difficult to apply the principle of this case where two statutes have not the same purpose Apart from the fact that we have here no two statutes the Indian enactments with which we are concerned would seem to have made a complete departure from the position existing on the same subject during the French Administration
lit the other case it was held that when a thing duly done tinder a repealed enactment was saved by a saving clause in the repealing Act the effect of it was also saved
But the effect of the thing done would be saved by the express provision contained in the saving clause namely that the repeal shall not affect any right acquired under the repealed enactment and the judgment in this case was also based on this express provision to remove any doubts that might arise as to the other reasoning employed
The thing done in this case was the giving of a notice by a local authority to certain house owners to sewer and make up a private street
The effect saved was the recovery by the local authority from the owners of the expenses of the sewering 1 2 328 and making of the street which it had to incur on the owner s failure to carry out the terms of the notice
These things naturally took time and in the meantime the Act under which the notice was given had ceased to be applicable
The observation made in this case cannot be applied to a case like the present
Then again it seems to me that there is considerable difference between the terms of the saving clause con sidered in the English cases and the saving clause with which we are concerned
The saving clause in the English cases as also section 6 of our General Clauses Act applies where a subsequent statute repeals a previous statute passed by the legislature of the same country
That is not the position here
We have here laws of the Indian legislature replacing French laws
Indeed it is at least arguable whether without more the French laws would have been of force after the transfer it would seem that this difficulty was realised and so it was expressly provided by paragraph 5 of another Order called the French Establishments Administration Order made by Notification No 3314 dated October 30 1954 issued by the External Affairs Ministry of the Government of India that all laws in force in the French Establishments and not repealed by para
6 of the Application of Laws Order would continue to be in force until repealed
Further the saving clauses considered in the English cases preserved unaffected by the repeal only things done under the repealed enactment and the rights acquired thereunder
The saving clause that we are considering saves things done before the commencement of the Application of Laws Order whether the thing was done under any law or not it does not purport to preserve a right acquired under a statute repealed
In Hamilton Gell vs White 1 it was observed that section 38 of the English Interpretation Act 1889 which corresponds to section 6 of our General Clauses Act  was not intended to preserve the abstract rights conferred by the repealed Act 
It only applies to specific rights given to an individual upon the happening of one or other of the events specified in the 1 431
329 statute
 Likewise in Abbott vs Minister for Lands 1 it was observed about a saving clause which protected rights accrued under repealed enactments that  the more right assuming it to be properly so called existing in the members of the community or any class of them to take advantage of an enactment without any act done by an individual towards availing himself of the right cannot properly be deemed a  right accrued  within the meaning of the enactment
The principle of the English cases on which the petitioners relied would not apply except to protect rights acquired under repealed statutes
In the cases before us the petitioners could not say that they had acquired any right tinder any French law to import the goods
There was admittedly no law which gave the petitio ners any right to import any goods
The position was only that there was an absence of laws prohibiting import
That clearly did not give the petitioners any right and certainly not a right under a statute which was repealed
All that the French authorities had done was to permit the petitioners to acquire foreign exchange in the open market for financing their imports
It would be impossible to say that thereby the petitioners acquired any right under any French law to import any goods
Lastly the principle of the two English cases applies admittedly only where there is no intention to the contrary
Now it seems to me that here there is indication of an intention to the contrary
Clause 17 of tile agreement between India and France provided that imports finalised through the grant of licence prior to the transfer would be fulfilled but the goods would be liable to customs duty normally leviable in Indian ports
Clearly therefore it was not intended that after the transfer Pondicherry would remain a free port in respect of imports made even under agreements concluded prior to the transfer under a licence
On such imports duty had to be paid after the transfer
The right to import freely was not therefore intended to be preserved
If so there could have been no intention in any event to protect a right to import freely 1 431
330 under an agreement made prior to the transfer where there was no licence granted for the import
Admittedly the petitioners had not obtained any such licence
For all these reasons it seems to me that the English decisions relied on are of no assistance in the present case
I am unable to read the saving clause in this case as if it is the same as section 6 of our General Clauses Act or the corresponding clause in the English Interpretation Act 1889 and to obtain guidance from the decisions based on these statutes
I have therefore come to the conclusion that the saving clause in paragraph 6 of the Application of Laws Order does not protect the imports made by the petitioners from the operation of the Indian laws applied to the French Establishments
I would dismiss these petitions
SHAH J Petition No 123 of 1957 Prior to November 1 1954 Pondicherry was one of the French Establishments in India administered by the Government of France
Under the French administration except specified categories like gold rock salt and certain medicinal preparations all commodities could be imported into the Pondicherry Port without a licence
The French Administration exercised control on im port of commodities into Pondicherry indirectly by making allotment of the requisite foreign exchange
The Government of France made an overall allotment of foreign exchange for the French Establishments in India and persons desiring to import goods in Pondicherry and other French Indian settlements were on applications addressed to the Chief Commissioner French Settlements granted foreign exchange facility for financing imports out of that allotment
Besides the allotment of foreign exchange for financing im ports into the French Establishments in India certain other currency allotments were made by the Government of France in the light of Trade Agreements between the French Government and other countries
The Chief Commissioner of Pondicherry issued permits for the import of commodities specified in the Trade 331 Agreements upto the current ceilings fixed in the Agreements
Two kinds of permits for obtaining official exchange by importers were issued by the Chief Commissioner which were known as  Authorisation  and  Attestation 
 Authorisation  was issued for import of goods from countries with which France had Trade Agreements and  Attestation  for import of goods from France and from countries with which the Government of France had not made Trade Agreements
By issuing  Authorisation  and  Attestation  the Government undertook to provide foreign exchange for financing the imports made pursuant thereto
Since April 1 1954 the Chief Commissioner of Pondicherry allowed intending importers to purchase foreign exchange in the open market for financing imports of merchandise
The Department of Affairs Economics endorsed  authorise  on the application submitted by the importers  banker in respect of such transactions but the Government did not undertake thereby to provide foreign exchange
As official exchange for imports was freely released only a few imports were financed before July 1954 with the aid of exchange purchased in the open market
Negotiations were proceeding between the Government of India and the Government of France for transfer of the French Establishments in India to the Union of India and when it came to be known that the transfer was imminent there was feverish activity to import goods into the French Settlements with the aid of foreign exchange purchased in the open market and in the months of August September and October orders were placed by importers with foreign suppliers for purchase of commodities of the value of Rs 280 lakhs to be financed by foreign exchange procured from the open market
Traders who were not normally doing business in Pondicherry and who had no business interest in French Establishments also opened offices in Pondicherry and started indenting goods to be financed with the aid of foreign exchange in the open market
43 332 An agreement for the de facto transfer of the ad ministration of the French Establishments in India was executed between the Government of India and the Government of France on October 21 1954
This agreement became effective on November 1 1954
In exercise of the powers conferred by section 4 of the  on October 31 1954 the Government of India issued two orders section R O 3314 the French Establishments  Administration Order 1954 and section R O 3315 the French Establishments Application of Laws Order 1954
By section R O 3315 certain enactments specified in column 3 of the Schedule which included the  The  The Imports and Exports Trade Control Act 1947 The Foreign Exchange Regulation Act 1947 and The Indian Tariff Act 1934 were applied to the French Establishments of Pondicherry Karaikal Mahe and Yanam with the modification that references in the enactments notifications orders and regulations which were applied to the French Establishments to India or to the States were to be construed as referring to the French Establishments also
These orders came into force on November 1 1954
The petitioners who carried on trade in diverse commodities in Bombay opened a place of business in Pondicherry on April 14 1954 and placed eight indents with Messrs Shimada Trading Co Ltd Osaka Japan for importing porcelain ware glass marbles and beltings
On an application submitted by Bankque D L  Indo China on behalf of the petitioners the Bureau Des Affairs Economique Pondicherry endorsed  authorise  for the requisite foreign exchange purchased in the open market
This exchange was sold to the petitioners for the amount involved in the letters of credit
Between August 28 1954 and August 31 1954 three irrevocable letters of credit of the aggregate value of pound 12850 were opened by the petitioners and pursuant to these letters Ms Shimada Trading Co Ltd shipped goods to Pondicherry
On November 30 1954 the shipping documents were received by the petitioners from Messrs Shimada Trading Co Ltd 333 Admittedly the goods were shipped by the foreign suppliers after the defacto transfer of Pondicherry
The applications submitted by the petitioners for the issue of customs permits sanctioning clearance of the goods were rejected by the Controller of Imports and Exports at Pondicherry
On January 5 1955 the Chief Controller of Imports and Exports issued a public notification that on a consideration of the representations made by some of the importers asking for permission to import goods for which necessary foreign exchange had been obtained in the open market through bankers in Pondicherry and in consultation with the authorities concerned it was  clarified for information  that open market transactions of the nature referred to in the representations were not covered by the Indo French Agreement and that the import of goods against open market transactions after November 1 1954 must be treated as unauthorised  but having regard to the hardship likely to be caused to genuine importers who had placed orders in pursuance of their normal trading operations the Collector of Customs Pondicherry was being authorised to accord certain concessions to genuine importers
By one of such concessions goods shipped before November 1 1954 were permitted to be cleared  without penalty  irrespective of their origin and value and consignments fully paid for in foreign currency and shipped after November 1 1954 and ordered before August 15 1954 were also permitted to be cleared it without penalty
The goods indented by the petitioners were confiscated by the customs authorities exercising powers under section 1678 of the  on the ground that the same had been imported without a valid licence and in contravention of the Department of Commerce and Industries Notification No 43 1 TC43 dated July 1 1943 as amended read with sub section 2 of section 3 of the Imports and Exports Trade Control Act 1947
The petitioners were by orders passed between February 28 and March 4 1955 given an option to clear the goods for  home consumption  on payment of customs duty and fine specified in the order
These 334 orders were confirmed in appeal by the Board of Revenue and by the Government of India in exercise of revisional jurisdiction
In the meanwhile the petitioners paid the duty and the fine imposed by the customs authority and cleared the goods
The Union Government having rejected the Revision applications the petitioners submitted this petition under article 32 of the Constitution for a writ or direction in the nature of certiorari requiring and commanding the Chief Controller of Imports and Exports Pondicherry the Collector of Customs and Central Excise Pondicherry the Central Board of Revenue and the Union of India and quashing the orders passed by the Customs authorities and the Union of India and for a mandamus requiring the respondents to forbear from giving effect to or otherwise acting upon the orders passed by the Customs authorities and the Union of India and for a further writ or order directing the respondents to restore to the petitioners the sum of Rs 30890 paid as penalty for releasing the goods
Undoubtedly the petitioners had before November 1 1954 placed indents for importing goods of diverse descriptions from foreign suppliers and for that purpose they had acquired foreign exchange through their bankers in the open market
The petitioners had also opened irrevocable letters of credit in favour of the Japanese suppliers
It may be assumed even though there is no clear evidence in that behalf that the petitioners were after opening irrevocable letters of credit unable to cancel the indents
Section 167 cl
8 of the  in so far as it is material provides that if any goods the importation of which is for the time being prohibited or restricted by or under Chapter IV of the Act are imported into India contrary to such prohibition or restriction such goods shall be liable to confiscation
By section 3 of the Imports and Exports Trade Control Act XVIII of 1947 the Central Government is authorised by order published in the official Gazette to prohibit restrict or otherwise control in all cases or in specified classes of cases the import the bringing into any Port or place 335 in India of goods of any specified description
By section 4 all orders made under r 84 of the Defence of India Rules or that rule as continued in force by the Emergency Provisions Continuation Ordinance 1946 and in force immediately before the commencement of the Act in so far as they were not inconsistent with the provisions of that Act continued to remain in force and were to be deemed to have been made thereunder
Under the rules framed under the Defence of India Rules the import of goods of the description indented by the petitioners was it is not disputed prohibited and the rules framed under the Defence of India Rules continued in force by the operation of section 4 of the Imports and Exports Trade Control Act 1947
The rules and orders made under r 84 of the Defence of India Rules were on November 1 1954 operative as if they were made under the Imports and Exports Trade Control Act 1947 and when that Act was extended to the French Establishment of Pondicherry these rules and orders became also applicable to that area
By section 19 of the  the Central Government may by notification prohibit or restrict the bringing by sea goods of any specified description into India across any customs frontier as defined by the Central Government
By section 2b of the Imports and Exports Trade Control Act 1947 import is defined as bringing into India by sea land or air
Import of goods therefore means carrying goods across the customs frontier declared by the Government of India
There is no dispute that under section 19 the Port of Pondicherry was declared a customs frontier
Admittedly the goods indented by the petitioners were brought into India ie imported into India after November 1 1954
Importation of these goods without a licence in that behalf being prohibited under a notification under the Imports and Exports Trade Control Act by bringing the goods into the Pondicherry Port prima facie section 1678 of the was contravened
But the petitioners contend that in view of the agreement between the Government of India and the Government of France and the two orders issued in 336 exercise of the powers conferred by section 4 of the  the provisions of the and the orders made or deemed to be made under the Imports and Exports Trade Control Act 1947 did not apply to the goods in question
By cl 3 of the agreement dated October 21 1954 the Government of India succeeded to the rights and obligations resulting from such acts of the French Administration in these Establishments as were bind ing on the territory
By para
5 of article 10 acts or deeds constitutive of rights established prior to the date of the de facto transfer in conformity with French law retained the value and validity conferred at that time by the same law
By article 17 in so far as it is material all orders placed outside the establishments and finalised through the grant of a licence by competent authorities in accordance with the laws and regulations in force prior to the date of the de facto transfer were to be fulfilled by the Government of India who were to grant the requisite foreign currency if the goods were imported within the period of validity of the relevant licence subject to payment of customs duty and other taxes normally leviable at Indian Ports
This agreement is between the Government of India and the Government of France and the covenants thereof do not purport to and cannot confer any rights enforceable at the instance of citizens of Pondicherry or of India
By section 3 certain obligations enforceable against the French Administration were undertaken by the Government of India but no obligations thereby enforceable were undertaken by the Indian Government which the petitioners could enforce
5 of article 10 falls in the chapter headed  Judicial Matters  and only declares that acts and deeds which constitute rights in conformity with the French Law shall retain the same value after merger with the Union of India and by article 17 the obligation is undertaken by the Government of India to fulfil the orders placed outside the Establishments and finalised through the grant of a licence by competent authorities
But the petitioners had obtained no license from any competent authority for importing or even for indenting the goods
337 It was urged that the orders section R O 3314 and section R O 3315 issued under the should be construed in the light of the agreement between the Government of India and the Government of France
By section R O 3314 provision is made by the Government of India for the administration of the erstwhile French Establishments
By cl 5 of that notification all laws in force in the French Establishments or any part thereof immediately before the commencement of the order and not repealed by cl 6 of the French Establishments Application of Laws Order 1954 shall continue to remain in force until repealed or amended by a competent authority
The law if any relating to the import of goods into India applicable in the French Establishments prior to November 1 1954 stood expressly repealed by cl 3 of section R O 3315 which provided that the enactments specified in column 3 of the Schedule as in force before the commencement of this order shall be applied to and shall be in force in the French Establishments subject to a any amendments to which the enactments are for the time being generally subject in the territories to which they extend  b the modifications if any specified in column 4 of the schedule and c the subsequent provisions of the order
By column 3 of the schedule to this order the  the and the Imports and Exports Trade Control Act were expressly applied to the French Establishments and under the provisions of these Acts and notifications issued thereunder as from November 1 1954 no person could without a license in that behalf import goods of the nature indented by the petitioners
By cl 6 it was enacted that  unless otherwise specifically provided in the schedule all laws in force in the French Establishments immediately before the commencement of this order which correspond to the enactments specified in the schedule shall cease to have effect save as respects things done or omitted to be done before such commencement 
The and the Imports and Exports Trade Control Act were expressly made applicable to the French Establishment of 338 Pondicherry and all corresponding law in that territory ceased to have effect save as respects things done or omitted to be done before such commencement
Clause 6 does not authorise the doing of things expressly forbidden by the provisions of the Acts made applicable by schedule 3 in the Pondicherry Establishment and by the use of the expression  things done or omitted to be done  in the clause to the rights or legal consequences which may but for the application of the enactments specified in schedule 3 have flown from the acts done or omitted to be done the French law does not continue to apply
The clause undoubtedly protects French laws which correspond to the enactments specified in schedule 3 in so far as they concern things done or omitted to be done before the commencement of S R O 3315
In superseding the French law in force on the prescribed date the cl 6 emphasises that the enactments specified in schedule 3 have no retrospective operation and as counterpart thereof provides that all transactions which have been concluded before November 1 1954 will continue to be govered by the French law notwithstanding the enactment of the Acts specified
Since the date of the de facto transfer of the French Establishments to the Indian Union all imports of goods across the customs frontier at Pondicherry were subject to the provisions of the and the Imports and Exports Trade Control Act and goods shipped after November 1 1954 in pursuance of indents before that date were not expressly saved from the operation of the restrictive provisions of those Acts
On and from November 1 1954 the law if any relating to the import of goods operative in the French territory was superseded and the goods having been brought into the Pondicherry Port after November 1 1954 the import was governed by the and the Imports and Exports Trade Control Act and not by any law of the French territory
The supersession of the French laws by the application of the statutes set out in schedule III was on November 1 1954 complete  save as respects things done or omitted to be done 
Does the expression  things done  include consequences which may 339 have ensued in future but for the supervention of the merger agreement  Ex facie by cl 6 the French law is kept alive in respect of  things done or omitted to be done  ie things done or omitted to be done in the past it has not the effect of keeping alive that law in respect of things to be done or omitted to be done in future
All transactions completed after November 1 1954 will on the plain words of cl 6 be governed by the statutes made applicable by virtue of cl 3 of section R O 3315
Section 6 of the  has in terms no application when the court is called upon to ascertain the effect of supersession of French law by the application of the specified statutes by cl 6 of section R O 3315
In terms section 6 of the applies to the effect of repeal of enactments of the Indian legislature and there is nothing in section R O 3315 which supports the plea that the section applies as if the French law in operation before merger of the French Establishments is to be regarded as a statute enacted by the Indian legislature
In that premise it is difficult to appreciate how the principle of cases decided by the courts in England on the words of section 38 of the Interpretation Act 1889 52 and 53 Viet
ch 63 which are substantially the same as those used in section 6 of the  can lend any assistance in interpreting the meaning of the expression  things done or omitted to be done  in cl 6 of section R O 3315
By enacting section R O 3315 the French law after its supersession has not been expressly kept alive in respect of any right or privilege acquired or accrued under the things done under that law and it would be an unwarranted incursion into the field of legislation to attempt to extend the protection of that law to transactions which have taken place after the prescribed date relying upon the 
Nor is the interrelation between the agreement of purchase with a foreign seller and the various processes leading to the delivery of goods to a common carrier and the ultimate import of goods sufficient to include within the expression  things done  used in 44 340 cl
6 of section R O 3315 consequences of the things done which may ensue in future
Within the expression  in the course of import of the goods into the territory of India  used in article 2861 b of the Constitution a series of integrated activities resulting in the taking of goods across the customs frontier may be involved
But import as defined in the Imports and Exports Trade Control Act is bringing a commodity in the territory of India preliminary steps even if they are closely integrated therewith are not included in that definition
If steps preliminary to import are not included in the concept of import in dealing with the provisions of the and the Imports and Exports Trade Control Act it would be difficult to afford protection of the French laws expressly granted by virtue of cl 6 of section R O 3315 to such of the preliminary steps as have taken place before the prescribed date and to create an exemption in favour of imports consequential upon those preliminary steps which the legislature has declined to do
In my view therefore by the use of the expression things done or omitted to be done before such commencement  in cl 6 of section R O 3315 French law applies to acts and omissions before November 1 1954 and not to legal consequences of those acts and omissions ensuing after that date and hence import of goods across the customs frontier in the Pondicherry Port after November 1 1954 without a licence in that behalf is contrary to the provisions of the and the Imports and Exports Trade Control Act
The provisions of the and the Imports and Exports Trade Control Act whereby restrictions are imposed upon the import and export of goods are not by themselves unreasonable
If the petitioners are not entitled to the benefit of cl 6 of the Indo French Agreement there is no other ground on which they can successfully impugn the validity of the orders imposing duty and penalty
I am therefore of the view that this petition should be dismissed with costs
341 For reasons set out in the principal petition petitions Nos 124 and 125 of 1957 and 118 of 1959 should also be dismissed with costs
BY COURT In view of the majority Judgment the petitions are allowed
The petitioners in all the petitions will have their costs
Petitions allowed


Summary:
The Assam Taxation on goods carried by Roads and Inland Waterways Act 1954 was passed under Entry 56 of List II of Seventh Schedule to the Constitution
The appellants contended that the Act violated the freedom of trade guaranteed by article 301 Of the Constitution and as it was not passed after obtaining the previous sanction of the President as required by article 304b it was ultra vires
The respondent urged that taxing laws were not governed by Part XIII which contained articles 301 and 304 but only by Part XII and in the alternative that the provisions of Part XIII applied only to such legislative entries in the Seventh Schedule as dealt specifically with trade commerce and intercourse
Held per Gajendragadkar Wanchoo and Das Gupta JJ that the Act violated article 30i and since it did not comply with the provisions of article 304b it was ultra vires and void
The freedom of trade commerce and intercourse guaranteed by article 301 was wider than that contained in section 297 Of the Government of India Act 1935 and it included freedom from tax laws also
Article 301 provides that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves  and if any Act imposes any direct restrictions on the movement of goods it attracts the provisions of article 301 and its validity can be sustained only if it satisfied the requirements of article 302 or article 304
The operation of article 301 cannot be restricted to legislation under the Entries dealing with trade and commerce
The Assam Act directly affected the freedom contemplated by article 301
Ramjilal vs Income tax Officer Mohindargarh 1951 SCR 127 M P V Sundararamier  Co vs The State of Andhra Pradesh 1058 SCR 1422 James vs Commonwealth of Australia  The State of Bombay vs The United Motors India Ltd   Saghir Ahmed vs The State of UP 810   James vs State of South Australia  and James vs Cowan  referred to
Per Sinha C J
The Assam Act did not contravene article 301 and was not ultra vires
Neither the one extreme position that article 301 included freedom from all taxation nor the other that taxation was wholly outside the purview of article 301 was correct
The freedom conferred by article 301 did not mean freedom from taxation simpliciter but only from the erection of trade barriers tariff walls and imposts which had a deleterious effect on the free flow of trade commerce and intercourse
The Assam Act was a taxing statute simpliciter and did not suffer from any of the vices against which Part XIII of the Constitution was intended
Ramjilal vs Income tax Officer Mohindargarh 1951 SCR 127 referred to
Further the impugned Act was within the competence of the State Legislature and fell directly within Entry 56 of List 11  it was not in conflict with the Tea Act Of 1953 enacted by Parliament it did not contravene article 14 and it was not extra territorial in operation
The Tata Iron  Steel Co Ltd vs The State of Bihar   followed
Per Shah J The Assam Act infringed the guarantee of freedom of trade and commerce under article 301 and as the Bill was not moved with the previous sanction of the President as required by article 304b nor was it validated by the assent of the President under article 255c it was ultra vires and void
Article 301 guarantees freedom in its widest amplitude freedom from prohibition control burden or impediment in commercial intercourse
The freedom includes not only freedom from discriminative tariffs and trade barriers but also from all taxation on commercial intercourse
Part XIII of the Constitution places restrictions upon the legislative power granted by articles 245 246 and 248 and the Lists and these restrictions include burdens in the nature of taxation
James vs Commonwealth of Australia  referred to