Special Leave Petition Criminal No 3115 of 1987
From the Judgment and Order dated 29101987 of the Delhi High Court in Criminal Writ Petition No 219 of 1987
Kapil Sibal Pinaki Mishra Ms Bina Gupta and Atul Tewari for the Petitioner
Kuldip Singh Additional Solicitor General VC Mahajan CV Subba Rao Ms A Subhashini Hemant Sharma and Arun Madan for the Respondents
496 The Judgment of the Court was delivered by SHARMA J
The petitioner has challenged his order of detention made under Section 31 of the hereinafter referred to as the COFEPOSA
He filed an application under Article 226 of the Constitution before the Delhi High Court being Writ Petition No 219 of 1987 which was dismissed by the judgment dated 29 10 1987 impugned in the SLP Crl 3115 of 1987
He has also filed an application directly before this Court under Article 32 of the Constitution which has been registered as Criminal Writ Petition No 830 of 1987
In January 1987 on receipt of a confidential information by the Directorate of Enforcement Delhi Zone New Delhi that a group of persons were engaged in illegal activities causing remittances of large amounts of money to foreign countries an inquiry was instituted
It appeared that the remittances were ostensibly made for import of certain goods on the basis of forged documents and actually goods were not received from outside
Information collected in the course of inquiry disclosed that a number of persons were engaged in the criminal activities and were operating through five Indian firms and a number of foreign firms in Hong Kong and Singapore
On 20 2 1987 one Sita Ram Aggarwal associate of the petitioner disclosed during his interrogation facts which indicated that the petitioner was the main person directing the illegal activities
The petitioner was apprehended in a hotel in Calcutta on 2 4 1987 and on being questioned made certain statements
He was formally arrested the next day and was produced before the Additional Chief Metropolitan Magistrate New Delhi who remanded him to judicial custody till 13 4 1987
Sita Ram Aggarwal the aforesaid associate of the petitioner was in the meantime enlarged on interim bail which wasextended after expiry of the initial period and according to the case of the respondents the detaining authority apprehended that the petitioner also was likely to be released on bail on 13 4 1987
In this background the impugned order of detention was passed and served on him
The application for bail by the petitioner which had already been filed was actually allowed the same day ie on 13 4 1987
After his representation against the detention order was rejected the petitioner moved the Delhi High Court for a writ of habeas corpus which was dismissed by the order dated 29 10 1987 challenged in the special leave petition
The Writ Petition No 830 of 1987 was filed before this Court on 9 11 1987
Both the cases are being disposed of by this judgment
497 3
When the cases were placed for preliminary hearing before us we directed notice to be issued only on two of the grounds taken by the petitioner namely whether there was compelling necessity for passing the order as the petitioner was already in judicial custody and whether the order was passed for the collateral purpose to frustrate the grant of bail and was punitive in nature
The learned counsel for the petitioner has contended that the impugned order amounts to double detention of the petitioner as he was already in jail when the detention order was made
Relying upon several decisions of this Court it was argued that it was essential for the detaining authority to have been aware of the fact that the petitioner was already in jail and was likely to be released on bail and further he had to be satisfied that compelling necessity existed for the detention
It is said that none of these conditions is satisfied
Mr Kuldip Singh the learned Additional Solicitor General appearing on behalf of the respondents said that there cannot be any manner of doubt that the detaining authority was fully aware of the fact that the petitioner was already in custody and that he was likely to be released on bail on 13 4 1987
Besides relying on the counter affidavit the learned counsel placed before us the original records of the case for our perusal
It appears that a note specifically mentioning these facts was on the file and immediately there after the detaining authority recorded his order
It was urged on behalf of the petitioner that the respondents were not entitled to rely on the original file for this purpose and that the awareness of the detaining authority ought to have appeared from the grounds themselves and unless that is shown the detention order cannot be defended
Even assuming that the stand taken on behalf of the petitioner is correct he cannot succeed in the present case
A perusal of the grounds which runs into many pages clearly indicates that the detaining authority was conscious of the fact that the petitioner was in judicial custody and was apprehensive that he would be released on bail
In paragraph 24 of the grounds it was stated that the petitioner had been arrested on 3 4 1987 and was in judicial custody till 13 4 1987 and in paragraph 26 the detaining authority reminded the petitioner that an application for bail moved on his behalf was going to be heard by the Additional Chief Metropolitan Magistrate on 13 4 1987
In paragraph 38 the order passed on the bail application of the petitioner s associate Sita Ram Aggarwal was referred to
Thereafter the detaining authority had mentioned his satisfaction about the necessity of the detention
498 6
On the question as to whether the detaining authority was satisfied about the compelling necessity for the detention order also there is no merit in the petitioner s case
It is true that the order could not have been passed for the purpose of circumventing the expected bail order
The object of detention has to be prevention of a detenu from indulging in activities prejudicial to the conservation of foreign exchange resources and not to facilitate his trial in a criminal case nor as a punitive measure
The learned Additional Solicitor General placed before us the grounds served on the petitioner at some length wherein it is inter alia stated that the petitioner was running a business firm under the name and style of Ms BN Corporation in Hong Kong as also offices in other places including Singapore and got certain business firms in India detailed therein registered in Nagaland under farzi  names and employed a number of persons who were acting at his behest
The role of the petitioner has been detailed in the grounds showing how he got illegally siphoned the foreign exchange to the tune of about 2 crores of rupees out of the country
Besides the aforementioned Sita Ram Aggarwal and the petitioner s nephew Subhash Aggarwal the other associates working in accordance with the direction of the petitioner are mentioned along with their activities
The grounds also referred to the statements made by Sita Ram Aggarwal which indicated that the petitioner was travelling by air under assumed names and has been dodging the authorities when they attempted to contact him before he was apprehended in a Calcutta hotel
It is further said that the petitioner s firm Ms BN Corporation of Hong Kong received remittances through bank worth Rs85 90 lacs during the year 1986 but did not supply or ship any goods for which the invoices were supposed to have been issued
Some of the documents are alleged to bear his signatures
We do not think it necessary to deal with the grounds in greater detail
The statements indicate that the offences in respect of which the detenu is accused of are in language of Mukharji J in Suraj Pal Sahu vs State of Maharashtra   so interlinked and continuous in character and are of such nature that they fully justify the detention order
In the circumstances we do not doubt the satisfaction of the detaining authority specifically recorded in paragraph 41 of the grounds
It was also urged on behalf of the petitioner that since the prayer for bail made on behalf of the petitioner was not opposed on behalf of the respondents before the Additional Chief Metropolitan Magistrate it must be held that this detention was not called for
Reliance was placed on paragraph 6 of the judgment in Ramesh Yadav vs District Magistrate Etah The learned counsel is not 499 correct in interpreting the observation of this Court relied upon by him as laying down a principle for general application
The Bench while considering the merits of the case before it made the remark in the background of the facts and circumstances of the case
Having regard to the circumstances arising in the case before us no such inference is permissible to be drawn in favour of the petitioner
Besides according to the respondents the bail application was as a matter of fact opposed
In any view of the matter this factor is not of much consequence in the facts of the present case
In the result both the writ application and the Special Leave Petition are dismissed
PSS Petitions dismissed


Summary:
 The respondent assessee carried on business in Tendu leaves
He contended before the Assessing Authority that there was no inter state sale of Tendu leaves that the entire sales of Tendu leaves were effected in Uttar Pradesh and that he did not know if the purchasers had taken these Tendu leaves to places outside Uttar Pradesh and even if they have so taken the assessee could not be assessed to tax under the  as the contract between him and the purchaser was to purchase goods in UP
This contention was not accepted and the Assessing Authority assessed the respondent
The Assistant Commissioner Judicial having dismissed the appeal against the order of the Assessing Authority the respondent went in Second Appeal to the Sales Tax Appellate Tribunal
The Tribunal took notice of TP Form IV which was a transport permit issued by the Forest department regarding the validity of Nikasi of Tendu leaves from the forest and came to the conclusion that merely because TP Form had been issued it does not follow that there were inter state sales
The Tribunal allowed the appeal and quashed the order passed by the assessing authority as well as First Appellate Authority
The Revenue went up in appeal to the High Court which held that the goods were moved out of UP in pursuance of an agreement of sale entered into between the assessee and their customers and that the condition precedent for imposing sales tax under the Central Sales Tax 447 Act was not present and dismissed the appeal
Dismissing the Special Leave Petitions of the Department this Court  HELD 1
Sale could be said to be in the course of inter state trade only if two conditions concur viz 1 a sale of goods and 2 transport of those goods from one State to another
Unless both these conditions are satisfied there could be no sale in the course of interstate trade
There must be evidence that the transportation was occasioned by the contract and as a result goods moved out of the bargain between the parties from one State to another
448H 449A Bengal Immunity Co vs State of Bihar 6 STC 446 referred to 2
The condition precedent for imposing sales tax under the  is that the goods must move out of the State in pursuance of some contract entered into between the seller and the purchaser
449F G 3
TP Form IV is a transport permit issued by the Forest Department
The Forest Department has given in writing that this permit did not relate to sale but was a certificate regarding the validity of Nikasi of Tendu Leaves from the forest
Merely because TP Form has been issued it does not follow that there were inter state sales
448F G 4
The onus lies on the Revenue to disprove the contention of the assessee that a sale is a local sale and to show that it is an inter state sale
449C