Case: Collector of Customs, Calcutta & Another Vs. G. Dass & Co. & Others

Bachawat, J. 1. G. Dass and Co., the contesting respondents, imported two consignments of betelnuts into the Port of Calcutta by the vessel "S. S. Eastern Queen". On April 26, 1955, they presented the bills of entry for the consignments to the proper officer of Customs. The Customs Officer retained the bills of entry after noting on them the words "before entry". On April 27, the importing vessel obtained to order for inward entry. Before April 30, the rate of import duty on betelnuts was one rupee per lb.; on April 30, the rate was reduced to 12 annas per lb. After April 30, the vessel discharged her cargo and landed the two consignments of betelnuts. On May 7, the Sea Customs (Amendment) Act, 1955 (Act XXI of 1955) was passed amending Ss. 37, 86 and other Sections of the parent Act. The contesting respondents paid duty at the rate of one rupee per lb. On clearing the goods, they claimed refund of part of the money paid alleging that they were liable to pay duty at the rate of 12 annas per lb. only. Their applications for refund were rejected by the Assistant Collector of Customs. Their appeals to the Collector of Customs and revision petitions to the Ministry of Finance were also dismissed. Thereupon, they filed writ petitions before the Calcutta High Court asking for the issue of appropriate writs directing the refund of the excess duty paid. D. N. Sinha, J. dismissed the writ petitions. On appeal, a Division Bench of the High Court set aside the order of D. N. Sinha, J., and allowed the writ petitions. The customs authorities now appeal to this Court on certificates granted by the High Court. The only question in issue before us is at what rate the import duty was chargeable on the goods. 2. The appeals were argued in the Courts below and before us on the footing that the rate of duty applicable to the goods must be determined by reference to the Sea Customs Act (VIII of 1878), as it stood before its amendment by Act XXI of 1955, and we must decide the appeals on that footing. The decision of the appeals turns on the construction of the unamended Ss. 37 and 86. It is a matter of accident that the rate of import duty was decreased instead of being increased on April 30, 1955. The relevant Sections should receive the same interpretation whether the rate of duty be increased or decreased. Neither a strict nor a liberal construction is called for, we should give the Sections a fair construction. 3. The unamended S. 86 permitted the delivery of a bill of entry to the Customs Collector by the owner of the goods "on the landing thereof from the importing ship". The Collector could not accept the bill of entry before the landing of the goods. Until the landing, there could be no delivery of the bill of entry to the Collector. Where, as in this case, the bill of entry was submitted to the Collector before the landing and kept by him in his custody, it would be treated as delivered to him on the date of the landing. This is because the bill of entry could be delivered to the Collector under the Section on the landing of the goods and not earlier. If the consignment covered by the bill of entry consisted of several packages and the landing was spread over several days, the date of the landing of the last package would be the date of the landing, and this date would be deemed to be the date of the delivery of the bill of entry to the Collector. 4. The unamended S. 37 provided that the rate of duty applicable to any imported goods would be the rate in force "on the date on which the bill of entry thereof is delivered to the Customs Collector under S. 86."The Explanation to the unamended S. 37 provided that "a bill of entry shall, for the purposed of this Section, be deemed to be delivered when it is first presented to the proper officer of Customs". The Explanation created the fiction that the presentation to the proper office of Customs would be deemed to be delivery to the Customs Collector; but the fiction went no further. The bill of entry could be delivered under S. 86 upon and not before the landing of the goods. Therefore, in a case where a bill of entry was presented to the proper officer of Customs before the landing of the goods and was kept by the officer, the date of the landing of the goods must be deemed to be the date of delivery of the bill of entry to the Customs Collector within the meaning of S. 37, and the rate of duty chargeable on the imported goods must be the rate in force on that date. 5. Condition No. 2 of the relevant bills of entry provided that for the purposes of S. 37 they would be deemed to be delivered on the date on which the order for inward entry would be passed. This condition could not override the provisions of Ss. 37 and 86.Under those Sections, no date earlier than the date of the landing of the goods could be treated as the date of delivery of the bill of entry to the Customs Collector. The rate of duty leviable on the imported goods must be determined with reference to Ss. 37 and 86 and not by reference to condition No. 2 of the bill of entry. Under the Sea Customs Act,1878, as it stood before the amendment, the contesting respondents were, therefore, liable to pay duty at the rate in force on or after April 30, 1955, i.e., at the rate of 12 annas per lb. only. 6. Sections 37 and 86 of the Sea Customs Act were amended by Act XXI of 1955. Under the amended S. 86, the bill of entry may be delivered to the Customs Collector after the delivery of the manifest by the master of the importing vessel, and under Explanation (b) to the amended S. 37, a bill of entry delivered in anticipation of the arrival of the vessel will be deemed to be delivered on the date on which the order for inward entry is passed. It might be suggested that the landing of the goods was completed on May 7, 1955 and, therefore, the bills of entry were not effectively delivered while the unamended Act was in force, and consequently, the rate of duty should be determined by reference to the amended Act, and by Explanation (b) to the amended S. 37, the rate of duty chargeable on the goods would be the rate in force on April 27, 1955, the date on which the order for inward entry of the importing vessel was passed. But we are of the opinion that the appeals must be decided on the footing that the rate of duty chargeable on the goods should be determined by reference to the provisions of the unamended Act. The case was argued in the Courts below and in this Court on that footing alone. Even if the appellant were to raise this new point, we would not be inclined to entertain it. Moreover, though the respondents had alleged that the goods were landed on or about May 7, 1955, this allegation was not admitted by the appellant, and D. N. Sinha, J., recorded the finding that the landing of the goods was completed before May 7, 1955, that is to say, before the amending Act XXI of 1955 came into force. Furthermore, the amending Act is not retrospective, and it would seem that Explanation (b) to the amended S. 37 would not apply to a bill of entry presented before the amending Act in anticipation of the arrival of the importing vessel. 7. We have, therefore, come to the conclusion that the contesting respondents were liable to pay the reduced duty of 12 annas per lb., and they are entitled to the refund of the excess duty paid by them. 8. One of the question mooted before the High Court was whether the High Court in its writ jurisdiction under Art. 226 of the Constitution had power to pass an order of refund of money. The High Court answered the question in the affirmative. The correctness of this finding was not challenged before us.

Decision reasoning: 0[ds]2. The appeals were argued in the Courts below and before us on the footing that the rate of duty applicable to the goods must be determined by reference to the Sea Customs Act (VIII of 1878), as it stood before its amendment by Act XXI of 1955, and we must decide the appeals on that footing. The decision of the appeals turns on the construction of the unamended Ss. 37 and 86. It is a matter of accident that the rate of import duty was decreased instead of being increased on April 30, 1955. The relevant Sections should receive the same interpretation whether the rate of duty be increased or decreased. Neither a strict nor a liberal construction is called for, we should give the Sections a fair constructionIt might be suggested that the landing of the goods was completed on May 7, 1955 and, therefore, the bills of entry were not effectively delivered while the unamended Act was in force, and consequently, the rate of duty should be determined by reference to the amended Act, and by Explanation (b) to the amended S. 37, the rate of duty chargeable on the goods would be the rate in force on April 27, 1955, the date on which the order for inward entry of the importing vessel was passed. But we are of the opinion that the appeals must be decided on the footing that the rate of duty chargeable on the goods should be determined by reference to the provisions of the unamended Act. The case was argued in the Courts below and in this Court on that footing alone. Even if the appellant were to raise this new point, we would not be inclined to entertain it. Moreover, though the respondents had alleged that the goods were landed on or about May 7, 1955, this allegation was not admitted by the appellant, and D. N.Sinha,, recorded the finding that the landing of the goods was completed before May 7, 1955, that is to say, before the amending Act XXI of 1955 came into force. Furthermore, the amending Act is not retrospective, and it would seem that Explanation (b) to the amended S. 37 would not apply to a bill of entry presented before the amending Act in anticipation of the arrival of the importing vessel7. We have, therefore, come to the conclusion that the contesting respondents were liable to pay the reduced duty of 12 annas per lb., and they are entitled to the refund of the excess duty paid by them8. One of the question mooted before the High Court was whether the High Court in its writ jurisdiction under Art. 226 of the Constitution had power to pass an order of refund of money. The High Court answered the question in the affirmative. The correctness of this finding was not challenged before usIn C. A. No. 664 of 196312. In this appeal the Collector of Customs assails the order of the Division Bench on two grounds only; the first is that the Calcutta High Court had no jurisdiction to issue a writ to the Government of India because the order passed by the Collector of Customs merged in the order of the Government of India made at New Delhi and the order of the Government of India could not be challenged by a petition filed in. This case arose before the amendment of Art. 226. Although this point was taken in the Return it does not appear to have been argued at any stage in the High Court, because neither Mr. Justice Sinha nor the Division Bench considered it. If this point had been taken it would have been noticed at the very forefront of the two orders. As the learned counsel could not state that the point was urged, we did not permit it to be raised13. The second ground on which the order is challenged is that the interpretation of the relevant provisions of the Sea Customs Act by the Division Bench is erroneous and that the better view was expressed by the learned single Judge.To appreciate the point in controversy I shall refer to the provisions of the Sea Customs Act as they were before the amendment in May, 1955 and thereafterThis seems to prescribe that the date of delivery was not the actual date, that is to say, the 26th of April, but the date on which the order for entry inwards was passed, that is to say, April 27. Mr. Justice Sinha observed that this made no difference to the case because whether import duty is calculated as on April 26 or as on April 27, the old rate would be applicable and the order of the Assistant Collector of Customs was right in the circumstances of this case. The Divisional Bench, on the other hand, held that the Explanation to S. 37 did not apply to the case because under S. 37 the rate of duty applicable to any goods imported would be the rate in force on the date on which the bill of entry thereof is delivered under S. 86, that is, on the landing of the goods as stated in S. 86. Therefore, the rate applicable must be the rate in force on the date the goods were landed. There is nothing to show when this consignment was landed. The petition stated that the consignment was landed on or about May 7, 1955. This was not specifically denied and another date suggested. Mr. Justice D. N. Sinha stated, in narrating the facts, that the consignment was landed before the 7th but I do not find any support for this observation16. The Explanation and S. 86 between them cause some difficulty and lead to confusion. This was perhaps sought to be remedied by including another deeming provision in the Bill of Entry which ran somewhat counter to the fiction created by S. 37. The statute created a fiction under which the first presentation of the bill of entry was the crucial date. Section 86 said that the bill of entry must be prepared on the landing of the goods. The condition in the bill of entry for consumption created a fiction under which the crucial date was the date on which the order for entry inwards was made. It is obvious that these two dates might not be the same, and in fact they are not so here, and a question might well have arisen which was to prevail. Fortunately, it has not arisen because the duty on the 26th and 27th April was the same and by the recent amendments of S. 37 and S. 86 the need for Cl. 2 in the bill of entry for consumption has disappearedAs the vessel cannot now pass the prescribed point till the manifest is delivered and the bill of entry can only be handed after the manifest is delivered the delivery of the manifest and not the landing of the goods is the crucial fact. Under the new explanation to S. 37 the earliest date will be the date of the order of the entry inwards and thereafter the date on which the bill of entry is actually first presented. The need for the second clause in the bill of entry disappears17. I shall now attempt to construe Ss. 37 and 86 as they were prior to these amendments. There are two fundamental facts which must be borne in mind when construing them. The first is that an explanation must be accepted according to its own terms. An explanation seeks to explain a particular proposition, and it stands to reason that explaining the explanation by referring to other provisions may not be open. The explanation which is added to S. 37, is intended to explain that Section, and this leads to the second fundamental fact, namely, that the explanation lays down the exact point of time when the bill entry can be taken to be delivered "for the purposes of the Section". The purpose of the Section is that duty is calculated at the rate in force when the bill of entry is delivered under S. 86. Section 86 does not lay down that the bill of entry may be delivered only after the goods are landed. The owner of the goods must make entry in the bill of entry of goods for home consumption or warehousing on the landing of the goods, and hand over the bill of entry in duplicate to the Customs Collector. In other words, the bill of entry must, in any event, be handed in when the goods are landed. That is the normal mode of doing the act. The practice, however, appears to have grown to prepare such bills of entry in advance of the landing of goods and to clear the claim for import duty betimes so as to make the goods ready for clearance. To make the date certain for purpose of calculation of duty it was provided that the first presentation to the proper officer of Customs would be the crucial date for levy of duty and determination of the rate thereof. The reference to S. 86 in S. 37 does not reappoint a different date for the purpose of calculation of duty. The presentation of bill of entry will still be the decisive date whether it is presented before the landing of the goods or after they are landed. To hold otherwise would mean that the explanation cannot function at all unless the bill of entry is presented after the goods have landed. This would lead to the result that there would be no point of time by reference to which duty can be calculated in a case such as this. To assume that the bill of entry was presented after the goods were landed would be to go against both law and fact. The bill of entry was first presented on the 26th April and the order for entry inwards was 27th April under the explanation to S. 37, as it originally stood, the crucial date for calculation of duty would be the 26th. Under Cl. 2 of the bill of entry it would be the 27th. The rate applicable would be Re. 1 per lb18. If the original S. 86 is intended to alter the date from the 26th (under the original explanation to S. 37) to a date after the landing of the goods we get into this difficulty. Are we to take the crucial date to be 30th April (when the landing began) or the 7th May (when the landing was completed), or any of the intermediate dates ? On May 7, the amendments to S. 37 explanation and S. 86 became law and they take one back to the 27th as the crucial date. Are the goods landed from the 30th to the 6th subject to the duty at the rate of Re. 1 per lb. and those landed on the 7th at Re.0 per lb., or is the whole consignment subject to the higher or the lower rate ? I can see no answer to these questions19. To avoid such an impossible result the explanation must be read and construed on its own terms and must not be made a new explanation with the aid of S. 86.As the bill of entry was presented on the 26th April, 1955, it could either be treated as presented on that date under the Explanation to S. 37 or on the 27th April 1955 under Cl. 2 in the bill of entry for home consumption if it could be held applicable, a point I do not decide. But it could not be held to have been presented on any of the dates from April 30 to May 7 during which the goods were landed because there is no provision under which another date can be fixed either actually or even fictionally once the bill of entry is presented and the fiction in the explanation to S. 37 applies. It may be contended that under my construction of the Sections the bill of entry may be presented at any timesay six months before. The short answer to that is the bill entry is intimately connected with the Masters manifest and before the passing of the Prior Entry Manifest Order, 1957 (7th September 1957 C. B. R. Notification No.) under the new S. 54A the manifest could not be delivered in anticipation of the arrival of the vesselThe recent changes enable the manifest to be delivered not more than 15 days earlier and the new explanation to S. 37 makes the delivery of the bill of entry or the date of the orders for the entry of the vessel the crucial datesand the new S. 86 which allows the bill of entry to be presented after the manifest is again overborne by the explanation in much the same way as the reference to theg of the goods in the former S. 8620. On the whole I am satisfied that the duty leviable was that in force on the 26th or 27th April 1955, that is to say, Re. 1 per pound.