Case: Hind Trading Company Vs. Union Of India &amp; Anr

by the permit during the entire journey up to their ultimate destination. In such cases, Section 5(3) was infringed if the permit covering the goods was not produced on demand by any Land Customs officer. Except in such cases, Section 5(3) did not apply, and it was not necessary to keep the permit with the goods. We hold that Section 5(3) was not infringed when the carriers did not produce the permit covering the goods at the Sonapur airstrip on May 18, 1957 and the goods could not be confiscated under Section 5 (3).11. Nor were the goods Hable to confiscation under Section 7 (1) of the Land Customs Act. The appellant imported 1,65,000 dollars from Tibet under two Reserve Bank licences and two import permits. There was no distinguishing mark on any dollar. The appellant was found in possession of 1,65,000 dollars only. No attempt was made to prove that the appellant was in possession of another consignment of 82,500 dollars. At the time of import the dollars were packed in 66 bags marked "HN." and 66 bags marked "H.D."The Range Officer seized 82,500 dollars packed in 66 bags marked "H.D." There is no evidence to show that the seized dollars were not covered by the permits and licences held by the appellant. The onus was on the respondents to prove that the first consignment of 66 bags bore the mark "HD."Application No. 34 accompanied the first consignment. There was no nothing on application No. 34 by the Customs officers at Sonapur or at Dum Dum indicating that they had examined the bags or that the bags were found to bear the mark "HD." The summary of the diary of the Range Officer Matidhar set out in the order of confiscation does not show that the officer examined the bags. The note in the diary that the mark checked was "HD." could have been made on the basis of the mark "HD" shown in the accompanying application No. 34. Before the issue of the show-cause notice on July 17, 1957, the appellant had no occasion to produce before the Customs authorities any of the 66 bags marked "HN" which had reached Calcutta.No inference has been drawn against the appellant from their inability to produce any bags marked "HN" after July 17, 1957.On the materials on the record it is impossible to hold that the dollars seized on May 18, 1957 were smuggled goods. There was no nothing by the Customs officers at Sonapur and Dum Dum on application No. 34. If the appellant desired to send smuggled "HD" bags from Sonapur to Dum Dum, they could easily obtain application No. 34 from Calcutta and send it with the consignment seized at Sonapur. Moreover, the Customs officers had not put any mark or initials on the bags, and there was nothing to prevent the appellant from putting the mark "HN." on other bags and using them for the carriage of the dollars.The conclusion is irresistible that due to the inadvertence of the carriers the permits were interchanged and that application No. 34 was sent with "HN." bags and application No. 32 was with "H.D." bags. No inference of smuggling could be drawn from the fact that "H.D." bags were found with application No. 32. In the circumstances, the finding that the appellant had smuggled the goods and was guilty of an offence under Section 7(1) of the Land Customs Act must be characterized as perverse.12. Nor was it proved that the appellant committed any offence under Section 8 (1) and Section 23-A of the Foreign Exchange Regulation Act read with Sections 19 and 167 (8) of the Sea Customs Act. An offence under those sections can be proved by circumstantial evidence, see Issardas Daulat Ram v. Ram Union of India, (1962) Supp 1 SCR 358 = (AIR 1966 SC 1867 ). In the present case there was no evidence either direct or circumstantial to prove the offence. The appellant had valid Reserve Bank licences for the import of 1,65,000 dollars. Those licences were not examined nor seized by the Customs officials and no attempt was made to prove that the licences did not relate to the dollars seized on May 18, 1957. It follows that the dollars were not liable to confiscation under any provision of law.13. Having regard to the facts on the record, no Tribunal could reasonably come to the conclusion that the dollars were liable to confiscation if they properly understood the relevant enactments. In the circumstances, the order of the Collector confiscating the goods is liable to the quashed by a writ of certiorari; see Halsburys Laws of England, 3rd Edn., Vol. II, Act, 119, pp. 62, 63.In Regina v. Medical Appeal Tribunal, (1957) 1 QB 574 at p. 582, the Court held that an assessment of 20 per cent disablement must, having regard to the facts appearing on the record, be held to be erroneous in point of law and based upon a misconstruction of Regulation 2 (5) of the National Insurance (Industrial Injuries) (Benefits) Regulation, 1948, and the award of the Medical Appeal Tribunal was, therefore, liable to be quashed by a writ of certiorari. Denning L. J., observed."No reasonable person, who had proper regard to Regulation 2 (5) could have come to such a conclusion. It is now settled that when a Tribunal come to a conclusion which could not reasonably be entertained by them if they properly understood the relevant enactment, then they fall into error in point of law; see Edwards (Inspector of Taxes) v. Bairstow, (1956) AC 14: When the primary facts appear on the record, an error of this kind is sufficiently apparent for it to be regarded as an error on the face of the record such as to warrant the intervention of this Court by certiorari."14. This conclusion is sufficient to dispose of the appeal. It is, therefore, unnecessary to examine the contention that the impugned orders were passed in contravention of the principles of natural justice.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]9. The Central Board of Revenue framed the Chinese Silver Dollars (Import) Rules on March 29, 1958 in exercise of the powers conferred by Section 9 (1) of the Land Customs Act, 1924. Rule 6(2) provided that on its journey from Kalimpong land customs station to its ultimate destination any consignment of Chinese silver dollars imported from Tibet into India must be accompanied by a permit, i.e., the importers copy of the relative import application bearing the endorsement of the officer in charge of the Kalimpong land customs station permitting the clearance of the consignment. The permit must be produced at the land customs check-post at Teesta Bazar, along with the consignment if the destination was Teesta Bazar or beyond. It must also be produced on demand by any land customs officer at any time during the journey of the consignment up to its ultimate destination. These rules were framed on the assumption that independently of the Rules, the importer was not obliged to keep the permit with the dollars after they passed out of the Kalimpong land customs station. The rules were not in force on May 18, 1957 when the dollars were seized by the Range Officer Matidhar. There was no provision in the Act or the Rules in force on May 18, 1957 which required the appellant to keep the permit at Sonapur airstrip with the dollars seized on that date.10. The contention of the Revenue is that Section 5(3) required that all important goods must always, at all time and at all places be accompanied by a permit. We are unable to accept this contention. After the import, the goods became a part and parcel of the mass of other like goods in India.There was no duty to keep the permit with the consignment of imported goods for all times and at all places.Nor was the importer under a duty to keep the consignment intact in his hands. He could sell portions of it to different buyers and obviously he could not give the permit to every consumer.He could import rubies from Burma by land and by sea. It was not necessary to keep any permit with the rubies imported by sea after their clearance from the Customs House. Nor was the position different in case of rubies important by land. A consumer wearing a necklace made of rubies was not expected to carry the permit for the rubies in her bag. Under the Land Customs Act a customs clearance permit was necessary for the passage of goods imported or about to be exported through the land customs station. For this reason Section 5 (3) read with Section 7(1) (a) required that the goods so passing through the land customs station must be accompanied by the permit. The rule could provide that the important goods should be accompanied by the permit even after such passage.As already stated. The rule required that important Chinese silver dollars should be accompanied by the permit during the entire journey up to their ultimate destination. In such cases, Section 5(3) was infringed if the permit covering the goods was not produced on demand by any Land Customs officer. Except in such cases, Section 5(3) did not apply, and it was not necessary to keep the permit with the goods. We hold that Section 5(3) was not infringed when the carriers did not produce the permit covering the goods at the Sonapur airstrip on May 18, 1957 and the goods could not be confiscated under Section 5 (3).11. Nor were the goods Hable to confiscation under Section 7 (1) of the Land Customs Act. The appellant imported 1,65,000 dollars from Tibet under two Reserve Bank licences and two import permits. There was no distinguishing mark on any dollar. The appellant was found in possession of 1,65,000 dollars only. No attempt was made to prove that the appellant was in possession of another consignment of 82,500 dollars. At the time of import the dollars were packed in 66 bags marked "HN." and 66 bags marked "H.D."The Range Officer seized 82,500 dollars packed in 66 bags marked "H.D." There is no evidence to show that the seized dollars were not covered by the permits and licences held by the appellant. The onus was on the respondents to prove that the first consignment of 66 bags bore the mark "HD."Application No. 34 accompanied the first consignment. There was no nothing on application No. 34 by the Customs officers at Sonapur or at Dum Dum indicating that they had examined the bags or that the bags were found to bear the mark "HD." The summary of the diary of the Range Officer Matidhar set out in the order of confiscation does not show that the officer examined the bags. The note in the diary that the mark checked was "HD." could have been made on the basis of the mark "HD" shown in the accompanying application No. 34. Before the issue of the show-cause notice on July 17, 1957, the appellant had no occasion to produce before the Customs authorities any of the 66 bags marked "HN" which had reached Calcutta.No inference has been drawn against the appellant from their inability to produce any bags marked "HN" after July 17, 1957.On the materials on the record it is impossible to hold that the dollars seized on May 18, 1957 were smuggled goods. There was no nothing by the Customs officers at Sonapur and Dum Dum on application No. 34. If the appellant desired to send smuggled "HD" bags from Sonapur to Dum Dum, they could easily obtain application No. 34 from Calcutta and send it with the consignment seized at Sonapur. Moreover, the Customs officers had not put any mark or initials on the bags, and there was nothing to prevent the appellant from putting the mark "HN." on other bags and using them for the carriage of the dollars.The conclusion is irresistible that due to the inadvertence of the carriers the permits were interchanged and that application No. 34 was sent with "HN." bags and application No. 32 was with "H.D." bags. No inference of smuggling could be drawn from the fact that "H.D." bags were found with application No. 32. In the circumstances, the finding that the appellant had smuggled the goods and was guilty of an offence under Section 7(1) of the Land Customs Act must be characterized as perverse.Having regard to the facts on the record, no Tribunal could reasonably come to the conclusion that the dollars were liable to confiscation if they properly understood the relevant enactments.This conclusion is sufficient to dispose of the appeal. It is, therefore, unnecessary to examine the contention that the impugned orders were passed in contravention of the principles of natural justice.