Moy I. SUPREME COURT REPOR'fS [1963] EAST INDIA COMMERCIAL CO., LTD., CALCUTTA AND ANOTHER v. THE COLLECTOR OF CUSTOMS, CALCUTTA (A. K. SARKAR, K. SmrnA RAo 11.nd J. R. MunnoLKAR, JJ.)
Import-Law enabling Government to iasue notifications prohibiting or restricting Import-Import licence-Breach of conditions-If amounts to import without licence-Law deo/ared by High Oourt-lf binding on authorities or tribunals under its superintendence-Sea OUBtnma Act, 1878 (8 of 1878), ss. 19, 167;8)-Imports and Exports (Oontrol) Act, 1947 (18 of 1947), ••· 3, ti-Oomtitution of India, Arts. 226, 227.
On October 8, 1948, the appellant company was granted a licence to import from the U. S. A. a large quantity of electrical instruments. The licence was issued subject to the condition that the goods would be utilised only for consump- tion as raw material or accessories in the licence holder's factory and that no portion thereof would be
sold to any party. After the goods arrived in India in February- March, 1949, the company took delivery of them on pay- ment of customs duty. On information alleged to have been received by the
authorities concerned that the goods were being sold in the market io breach of the conditions of the licence, the Police, after obtaining a search warrant from the magistrate seized a large stock of the goods from the
godown of the appellant. On January 12, 1951, the customs authorities filed a complaint before the Magistrate under s. 5 of the Imports and Exports (Control) Aet, 1947, against the second appellant, who was a director of the company, and
others, on the allegation that the accused persons had, in violation of the conditions of the licence, disposed of portions of the goods covered by it. The Magistrate discharged the
accused and his order was confirmed by the Hi~ h Court on March 3, 1955, on the ground thats. 5 of the Act penalised only a contravention of an order made or deemed to have been made under the said Act, but did not penalise the
contravention of the conditions of licence issued under the Act or issued under a statutory order made under the Act, On January 16, 1953, the High Court made an order directing the seized goods to be sold and the sale proceeds kept with the Chief Presidency Magistrate. On August 28,
3 S.C,R. 1955, the Collector Cuatoms served a notice on the appel· !ants under s. 167(8) of the Sea Customs Act, 1871, read with s. 3 (2) of the Imports and Exports (Control) Act, 19-4-7 to show cause why the moneys lying with the Chief
Presidency Magistrate representing the imported goods should not be confocated and also why penalty should not be imposed on them, inasmuch as they had infringed the conditions of the licence issued to them by selling a portion of the goods imported to others. The appellants filed an
application under Art. 226 of the Constitution of India before the High Court of Calcutta praying for a write of prohibition restraining the respondent from proceeding with the enquiry on the ground that it was without jurisidiction. Held, ( Ptr Subba Rao and Mudholkar, JJ., Sarkar, J.,
dissenting), that: (I) that the application under Art. 226 of the Constitution was maintainable, because, if on a true construction of the provisions of law under which the notice was issued, the respondent had no jurisdiction to initiate proceedings in respect of the acts alleged to have been done by the appellants, the respondent could be prohibited from proceeding with the same.
(2) under s. 167(8) of the Sea Customs Act, 1878, read· with s.3(2) of the Imports and Exports (Control) Act, 1947, only the goods imported in contravention of an order under the latter Act were liable to be confiscated, but the section did not expressly or
by necessarly implication empower the authority concerned to consficate the goods imported under a valid licence on the ground that a condition of the licence not imposed by the order was infringed or violated. The
infringement of a condition in the licence was not an infringe- ment of the order and did not, therefore, attract s.167(8) of the Sea Customs Act. (3) public notices issued by the Government of India
governing the issue of import licences were not orders issued under s. 3 of the Imports and Exports (Control) Act. (4) in the present case, as the goods were imported under a valid licence they could not be considered as goods either prohibited or restricted within the meaning of s. 167 (8) of the Sea Customs Act and,
therefore, the Collector of cu~toms had no jurisdiction to proceed with the enquiry under that section. Per Subba Rao and Mudholkar,JJ.-The law declared by the hi~hest Col\rt iq the Stat"' w~s binding on
'\Uthoritie~ 19(1 Ea1t lniia Comm1rcial Co., Ltd., CalcJttta y, Co/hctQr of Curt1m• o.tcutta 11161 East India Commercir:d Ct'., Ltd., Calcutta Oo/lector of Cu•lorns, C11lculta or tribunals under its superintendence and that they could not ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. Consequently, the High Court of Calcutta, having by its order dated March 3, 1955, held that a contravention of a condition imposed by a licence issued under the Act was not an offence under s. 5 of the Act, the notice dated August 28, 1955, signifying the
launching of proceedings contrary to the law laid down by the High Court, was invalid. Per Sarkar, J.-(1) The application under Art. 226 of the Constitution was not maintainable, because the Col- lector had jurisdiction t<> decide what was a breach of an order and, therefore, whether the breach of a condition of a licence was breach of an order.
(2) Even assuming that the decision of the High Court dated March 3, 1955, was binding on the Collector, that would not afftct his jurisdiction in the present case to deci<fe whether the goods were liable to confiscation.
(3) A breach of a condition of a licence issued under an order made under the Imports and Exports (Control) Act 1917, was a breach of the order itself. ( 4) Where after crossing the customs barrier lawfully,
goods are disposed of in contravention of a restriction duly imposed, they must be considered to have been imported contrary to the restriction. C:rvIL APPELLATE JURI!!DICTION : Civil Appeal
No. 383 of 1960. Appeal by Rpeoial leave from the judgment and order dated January 5, 1959, of the Calcutta High Court in Appeal from Original Order No. 54 of 1957. A.V. Vishvanatha Sastri, E. R. Mayer, Noni
Kumar Ghakrawrti and B. P. Maheshwari, for the appellants. Daulat Ram Prem and D. Gupla, for the res- pondent. 1962. May 4. Sarkar J. delivered his own 1–·. Judgment and the judgment of Subba Rao and
Mndholkar! JJ.~ was delivered b! Subba Rao~ J, – –', 3 S.O.R. SUPREME COO.RT REPORTS S.utJUJl., J.-The a.ppellants had brought into India from the U.S.A. a lit.rge quantity of elec-
trical instrument11 under a. licenre. The respondent, the Collector of Customs, Calcutta, started uroceed- ings for confiscation of these goods under· s.167(8) of the Sea Customs Act, 1878.
The appellants con- tend that the proceedings are entirely without jurit1diction as the Collector can confiscate only when there is an import in contravention of an order prohibiting or re1tricting it and in the present
case the Collector was proceeding to confiscate on the ground that a condition of the licence under which the goods had been imported had been disobeyed. The appel1ants, therefore, ask for a
writ of prohibition directing the Collector to stop the proceedings. The question is, has the Collector jurisdiction to adjudicate whether the goods are liable to be confiscated? '1 he decision of that ques-
tion, however, depends on certain statutory provi- sions and the fact of the case to which, therefore, I shall immediately turn. Sub-section ( 1) of I!!. 3 of the Import and Ex- port& (Control) Act, 1947, provide!!! that the Govern-
ment may by order prohihit, restrict or otherwise control the import of goods. By Notification No. 23-I.T.C./43 issued under r. 84 of the Defence of India Rnles which by virtue of s, 4 of the Act of
194 7 is to be deemed to have been issued under that Act, it waR ordered that no electrical instrument could be brought into India except under a licence. By another order made under B. 3 of the Act and
contained in Notification No. 2-ITC/48, dated March 6, 1948, it was provided that the licence to import electrical instruments might be issued suject to the condition that the goods would not be disposed of
or otherwise dealt with witho~t the written permis- sion of the licensing authority. The first appellant is a company and thll se- 9ond appellant, one of it~ dµ-e"Otors. On October 8,
1961! Ea1t I niia Cornrn••ciaJ C•., Lrtl., C"/cuttc v. Co//eotor •f Cu1lom• Calcutta Sarkar J. /___,.. Ea.at India Commdrcial Co., Ltd., C alcuUa v. Colltctar ofCUlltoms, Calcutta
Sarkar J. 1948, a licence was granted to the appellant to im- port from the U.S.A. a large quantity of electrical instruments, namely fluorescent tubes and fluores- cent fixtures. In the application for the licence it
was stated that the goods were not required for sale but for modernising the lighting system of the appellant's factory at Ellore in Madras. The licence was issued subject to the condition that the goods
would be utilised only for consumption as raw material or accessories in the licence holder's factory and that no portion thereof would be sold to any party. The goods duly arrived in India and were
cleared out of the customs sometime about the end of February, 1949. Soon t,hereafter, the authorities concerned are said to h'1ve got information that the goods were being sold in the market in breach of
the condition of the licence. Thereupon the police took steps and after obtaining a search warrant from a Magistrate in Calcutta on August, 12, 194!), seized a large stock of the goods from the godown
of the appellents. 1:· ~ Thereafter on January 12, 1951, two proceed- ings were started. One of them was a prosecution of various officers of the appellant company inclu- ding the second appellant under s. 420 read with s.
120 of the Indian Penal Code on the allegation that the licence had been obtained on false and fraudu- lent representations as there was no intention at any time to use the goods for any factory. After
certain proceedings to which it is unnecessary to refer, the accused persons were discharged by a Pre- sidency Magistrate of Calcutta on July 27, 1953 under s. 253 of the Code of Criminal Procedure and
the prosecution under ss. 420 and 120B of the Penal Code came to an end. The learned Magistrate held …… that it had not been proved that the licensing auth- ority had been deceived by any representation of
the a,ocu.sed o~cers of the oompan~ nor that "ri~ht …. , 3 S.C.R. from the time of applying for the licen0e, the inten- tion was to sell the goods or part thereof''. The other proceeding was a prosecution of the
second appellant and another person under s. 5 of the Act of 194 7. That section provides that "if any person contravenes any order … under this Aot, he shall … be punishable with imprisonment … ". It
was alleged that the accused persona had in viola- tion of the conditions of the licence disposed of portions the goods covered by it and, therefore, com· mitted an offence under s, 5 of the Aot of 1947. Thia
proceeding resulted in a acquittal by the trial Court which was confirmed by the High Court at Calcutta on March 3, 1955. Sen .r., who delivered the judgment of the High Court said that it was difficult to hold
that a condition of the licence amounted to an order under the Act and unless the penal section included the contravention of the condition as an offence it could not be held that such a contravention amoun-
ted to an offence under the section. While these prooeedings were pending an order was made by the High Court on January 16, 1953, directing the seized goods to be sold and the sale proceeds kept with the Chief Presidency Magis-
trate, Calcutta. Pursuant to this order the goods were sold for a sum of Ra. 4,15,000 and the sale proceeds have since been lying with the Chief Pre- sidency Magistrate. After the aforesaid proceedings had come to
an end, the Collector of Customs, Calcutt.a on Aug- ust 28, 1955, served a notice on the appellant to show cause why the moneys lying with the Chief presidency Magistrate representing the imported
goods should not be confiscated under s. 167(8) of the Sea Customs Act read with a. 3(2} of the Act of 1947 and why further penalty should not be impo- sed on them under these provisions. It is this notice
which gave rise to the proceedings with which w~ Ea.& .India Oommercial Co., Ltd., Calcutta v. Coll~c:or of Customs, Calcutla Sarkar J. (_ East India Ct>mtMrolal Co., Lid., Calcutea
v. Collulot' oj Cu1tomB, Ca/Mia Sarkar J, :I are concerned. The notice stated that a prohibition on the import of the goods except under a special licence and subject to the conditions stated in it
was imposed under s. 3( l) of the Act of 1947 and that by virtue of this prohibition the importation of the goods would be deemed to be illegal unless "(I) at the time of importation of goods were cover-
ed by a valid special licence which had not been caused to be issued by fraudulent misrepresentation, (2) after importation the goods or any part of them were not sold or permitted to be utilised by any
other party, except the importers for consumption as raw material." It also stated that investigation had revealed that portion of the goods were sold by the appellants to other people.
After receipt of the notice the appellants moved the High Court at Calcutta under Art. 226 of the Constitution for a writ of prohibition pro- hibiting the respondent, the Collector of Customs,
Calcutta, from taking any proceeding pursuant to the notice under ss. 167 and 182 of the Sea Cus- toms Act against the appellante. The application was first heard by Sinha, J,, and was dismissed.
An appeal by the appellants to an appellate bench of the High Court also failed. The appellants have now approached this Court in further appeal by special leave. Sub-section (2) ofs. 3 of the Act of 1947 pro-
vides that "all goods to which any order under sub-section (1) applies shall be deemed to be goods of which the import or export has been pro- hibited or restricted under s. 19 of the Sea Customs
Act, 1878 and all the provisions of that Act shall have effect accordingly". Section 19 of the Sea Customs Act is contained in Chapter IV of that Act. Section 167(8) of the Sea Customs Act states
the "If any goods, the importation or exportatioq ', __ ….. , —· 3 S.C.R. SUPREME OOURT REPORTS of which is for the time being prohibited or res- tricted by or under Chapter IV of this Act, be impor-
ted into or exported from India contrary to such prohibitinn or restriction . . . such goods shall be liable to confiscation; and any person concerned in any such offence shall be liable to a penalty".
Section 182 of this Act authorises various Customs Officers including a Customs Collector to adjudi- cate on questions of confiscation and penalty under s. 167(8). As earlier stated the question is one of juris-
diction. The contention of learned conusel for the appellant is that under s. 167(8) of the Sea Cus- toms Act read withs. 182 of that Act under which the Collector of Customs is proceeding, he has juris-
disction only to decide whether goods have been im- ported contrary to the prohibition or restriction impo- sed by an order made under s. 3( I) of the Act of 194 7 but he has no jurisdiction under these sections to
decide any question of confication of goods for breach of a condition of a licence issued under suoh an order. It is said that it 'Lppeared from the notice served by the Collector that he was
proceeding to decide whether the goods were liable to confiscation because they had been disposed of in breach of the condition of the licence under which they had been imported which he has no
jurisdiction to do and hence the appellants were entitled to a writ of prohibition which they sought. For the purpose of this argument the appellants proceed on the assumption that there has been a
breach of the condition but this they do not, of course, admit. The basis of the appellant's contention is the proposition that a breaoh of the conditions of a licence is not a breach of the order under which
the licence was granted and the condition imposed and that no offence under s. 167(8) of the Sea Cqstoms Act is committed if a condition of the •f East India Co111,,.,,cial Co., Lid., 0 o/&utta
v. Co//ecto, of Customs, CalouUa Sarkar J. Eutlndii Comrnlf'&iaZ Co., Ltd., Calcutta Collutor of Oustoms, Ca/culta SarkarJ. licence is contravened. In my view this proposi- tion is not well founded. But assume it is correct.
Even so it sJems to me that there is no lack of jurisdiction in the Collector in the present case . He has admittedly jurisdiction to decide whether there has been a. breach of an order.
l t follows that he has jurisdiction to decide what is a breach of an order and, therefore, whether the breach of a condition of a. licence is breach of an order. To say that the breach of a condition is not a breach
of an order is only to set up a defence that the goods cannot be confiscated for such a breach. Such a contention does not oust the jurisdiction of the Cullector to decide whether the breach of
a condition is breach of an order. If the Collector decides that the breach of a condition is a breach of an order. his decision, on the assnmption that I have made, would be wrong but it would not be
a decision made without jurisdiction. This is the view which all the learned Judges of the High Court took and it seems to me to be the correct view. Further I think in the present case one of
the allegations in the notice is that the goods had been imported without a licence and therefore in direct violation of an order made under s. 3(1) of the Act of 1947. Clearly, the Collector has juris·
diction to decide the question raised by such an allegation. Now the notice served by the Collec- tor on the appellants contains a statement that an importation of goods would be illegal unless it
was covered by a licence which has not been pro- cured by fraudulent misrepresentation and that in the present case the licence had been obtained by fraudulent misrepresentation. '.l'he notice hence
alleges that the goods had been imported really without a licence, that is, in breach of an order. Even if it be assumed, as the appellants contend H1at an importation -qnder a licence fraq.dulently
1- ,… – 3 S.d.R. procured is not an importation without & licence, that would only show that there has been no importation without a licence, that is, in breach of an order, but it would not deprive the Collec-
tor of his jurisdiction to decide that question. Likewise the fact that a Magistrat~ has decided that the licensing authority had not been deceived by the appellants in the matter of the issue of the
licence which, if binding on the Collector, would only show that the licence had not been fraudu- lently procured and cannot affect the Collector's jurisdiction in any way. It is also said that the decision of a. High
Court on a point of law is binding on all inferior Tribunals within its territorial jurisdiction. It is, therefore, contended that the Collector is bound by the decision of Sen. J., to which I have earlier
referred, that the breach of a condition of a licence is not a breach of the order under which the licence was issued and the condition imposed, As at pre- sent advised I : m not prepared to subscribe to
the view that the decision of a High Court is so binding. But it seems to me that the question does not arise, for even if the decision of the High Court was binding on the Collector, that would not
affect his jurisdiction. All that it would establish is that the Collector would have, while exercising his jurisdiction, to hold that the breach of a con- dition of the licence is not a breach of an order.
Its only effF .i would be that the appellants would not have to establish independently as a. proposi- tion of law that a breach of a condition of a licence is not the breach of an order under which it had
been issued but might for that purpose rely on the judgment of Sen, J. I think, therefore, that the Collector has jurisdiction in this case to decide whether the goods were liable to confiscation. If he has this
jurisdiction, he has clearly also the jurisdiction to East India Oommercial Co., Ltd , C•l•uUa v. CollUlor of Ousto1nr Catoulla Sarkar J, lla1t /n,ia 0tmmllf'eial Co., Lid., Caiculla
Colltelor ol Custom1, Ca/OUlla Sarkar .1. StJPltEME 00Ult1' REPoRTS (196:lJ decide whether the appellants are liable to have a. further pecuniary penalty imposed on them under s.167(8) of the Sea Customs Act. If this is the
correct view, as I think it is, then the appellants are not entitled to the writ. But suppose I am wrong in what I have said so far about the Collector's jurisdiction. Suppose as the appellants contend, he had in this case no
jurisdiction to decide whether the goods are liable to confiscation. That would be because the breach of a condition of a licence is not a breach of an order under which it was issued and the Collector
has no jurisdiction to decide whether it is so or not. This is how the appellants themselves put it. It has not been contended, and indeed it cannot be, that if the breach of a condition of a licence
is the breach of an order under which it was issued, the Collector would have jurisdiction to decide whether in the present case the goods are liable to confiscation. I am unable to agree that the breach of a condi·
tion of a licence issued under an order made under the Actofl947 is not a breach of the order. In my view, euch a breach is a breach of the order itself. Sub· section ( l) of s ;{ of the Act of 194 7 empowers
the Government. to make orders prohibiting, res- tricting or otherwise controlling the import of goods. Now clearly, one method of restricting or controlling the import of goods would be to regu.
late their use or disposition after they had been brought into India. Therefore, under the Act of 1947 the Government has power to restrict or con- trol imports in this way; it could lawfully drovide
that the goods would not after import be dealt with in a certain way. It would follow that Noti- fication No. 2-ITC(48 was quite competent and intra vires the Act and, therefore, the condition in
the licence issued in this case that the goods would not be sold after they had been brought 8 S.C.R. SUPRElME OOURT REPORT$ into Iodia had been legitimately imposed. The contrary has not indeed been seriously contended.
When, therefore, such a condition is contravened, it is really the order authorising its imposition that is contravened. That aeems to me to be the clear intention of the legislature for otherwise the
efficacy of the Act of 1947 would be largely des- troyed. That Act was intended to preserve and advance the economy of the State on which the welfare of the people depended. In such a statute
large powers have to be given to the Government and they were undoubtedly so given in the present case. The statute clearly intended and it 11hould be so read that these power could be e.ffeotively
exercised. Therefore the breach of a condition of a licence legitimately imposed in exercise of that power has to be read as a breach of the order by which the power was exercised and the condition
imposed. It follows that the Collector has juris- diction to decide whether there has been a breach of a condition of a licence and whether, therefore confiscation should be ordered under s. 167(8) of
the Sea Customs Act and further penalty imposed. I observed that Sen, J., in dealing with the argument advanced on behalf of the customs authorities that a breach of a condition of a licence
imposed under an order issued under the Act would be a. breach of that order said that there might be some substance in it in the present case, if notifi- cation No. 23-ITC/43 which provided that electri-
cal instrument could not be imported without a licence had itself provided that the licence might impose condition as to how the goods were to be dealt with after they had been brought into India
but that that had not been done. I am unable to appreciate this reasoning. Notification No. 23-ITC/ 43 has to be read along with Notification No. 2-ITC/48. The latter provided that a licence to
import might hfl issued subject to a condition like Ea•t India Commerci•l Co , Ltd. Q•leulla Oell11:tor oJOuatoms, Cal<ulla Sarkar J. llOI l!lu• lndia Cmm8""6l 60,, Lil., OtiletAla
v. C4U"~ oj Ousto1111, Ciilcutta Sa1la,. J. §50 the one which we have in the present case. The licence that was issued in this case was subject to these notificB.tions and was issued under both of
them. The position, therefore, is the same as if one order had provided that the goods could not be imported except under a licence which could impose the condition. I am unable to agree
with Sen, J., and also Sinha, J., who expressed the same view without giving any reason to support it. I find that the view that I have taken is supported. by authority. WiUingale v. Norris (1)
is a case fully in point and is a much stronger case That oa.se dealt with a prosecution under s. 19 of the London Hackney Carriages Aot, 1853, which provided that "for every offence against the provi-
sions of this Act for which no special penalty is hereinbefore appointed the offender shall be liable to a penalty not exceeding forty shillings." A cab driver was prosecuted under the section for breach
of a regulation made under s. 4 of the Hackney Carriages Act, 1850. Section 21 of the Hackney Carriages Act, 1853, provided that the Acts of 1850 and 1853 were to be considered as one Act.
The driver was held liable to be penalised under s. 19 of the Act of 1953. It was observed at p. 66. "How a.re the words 'against the provi- sions of the Aot' to be read ? The two statutes
a.re to be construed as one. In my opinion, to break the regulations made under the au- thority of a statute is to break the statute itself, and therefore s. 19 of the London Hackney
Carriages Act, 1823 must be read thus: 'For every offence against the regulations prom- ulgated under these two Aet, which are to be read as one, a penalty not exceeding forty shillings may be imposed'."
,<Ii (I) [ 1909] I K .B. 57, 66. 3 S.C.R. That case received the full approval of the House of Lords in Wicks v. Director of Public Prosecutions (1) where Viscount Simon said, "There is, of course, no doubt that when
a statute like the Emergency Powers (Defence) Act, 1939, enables an authority to make regu· lations, a regulation which is validly made under tbe Act, i. e., which is intra vires of
the regulation-making authority, should be regardod as though it were itself an enactment." I think these observations fully apply to an Act like the Imports and Exports (Control) Act. Then
I find that in our country too the same view has been taken. Thus in Emperor v. Abdul Hamid(&), Mullick, J., observed, "When a notification is issued by an executive authority in exercise of a power
conferred by statue, that notification is as much a part of the law as if it had been incorporated within the body of the statute at the time of its enactment." It has, therefore, to be held that where an order
passed under the Act authorises the impostion of a condition a breach of the condition would be punishable as a breach of the order under the Act. I might now notice another argument. It
was this: Under s. 167 (8) of the Sea Customs Act, it was the import in contravention of the restriction that was an offence. The contention was that once the goods hai been imported validly, tb.at is to say,
once they had been aliowed to cross the Customs barrier under a valid licence, there could not be an import contrary to any prohibtion or restriction. It seems to me that this il!I taking too narrow a
view of s. 167 (8). Suppose the order under s. 3 (1) of the Imports and Exports (Control) Act had itself (I) [1947) A.C. S62, 365. (2) A.I,R. 1923 Pat. I. Ealt India Conim11cial Co.,
Ltd., Calcutta 'f. C•ll1ctor of Cull•ms' Caloutt, Sttrler J. East lnditJ Commercial Co., Ltd., Calcutt·i Colltclor of Customs CalcutttJ Sarkar J. said that goods imported shall not be sold in the
market without the permission of a certain autho- rity and the goods imported were notwithstanding this sold without such permission. It would to my mind make nonsense of s. 167 (8) if it were to be
said even in buch a case that the goods had not been imported in contravention of the restriction imposed by a legitimate order duly made. I have earlier stated that the coditions in the licence have
to be treated as conditions contained in an order issued under the Act of 1947 itself. Therefore, the breach of such a condition would amount to a contravention of an order restricting the import
of goods. Such a contravention is clearly punish- able under s. 167 (8). The word "import" has not be< n defined in the Sea Customs Act. In order that the Act of 1947 does not become infructuous,
which result the legislature could not have intended, it must be held that where after crossing the Cus- toms barrier lawfully, goods are disposed of in contravention of a restriction duly imposed, they
have been imported contrary to the restriction. It remains only to consider the argument that under the Sea Customs Act only the goods imported can be confiscated and therefore, the
money now lying with the Presidency Magistrate cannot be confiscated. I think this argument is wholly untenable. The money represents the goods. The order for sale was made by the High Court
with the consent of both the parties because the goods were deteriorating. Therefore there can be no doubt that the sale proceeds of the goods which could be confiscated, can also be confiscated.
I think that the appeal fails and should be dismissed. Suoba Rao J. SUBBA RAO, J.-This appeal. by special leave is directed against the judgment of a division Bench of _the High Court at Calcutta dated Janu!lry
3 S.C.R. 5, 1957, confirming the order of a single Judge of that Court dismissing the petition filed by the appellants under Art. 226 of the Constitution. The dispute which culminated in this appeal
has had a tortuous career and had its origin in the year 19~8. To appreciate the contentions of the parties it is necessary to survey broadly the events covering a long period. The appellants are
Messrs. East India Commercial Co., Ltd., a company having its registered office in Calcutta and the Director of that Company. On September 27, 194~, the appellant-Company filed an application with
the Chief Controller of Imports, New Delhi, for the grant of a licence to import 20, 000 fluorescent tubes and 2,000 fluorescent fixtures from the United States of America. The application was accompa-
nied by a covering letter. In the application it was mentioned that the goods were required for the Company's own use as industrial raw material or accessories; but in the covering letter it was
stated that the goods were required primarily for their mills at Ellore in the Madras Presidency where they whe~e planning to arrange for an up-to-date lighting system. The Chief Contoller of Imports
issued a special licence to the appellants on October 8, 1948. The licence granted was in respect of fluorescent tubes and fixtures of the approximate CIF value of Ra. 3,33,333 equivalent to $100,000
and the shipment was to be made within one year from the date of issue of the licence. The licence issued had a rubber stamp which ran thus: "This licence is issued subject to the condi-
Jff tion that the goods will be utilised only for con- sumption as raw material or accessories in the licence holder's factory and that no portion thereof will be sold to any party."
The licence did not impose any restriction as regards the number of tubes and fixtures to be East India OommerciuJ Oo., Ltd., Calcutta v. Collector of Customs, Calcutta Subba Rao J.
East India Commercial Co., Ltd., Oalcvtt1 v. Col/tctor of Customs, Calcutta Subba Ii ao J. imported, but a ceiling was placed on the value of the goods as stated supra. Between March 21,
1949, and March 26, 1949, the appellants took delivery of the said tubes and fixtures of the speci- fied value and cleared them on payment of customs duty. The numbet of tubes and fixtures imported
was larger than that mentioned in the application, but it is common case that the value did not exceed the ceiling fixed under the licenne. On information alleged to have been received by the
v Chief controller of imports that the appellant-Com- pany was selling the goods to various parties, the matter was placed before the Special Police Esta- blishment Government, of India, New Delhi. On
August 31, 1949, the said Police establishment obtained a search warrant from the Chief presi- dency Magistrate, Calcutta, and seized, among others, from the appellants' godown a large stock
of fluorescent tubes and fixtures, and left them with the appellants on their executing a bond, It may be mentioned at this stage that the value of the stock imported was a.Lout Rs· 4,66,000 i. e.,
the purchase price of Rs. 3,33,333, together with the customs duty paid on the said goods. In the sale subsequently made at the instance of the High Court, the stock seized fetched a sum of Rs.
4,15,000. On December 9, 1951), the aµpellants filed an application before the Chief Presidency Magistrate, Calcutta, for the return of the seized goods, whereupon the learned Magistrate called
for a report from the Special Police Establishment, New Delhi. On January 9 12, 1951, the said Police Establishment submitted a Challan against appel- lant No. 2 and others for alleged offences under
s. 420/120B of the Indian Penal Code and the same was registered as Case No. C. 121 of 1951. On the same day, the Assistant Collector of Customs filed a complaint before the said Magistrate against
appellant No. 2 and others for committing an -f ~ s.c.R. offenne under s. 5 of the Imports and Exports (Control) Act, 194 7 (hereinafter called the Act, for having sold a portion of the stock of fluorescent
tubes and fixtures in contravention of the terms of the licence and the same was registered as Case No. C. 120 of 1951. On June 28, 1951, the learned Presidency Magistrate discharged all the accused in
both the cases under s. 253 of the Code of Criminal Procedure after holding that no prima facie case had been made out against any of them. Two revisions were filed against that order in the
High Court-one by the State and the other by the Customs Authorities. Chunder, J., who heard the revisions, set aside the orders of discharge made by the Presidency Magistrate and remanded the
cases for fresh disposal. On June 8, 1952, the appellants filed an application before the Chief presidency Magistrate for the release of seized goods on the ground that they were deteriorating,
but that was dismissed. But in a revision against that order, the High Court on January 16,1953, directed the goods to be sold by the Presidency Magis- trnte and the sale proceeds to be kept in his custody .
The goods were sold .accordingly and they fetched a sum of Rs. 4, 15,000 and the money has since then been in the custody of the said court. After remand, the Presidency Magistrate took the evi-
dence of innumerable witnesses for the prosecution and for the defence, considered a number of docu- mf1nts and discharged appellant No. 2 in· both the cases. He held that appellant No. 2 was neither
guilty of the offence under s. 420 of the Indian Penal Code, as, in his view, there wi:.s no fraudu· lent or dishonest inducement at the time the appli- cation for licence was made, nor of any contraven-
tion of the provisions of the Act. Though he discharged appellant No. 2. he did not make over the sale proceeds to him. though the said appellant filed an application for payment of the same: the
learned Magistrate adjourned the said application East Ind'a Commercial Co., Ltd., Calcutta v. Colltetoroj Cuatoma, Calcutta S11bba Rao J. East lr.dia Commercial Co., Ltd, Calcutta
v. Collector of Customs, Calcutta Subba Rao J. till August 29, 1953. The Assistant Uollector of Customs filed a revision to the High Court against the order of discharge of appellant No. 2 passed in
case No. C. 120 of 1951' and the same was regis- tered as Criminal Revision No. 1124 of 1953; he also obtained an interim stay of the return of the money to appellant No. :I. Bnt no
revision was filed against the order of the Presidency Magistrate discharging appellant No- 2 of the offence under s. 420, Indian Penal Code. The Criminal Revision (No. 1124 of 1953) came up
before a division Bench of the Calcutta High Court, Consisting of Mitter and Sen, JJ., and the learned Judges, by their judgment dated March 3, 1955, dismissed the revision holding that there had been
no contravention of the order made or deemed to be made under the Act. The learned Judges cons- trued s. 5 of the Act and held that the said section penalised only a contravention of an order made
or deemed to have been made under the said Act, buL did not penalise the contravention of the con- ditions of licence issued under the Act or issued under a statutory order made under that Act, and
dismissed the revision. On March 24, 1955, the appellants filed an application before the Chief Presidency Magistrate for making over the aale proceeds to them; and the said Magistrate issued
a notice to the Assistant Collector of Customs and also to the Delhi Special Police Establishment to ~how cause on or before April 19, 1955. On April 19, 1955, the Superintendent, Special Police Estab-
lishment, did not show cause, but th11 Assistant Collector of Customs asked for an adjournment and the same was granted till May 7, 1955; and again on May 7, 1955, he took another adjournment of
the hearing of the application on the ground that depart.mental proceedings were pending against the appellants. On May 9, Hi55, the appellants filed a revisio111 in the High Court, presumably, against
the order adjourning the application and the said revision was numbered as Hevision Case No. 582 of 1955 and it was adjourned from time to time at 3 S.C.R. SUPREME COtJR'r REPORTS
the request of the respondent. On May 28, 1955, the respondent started a proceeding purported to be under s. 167(8) of the Sea Customs Act, read ' with s. 3(2) of the Act and called upon the appel·
!ants by notice to show cause within seven days from the date thereof why the said proceeds, namely, Rs. 4,15,001) should not be confiscated and also why Penal action should not be taken
against them. It was stated in the notice that the special licence was issued on the express con- dition that the goods covered by the said licence should be utilised for consumption as raw material
or assessories in the factory of the licence holder and that no part thereof should be sold or per- mitted to be utilised by any other party, that the appellants sold a potti on of the goods imported
under the said licence to others in Breach of the said condition and that, as the appellants infringed the said condition, the goods, or the money substi- tuted in its place, were \\a.ble to be confiscated.
On June 3, 1955, the appe\\ant fi.\ed an application in the High Court at Calcutta under Art. 226 of the Constitution for the issue of an appropriate writ, including a writ in the nature of prohibition,
against the Collector of Customs from continuing with the proceedings initiated by him. Ths appli- cation, in the first instance, came up before Sinha, J., who by his order dated March 18, l!:J,)7, dis-
missed the application as premature; but, in the course of his judgment. the learned ,Judge ngreed with the earlier division Bench, which disposed of the revision against the order of discharge, that a
breach. of a condition alone would not be a viola- tion of the order passed by the Central Government, but he observed that the learned Judges on the earlier occasion did not decide the question as to
what was permitted to be imported: he drew a distinction between a licensee who imported goods perfectly bona fide for his own consumption but East Ind a Commerc.al Co., Ltd.,C1lcu ita
Collector ofCustoma Calcutta Sub/J.; Rao J, Eatt lnd!a CtJmmercial Co., Ltd., Calcutta Cttlfutor of Customi, Calculta Subba Rlio J, 358 SUPREME G'OURT REPORTS [1963) who later changed his mind and a licensee who,
even from the inception, knew that he did not require the goods for his own use, but entered into the transaction fraudulently; in the second situa- tion, he learned Judge proceeded to state, the
goods imported were never goods required for the petitioner's company for its own use. The appe- llants preferred an appeal to a division Bench of of the High Court, consisting of Das Gupta, C.J.,
and Bachhwat, J. 'rhe learned Judges dismissed the appeal solely on the ground that it was within the jurisdiction of the Collector of Custums to ascertain whether there had been a contravention
of the relevant provisions of the Act as would entail an order of confiscation and that, therefore, Sinha, J., was right in refusing to issue a writ; but they made it olear that all the questions raised in
the oase were left open for decision by the Chief Controller of Imports. Hence the present appeal. Mr. Vishwanatha Sastri, learned counsel for the appellants, raised before us the following
points: ( 1) The Assistant Collector of Customs has no jurisdiction to initiate proceedings under s. 167 ( 8) of the Sea Customs Act, 1878, read with s. 3(2) of the Imports and Exports (Control) Act, 1947,
in the circumstances of the case, and therefore, the High Court should have issued an order in the nature of a writ of prohibition restraining him from pro- ceeding with the said inquiry. (2) A division Bench
of the High Court of Calcutta in Criminal Revision No. 1124 of 1953, to which the respondent was a party, declared the law on the construction of the provisions of s.5 of the Act, read with s.3(2) thereof,
viz., that it penalizes only a contravention of an order made or deemed to have been made under the Aot and not a contravention of a condition im- posed by the licence issued under the Act or issued
under a statutory order made. under the Act; and 'y r 3 S.O.R. after that declaration, which is binding on all the authorities and tribunals within the territorial juris- East Indi•
diction of that court, the respondent has no juris- Commeroiol Co., d' h 'd d d d . h Ltd , Caloutla iction to ignore t e sa1 or er an procee wit a v. fresh inquiry in direct contravention of the law SO Oolloc·or of Custom• declared. (3) That apart, the proposition so laid
~C::..C:.: down by the said division Bench is sound and, if Su bba Rao J. so, the respondent could not initiate proceedings under s. 167(8) of the <:lea Customs Act in respect of a contravention of a condition of the licence, as it
is neither a part of an order nor a condition laid down by the Order within the meaning of s. 3 of the Act. ( 4) The chief Controller of Imports has no jurisdiction to take action under s. 167(8) of the
Sea Customs Act on the ground that a condition inserted in a licence is subsequently infringed by an importer, for it is said, the rule only enables the Customs Authorities to confiscate the goods impor-
ted without a license whereas in the present case the goods were imported under a valid subsisting licence. (5) Clause (8) of s. 167 of the Sea Customs Act does only authorize the confiscation of goods
so imported and not the sale proceeds of the said goods, for the reason that the said money could not conceivably be goods in any sense of the term. Mr. Prem, learned counsel for the respondent,
argued contra. His argument may be summarized thus: ( 1) The Collector of Customs has jurisdiction to consider under s. 167,8) of the Sea Customs Act whether the goods are imported contrary to the
restrictions imposed under the Act, and, therefore, the High Court could not issue a writ of prohibition against the said authority from proceeding with the inquiry. (2) The notice issued is not a statutory
notice but is only an intimation to the appellants of the initiation of the proceedings and, therefore, the question of jurisdiction could not be decided on the contents of the said notice. (3) The Customs
Authorities have a concurrent jurisdiction with t.he 196: EaJt India Oommer.:i!Jl Co,, Lid., CtJlcuttri Colleofor of Curfoms, Cr.lcutta .•ubba Rao J, criminal Court to deal with matters entrusted to
them under the Acts and, therefore, the findings of a criminal court or even of a High Court on the same or similar matters could not bind them and they could come to a different conclusion of their
own both on the question of law as well as on facts from those of criminal courts, though the decision of the High Court may have persuasive influence on them. (4) The condition imposed in a licence is under the
relevant order issued by the Central Government in exercise of its power under s. 3 of the Act, and, as the appellants infringed that condition, the goods imported are liable to be confiscated under s.167(8)
of the Sea Customs Act, read with s.3(2) of the Act. ( 5) As the appellants imported goods on a misre- presentation, in law the import must be deemed to be one made without a licence and therefore the
goods imported are goods either prohibited or res- tricted within th11 meaning of s. 167(8) of the Sea Customs Act. (tl) The Customs Collector has juris- diction to confiscate goods after they have left the
customs barrier, and, as the money in deposit in court is the proceeds of the sale directed to be held by the High Court in the interest of both the parties, it represents the said goods, and, in any
view, as the order of the High Court is binding un both the parties, it is not open to the appellants to plead that the goods are not represented by the said money, The first question is whether the petition filed
by the appellants under Art. 226 of the Constitu- tion for the issue of a writ in the nature of pro- hibition is maintainable in the circumstances of the case. A writ of prohibition is an order directed to
an inferior Tribunal forbidding it frrm contivuing with a proceeding therein on the ground that the proceeding is without or in excess of jurisdiction or '>1 ' .. y a s.o.R. contrary to the laws of the land, statutory or other·
wise: Maclconochie v. Lord Penzance(1) and Halsbury's Laws of England, 3rd Edn: Vol. 11, p, 52. The argument of learned counsel for the appelllilnts is that on the face of the notice dated
May '28, 1955, issued by the respondent, the latter has no jurisdiction to initiate proceedings under s. 167(8) of the Sfla Customs Act, read with s.3(2) of the Act. Learned counsel for the respondent
argues that the said notice is not a statutory notice but only a memorandum informally sent to the appellants intimating them that proceedings have been started against them, that the said notice is
neither full nor exhaustive and that jurisdictional facts could be ascertained only by the Customs Collector in the course of the said proceedings on full inquiry, We do not see any justification for
this argument, The respondent proposed to take action under s. 167(8} of the Sea Customs Act, read with s. 3(2) of the Act. It cannot be denied that the proceedings under the said sections are quasi-
judicial in nature. Whether a statute provides for a notice or not, it is incumbent upon the respondent to issue notice to the appellants disclosing the cir- cumstances under which proceedings are sought to
be initiated against them, Any proceedings taken without such notice would be against the principles of natural justice. In the present case, in our view, the respondent rightly issued such a notice wherein
specific acts constituting contraventions of the pro- visions of the Acts for which action was to be initiated were clearly mentioned. Assuming that a. notice could be laconic, in the present case it was
a speaking one clearly specifying the alleged act of contravention. If on a reading of the said notice, it is manifest that on the assumption that the facts alleged or allegations made tht>rein were true, none
of the conditions laid down in the specified sections (1) (I8Btl 6 App. Cas. 424. East India Commercial Co., Ltd., Calcutta v. Collector of Customs, Ca/cutlu Subba .Qao J, East India
Commt!rcial Co., Ltd., Calcutta Coll ecfor of Custom8, Oalcutta Subba Rao J. was contravened, the respondent would have no jurisdiction to initiate proceedings pursuant to that notice. To state it differently, if on a true oonstruc-
tion of the provisions of the said two sections the respondent has no jurisdiotion to initiate proceed- ings or make an inquiry under the said sections in respect of certain acts alleged to have been done
by the appellants, the respondent can certainly be prohibited from proceeding with the same. We therefore, reject this preliminary contention. The next question is, what is the true cons-
truotion of the provisions of the relevant sections? It would be convenient at this stage to read the relevant parts of ss. 3 and 5 of the Act and eli. 19 and 167(8) of the Sea Customs Act ..
Imports and Exports (Control) Act, 1947 Section 3. (1) The Central Government may, by order published in the Official Gazette, make provisions for prohibiting, restricting or otherwise controlling, in all. cases or in
specified classes of cases, and subject to suoh exceptions, if any, as may be made by or under the order:- (a) the import, export, carriage coastwise or shipment as ship stores of goods of any
specified description, ( b) the bringing into any port or place in India of goods of any specified description intended to be taken out of India without being removed from the ship or conveyance
in which they are being carried. (2) All goods to which any order under sub-seotion (1) applies shall be deemed to be goods of which the import or export has been prohibited or restricted under section 19 of
the Sea Customs Act, 1878 (VIII of 1878) and 3 S.C.R. all the provisions of that Act shall have effect accordingly, except that section 183 thereof shall have effect as if for the word "shall"
therein the word "may" were substituted. Section 5. Penalty-If any person con- travenes or attempts to contravene. or abets a contravention of any order made or deemed to have been made under this Act, he shall,
without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Sea Customs Act, 1878 (VIII of 1878), as applied by sub-section (2) of section :.i, be
punishable with imprisonment for a term which may extend to one year, or with fine, or with both. The Sea Customs Act, 1878. Section 19. The Central Government may from time to time, by notification in the Offi-
cial Gazette, prohibit or restrict the bringing or taking by sea or by land goods of any specified description into or out of India across any customs frontier as defined by the Central
Government. Section I 67. The offences mentioned in the first colnmn of the following schedule shall be punishable to the extent mentioned in the third E 181 India Commerciul Co.,
Ltd., Cale 1tt" v. Colle.tor of Customs, Calcutta .!ubba Rao J. J9l2 Eajt India Cvmme•ciul Co, Ltd, Calcutta Collec.'01 of CuB/oms, Ca!outta Suoba RaoJ. column of the same with reference to such
offences respectively : – Section of this Offences Act to which Penalties offences has 8.Ifany goods, the importation or exporta- tion of which reference. is for the 18 and 19 time
being prohibited or restricted by or under Chapter IV of this Act, be imported into or ex- ported from India cont- rary to such prohibition or restriction. such goods shall be liable to con-
fiscation, and any person concerned in any such offen- ce shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees. The essence of the offence is a contravention
of any order made or deemed to have been made under the Act. All orders under this Act can only be made by the Central Government in exercise of the power conferred upon it by S· 3 of ·the Act, and
"1111 orders made under r. 84 of the Defence of India Rules or that rule as continued in force by the Em- ergency Provisions (Continuance) Ordinance, 1946 (XX of 1946 ), and in force immediately before the
oommencement of this Act, shall continue in force and be deemed to have been made under this Act". The contravention of only these two categories of orders attracts. the provisions of s. 19 of the Sea
3 S.C.R. Customs Act. By rea.son of s. 3(2) of the Act, all goods to which any order under sub-s. (I) of s. 3 itpplies shall be deemed to be goods of which the import or export has been prohibited under s. 19
of the Sea Customs Act and all the provisions of the Sea Customs Act, with some modifications- with which we are not concerned now-shall apply. This provision in its turn atbracts. along with others
s. 167 (8) of the Sea Customs Acts, and under that section, read withs. 3(2) of the Act, the goods im- ported in contravention of an order under the Act shall be liable to be confiscated. But ·the section
does not expressly or by necessary implication em- power the authority concerned to confiscate the goods imported under a valid licence on the ground that a condition of the licence not imposed by the
order is infringed or violated. If that be the true construction of the said provisions, the question arises whether in the instant case the allrgations made in the notice bring the goods imported within
the scope of th€ provisions of s. 167(8) of the Sea Oustoms Act. We shall now proceed to deal with that question. As we have already noticed in the earlier stage of the judgment, the notice issued by the res·
pondent charges the appellants thus : "One of the conditions of the special licence was that the goods would be utilized for consumption as raw material or accessor- ies in the factory of the licence-holder and no
part thereof would be sold to other parties, but in contravention of that condition the appellants sold a part of the goods imported to a third party and as the goods had been caused to be issued by fraudulent misrepresent-
ation, they were liable to be confiscated under s. 167(8) of the Sea Customs Act." East fndia Commercial Co., Ltd., Oalcutta v, Collecto» of C:ustom 8 , <..al cut ta Sub I 'J Rao J,
J90t EaJt India Commucirrl Co. Ltd , Calcutta v. Collec or of Cu rloms, Calt;.urta Subba R<io J. . SUPREME COURT .REPORTS (1963] Seotion 167 (8) of the Sea Customs Act can be invoked only if an order issued under s.
3 of the Act was infringed during the course of the import or export. The division .Bench of the High Court held that a contr11.vention of a condition imposed by a licence issued under the Act is not an offence
under s. 5 of the Act. This raises the question whether a'! administrative tribunal can ignore the law declared by the higheRt court iu the State and initiate proceedings in direct violation of the Jaw
so declared. Under Art. 215, every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Under Art. 226, it has a
plenary power to issue orders or writs for the en- forcement of the fundamental rights and for any other purpose to any person o~ authority, including in appropriate cases any Government, within its
territoriai jurisdiction. Under Art. 227 it has jur- isdiction over all courts and tribunals throughout the territories in relation to which it exercise jur- isdiction. It would be anom'1lous to suggest that
a tribunal over which the High Court has superint- endence can ignore the law declared by that court and start proceedings in direct violation of it. If a tribunal can do so, all the sub-ordinate courts can
equally do so, for there is no specific provision, just like in the case of Supreme Court, making the law declared by the High Court binding on subordinate courts. It is implicit in the power of supervision
conferred on a superior tribunal that all the tribun- als subject to its supervision should conform to the law laid down by it· Such obedience would also be conducive to ,their sm.ootb working: otherwise there
would be confusion in the administration of law and respect for hw would irretrievably.suffer. We, there- for, hold t.hat the law declared by the highest court in the State is binding on authorities or tribunals
under its supreintenden<ie, and that they cannot -f –,. 3 S.C.R. ignore it either in initiating a proceeding or decid• ing on the rights involved in such a proceeding. If that be so, the notice issued by the authority
signifyin~ the launching of proceedings contrary to the law laid down by the High Court would be in· valid and the proceedings themselves wonld be without jurisdiction. We shall now proceed to consider the merits.
Sub-section (2) of s. 3 of the Act clearly lays down that all goods, to which an order under sub-s. (1) thereof applies, shall be deemed to be goods of which the export or import has been prohibited or
restricted under a. 19 of the Sea Customs Act. Therefore, s. 167(8) of the Sea Customs Act can be attracted only if there was a contravention of the order issued under s. 3 of the Act. Does any order
so issued by its own force impose i:mch a condition ? The Import Trade Control Notification dated July 1, 1943, reads thus: The notification of the Government of India in the late Department of Commer1}e
No. 23 ITC/43, dated the Ist July, 1943, in- corporating all amendments upto the 25th November, 1951. In exercise of the powers conferred by sub-rule (3) of rule 84 of the Defence of India
Rules the Central Government is pleased …………………………… to prohibit the bring- ing into British India by sea, land or air from any place outside India of any goods of the
descriptions specified in the Schedule hereto annexed except the following, n,amelyi • • • •.I •I I I I I I I I I I'•••• I I I I I Io I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I
(.xiii) any goods of the descriptions spe· cified in the schedule which a.re covered by a special licence issued by any officer specially East IndiJ Comm1rciot Go., Ltd. Ca/cu;tci
Collectvr of Customs, Calcutta — Subba Ra• I, East India Commercial Co., Ltd. Calcutta, v. Collector of Cu1tom•, Calctdta Subbu Rao J. SUPREME COUR'l' REPORTS (1963] authorised in this
behalf by the Central Government. It is not disputed that the goods imported in the present case were specified in the schedule.· This order prima Jacie does" not impose a condition
in the matter of issuing a licence for the specified goods. On March 6, 1948, another notification No. 2-ITC/48 was issued by the Ministry of Commerce. The relevant part of it reads:
In exercise of the powers conferred by sub-section (I) and sub-section (3) of section 3 of the Imports and Exports (Controll Act, 1947 (XVIII of 1947), the Central Govern- ment is pleased to make the following order,
namely :- (a) any officer issuing a licence under clauses (viii) to (Xiv) of the Notification of the Government of India in the late Depart- ment of Commerce No. 23-ITC/43, dated the
Ist July 1943, may issue the same subject to one or more of the conditions stated below : (i) that goods covered by the licence shall not be disposed of or otherwise dealt with without the written permission of the licen-
sing authority or any person duly authorised by it; 0 0 0 0 0 0 0 0 0 0 0 0 o 0 o 0 0 0 00 0 o o o 0 0 0 0 0 o 0 o o 0 0 I 0 o 'o o 0 0 0 0 o o o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o (v) that such other conditions may be
imposed which the licensing authority consi- ders to be expedient from the administrative point of view and which are not inconsistent with the provisions of the said Act. (b) Where a licensee is found to have
contravened the order or the terms and condi- tions embodied in or accompanying a licence, r a s.c.R. the appropriate licensing authority or the Chief Controller of Imports may notify him
that, without prejudice to any penalty to which he may be liable under the Imports and Exports (Control) Act, 1947 (XVIII of 1947), or any other enactment for the time being in force, he shall either permanently or for a
specified period be refused any further licence for import of goods. It will be seen from this order that it does not provide for a condition in the licence that sub- sequent to the import the goods should not be sold.
Condition (Y) of cl. {a) only empowers the licensing authority to impose a condition from an adminis- trative point of view. It cannot be suggested that the condition, with which we are now concerned, is
a condition imposed from an administrative point of view, but it is a condition which affects the rights of parties. Learned counsel for the respondent argues that a public notice issued by the Govern-
ment on July 2o, 1948, is an order made in exercise of the power conferred on the Central Government under s. 3 of the Act and that the order directs the imposition of a. condition not to sell to a third
party the goods permitted to be imported and that that condition was contravened. The public notice dated July 26, 1948, was published in the Gazette on July 29, 1948. The relevant part of it reads :
Government of India MINISTRY OF COMMERCE PUBLIC NOTICES New Delhi, the 26th July, 1948 Subject :-Principles governing the issue of import licences for the period July• December, 1948.
No. I (13)-I.T.C./47 (i). The following decisions made by the Government of India East India Commercial Co., Ltd. Ca/cntla v. Collector of Custom•, .Calculla Subba Ra1 J. Ee.rt India
~Commercial Co., Ltd. Ca!culla · C1lt1clor of Customs, Calcutta , Subbo Rao J. governing the issue of import licences for goods falling under Parts II to V of the Import Trade Control Schedule for the licen-
cing period July-December, 1948 are hereby published for general information. These decisions do not apply to goods falling under Capital Goods and H.E.P. Licensing procedure which has been prescribed in the Public
Notice issued on 10th April, 1948. Under paragraph 5, importers are requested to study the Appendix carefully and avoid making applications for import licences for articles which will not be licensed; para. 7 prescribes the form of
application; para. 8 says that in the case of articles which are subject to overall monetary limits, where goods are raw materials and accessories used in Industrial concerns, applications from actual consu-
mers of goods will receive consideration, and that actual consumers should clearly specify in their application their past and estimated consumption of the article concerned as required in par.i.. 6 of
the form of application. Paragraphs 6 to 10 deal with would-be applicants. Paragraph 11 s:tys that no time limit has been fixed for receiving applica- tions from importers who are actual consumers of
industrial raw material and accessories and who have imported tbe commodities concerned during any financial year between 1938-39 and 1947-48 (inclusive) and that it is hoped to deal with these
applications chronologically as and when received. Paragraph 13 describes the authorities to whom applications should be made. A perusal of this notice shows that it is intended to give information
to the public as regards the procedure to be follow- ed in the matter of filing of applications by different categories of applicants. It not only does not on its face purport to be a statutory order issued under
s. 3 of the Act. but also the internal evidence fur- nished by it clearly shows that it could not be one 3SC.R. SUPREME COURT REPORT8 under that section. That apart, this order does not
amend the previous orders or direct the imposition of a condition on an importer not to sell the go?ds to a third party or provide for a penalty for domg so. Learned counsel for the respondent asserts that
the said public notice is A.n order made in exercise of the power conferred on the Central Government under s. 3 (1) of the Act. On the other hand, learned counsel for the appellants contends that
public notices are not such orders but only infor- mation given to the public for their guidance. l!,irstly, the said notice does not purport to have been issued under s. 3 (1) of the Act, whereas
the orders referred to earlier, that is, notifications Nos. 23-ITC/43 and 2-ITC/48 and similar others, were issued by the Central Government in exercise of the power conferred on it by sub-r. (3) of r. 84 of
the Defence of India Rules or s. 3 (3) of the Act, as the case may be. The Central Government it- self makes a clear diAtinction in the form adopted in issuing the notice. Secondly, while the notifica-
tions issued under s. 3 of the Act are described as orders, the notices are de1:1cribed as "public notices"; while the notifications under s. 3 of the Act regu- late the rights of parties, the public notices give
information to the public regarding the principles governing the issue of import licences for specified periods. It is also clear that the orders issued under s. 3 of the Act, having statutory force, have
to be repealed, if the new order in any manner modifies or supersedes the provisions of an earlier order; public noticeH are issued periodically without repealing or modifying the earlier notices or noti-
fications. For instance, on December 7, 1955, the Central Government in exercise of the power con- ferred by ss. 3 and 4-A of the Act made an order and under cl. 12 thereof the orders contained in
J.961 East India Commercial c •. , Ltd, Calcutta v. C1/ltotor of Customs, Ca/cut ta Sub&a Rtu J. 19611 Ea1t India ComtrUrcial Co., Ltd. Calcutta C•Jlector of OuJtoms, Calcutta 6'ubba Ra1 J.
SlJPREMll: COURT REPORTS [1963) Sohedule IV were repealed; Schedule IV only mentiOned five notifioations issued under s. 3 of the Aot, but no public notice was included in that list.
To put it differently, orders made under s. 3 of the Act have statutory force, whereas publio notices are policy statements administratively made by the Government for publio information. The fore-
word to the Import Trade Control Hand-book of Rules and Procedure, 1952, under the signature of the Secretary to the Government of India, in the Ministry of Commerce and Industry brings out thia
distinction thus : "In the past the half-yearly publication on Import Control, popularly known as the "Red Book", has inoluded not only a state- ment of policy for the ensuing six months
but also a reproduction of various notifica- tions relating to Import Control anci detailed information on points of procedure". It is true the Chief Controller made an affidavit in
the High Court that the policy-statements are issued under s. 3 of the Act. But, as we have said, that is only on information which has no support either in the form adopted or the practice followed
or the matter incorporated in the notifications. We have no hesitation in holding that public notices are not orders issued under s. 3 of the Act. It follows from the above that the infringe-
ment of a condition in the licence not to sell the goods imported to third parties is not an infringe- ment of the order, and, therefore, the said infringe- ment does not attracts. 167 (8) of the Sea Custom&
Act. Nor is there any legal basis for the contention that licence obtained by misrepresentation makes the licence non est, with the result that the goods should be deemed to have been imported without
x 3 S.C.R. licence in contravention of the order issued under s. 3 of tb.e Act so as to bring the case within ol. (8) of s. 167 of the Sea Customs Act. Assuming that the principles of law of contract apply to the issue
of a licence under the Act, a licence obtained by fraud is only voidable : it is good tiJI avoided in the manner prescribed by law. On May 1, 19181 the Central Government issued an
order in exercise of the power conferred on it by s.3 of the Act to provide for licences obtained by misrepresentation, among others, and it reads: "The authorities mentioned in the Sche-
dule hereto annexed may under one or other of the following circumstances cancel licences issued by any officer authorised to do so under clauses (viii) to (xiv) of the notification of the
Government of India in the late Department of Commerce, No. 23-ITC/43, dated lst July 1943, or take such action as is considered aecessary to ensure that the same is made ineffective, namely:-
(i) when it is found l!lubsequent to the issue of a licence that the same has been issued inadvertently, irregularly or contrary to rules, fraudulently or through misleading statement on the part of the importer con-
cerned; or (iii) when it is found that the licensee has not complied with any one or more of the conditions subject to which the licence may have been issued. J962 Ea1/ lndia Comm1 rcial C1.,,
Lttl. Ca/cult• , .. 01!/eclor of Cu1tom1, Ca/c'Ulte Subba R•• J. 191B East lndi11. SOPREME COURT REPORTS (1963] SCHEDULE Cornmerciol C'tJ., Clauses Licensing Authority Cancelling authority
Lti. Calcuitc 1 firlllect•r tJj Customs, CG7cutls Clause (xiii) Any officer authorised by the Central Govern- ment. Chief Con- troller of Imports and/or Government of India. This order, therefore, authorised the Government
of India or the Chief Con troll er of Im ports to cancel such licences and make them ineffective. The specified authority has not cancelled the licence issued iu this case on the ground that the conditiop
has been infringed. We need not consider the question whether the Chief Controller of Imports or the Government of India, as the case may be, can cancel a licence after the term of the licence
ha.s expired, for no such o:moellation has b'len made in this case. In the circumstances, we must hold that when the goods were imported, they were imported under a valid licence and therefore it is
not possible to say that the goods imported were those prohibited or restricted by or under Ch. IV of the Act within the meaning of cl. (8) of s. 167 of the Sea Customs Act. It follows that on the assumption that the .
allegations made in the notice are true, the tribunal has no jurisdiction to proceed with the inquiry under a. 16 7(8) of the Sea Customs Act. Learned counsel for the appellants further
contends that s. 167(8) of the Sea Customs Act applies only to an act done before or during the course "of an import or export into or out of India in contravention of the prohibition or restrictions
j ,… 3 S.0.R. imposed under s.3 of the Act and that, as in the instant case the breach of the condition was com- niitted subsequent to the importation of the concern- ed goods, the said goods could not be confiscated
under the &aid section. But we do not propose to expre11s our opinion on this question, as it does not a.ri11e in view of our findings on other questions raised in the case. Before closing we may briefly notice one more
contention raised by learned counsel for the appel- lants. It is said that, a.s the goods imported were converted into money, the Customs Collector has no jurisdiction to confiscate the same and that he can,
at the best, only trace the goods in whosesoever hands they may be. We have pointed out that the goods were sold only at the instance of the court in the interest of both the parties, as they were deteriorat-
ing. The order is binding on the parties. The sa]e proceeds are preserved for the benefit of the party who final1y succeeds. In the circumstances it is not open to the appeUants to argue tha.t money
deposited in the court does not represent the goods. In the result, the order of the High Court is set aside and the appeal is alJowed with costs. There wil1 be an order of prohibition restraining the
Customs Authority from proceeding with the inquiry under s.167(8) of the Sea Customs Act. BY COURT: In view of the majority opinion of the Court, the appeal is allowed with costs. There wiU
be a.n order of prohibition restraining the Customs Authority from proceeding with the enquiry under s. 167(8) of the Sea Customs Act. Appeal allowed. J96! East l ntlia Commercisl ro.,
Ltd. Ca/cu1ta v. Collector of Cusl•mr, Oat cull a Subba Rao J.