2 S.C.R. SUl'REME COURT REPORTS FIRM GULAM HUSSAIN HAJI YAKUB & SONS fl. STATE OFRAJASTHAN (B. P. SINHA, c. J., P. B. GAJENDRAGADKAR, K. N. WANCHOO, N. RAJAGOPALA AYYANGAR a.nd T. L. VENKATARAMA AIYAR, JJ.)
C'U8tom Duty-Export of Charcoal-Validity of State Council Order imposing li"bility-Regency Act for the Sirohi Minority Atiminiatration, 1947, a. 9-Rajaathan Ordinance (No . 16 of 1949), 1. 4(2).
The appellant firm was made liable to pay Rs. 24,395/· as customs duty for exporting charcoal from the State Sirohi and as it did not deposit the amount the collector of Sirohi, on the requisition of the customs authorities. issued a notice for r<covery of the· said amount und<r the Public Demands
Recovery Act. The appellant moved the High Court under Art. •226 of the Constitution. Its case was that the order of the Sirohi State Council levying customs duty on the export of charcoal at the rate of /·BF per maund was invalid and ultra virea. The case of the respondent was that the said duty had been validly' levied by virtue of the resolution passed by the State Council and approved by the Rajmata. The High Court held
in favour of the respondent and dismissed the petition. The question was whether the impugned order dated May 31, 1948, purported to have been passed in pursuance of the Council Resolution dated May 15, 1948, imposing for .the first time customs duty on export of charcoal, had .been validly iS!ued. Held, that the State Council did not have legislative
power ; after the psssing of the Regency Act for the Sirohi Minority Administration, 1947, it could pass a law only with the approval of the Board of Regency of which the Rajmata Saheba was the President ; since there was nothing to show that the Board had approved of the order, it must be .held to be invalid.
It 'was not correct to say that the Raj Mata could act independently of the Board, it was the Board alone that could collectively legislate or pass executive orders. The view of the High Court that the Raj Mata could be treated as the de facto Ruler as the State was clearlr erroneous,
1'61 — April 19. 11111 Firm Qulam Hunoin llaji Tabb~ Soni v. Buu o Roj"""4n SUPREME OOURT REPORTS [1963] Nor could the levy on the appellant be sustained under the relevant provisions of Rajasthan Ordinance (No. 16 of
1949), which had no application. CxvIL APPELJ,ATE JurusDICTION : Civil Appeal No. 300 of tiO. Appeal from the judgment and order dated November 13, 1958, of the Rajasthan High Court
in D.B.C. Writ Application No. 58 of 1957. Chand Mal LO<lha and Rrijbans Kish.ore. for tho appellant. S. K. Kopu.r and D. Gupta, for the respondent. 1962. April l!l. The Judgment of the Court
was delivered by GoJnoJr•pdk• J. GAJENDRAGADKAR, J .-The appellant, Firm Ghulam Hussain Haji Yakoob & Sons, moved the Rajasthan High Courf by a petition under Art~ 226 of tha Constitution for the iBBue of a writ in the
nature of prohibition or other writ or appropriate order, declaring that it was not liable to pay the customs duty sought to be levied on it by the Controller of Sirohi bv his order of the 9th Feb.,
1956. It appears th~t one Mohammad Sagir had taken a contract for cutting forest of Harani Amrapura from tlie Thakur of Nibaj on the 12th ,July, 1!146. Thti duration of this contract was five
years and tho purpose of the oontract was to enable the contractor to prepare charcoal. This contract was subsequently transferred to the appellant by the said Sagir on the 13th September, 1948. In due
course, the contra'lt was extended by the Thakur of Nibaj by two years and on endorsement was made on it to that effect on the 15th April, 1950. Under this contract, the appellant prepared charcoal and
exported it out of the State of Sirohi. The ABflis- tant CommiBBioner, Customs and Excise, Sirohi, took the view that the appellant was liable to pay .,. . ·-·v 2 S.C.R. 196! Finn Gulam Hus1ain
Haji Yakub ch Sons customs duty@ As. -/Bf- per maund on the quantity of charcoal exported by it. The Asstt. Commis.sioner found that the charcoal thus exported by the appellant was 27, 003 mds.
Accordingly, the said Asstt. Commissioner made a report to the Commis- sioner on the 11th February, 1954. The matter was then dealt with by the Dy. Commissioner, Customs & Excise, and he passed on order that the appellant
had expor·ted charcoal without payment of duty. This order was made on the 17th Dec~mber, 1954. According to the finding made by the Dy. Commis- sioner, the charcoal exported by the appellant
after the 30th November, 1948, amounted to 48,650 maunds. On this basis, the appellant was asked to pay Rs'. :!4,325/- on account of the duty on export of charcoal @As. -/8/- a maund. The
appellant challenged the correctness of this order ·by preferring an appeal to the Government, but its appea.l was rejected on the 24th May, 1956. The appellant came to know about this order on the
5th April, 1957, when it was asked by the Tehsildar to deposit the dut.y assessed on it a.long with interest. Since the appellant did not aeposit the amount, the Customs authorities had, in the mean-
while, made a requisition to the Collector of Sirohi for recovery of the said amount, and the Collector had issued a notice on the appellant under the Public Demand Recovery Act on the 9th February, .
1956. It is the validity of this notice that the appellant challenged by its present writ petition. The appellant's case was that the order purported to have been passed by the State Council of Sirohi
by whioh the customs duty@ As. -/8/- was levied on charcoal was invalid and ultra vires and so, it was not competent to the Customs authorities to levy any duty on the charcoal exported by the
appellant and it was not competent to the Collector to issue a demand notice for the recovery of the said duty under the Public Demand Recovery Act. Stat1 of Rajaslhan OJ) the other hand, the respondent, the State
IHI Firm <J1llat Hwi. in H•JI TaM di 8011S Bt.1,of RajOJlilon 258 SUPREME OOURT REPORTS [1963] of Rajasthan, disputed the correctness of the appel- lant's allegation that the duty had been illegally
levied. It was urged by the respondent that the said duty had been levied validly by the resolution paBB- ed by the State Council whioh had been approved by Her Highness Shri Rajmata Saheba, Since the
said resolution had been duly paBBed by a com· patent authority, the levy of the duty imposed on the appellant was valid and tho Collector was juRtified in issuing the notice of demand under the
Public Demand Recovery Act. The High Court has upheld the plea made by the respondent, with tho result that the writ peti- tion filed by the appellant has been dismiSBed with costs. Tho appellant then applied for and obtained
a certificate from the High Court and it is with the said certificate that it bas come to this Court by its presont appeal. The customs tariff had been prescribed in the State of Sirohi by th'3 Sirohi Customs Act of 1941.
Section 14 of the said Act lays down that : "exoept as hereinafter provided, customs duties shall be levied at such rates as are prescribed in the Sirohi Customs Tariff on all goods mtintioned therein, at
the time of import or tixport of goods (including those belonging to the State) into or out of Sirohi State by rail, road or air". It would thus be seen that s. 14 which is the charging
section provides that customs duties shall be levied on the goods mentioned in the Tariff at the rates 'prescribed by it. The result is that it is only in respect of goods mentioned in
tho Tariff and at the rates specified therein that. customs duties could be leived. Section 15 of the said Act conferred upon the Darbar power to fix and alter tariff rates. It says
that : the Darbs.r may, from time to time, b,Y …. notification in the Sirohi State Gazette, save in emergency cases, alter the rates prescribed in the Tariff and such altered rates shall come into force
froni the date mentioned in the notification, or, in the evt>nt of the notification not reaching any customs post concerned, on a subsequent date from such date.'' The 1 effect of this section is that the
power to fix and alter tariff rates has been con- ferred on the Darbar which is required ordinarily to issue a notification in that behalf. The High Court thought that as a result of reading sections
14 and 15 together, it was open to the Darbar not only to alter rates at which customs could be levied, but also to include new items under the taxable articles mentioned in the Tariff. This view
is clear!; erroneous. The power conferred on the Dar bar by s. 15 ia to fix and alter tariff rates, No power has been conferred on the Darbar to add to the list of taxable commodities in the Tariff itself.
The goods on which customs duties could be levied have been specified in the Tariff attached to the Act and no addition could be ma e to the said Tariff in that behalf by the Darbar by virtue of
the authority conferred on it ~y s. 15. There is no doubt about this position. At this stage, it is relevant to add that in the Tariff prescribed by the Act of 1944, charcoal is included in the list of commodities, the import of
which is liable to pay the customs duty. It is however, not included in the list of commodities the export of which is liable to pay cu~toms duty. This position is not disputed. Therefore, in order that
export of charcoal should be made liable to pay t.he customs duty, the respondent ought to be able to rely upon some legislative enactment in that behalf. It appears that in 1940,, the Ruler of the
Sirohi State brought into existence the Council of Firm <lul•m Hua8•in H llji T•1'W &: Sons 8t1ll1 •/ R•jcrthon Gaiendniz•dl<"' .J. IHZ "irm Gulom Huuaitt <Ho Ji r •llub "' s.., Sui. of R•jaslh ..
Gojeatho111dk., J. State and its functions and duties and its rights wore duly notified in the State Gazette. The Council which was designated as the Council of State. Sirohi, was to consist of His HighneBS as President,
tho Chief Minister as Vice-President and such other member as His HigbneBS ma.y appoint from time to ~ime; The general working of the Council bad to be under the control of the President who, under
rule 9, was empowered, if the matter was urgent, to a.ct on behalf of the Council, provided that the Council was duly informed a.bout the action taken by tbt'I President as soon as possible.
Rule 11 of the notification provided that all cases of the kind enumerated in Schedule I shall oo referred to the Council for decision before final orders are passed, save as provided in rule II.
Now, amongst the matters specified in Schedule I is included the topic of any new taxittion, or alteration or abolition of taxation. This is entry 7 in the said SchAdule. It would thus .. ppear that it. was within the com-
petence of the Council to consider the proposal for any new taxation or alteration or abolition under rule II a.nd it was for the Ruler to pass final orders in tho light of the decision by the Council on tha.t
point. Rule 11 makes it clear that though it was competent to the Council to reach a decision 9n topics covered by entry 7 in Schedule I, it was for the Ruler to pa.s9 imal orders which would make
the decision effective. In other words, there ca.n oo little doubt that the power of the Council in respect of the matters covered by Schedule I were no more than advisory ; it was always for the
Ruler to decide what final orders should be passed in respect of the matters referred to the Council for its decision. That is the nature and scope of the power conferred on the Council.
Since the Ruler of the State, His HighueBB Maharajadhiraja Maharao Taj Singhji Ba.hadur, was -. …,,. – 2 s.c.R. a minor in 1947, His Excellency the Crown Repres- entative was pleased to sanction the passing of the
Regency Act for the Sirohi Minority Administration on the 14th August, 1947. .This Act provided that it was tu come into force on the 14th August, 1947 and was to continue until the Ruler attained the
age of 18 years. Section 3 of the Act prescribes that for the purpose of the Constitution of the Sirohi State, the word "Ruler" wherever occurring in the Constitution shall be deemed to be the
Board of Regency. Section 4 provided for the constitution of the Board of Regency. It was to consist of Her Highness the Dowager Maharani Saheba of Sirohi, Maharana Shri Sir Bhawani
Singhji Bahadur of Danta and Raj Saheban Shri Bhopalsinghji of Mandar. Section '6 of the Act pr9vi9ed that the Board of Regency shall be legal guardian of the Ruler. After this Act was passed,
the functions of the Ruler were dischP.rged by the Board of Regency which, for a.II constitutional .and legal purposes, represented the Ruler during his minority.' In pursu•mce of the material provisions
of this Act, notification was issued on the same day constituting the Board of Regency. Thus, it would be clear that when the impugned order .levying a duty on coal was passed on the 31st· May,
1948, the constitutional position was that the governance of the State was entrusted to the Board of Regency; and U:nder the Board of Regency was functioning the State Council which had been
constituted by the previous Ruler in 1940. It is in the light of thia constitutional position that the question about the validity of the impugned levy of customs duty on the appe!Ia.nt has to be judged,
On the 31st May, 1948, an order was passed which purports to have been issued in pursuance of the Council Resolution dated 15th May, 1948.. for which approval had been obtained from Her
Highness Shri Raj Mata Saheba. As a result of this Order, the duties imposed or. goods specified Firm Gul·• Huuain Haji T•ltu6 &> S.., y, S1111 of Rajasl/ltJn Gojt' dragadtar ,/ 1
I Ht Finn Gulan Huss•in H.,;i YaAub d: S•n• v. Slul1 of RajaJflwn Gajmdrotcdkar J. SUl>REME COURT REPOM'S [1963] in the Tari!f attached to the earlier Act wore enhan- ced in respect of bones, wool, timber and fire wood,
and a. fresh duty wa.e imposed in respect of export of charcoal. ThiH duty was imposed @ As. -/8/- per maund. As we have already soon, it is common ground that according to t,he Ta.riff presoribed by the
Act of 1944, charcoal wa.e not included in the list of articles, the export of which was liable to custOiQs duty. The·question which calls for decision in the present appeal is whether the order thus issued is
valid; and the answer to this question depends upon · whether or not the imposition of the customs duty on charcoal has been levied by an authority which was legislatively competent to issue such an order. If
the levy has been ordiired only by the State Council without the approval of the Boa.rd of Regency, then it would be invalid because it wa.A not competent to the State Council to pass a. law. It was open to
the State Council to reach a decision on the question about the imposition of customs duty on any new article, but that decisim> had to be approved and accepted by the Boa.rd of Regency which alone
was clothed with the requisite legislative power. Therefore, the validity of the order can be sustained only if it is shown that it has been paesed with the approval of the Board of Regency of which Shri
Raj Ma.ta Sa.heba was the President. In dealing with this question, it is nece88ary to bear in mind the.t the order does not formally recite that Shri Raj Mata Sa.heba had approved of
the order as the President of the Board of Regency. The order he.a been issued by the Secretary of the State Council and does not purport to he.vo been issued by the executive officer of the Boa.rd of
Regency. The order does not refer to the Boe.rd of Regency a.t all and does not purport to say that Shri Rajmata Sa.hebe., when she gave her approval, was a.oting on behalf of the Boa.rd.
If the order bad formally been passed a.s on behalf i-f ~ s.c.R. SUPREME OOURT REPORTS of the Board of Regency, it would have been open to the respondent to contend that the assumption
should be that it was duly passed by the Board of Regency and has been promulgated according to the rules of business prescribed by the said Board. But since the order does not purport to have been
issued either on behalf of the Board of Regency or on behalf of Shri Raj Mata Saheba acting for the Board of Regency, it is necessary to enquire whether, in fact, the Board of Regenoy bas approved of this
·order, and it appears that so far as this enquiry is concerned, the respondent has placed no material before the Court which would assist it in coming to the conclusion in favour of the validity of the
impost. Indeed, the plea taken by the respondent is disputing the correctness of the appellant's claim before the High Court, was that Shri Raj· Mata Saheba was the President of the Board of Regency
and that whenever shti acted, she did so on behalf of the Board and it was for her to take counsel from the other members. It was, therefore, urged that 'in the circumsUU!cee, it would be presumed that
she has passed the orders in consultation with other members till the contrary is proved. It is signifi- cant that this plea proceeds on the assumption that it was at the option of Shri Raj Mata Saheba either
to consult the Board of Regency or D<>t. The respondent's case appears to be that the Ra:j Mata bE)ing the President of the Board of Regency could act on her own in matters relating
to the government of the State either exeoutively or legislatively and that it was for her to decide whether she should consult the other members of the Board or not. The case set out by the respondent
is not that the Raj Mata as the President of the Board always consulted the Board before she acted "°'· on its behalf. On the contrary, the plea taken seems to. suggest that the Raj Mata was not bound
Fim Gultun llussait1 Haji t"ahib d: 80111 v. Blatt of Rajutlio:n ,.imt Gul1111 H1111oi11 Hoji Yabb « SonJ SC.te of Rajaslhm Goj<Mtogodkar J, 264 SUPREME COURT REPOR~ (1913] to consult the Board and could have acted indepen-
d~ntly of the Board in passing orders either executive or legislative. That being the plea, it is Jifficult for us t-0 accept the argument that the approval of the Raj Mata to which the impugned
order makes a refer<>noe, can be safely taken to be the approve.I of tho Raj Mata after she had consulted the Board in that behalf. There is no doubt that as a result of the Sirohi Regency Act, the governance
of the State was left in the hands c;f the Boa.rd of Regency a.nd it was the Boe.rd of Regency alone acting collectively that could legislate or paae executive orders. If the Raj Mata. took the view
that she could a.ct on her own without consulting the Board, that waa clearly inconsistent with the ma.teria.l provisiollB of tho Act. Therefore, we are not inclined to a.ocept the conclusion of the
High Court that the impugned order can be said to have been pae1ed aa a result of the decision of the Board of Regency, since the Board of Regency a.lone we.a clothed with the necessary legislative
authority. UrileBs the Board passed the resolution, it could not take effect aa a law in the State of Sirohi. The approval of the Raj Mata to the resolution paascd by the State Council cannot cure
infirmity arising from the fact that the State Council had nu legislative power. The High Court seems to have ta.ken the view that since the Raj Mata entered into the agreement of merger, she can be treated at the de facw. Ruler
··–.,– of the State and as such, ehe was competent to exercise the necessary legislative power to p888 the impugned order. we are not inclined to accept this view. It is clear that the document of merger
has been signed by the Raj Mata describing her110lf aa the' President of the Regency Board; but the High Court thought that since the document had .-' not been signed by the Board itself, the Raj Mata
could be treated as the de facto Ruler oft.he State. 2 S.C.R.. This view is clearly erroneous. Sinoe the Raj Mata was the President of the Board of Regency, it was competent to her to sign the document on behalf
of the Board and she purported to sign it as the President of the Board of Regency obviously because she had consulted the Board and it was as a result of the decision of the Board that she proceeded to
execute the document and sign it as the Board's President. Therefore, there is no substance in the contention that the Raj Mata alone, without the concurrence of the Board, could have validly
· given sanction to the passing of the impugned order. In the result, we must hold that the im· pugned order has not been validly passed and no levy of customs duty can be legally imposed on
the appellant in regard to the charcoal which it has exported out of the State of Sirohi. It is, however, urged that the duty levied against the appellant for the export of charcoal
can be sustained under the provisions of Ra.jasthan Ordinance (No.16 of 1949). Section 4(2) of the said Ordinance authorised the Government to issue any revised tariff and in exercise of this
power, the Government of Rajasthan has issued a notification No. 211/SRD on the 10th August, 1949, whereby a revised ta.riff was imposed and it was directed that the duties of customs shall be levied
and collected in accordance with the said revised Tariff. According to item No.367 in the said Tariff, export duty on charcoal was As.-/8/-per maund. The respondtnt's argument was tbat when Sirohi
became a part of Rajasthan, the Ordinance in question applied to Sirohi and so, the claim for the customs duty made against the appellant was justified under the relevant, provisions of the said
Ordinance. This Ordinance came into force on the 4th August, 1949. In our opinion, this argument is not well- founded. When Ordinance XVI was passed and 11H Firm Gui.,. Huu11 Haj; l"aku~ "1 s,.
State of B•Jutk. Gaj,nd'f4ltulk.r J Pl,.n Gu/am !furs nn H oji Y Jfub ~ So:u $1414 of Rojost114h GopnJro:odbr J. SUPRKME OOURT REPORTS [1963] ca.me into foroe, it no doubt applied to the whole
of Ra.jastha.n as it was then constituted, but the State of Sirohi was at the relevant time not a. pa.rt of Raja.stha.n and it became a part of Ra.jas- tha.n as from the 25th January, 1950. It appears
that the Ministry of Sta.tee issued a notification on the 24th January, 1950, in Eoxercise of the powers conferred on the Government of India by sub- section (2) of section 3 of the Extra.-Provincia.l
JuriBdiotion Act 1947 (47 of 1947) a.nd it was as a result of. this notification that the Central Govern- ment delegated to the Government of the United States of Raja.stha.n the extra-provincial jurisdiction
inoluding the power conferred by seotion 4 of thi:i aa.id Aot to make orders for the effective exercise of that juriadiotion. It is thus clear that until the 25th, January, 1950, Sirohi wa.s not a. pa.rt of
Rajaatha.n and was not amenable to the application of the Ordinance in question. The respondent attem- pted to suggest that as soon a.s Sirohi beoame a. pa.rt of Raja.sthan, the Ordinance in question
applied to it. This argument is obviously falla.- oious. When Sirohi beoa.me a. pa.rt of Raja.etha.n, the laws a.pplioa.ble to Ra.ja.stha.n prior to the mer- ger of Sirohi could be
made a.pplica.lile to Sirohi only after a.n a.ppropria.te legislation had bean pa.saed in that behalf. In fa.ct, in 1953, the Ra.jastha.n La.ws (Application to Sirohi) Act (No.III
of 1953) was p1111&ed to deola.re that certain Raja.s- than la.ws applied to Sirohi. Section 3 of this Aot provided that the R aja.stha.n la.ws specified in the Schedule to the Act she.II, in so far a.s they
relate to any of the ma.ttel"B enumerated in Lists II and ID in the Seventh Schedule to the Con.s- t.itution of India., apply, a.nd as from the appoint- ed day, be deemed to have applied to Sirohi not.-
withstanding a.ny thing to the contra.I}' contained in the Sirohi Administration Order, 1948, ot in any other law, or i.netrument. There is a. proviso to this ;j 2S.C.R. section with which we are not conoerned for the
purposes of the present appeal. The Ordinace in question is not included in the Schedule and so, it is clear that the said Ordin1mce was not intended · to apply to Sirohi. It is not
suggested that auy . other law passed by the Raja.stjian State or a.ny , other instrument executed in that behalf made the ·Ordinance in question applicable to Sirohi. Therefore, we are satisfied tltat the respondent
cannot rely upon the relevant provisions of the Rajasthan Ordinance .1949 to support the demand for customs duty against the State of Sirohi. In the result, the appeal must be allowed and
the :writ issued in favour of the appellant declar- ing t,hat the appellant is not liable ·to pay the customs duty in question and qu~Ehing the orders passed by the Dy. Commissioner, Customs & Excise
as well as the Minister of Excise & Taxation and the d.emand notice issued by the Collector at the instance of the excise authorities. The appellant . would entitled to its cost throughout .
.A.ppwZ allowed. I96B Firm G~l'f'! .Hustaio H.ji Y okiib cl: 8Mu v. Slat1 of R'jMthtn