# ~57 UNION OF INDIA v. TARACHAND GUPTA & BROS

- **Citation:** [1971] 3 S.C.R. 557
- **Court:** Supreme Court of India
- **Decided:** 1971-01-28
- **Case number:** Civil Appeal No., 344 of 1967
- **Bench:** J. M. Shelat, C. A. Vaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/57-union-of-india-v-tarachand-gupta-bros-5192
- **Pages:** 16

## Headnote

Civil Courts-Jurisdiction of-Exclusion of jurisdiction-Wiien in·
i••rred.
Import Tl'ade Control Policy-Jurisdiction of statutory au/Worlty.
Under cl. 3 of the Imports (Control) Order, 19SS, passed under s. 3
of the Imports and Exports (Control) Act, 1947, no person shall import
any goods of the description specified. in Sch. l except in accordance with
a licence, and if it was found that the goods impolrted did not conform to
the description in the licence, then, without prejudice to any action that
may be taken against the licensee under the Sea Customs Act, such goods
would be treated as having been imported without a valid licence in thai
behalf.
Under Entry 294 of s. II of Part IV of Sch. l of the Import
Trade Control Pvlicy (July to December 1956), import of motor.cycles
and scooters was permitted under an appropriate licence, but such a
licence could not be used for their import in a completety knocked down
(C.K.D.) condition except by approved manufacturers. That is, there was
no absolute phohibition for their import in C.K.D. condition. The words
completely knocked down conditions are not used in any technical sense
and have the dictionary meaning of "made or constructed SQ as to be
capable of being knocked down or taken apart as for transp<ittation; in
parts ready to be assembled''.
Under Entry 295, except for:Jluhber tyres
,md tubes, fdr whose import a separate licence could be obtainOIJ, there are
no limitations as to the number or kind of parts or accessorie's of motor
cycles and scooters which can be importeil under a license obtained in respect of the goods. There are no remarks against this entry as there are
against Entry 294, that the licence would not be Valid for import of sparo..s
and accessories which, if assembled, would make motor-cycles and scooters
in C.K.D. condition.
The respondents' licence authorised them to import goods coveted by
Entry 295, and they imported certain goods which arrived in two different
consignments and on two different dates. They did not contain tyres, tube>
.ind saddles so thnt it was impossible to say that they constitllted tnOtor
<Veles and scooters in C.K.D. condition. The Collector of Customs and
the Central Board of Revenue in appeal. however. put the two consignments
together and held that trade practiC'e did not require the supply of tyres
and tubes and saddles while supplying motor cycles, and that therefore
they made up mopeds in C.K.D. condition and were, for that reason, not
the articles covered by Enli'y 295 hut articles prohibited under Entry 294.
The gooc15~ were directed to be confiscated with an option to the respondents to pay certain sums in lieu of confis~ation, aild personal penalties.
The respondent filed a suit in the High Court and the trial Judge dismissed it on the authority of Secretary of Stale v. Mask & Co. [1948] LR.
67 I.A. 222, and that the suit was time barred under art. 14 of the Limita•
tion Act. 1908. In appeal. the Divisional Bench followed Anand v. Thakore
& Co .. a decision of that High Court, and allowed the appeal.
In appeal to this Court,
558
·SUPREME COURT REPORTS
[1971] 3 S.C.R.
HELD : (1) The mere fact that the goods imported by the respondents were so complete that when put together would make motor-cycles .
and scooters in C.K.D. condition would not amount to a breach of the
licence o~ of entry 295.
The restriction not, to import motor-cycles and
scooters 1n C.K.D. condition was against all importer holding a licence in
respect of the goods covered by entry 294 u~der which he could import
complete and assembled motor-cycles and scooters, and not against an
importer who had a licence to import parts and accessories under entry
295. · [5(;5 G-H; 566 E]
.
(2) When the Collector examines .goods imported under a licence in
respect of goods covered by Entry 295, what he has to ascertain is whether
the goods are parts and accessories, and not whether the goods, though
parts· and accessoHes, are so comprehensive, that if put together .woul

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~57
UNION OF INDIA
v.
TARACHAND GUPTA & BROS.
January 28, 1971
[J. M. SHELAT AND C. A. VAIDIALINGAM, JJ.]
Civil Courts-Jurisdiction of-Exclusion of jurisdiction-Wiien in·
i••rred.
Import Tl'ade Control Policy-Jurisdiction of statutory au/Worlty.
Under cl. 3 of the Imports (Control) Order, 19SS, passed under s. 3
of the Imports and Exports (Control) Act, 1947, no person shall import
any goods of the description specified. in Sch. l except in accordance with
a licence, and if it was found that the goods impolrted did not conform to
the description in the licence, then, without prejudice to any action that
may be taken against the licensee under the Sea Customs Act, such goods
would be treated as having been imported without a valid licence in thai
behalf.
Under Entry 294 of s. II of Part IV of Sch. l of the Import
Trade Control Pvlicy (July to December 1956), import of motor.cycles
and scooters was permitted under an appropriate licence, but such a
licence could not be used for their import in a completety knocked down
(C.K.D.) condition except by approved manufacturers. That is, there was
no absolute phohibition for their import in C.K.D. condition. The words
completely knocked down conditions are not used in any technical sense
and have the dictionary meaning of "made or constructed SQ as to be
capable of being knocked down or taken apart as for transp<ittation; in
parts ready to be assembled''.
Under Entry 295, except for:Jluhber tyres
,md tubes, fdr whose import a separate licence could be obtainOIJ, there are
no limitations as to the number or kind of parts or accessorie's of motor
cycles and scooters which can be importeil under a license obtained in respect of the goods. There are no remarks against this entry as there are
against Entry 294, that the licence would not be Valid for import of sparo..s
and accessories which, if assembled, would make motor-cycles and scooters
in C.K.D. condition.
The respondents' licence authorised them to import goods coveted by
Entry 295, and they imported certain goods which arrived in two different
consignments and on two different dates. They did not contain tyres, tube>
.ind saddles so thnt it was impossible to say that they constitllted tnOtor
<Veles and scooters in C.K.D. condition. The Collector of Customs and
the Central Board of Revenue in appeal. however. put the two consignments
together and held that trade practiC'e did not require the supply of tyres
and tubes and saddles while supplying motor cycles, and that therefore
they made up mopeds in C.K.D. condition and were, for that reason, not
the articles covered by Enli'y 295 hut articles prohibited under Entry 294.
The gooc15~ were directed to be confiscated with an option to the respondents to pay certain sums in lieu of confis~ation, aild personal penalties.
The respondent filed a suit in the High Court and the trial Judge dismissed it on the authority of Secretary of Stale v. Mask & Co. [1948] LR.
67 I.A. 222, and that the suit was time barred under art. 14 of the Limita•
tion Act. 1908. In appeal. the Divisional Bench followed Anand v. Thakore
& Co .. a decision of that High Court, and allowed the appeal.
In appeal to this Court,
558
·SUPREME COURT REPORTS
[1971] 3 S.C.R.
HELD : (1) The mere fact that the goods imported by the respondents were so complete that when put together would make motor-cycles .
and scooters in C.K.D. condition would not amount to a breach of the
licence o~ of entry 295.
The restriction not, to import motor-cycles and
scooters 1n C.K.D. condition was against all importer holding a licence in
respect of the goods covered by entry 294 u~der which he could import
complete and assembled motor-cycles and scooters, and not against an
importer who had a licence to import parts and accessories under entry
295. · [5(;5 G-H; 566 E]
.
(2) When the Collector examines .goods imported under a licence in
respect of goods covered by Entry 295, what he has to ascertain is whether
the goods are parts and accessories, and not whether the goods, though
parts· and accessoHes, are so comprehensive, that if put together .would
constitute motor cycles and scooters in C.K.D. condition, because, it would
then mean that there is in the entry a limitation against importation of all
parts and accessories of motor-cycles and scooters.
Such an approach,
would be acting contrary to and beyond entry 295, and in non-compliance
of the entry and woulJ lead to the anom~lous result that even if the il!tporter had sold away one consignment or part of it, the Collector i:oUJd
still say that had the importer desired it was possible for him to assemble
all parts and make motor-cycles and scooters in C.K.D. condition.
[566 A-C, H; 567 A·Bl
(3) This Court in Girdhari Lal Bansidhar v. Union of India, [1964] 7
S.C.R. 62; laid down that the High Court under Art. 226 of the Constitution, could not, on the ground that it was erroneous, interfere with the
decision of the authority upon whom jurisdiction wcs conferred to decide
the question whether the goods fell under one or other entry, that is, under
which of two competing entries the goods fell. This Court also held that
the import of parts of a prohibited article was import of the prohibited
article, and that the importer cotild not be allowed to do indirectly what
he could not do directly, and distinguished the case in Anand v. Thakore
& Co. In Anand's case, it was held that. the jurisdiction of the Collector
was only to ascertain whether the goods were spare .parts an~ accessories
and not to find out whether if put together they would .constitute auto
cycles in C.K.D. condition. [567 B-C; 568 B-E]
( 4) In the present case also the question before. the Collector was
whether the respondents' licence covered the goods imported by them,
that is, whether the goods were parts and accessories. It is not, therefore,
one of those cases wllere between two competing entries the statutory
authority applied one or the other and where a civil court cannot interfere
even if the statutory authority committed an error. [572 C-EJ
(5) Exclusion of jurisdiction of Civil. Courts is. not to be readily inferred.
Such exclusion is inferred when the statute gives finality to the
Of*r of the tribunal on which it confers jurisdiction and .provides for
adequate remedy to do what the courts woulq normally do,in such a .~ro
c*iag before it. Even where the st~1!'te gives finality silch 1t prov1s1on
dljes not exclude cases where the .prov1s1ons of the paf!iculM' •!a"!te h";ve
nc:lt beta complied with or the tnbunal has not acted m CClllformity with
fdlldamental principles of judicial procedure, _and a detel'lllio~tion ~Y a
triblmal of a question other than the one which the statute directs 1t to
decide would be a decision not under the provisions of the Act. [571 B-El
Firm //luri Subbayya Ch'et~ & Sons v.
Andhra Pradesh, [1964]
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S.C.R. 752, Dhulabhai v. Madhya Pradesh, [1968] 3 S.C.R. 662, Pcnthulu
v. Andhra Pradesh, [1970] 2 S.C.R. 714, Anlsmlnlq Ltd. v. Foreign ComA
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UNION V. TARACHAND (Shelat, 1.)
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pensc.tion Commissioner, [1969) l All E.R. 208 and R. v. Fulham, Hammersmith and Kensington Rent Tribunal, [1953) 2 All E.R. 4, referred to.
(6) Thetefore, the decision iii. the pre·sent case 'was covered by the
exception laid down in Mask & Co.'s case and the provision excluding the
jurisdiction of the civil court would not be applicable. Since non-compliance with the provisions of the Act would be acting in excess of jurisdiction the Collector's order was a nullity and Art. 14 of the Limitation Act,
1908, could not be applied. Even if it was applicable, the suit would not
be barred if the date of the appellate order of .the customs authorities wu
taken into consideration. [572 E·Fl
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CIVIL APPELLATE JURISDICTION: Civil Appeal No., 344 of
1967.
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Appeal from the judgment and order dated July 8, 1966 of the
Bombay High'Court in Appeal No. 17 of 1964.
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,V. A. Seyid Muhammad and S. P. Nayar, f0r the appellant.
S. 1. Sorabjee, 1. R. Gagrat and B. R. Agarwala, for the:
respondents.
The Judgment of the Court was delivered byShelat, J.
This appeal, by certificate, arises from the respondent's suit in respect of fines and penalties recovered from them
by the Collector of Customs, Bombay for the alleged cootravention of s. 3 of the Imports and Exports (Control) Act, 1947 and
s. 167(8) of the Sea Customs Act, 1878.
The responden~ held an import licence dated July 10, 1956
permitting them to import parts and accessories of motor cycles
and scooters as per appendix XXVI of the Import Policy Book for
July-December 1956. Under the said licence, the respondents
imported certain goods which arrived in two consignments, each
containing 17 cases, by two different ships.
According to the
respondents, the goods so iioported by them were motor cyck
parts which their licence authorised them to import. The customs
authorities, on the contrary. held, on the examination of the
goods, that they constituted 51 sets of "Rixe Mopeds cdmplete in
a knocked down condition". The Deputy Collector of .Customs.
thereupon held an enquiry in pursuance of two show cause notices
issued by him.
·
The result of the enquiry was an order under which the Deputy
Collec\or directed confiscation of the said goods with 'an option
to the respondents to pay certain sums ion lieu of confiscation and
also personal penalties.
That order was passed on the basis Uiat
·the goods imported were not parts and accessories 9f motor cycles
and scooters permissible under entry 295 of the SChedule to the
560
SUP.lU!MB COUIT llEPOkTS
[1971] 3 S.C.R.
Jmpon Control Order but were motor cycles/scooters in completely knocked down condition, prolubited u.nder remark II against
entry 294, a licence in respect of goods covered by it would
author.ise import of motor cycles and scooters. The order of the
Deputy Collector dated November 19, 1957 reads as under :
"On examination of the goods and scrutiny of the
documents relating to the Bills of Entry stated above, it
was ascertained that M/s. Tarachand Gupta & Bros. had
imported· 51 sets of "Rixe" Mopeds complete (except
tyics, tubes and saddles) in a knocked down condition.
The total number of consignments covered by the afore·
said two Bills of Entry were. sufficient to give exactly S 1
sets complete Rixe 'Mopeds' (except for tyres, tubes
and sadales which would in anY. case have required a
separate licence). The packing was also such as to show
that those were nothing but "Mopeds" in a·dis-assembled
condition, since each of th!) cases contains components
relating to three mopeds.
Moreover, it was found that
major components such as the frames, completely fitted
with electrical wires and control cables and grips had
been imported in equal numbers.-All these went to
show that the goods were not imported as spare parts
but as complete vehicles in a knocked down condition.
The goods were therefore, considered to be correctly
classifiable under item 75(2) of the J.C.T. corresponding to S. No. 294,
N of the I.T.O. Schedule.
The
licence under which clearance was sought, could ;not,
therefore, be acc!lpted."
The Deputy Collector rejected the respondents' contention that
the two consignments which arrived in two different ships at different dates should be viewed separately, that the machines were
incomplete as they were without tyres, tubes and saddles and
therefore they could not be said to constitute motor cycles in
knocked down condition. He held, on the other hand,
that
though the goqds were n()t in completely knocked down condition
it made no· difference as the tyres, tubes and saddles were easily
.obtainable in India and their absence did not prevent the machines
being otherwise complete. He also found that there was a trade
practice ooder which traders were supplying motor cycles without fyres, tubes and saddles unless the purchaser specially asked
for these parts.
According to him, the goods could not be regarded as spare parts but were 'Mopeds in dis-assembled condi1ion''.
In the suit filed by the respondents in the Higli. Court against
the said-order, the Trial Judge held, on the authority of the
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UNION v. TARACHAND (She/at, JS
561
Secretary of State v. Mask & Co.(1) that an order of a statutory
tribunal, such as the Col!ector of Customs under the Sea Customs
Act, which the statute makes final, subject, of course, to an
appeal provided ooder it, can be set aside in a suit before a civil
court on two grounds only, namely, where the provisions of the
Act have not been complied with, or where the tribunal has failed
to act in conformity with the fundamental rules of judicial procedure. He rejected the respondents' contention that the case fell
within the first ground and held that however erroneous the- Collector's decision might .be since it was within his jurisdiction to
decide whether the goods fell under one entry or the other,, a civil
court had no jurisdiction to grant relief.
He also held that the
order could not be said to be without or in excess of jurisdiction
and was, therefore, not a nullity. 'fhe order consequently required to be set aside if the respondents were to have any relief,
and therefore, Art. 14 of the Limitation Act, 1908 applied. On
that basis he held the respondents' suit to be time barred and dismissed it.
We may, at this stage, mention that in a similar matter involving import of spare parts ·and accessories under a licence relating to entry 295, the Collector's order, on the basis that the
goods fell under entry 294, as the spare parts in question could.
if all the different indents were take.n. together, constituted auto
cycles in completely knocked down condition, was held to be bad
as "the Collector's approach to the matter was wholly wrong" by
a Division Bench of the same High Court in D. P. Anand v. Mis.
T. M. Thakore & Co.(2 ) According to that judgment, the jurisdiction of the Collector was to ascertain whether the goods, such
as they were, were properly imported under the licence relating
to goods under entry 295, i.e., whether they were spare parts and
access0ries, and not to go further and find out whether they would.
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when put together, constitute. auto cycles in completely ·knocked
down condition as envisaged by entry 295, and therefore the
order was amenable to interference by the High Court. The 'Trial
Judge held, on the authority of this jud~ent that on merits the
Co~lector ?f Customs was in error in holding the respondents guiltv
of nnportmg goods not covered by the licence held bv them and
that the Collector would have been bound by that judgment had
it been delivered before he passed the impugned order. He, howG
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ever, was of the view that whereas the High Court in D. P. Anand's
case(') interfered witlr the order in its writ jurisdiction. a suit
could not lie as the imPUITTted order was within the jurisdiction of
the Collector and th~ mere fact that he aoplied a wronl! entry did
not invest the civil court with the jurisdiction to entertain a suit
and set aside such an order.
11) (1940) ~7 T.A. 222
12) Civil AnP<".al No. 4 nf 10~9. rlecid•d o" AU!l'JSt 17. 10"'1. 'H. C.)
562
SUPREME COURT REPORTS
[1971] 3 S.C:R.
The Letters Patent Bench of the High Court, following the
A.
judgment in Anand's case,( 1) agreed with the Trial Judge that
on merits the Collector was in, error. Following that judgment,
the Bench also held that the Collector's jurisdiction was limited to
ascertain whether or not the goOds imported by the respondents
were spare parts and acressories covered by entry 295 in respect
of which tl:iey undoubtedly ,held the licence, and therefore, he
CQU!d not have lumped together the two coasignments which, though
imported under one Iicl'nce; arrived separately and were received
on different dates and could not have come to the conclusion that
tho plaintiffs (i.e. the respondents herein) had imported 51 "Rixe"
mopeds in a completely knocked ~owt11 condition. The Bench
also held that upon the principle laid.,down in A11and's case(1) it
was not for the Collector to ascertain whether the goods, if assembled together, would constitute 51 "Rixe" Mopeds in C.K.D.
condition. The respondents were entitled to import the said goods,
and therefore, s. 167 ( 8) of the Sea Customs Act did not apply
and the respondents consequently could not have been held guilty
of. breach either of that section or s. 3 of. the Imports and Exports
(Control) Act.
The Bench also held that the decision of this
Court in Girdhari/al Bansidhar v. Union of India( 2 ) .• did not overB.
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rule but only distinguished the judgment in Anand's case, (1) and
therefore, the binding force of that decision remained unshaken.
R~arding thejurisdiction of civil courts, the Division Bench held
that where the question is simply whether one or 'the other entry
applies and the tribunal, to which jurisdiction is entrusted in that 'E
behalf. decides it erro.neously, even then its order, made final by
the statute conferring such jurisdiction, cannot be made· the subject maiter _of a· suit.
On the other hand, where its jwisdiction
is confined' to see whether the importation is under a μarticular
entry or not, but while deciding such a question. the tribunal
takes into account extraneous considerations. such as an entry
which h_as no bearing upon the question, . the case would fall outside the ambit of the powers of ·the statutory authority.
The
question. in other words, would then be, whether thei tribun'al
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has exceeded its jurisdiction and therefore acted jn non-compliance
with the provision ot the statute under whlch it has to decide the
question. The Division Bench deprecated the attempt on the part
Gof the Collector in considering 'th~ two consignments together
and making out a case that the two, when put together, would
make it possible to regard the goods as ''Pjxe" Moreds in C.K.D.
condition.
Such an attempt, the Bench-observed, was "a new
classification conjured up by the authorities to rope in .the imports as being illegal which. ·according to the terms of the licence
and entry No. 295 would be clearly legal". Lastly. the Division
Bench disagreed with the Trial Judge who had held" that the article
. (I) C.A. No. 4 of 1959 decided on Aus.._ 17, 1'160 (H.C.) (2) (1964] 7 S.C.R. 62.
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UNION V. TARACHAND (She/at, J.)
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in the Limitation Act applicable was A~t. 14 on the ground that
once it was accepted that the order was in excess of jurisdiction it
was a nullity, and. therefore, there was no question of its-having
to be set aside. Following A. Venkata Subba Rao v. Andhra Pradesh, (1) it held that the suit fell under Art. 62, and therefore, was
within time.
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Counsel for the Union of India challenged the correctness of.
the judgment of the Division Bench and urged that the Sea Customs
Act had clearly vested in the Collector the authority to decide
whether the goods in question fell within entry 295 or not and
for which the respondents had been granted the licence. His
decision, subject, of-course, to an appeal and revision provided
under the Act, being final, could not be challenged in a suit save
under the well recognized exceptions that his decision was not in
compliance with the provisions of the Act, or that he had failed
to follow the fundamental principles of judicial procedure. The
present case, according to him, was one of importing ''Rixe"
Mopeds in C.K.D. condition, not permissible either under entry
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295 or entrr, 294, and therefore, was a case where the importer,
misusing his licence, had attempted to do indirectly what he oould
not do directly. There was, according 'to him, no question of the
Collector acting in excess of his jurisdiction or.in non-compliance
with the provisions of the Act, and therefore, the Trial Judge was
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right in holding that no suit lay against his action.
Before we proceed to consider these conteaitions it is expedient first to look at the provisions of the relevant law. Under s. 3
of the Im ports arid Exports (Control) Act, 194 7, the Central
Government by an order can provide for prohibiting, restricting
or otherwise controlling inter alia the import of goods of aily
specified description and all goods to which any such order applies
are deemed to be goods of w.hich the import has b,een prohibited
by the Sea Customs Act, 1878 and all the provisions of that Act
are to have effect accordingly. The Imports (Control) Order
195 5, passed under the power reserved under ,the Act, by cl. ( 3)
thereof, provides that no person shall import any goods of the
description specified in Sch. I thereto except ooder and in accordance with a licence granted by the Central Government or. by an
officer specified in Sch. II. Sub-cl. [2) of cl. (3) provides that
if it is found that the goods imported iinder a licence do not conform to the description given in such a licence under which they
are claimed to have been imported, then without prejudice toany action that may be taken against the licensee under the Sea
Customs Act in respect of such importation, the licence may be
treated as havii been utilised for importing the said goods.
(I) [1965] 2
.R. 577.
·.
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SUPREME COURT REPORTS
[1971] 3 s.c.R.
Entties 294 aind 295 of s. II of Part IV of S9h. I of the Import
Trade Control Policy for the period July-December 1956 are in
this connection the relevant entries.
Entry 294 deals with import
of motor-cycles and scooters.
Remark (ii) in its column No. 6
lays down that "Licences granted under this item will not be valid
for the import of .motor cycles/ scooters in a completely knocked
down condition".
Remark (iii), however, provides that applications from approved manufacturers for import of motor cycles!
~cooters in C.K.1). condition will be considered ad hoc by the
Chief Controller, Imports in consultation with Development Wing.
Entry 295 deals with "Articles (other than rubber tyres
and
tubes) adapted for use as parts and accessories of motor eye Jes
and motor scooters, except such articles as are adapted for use as
-parts and accessories of motor cars".
Entry 41 in Part V deals
with import of rubber tyres and tubes and other manufactures of
rubber not otherwise SJY'--Cified.
Section 167 ( 8) of the Sea Customs Act provides that goods
shall liable to confiscaition if the goods, the importation of which
is for the time being prohibited or restricted by or under Ch. IV,
are imported contrary to such prohibition or restriction and any
person concerned in any such importation shall be liable to penalty
prescribed 1therein.
Section 188 of the Act makes
an order,
passed in appeal against the Collector's order, final subject only
to the power of revision under s. 191.
The position then is,
under entry 294 above-cited import
under the requisite licence of motor cycles and scooters was permitted.
However, a licence permitting import of motor cycles
and scooters could not be used for import of motor cycles and
scooters in C.K.D.
condition.
Even then,
the prohibition
was .not absolute because approved manufacturers could apply
and get licences to import motor cycles aind scooters in C.K.D.
condition, albeit on an ad hoc basis. It is thus clear that entry
294 deals with the import of motor cycles and scooters and the
import, though only by approved manufacturers, of motor cycles
and scooters in C.K.D. condition.
The entry is complete in itself
so far as import of motor cycles a.n& scooters complete and assembled and also in C.K.D. condition is concerned. · The words
"completely knocked down condition" in the entry are not used
in any technical sense, and therefore, must be given tl!eir ordinary dictionary meaning, i.e., "made or constructed so as to be
capable of beiqg knocked down or taken apart. as for transporta"
tion; in parts ready to be assembled".
(see Webster's New International Dictionary, Vol. II. p. 1371 and also Word.I' and Phrases.
Permanent Edition, Vol. 23, p. '60).
Under entry 295, except for rubber tyres and tubes for whose
import a separate licence could be obtained under entry 41 of
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UNION v. TARACHAND (She/at, J.)
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Part V, there are no limitations as to the number or kind of parts
or accessories which can be imported under a licence obtained in
respect of the goods covered thereunder. Prima facie, an importer could import all the parts and acc11swries of motor cycles and
scooters and it would not be a ground to say that he has committed breach of entry 2 9 5 or the licence in respect of the goods
described therein, that the parts and accessories imported, if assembled, would make motor cycles and scooters in C.K.D. condition.
There are no remarks against entry 295, as there are
against entry 294, that a licence in respect of goods covered by
entry 295 would not be valid for import of spares and accessories
which, if assembled, would make motor cycles and scooters in
C.K.D. condition.
Apart from that, the goods in question did
not admittedly contain tyres, tubes and saddles, so that it was
impossible to say that they constituted motor cycles and scooters
in C.K.D. condition.
The first two could not be imported and
were in fact not imported because that could not be done under
the licence in respect of goods covered by entry 2 9 5 which expressly prohibited their import and a separate licence under entry 41
of Part V would be necessary.
The third, namely, saddles were
not' amongst the goods imported.
No doubt, there was, firstly, a .
finding by the Collector that a trade practice prevailed under which
motor cycles and scooters without tyres, tubes and saddles could
be sold.
Secondly, the tyres and tubes could be had in the market here and so also saddles, so that if an importer desired, he
could have sold these goods as motor cycles and scooters in C.K.D.
condition.
The argument was that since there was a restriction
in entry 294 against imports of motor cycles and scooters in
C.KD. condition, the importer could not be allowed to do indirectly what he could not do directly.
The argument apparently looks attractive.
But the question
is what have the respondents done indirectly what they could not
have done directly. In the absence of any restrictions in entry
2 9 5, namely, that a licence in respect of goods covered by entry
295 would not be valid for import of parts and accessories which,
y;hen taken toge!~er, would make them motor .cycles and scooters
m C.K.D. cond1t1on, the respondents could rmport uncle1 their
licence all kinds and types of parts and accessories. Therefore,
' the mere fact, that the goods imported by them were so complete
that when put together would make them motor cycles and scooters in C.K.D. condition, would not amount to a breach of the
licence or of entry 295.
Were that to be so, the position would
be anomalous as aptly described by the High Court.
Suppose that
an importer were to import equal number of various parts from
different countries under different indents and at different times .
and the goods were to reach here in different consigliments and
on different dates instead of two consignments from the same
566
SUl'REME COURT REPORTS
[1971] 3 S.C.R.
country as in the present case. If the contention urged before us
were to be correct, the Collector can treat them ~ogether and say
that they would constitute motor cycles and scooters in C.K.D.
condition. Such an approach would mean thM there is in entry 295
a limitation against importation of all parts and accessories of
motor cycles and scooters_, Under that contention, even if the importer had sold away the first consignment or part of it, it would
still be possible for the Collector to say that had the importer
desired it was possible for him to assemble all the parts and make
motor cycles and scooters in C.K.D. condition. Surely, such a meaning has not to be, given to entry 295 unless there is in_it or in
the licence a condition that a licensee is not to import parts in such a
fashion that his consignments, different though they may be, when
put together would make motor cycles and scooters in C.K.D.
condition.
Such a conditioQ was advisedly not placed in entry
295- but was put in entry 294 only.
The reason was that import
·_ of both motor cycles and scooters as also parts and accessories
thereof was permitted, of the first under entry 2941 and of the
other under entry 295.
A trader having a licence in respect of
goods covered by entry 294 could import assembled motor cycles
. and scooters, but not those vehicles in C.K.D. condition, 1llllless
he. was a manufacturer and had obtained a separate licence there-
,for from the Controller of Imports who, as aforesaid, was authorised to issue such a licence. on an ad hoc basis.
Thus the restriction not to import motor cycles and scooters in. C.K.D. condition was against an importer holding a licence in respect of goods
covered by entry 294 under which he could import complete motor
cycles and scooters and not against an importer who had a licence
to import parts and access~ries under entry 295.
If Dr. Syed Mohamad's contentiQn were to be right we would
have to import remark (ii) against entry 294 into entry 295, a
thing which obviously is 111ot permissible while construing these
entries.
Further, such a condition, if one were to be implied· in
entry 295, would not fit in, as it is a restriction against import
of motor cycles and scooters in C.K.D. condition and not their
parts and accessories.
There is, therefore, no question of a licensee under entry 295 doing indirectly what he was not allowed to
do directly.
What he was not allowed to do directly was importing motor cycles aind scooters in C.K.D. condition under a licence
under which he could import complete motor cycles and scooters
only.
That restriction, as already observed, applied to a licensee
· in respect of. goods described in entry 294 and not a licensee in
respect of goods covered by entry 295.
The result is that when the Collector examm~ goods imported
under a licence in respect of goods covered by entry 295 what he
has. to ascertain is whether the goods are parts and accessories,
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567
and not whether the goods, though parts and accessor~s, are so
comprehensive that if put together would constitute motor cycles
and scooters in C.K.D. condition. Were he to adopt such 3ill
approach, he would be acting contrary to and beyond entry 295
under which he had to find out whether the goods imported were
of the description in that entry.
Such an approach would, in other
B words, be in non-compliance of entry 295.
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The question then is whether such a reading of the two entries
is in any way contrary to the decisions of this Court.
In Girdharilal Bansidhar,(1) the principle laid down was that the High Court
in its writ jurisdiction does not sit in appeal over the correctness
of the decision of the authorities under the Sea Customs' Act on
appreciation of entries in the Hand Book or in the Indian Tariff
Act. In that case, the appellant, who had a licence to import iron
and steel bolts, nuts, etc., imported nuts and bolts which were the
components of 'Jackson Type Single bolt oval plate belts fasteners",
which were described in the bill of entry as 'store bolts and nuti;'.
The Customs found that these were in reality the actual components
of Jackson 11ype Single belt oval plate belts fastemers, import
whereof was totally prohibited. The Collector, while arriving at
his decision, took into account also the fact that washers, the
third component of the prohibited article, were imported by a
firm owned by the appellant's relations.
On these facts, this
Court )leld ( 1) that importing components of a prohibited article
was importing the prohibited article, (2) that the evidence that
washers impo~ by the relatioms of the appellant was considered
by the Collector as evidence to confirm his conclusion that the
nuts and bolts imported . by him were in reality the components
of the prohibited article, and (3) that where the decision of the
statutory authority is whether an item falls under one or the other
entry, the High Court could not interfere with that decisioo on
the ground that it is erroneous. That is because when a statute
confers power on an authority to decide a particular question, its
decision, even if it is ¥rroneous, is still within its jurisdiction.
What needs to be observed in that decision is that the Collector's decision was, under which of the two competing entries the
imported items fell, that is, whethet the gOOds were bolts and nuts
or were components of the prohibited article.
And the Court
there laid down the well established principle that the High Court,
under Art. 226, could not interfere with the decision of the authority upon whom jurisdiction to decide the question, whether the
good~ fe:J under one or the other entry, was conferred on the
ground thaHt was erroneous. Further, the nuts and bolts imported
by the atiPellant could only be ·used as Components of the
prohibited 'article. In other words, the import was of parts of the
(I) (1964]7 S.CR. 62.
568
SUPREME COURT REPORTS ..
[1'971) 3 S.C.R.
prohibited article and therefore of the prohibited article. · It was,
therefore, that the Court held ( 1 ) that the Customs' decision was
not incorrect, and ( 2) that the importer could, not ~ allowed to
do indirectly what he could not do directly.
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It will be noticed that the Bombay decision in l>. P. Anand's
case(') was not dissented from but only distinguished, and therefore, the High Court in the present case was justified in followB
ing it.
It is true, however, that counsel for the appellant there
relied on that decision in support of his pro~~on
a completed article cannot be read as a ban on the importation
of its constituents, which, when assembled, would result in the
prohibited article, and this Court pointed out in answer that in
D. P. Anand's case,(1) the imported components could not have
when assembled, made up the completed article because of the
lack of certain essentjat' parts whicl;t admittedly were not available
in India and could not be imported. The real distinotion, however, between the two cases was that the decision of the Collector
in D. P. Anand' s case ( 1) was not, as was the decision in Girdharic
lal's case,(2) under which of the two comwting entries the import0
ed goods fell but that the imported goods in question, if assembl_.
ed, together, would not be the goods covered by the entry, and
therefore, not the goods in respect of which the licence was granted.
Further, the articles in question, even when assembled together,
were not prohibited articles as in Girdharilars case('). Girdharilal's case(2 ) is clearly distinguishable because it is not as if motor
cycles and scooters are prohibited articles as was the case there.
The restriction is not against licensees importing motpr cycles and
scooters under entry 294 and parts and accessories under entry
295 but against the licensees under entry 294 importing motor
cycles and scooters in C.K.D. condition. The question in the instant case was not under which of the two entries, 294 or 295, the
goods fell, but whether the goods were parts and accessories covered by entry 295.
In Firm Illuri Subbayya Chetty & Sons v. Andhra Pradesh,(3 )
the suit filed by the appellants was for recovery of a sum paid by
way of purchase tax under the Madras General Sales Tax Act,
1939. The cause of action was that the amount had been illegally recovered.
Relying on s. 18A of the Act, this Court held
that the expression "any assessment made under this Act" in that
section was wide enough to cover all assessments made by the
appropriate authorities ·under the Act and even if an assessment
was incorrect, ·so long as it was within the jurisdiction of the
authorities, it was not non-c.ompliance of the statute, and therefore, was not covered by the principle laid down in the case of
Mask & Co.(') The\Court observed:
(I) C.A. 4of1959 dt. Aug. 17, 1960 (H.C.)
(2) [1964]7 S.C.R. 62.
(3) [1964] l.S.C.R. 752.
(4) [1948] LR. 67 I.A. 222.
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"There is no justification for the assumption that if
a decision has been made by a taxing authority under
the provisions of a taxing statute, its validity can be challenged by a suit on the ground that it is incorrect on
merits and as such it can be claimed that the provisions
of the said statute have not been compiled with."
569
This principle was repeated in Dhulabhai v. Madhya Pradesh(1)
where it was held that where a statute gives finality to the orders
of the special tribunal the civil court's jurisdiction must be held
to be excluded if there is adequate remedy to do what the civil
c:Ourts .would normally do in a suit, ·i.e., to correct an assessment
which is ~rron~us. The Court also pointed out that in the 'Firm
ll/uri Subbayya Chetty & Sons' case,(~) it had been said that
Mask & Co.'s case(8 ) was an authority for the proposition that
non-compliance with the provisions of the statute would render
the entire proceedings before the authority illegal and without
jurisdiction.
The case of Panthulu v. Andhra Pradesh (4 ) illustrates as to
when an authority can be said to have acted in non-compliance
with the provisions of the statute under which it derives its authority. Section 3(2) of the Madras Estates Land
(Reduction of
Rent) Act, XXX of 1947 authorised the State Government to fix
the rates of rent in respect of each class of ryoti land in each
village in the State after considering the recommendwtions of the
special officer and the remarks of the Board of Revenue. Section
8(1) provided that no order passed under s. 3(2) could be challenged in a civil court. The suit filed by the appellants disputed the
legality of the notification reducing the rates of land in respect of
the dry delta ryoti lands in a village on the grou.nd that the class
of land had been determined to be delta ryoti lands on the basis
only of the setilement register which did. not contain any entry
with respect to the village in question, that the settlement register
could not be treated as conclusive and that proper factual enquiry
was necessary. The High Court held that the suit was not maintainable by reason of s. 8(1). Dua, J., speaking for the Bench.
held that under s. 2 the special officer had to determine the average rate of cash rent per acre for each class of ryoti land such as
wet, dry or garden.
This could only be done on relevant material.
The special officer, however, _had based his determination
on a report of his assistant, who had considered the entry in the
settlement register of another village. That meant that the special
officer had made his determination on irrelevant evidence,
i.e ..
on the register which did not contain any data with respect to- the
land in the village in q11estion.
On these tacts he held that the
(I) [1968] 3 S.C.R. 662.
(2) (1964) 1 S.C.R. 752.
(3) [1948] L.R.67 I.A. 222.
(4)
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SUPREME COURT REl'ORTS
[1971 J 3 S.C.R.
.determination by the special officer was based on no evidence with
the result that it was in violation of the fundamental principles of
judicial procedure. A fortiori, the order of the Government made
under s. 3(2) on the basis of the recommendations of the special
.officer was not iii confonnity with the provisions of the Act and
was therefore outside the purview of s. 3(2) and consequently s.
8 ( 1) was inapplicable.
Thus, sec. 8 ( 1) was held not to apply
because the Government's determination could not be said to be
one under s. 3(2).
- The words."a decision or order passed by an officer of Customs
under this Act" used in s. 188 of the Sea Customs Act must mean
a real and 111ot a purported determination.
A determination, which
takes into consideration factors which the officer has no right to
take into account, is no determination.
This is also the view
taken by courts in England.