# COLLECTOR OF CUSTOMS., MADRAS & ANR v. C.TARACHAND

- **Citation:** [1974] 3 S.C.R. 852
- **Court:** Supreme Court of India
- **Decided:** 1974-04-05
- **Case number:** Civil Appeal No. 1161 of 1973
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/collector-of-customs-madras-anr-v-c-tarachand-6095
- **Pages:** 5

## Headnote

852
COLLECTOR OF CUSTOMS., MADRAS & ANR.
v.
C.TARACHAND
April 5, 1974
[M. H. BEG AND R. S. SARKARIA, JI.]
Imports and Exports (Control) Act, 1947-S. 3-Scope of.
The respondent had imported sewing machine needJcs
under a
licence.
Claiming that the import licence did not cover the needles for domestic sewing
machines the Custom.Ii Authorities imposed a penalty and confiscated the goods.
The 1t$pondent cJaimed that the needles imported could be used in both domestic
and industrial 11ewing Ipachines or were interchangeable and that the prohibition
A
B
was not meant for such interchangeable needles
which could
be
used
for
c
"domestic" as welt as "industrial" sewing machines but was confined to needles
capable of being used only for domestic sewing machines. A single Judge of
the High Court :.et aside the penalty but confirmed the order of confiscation.
On appeal the Division Bench; without going into the other question raised
by the respondent. held that there was no prohibition or restriction during the
relevant period for the import of domestic sewing machine needles. It therefore
quashed the confiscation order.
Allowing the appeal and ren1itting the case to the High Court,
D
lfELD : There was the required prohibition against import without licence
of needles specified. Sec. 3 of the im_ports & ~xports (ControJ)
Act,
1947
clearlv provides·for .Prohibition and restriction of imports and cl. 3 of the Import
Control Order directly prohibits, in unambiguous and mandatory terms that "no
iJCrson shall import any goods of the description specified in Schedule I except
under and in accordance with the licence or a customs clearance permit granted
by the Central Government or by any officer specified in Schedule II''.
This
ianguage cannot have a ·meaning other than that the prohibition was· there so
E
long as the goods of the description given in the schedule were not imported in
accorda;Dce with the import licence. [856 E; 854 H; 855 A-Bl
(2) The prohibition is conditional in as mu Ch as it can be lifted by a licence
which permits it; the question whether the respondent's licence covered
the
particular goods imported, was not specifically considered or decided by the
division bench. . The division bench did not also consider it necessary to decide·
whether any rules of natural justice weI'e violated at the inquiry held.
If the
customs authorities had not acted in accordance with law
in holding the
F
imported goods to be of the prohibited category the High Court could correct
th;s error of law. [855 D·El

## Text

852
COLLECTOR OF CUSTOMS., MADRAS & ANR.
v.
C.TARACHAND
April 5, 1974
[M. H. BEG AND R. S. SARKARIA, JI.]
Imports and Exports (Control) Act, 1947-S. 3-Scope of.
The respondent had imported sewing machine needJcs
under a
licence.
Claiming that the import licence did not cover the needles for domestic sewing
machines the Custom.Ii Authorities imposed a penalty and confiscated the goods.
The 1t$pondent cJaimed that the needles imported could be used in both domestic
and industrial 11ewing Ipachines or were interchangeable and that the prohibition
A
B
was not meant for such interchangeable needles
which could
be
used
for
c
"domestic" as welt as "industrial" sewing machines but was confined to needles
capable of being used only for domestic sewing machines. A single Judge of
the High Court :.et aside the penalty but confirmed the order of confiscation.
On appeal the Division Bench; without going into the other question raised
by the respondent. held that there was no prohibition or restriction during the
relevant period for the import of domestic sewing machine needles. It therefore
quashed the confiscation order.
Allowing the appeal and ren1itting the case to the High Court,
D
lfELD : There was the required prohibition against import without licence
of needles specified. Sec. 3 of the im_ports & ~xports (ControJ)
Act,
1947
clearlv provides·for .Prohibition and restriction of imports and cl. 3 of the Import
Control Order directly prohibits, in unambiguous and mandatory terms that "no
iJCrson shall import any goods of the description specified in Schedule I except
under and in accordance with the licence or a customs clearance permit granted
by the Central Government or by any officer specified in Schedule II''.
This
ianguage cannot have a ·meaning other than that the prohibition was· there so
E
long as the goods of the description given in the schedule were not imported in
accorda;Dce with the import licence. [856 E; 854 H; 855 A-Bl
(2) The prohibition is conditional in as mu Ch as it can be lifted by a licence
which permits it; the question whether the respondent's licence covered
the
particular goods imported, was not specifically considered or decided by the
division bench. . The division bench did not also consider it necessary to decide·
whether any rules of natural justice weI'e violated at the inquiry held.
If the
customs authorities had not acted in accordance with law
in holding the
F
imported goods to be of the prohibited category the High Court could correct
th;s error of law. [855 D·El
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1161 of 1973.
Appeal by Special Leave from the judgment and order <lated the
26th June, 1973 of the Madras High Court in Writ Appeal Nos. 381
of 1972 and 106 of 1973.
G
G. L. Sanghi and S. P. Nayar, for the appellants.
K. Jayaram, for the respondent.
The Judgment of the Court was delivered by
BEG, J.-The Colleetor of Customs, Madras, has· c.ome up, by
11
grant of special leave to appeal, against the judgment of a Division
Bench of the Madras High Court quashing an order of the
Cen~ral
Government which confirmed an order of' the appellant confiscatmg
(
I
A
B
c
D
E
'
F
G
'
H
/
CUSTOMS COLL. V. TARACHAND (Beg, /,)
853
a . large quantity of sewing mai:hine needles. The respondent had
imported the llf!Cl(lles under a liceuce which did not, according to the
case of the Customs' Department, cover the goods imported. A learned
Single Judge of the High Court had set a5ide .a penalty of Rs. 5,000/·
imposed upon the respondent as the sewing needles imported by tlie
petitioner-respondent were not, according to the learned Judge, proved
to belong to the prohibited class, but the confiscation order had, rather
incoosistently, been maintained. On an appeal by the respondent
against the refusal to·quash the confiscation order, the Division Bench
of the Madras High Court came to the conclusion that there was no
prohibition at all as contemplated by Section 3 of the Import Control
Order, 1955, made under Sections 3 & 4A of the Imports & Exports-
(Control) Act, 1947 (hereinafter referred to as 'the Act'), so that no
further questiol). need be considered. The Division Bench, therefore,
did not go into the Other questions raised by the respondent, who wa.•
petitioner before the High Court, relating to violation 6f rules of natural
justice or the merits of the case that the sewing needles imported were ·
covered by the licence. It, therefore, held that the confiscation order
could not stand and bad to be quashed with the penalty.
The Division Bench was of opinion that a prohibition or restriction
authorised by the Act should be imposed by a Control Order such as
the Control Order of 1955 duly notified in tbe official Gazette and not
by any Other means. It held I.hat the prohibition relied upon by the
Customs Department in the instant case did not satisfy this requirement.
Sectioo 3 of the Act reads as follows·:
"3. Powers to prohibit or restrict imports and exports.
( 1) The Central Government may, by order published in tht
official Gazette; make provisions for prohibiting, restricting
or otherwise controlling in all cases or in specified classes of
cases, and subject to Such exceptions, if any, as may be made
by or under the order :-
(a) the import, export, carriage coastwise or shipment
as ships stores of goods of any specified descriptio'!;
(b) the bringing into any port or place in India of gop<ls
of any specified description intended to be taken out
pf India without being removed from the ship or conveyance in which they are being carried.
(2) All goods to which any order under sub-section ( l)
applies shall be deemed to be goods of which the import or
export has been prohibited under section 11 of the CustonLs
Act, 1962 (52 of 1962), and all the provisions of that Act
shall have effect accordingly.
(3) Notwithstanding anything contained in the aforesaid
Act, the Central Government may, by order published in the
Official Gazette, prohibit, restrict or impose conditions on
!lie -clearance, whether for home-· consumption or for sbip·
ment abroad of any goods or class of goods imported inlo
India".
854
SUPREME COURT REPORTS
(1974] 3 S.C.ll.
And clause 3 of the Import Control Order 1955 lays down :
A
"3. Restriction,of Import of certain goods.-(1) Save
as otherwise provided in this Order, no .person shall import
any goods of the description specified in Schedule I, except
under, and in accordance with, a licence or a customs clearance permit granted by the Central Government or by any
officer specified in Schedule 11.
n
(2) If, in. any case, it is found that the goods imported
unc!er a licence do not conform to the description given in
the licence or were shipped prior to the date of issue of the
licence under which they are claimed to.have been imported,
then, without prejudice to any action that mav be 1akei1
against the licensee under the Customs Act, 1962 (52 of
1962), in respect of the said importation, the licence may be
C
treaied as having been utilised for importing the said goods".
Item 288 of Schedule I of the Control Order specifies :
" (a) parts of sewing machines domestic.
(b) Needles for domestic sewing machines".
The case of the Customs ·Department is that the imporied sewing
D
machine needles fall under this description.
The contention is that, as
they were duly notified, no question of any failure to impose a prohibition in accordance with the provisions of the Act arose.
The Division Bench had held :
"Our attention, however, was invited by the learned
Counsel for the Central Government to &ction 3 of the Act
E
and the Import Control Order, 1955. That Section merely
invests the Central Government with power to prohibit, re~
trict or otherwise control specific goods or classes of goods
specified, subject to exceptions.
Such prohibition or restriction should be made by an order published in the official
Gazette.
The Imports Control Order, 1955, as applicabk
to the relevant year, did not specify, as far as our attention
F
was drawn, the goods imported in the instant case. Section 3
in the order does not prohibit the import of any goods whatever, if it is done under a licence. But what it does is to
prohibit a person from importing any goods of the description
specified in Scheudle I, except as specified and permitted by
the proper' authority. It follows, therefore, that there was no
prohibition or restrictio.n during the relevant period to the
Ci
importation of domestic sewing machine needles. The word
'nil' in the policy book does not mean anything in the nature
of prohibition or restriction".
We regret that we are unable to concur with the reasomng of the
Division .Bench.
We find that Section 3 of the Act clearly provides
for prohibition and resrriction of imports and tliat clause 3 of the
ff
Control Order directly prohibits, in unambiguous and mandatory terms,
that "no person shall import any good of the description specified in
Schedule I except under and in .accordance with the licence or a
{
(
,
A
B
c
0
E
F
G
II
CUSTOMS COLL. V. TARACHAND (Beg, /.)
855
Customs clearance p,rmit granted by the Central Govt. or by
any
officer specified in Scliedule 2". This language cannot have a meaning
other than that the prohibition i~ there so long as goods of the description given . in the schedule are not imported in accordance with an
impon licence.
The· case of the Department is that the import licence
ol the respondent does not cover
"needles
for domestic
sewing
machines" which the respondent had imported.
It was urged on behalf of the respondent that it was demonstrated
that the needles actually imported could be used in both domestic and
industrial sewing machines or were interchangeable. According to the
respondent, the prohibition was not meant for such interchangeable
needles which could be used for "domestic" as well as "industrial'"
sewing machines but was confined to needles capable of being used
only !or domestic sewing machines.
This question,
among other
questions, was not specifically considered or decided by the Division
Hench.
The Divi<ion Bench did not consider it necessary to decide
whether any rules of natural justice were violated at the iriquiry held.
If the Customs authorities had not acted in accordance with law in
holding the imported goods t.o be of the prohibited category the High
Court could correct its error of law. If they had violated any rule
of natural justice the case could be remitted to them for decision afresh.
lt is agreed by learned Counsel for both sides that the Division Bench
should decide questions of law left undecided by it ii the Division
Bench was in error in holding, on a preliminary question, that no
prohibitiQn to import needles for domestic sewing machines without
a licence had been imposed at all. As we are of opinion that the prohibition is conditional, in as much as it can be lifted by a licence which
permits it, the real question which will, ultimately, have to be decided
is whether the respondent's licence
covers
the
particular
goods
imported.
Before proceeding further, we may observe
that
there
were
references in \he order of the learned Single Judge as well as of the
Division Bench, to what is known as the "Red Book" containing the
.. Import Trade Control Policy" with regard to various types of goods
including needles for domestic sewing machines.
In the ''Red Book"
the word 'nil' appeared against the item in question in the column for
"policy" for the relevant year.
Therefore, the learned Single Judge
of the Madras High Court had relied upon a decision of this Court in
the Joint Chief Controller of Imports & Exports, ,';fadras v. M/S.
Amichand Mutha etc.(') where it was held (at page 272) :
"The last point urged was that subsequent to October
1957, Government of India changed its policy with respect
to import of fountain pens with which some of the present
appeals are concerned. This it l!'.as urged amounted to a ban
on the import of fountain pens and it would not be open to
the Joint Chief Controller to issue any licence for any period,
be it January-June 1957, after the import of fountain pens
had been banned from Ootober 1957. Now there is· no
II) [1966) I SCR 262 rii 272.
•·
856
SUPREME COURT REPORTS
(1974) 3 S.C.R.
doubt that it is open to the Central Government under s. 3
/I
to prohibit the import of any article but that can only be
done by an order published in the official gazette by the
Central Government under s. 3. The High Court has found
that no such order J!nder s. 3 of the Act has been published.
Nor hos any such order by the Central Government been
brought to our !JOtice. All that has been said is that in the
declaration of policy as to import, the word"nil" appears
B
against fountain pens. .That necessarily dor,i; not amount to
prohibition of import of fountain pens unless there is
an
order of the Central Government to that effect published in
the official gazette. We therefore agree with the High Court
that unless such an order is produced it would be open to the
licensing authority to issue a licenc> for the period of January,
-June 1957 eve,n after October 1, 1957"
C
We do not think that the above mentioned refercn:e to the Rd
Book was at all neceMary here or that a decision in a case where the
Customs authorities relied merely on something found in the Red
Book assists us in the case before us. Here, we have the item No. 288
in Schedule I read with clause 3 of the Control Order which was dilly
published in. the Official Gazette. This had the effect of a eategorieal
D
prohibition against needles satisfying the description but not covered
by a licence. We thi!lk that a reference to the Red Book, in the instant
case, seems to have misled learned Judges in the High Court.
The result is that we hold that there is the required prohibition
against import without licence of needles specified.
Other questions
of law which were not gone into by the High Court can now be ~onE·
sidered and decided bv it. Accordingly, we allow this appeal, set aside
the judgment and order of the Diyision Bench, so that the appeal is
now restored to its original number in the High Court. It may be
heard and decided in accordance with law.
In the circumstances of
the case, we award no costs of the appeal to this Court.
P.B.R.
A μpeal allowed.
I
f