# · 'Ii; HIND TRADING COMPANY v. UNION OF INDIA & ANR

- **Citation:** [1969] 2 S.C.R. 533
- **Court:** Supreme Court of India
- **Decided:** 1968-10-28
- **Bench:** S. M. S!Kri. R. S. Bachawat, K. S. Hegde
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ii-hind-trading-company-v-union-of-india-anr-4562
- **Pages:** 11

## Headnote

Lands Customs Act. 1924, .Ill'. 5(3) and 7(1)-Sea Customs
Act,
1878, s. 167(8)-Foreign Exchang.e
Regulation Act,
1947, s. 23Almport of Chinese Dollars from Tibet via Sikkim-Dollars in two lots
covered by two licences froni Reserve Bank of India-Licences show/I
and duty paid at Land Customs station-Applications made for permits
to allow goods to cross frontier-Subsequently one lot found with wrong
application-Effect-Whether any offence under above provisions com·
mitted-S. 5 (3) of Land Customs Act whether requires permit to ac-
-<·o~Hpa11y goods to ultimate destination--Certiorari to Tribunal when lies.
The appellant imported 1,65,000 pieces Chinese silver dollars from
Tibet through Sikkim State under two Reserve Bank import licences.
As
there were two licences the dollars were divided into two lots.
One lot
bore the mark 'H.D.' and the other 'H.N.' The appellant made two applications bearing Nos. 32 and 34 to the Officer-in-charge, Land Customs Station, for the grant of permits for passing the goods across the frontier. Application No. 32 related to the lot marked 'H.N.' and the application
No. 34 related to the lot marked 'H.D.' On May 16, 1957 the two
consignments arrived at the land customs station, Kalimpong and were
examined and appraised by the land customs
officer-in~charge of the
station.
On the duty being paid, the officer endorsed the applications
certifying that the duty was paid and permitting the import of the goods.
The consignments there were then delivered at Siliguri to the carriers for
carriage by air to Dum Dum. On May 17.
1957 one consignment together with application No. 34 was sent by plane from the Sonapur air-
'Strip and on the same date reached Dum Dum and was delivered to the
appellant at Calcutta. On May 18,
1957 the Range Officer,
Matidhar
seized the second consignment bearing the marks 'H.D.' together with
· application No. 32 when they were aboui to be despatched from the
Sonapur airstrip.
The seizure was made under s. 5 (3) of the
Land
Customs Act on the ground that the mark on the consignment was 'H.D.'
whereas the accompanying import application No. 32 related to the consignment marked 'H.N.' The Collector of Land Customs. Calcutta
after
hearing the appellant held that off enc°' under s. 5 (3) and s. 7 (I) of
the Land Customs Act, 1924. and s. 167(8) read with of the Sea Customs Act. 1878 had been committed by the appellant.
He directed confiscation. of the goods under those sections read with s. 23A of the
Foreign Exchan.ge Regulation Act. 1947.
Departmental remedies having
failed the appellant filed a writ oetition in the High Court.
Anpeal in
this Court was filed by the appellant with certificate.
The questions that
came up for con.;;ideration were inter alia: (i) whether the "ei7ure and
confiscation of the goods was authorised bv s. 5 (3) of the Lan.d Custom-.;
Act, 1924. and (ii) whether the finding that the appellant had committed
offences under that section and other provisions of ]aw v.,ras perverse and
liahle to be quashed.
HELD: (i) Section 5(3) of the Land Customs Act. by itself
doenot reqmre that all imported goods must always at all times, and at all
places be accompanied by a permit. After the permit the goods become a
part and parcel of the mass of other like goods in India. There is no outv
53,
SUPREME COURT REPORTS
[1969] 2 a.c.R.
to keep the permit with the consignment for all times and at all places.
Nor is the importer under a duty to keep the consignment in his hands. He
can sell portions of it to different buyers and obviously he could not give
the permit to every consumer. [540 G-HJ
Before March 29, 1968 when the Central Board of Revenue framed
the Chinese Silver Dollars (Import) Rules, there was no provision in the
Act or Rules in force which required the appellants to keep the permits
at Sonapur airstrip with the dollars seized on that date. Section 5(3)
was not infringed when the carriers did not produce the permit concerning the goods at the Sonapur airstrip on May

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HIND TRADING COMPANY
v.
UNION OF INDIA & ANR.
October 28, 1968
[S. M. S!KRI. R. S. BACHAWAT AND K. S. HEGDE, JJ.]
Lands Customs Act. 1924, .Ill'. 5(3) and 7(1)-Sea Customs
Act,
1878, s. 167(8)-Foreign Exchang.e
Regulation Act,
1947, s. 23Almport of Chinese Dollars from Tibet via Sikkim-Dollars in two lots
covered by two licences froni Reserve Bank of India-Licences show/I
and duty paid at Land Customs station-Applications made for permits
to allow goods to cross frontier-Subsequently one lot found with wrong
application-Effect-Whether any offence under above provisions com·
mitted-S. 5 (3) of Land Customs Act whether requires permit to ac-
-<·o~Hpa11y goods to ultimate destination--Certiorari to Tribunal when lies.
The appellant imported 1,65,000 pieces Chinese silver dollars from
Tibet through Sikkim State under two Reserve Bank import licences.
As
there were two licences the dollars were divided into two lots.
One lot
bore the mark 'H.D.' and the other 'H.N.' The appellant made two applications bearing Nos. 32 and 34 to the Officer-in-charge, Land Customs Station, for the grant of permits for passing the goods across the frontier. Application No. 32 related to the lot marked 'H.N.' and the application
No. 34 related to the lot marked 'H.D.' On May 16, 1957 the two
consignments arrived at the land customs station, Kalimpong and were
examined and appraised by the land customs
officer-in~charge of the
station.
On the duty being paid, the officer endorsed the applications
certifying that the duty was paid and permitting the import of the goods.
The consignments there were then delivered at Siliguri to the carriers for
carriage by air to Dum Dum. On May 17.
1957 one consignment together with application No. 34 was sent by plane from the Sonapur air-
'Strip and on the same date reached Dum Dum and was delivered to the
appellant at Calcutta. On May 18,
1957 the Range Officer,
Matidhar
seized the second consignment bearing the marks 'H.D.' together with
· application No. 32 when they were aboui to be despatched from the
Sonapur airstrip.
The seizure was made under s. 5 (3) of the
Land
Customs Act on the ground that the mark on the consignment was 'H.D.'
whereas the accompanying import application No. 32 related to the consignment marked 'H.N.' The Collector of Land Customs. Calcutta
after
hearing the appellant held that off enc°' under s. 5 (3) and s. 7 (I) of
the Land Customs Act, 1924. and s. 167(8) read with of the Sea Customs Act. 1878 had been committed by the appellant.
He directed confiscation. of the goods under those sections read with s. 23A of the
Foreign Exchan.ge Regulation Act. 1947.
Departmental remedies having
failed the appellant filed a writ oetition in the High Court.
Anpeal in
this Court was filed by the appellant with certificate.
The questions that
came up for con.;;ideration were inter alia: (i) whether the "ei7ure and
confiscation of the goods was authorised bv s. 5 (3) of the Lan.d Custom-.;
Act, 1924. and (ii) whether the finding that the appellant had committed
offences under that section and other provisions of ]aw v.,ras perverse and
liahle to be quashed.
HELD: (i) Section 5(3) of the Land Customs Act. by itself
doenot reqmre that all imported goods must always at all times, and at all
places be accompanied by a permit. After the permit the goods become a
part and parcel of the mass of other like goods in India. There is no outv
53,
SUPREME COURT REPORTS
[1969] 2 a.c.R.
to keep the permit with the consignment for all times and at all places.
Nor is the importer under a duty to keep the consignment in his hands. He
can sell portions of it to different buyers and obviously he could not give
the permit to every consumer. [540 G-HJ
Before March 29, 1968 when the Central Board of Revenue framed
the Chinese Silver Dollars (Import) Rules, there was no provision in the
Act or Rules in force which required the appellants to keep the permits
at Sonapur airstrip with the dollars seized on that date. Section 5(3)
was not infringed when the carriers did not produce the permit concerning the goods at the Sonapur airstrip on May 18, 1957, and the goods
could not be confiscated under s. 5(3). [5'41 CJ
(ii) Nor were the goods liable to confiscation under s. 7(1) of the
Land Customs Act. There was no
evidence to show that the seized
dollars were not covered by licences.
On. the materials on record the
conclusion was irresistible that due to the inad,·ertcnce of the carriers
the permits were inter changed and that application No. 34 was sent with
'H.N.' consignment and application No. 32 was kept with 'H.D.' consignment. No inference of smuggling could be drawn from the fact
that
'H.D.' consignment was found with application No. 32.
In the circumstances the finding that the appellant had smuggled the goods and was guilty
of an offence under s. 7 ( 1) of the Land Customs Act must be characterised
as perverse. [541 D-E; 542 B-CJ
(iii) It was also not proved that the aopeUant committed an.y offence
under ss. 8(1) and 23A of the Foreign Exchange Regulations Act read
with ss. 19 and 167(8) of the Sea Customs Act. Although the offence
under these sections may be proved by circumstantial evidence in
the
present case there was no evidence direct or circumstantial to prove the
offence. [542 DJ
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lssardas Daulat Ram v. Union of India, [1962J Supp, 1 S.C.R, 358,
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referred to.
(iv) Having regard to the facts on the record no tribunal
could
reasonably come to the conclusion that the dollars were liable to confiscation if they properly understood the relevant enactments. In the
circumstances the order of the Collector confiscating the goods was liable
to be quashed by a writ 'of certiorari. [542 F)
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Regina v. Medical Appeal Triburtal, [1957] 1 Q.B. 574, 582, applied.
CML APPELLATE JURISDICTION: Civil Appeal No. 1332 of
1966.
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Appeal from the judgment and order dated August 25, 1964
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of the Punjab High Court, Circuit Bench at Delhi in Letters Patent
Appeal No. 37-D of 1964.
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B. Sen, D. K. Kapur, B. P. Maheshwari and R. K. Maheshwari,
for the appellant.
R. M. Mehta ·and S. P. Nayar, for the respondents.
The Judgment of the Court was delivered by
Bachawat, ;J. The appellant, M/s. Hind Trading Company,
imported 1,65,000 pieces of Chinese Silver Dollars from Yatung
in Tibet to Kalimpong, via Nathula pass am;! Rangpo through
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HIND TRADING co. v. UNION (Bachawat, !.)
Sikkim State under two Reserve Bank import licences dated
April 22, 1957.
As there were two Reserve Bank licences, the
dollars were divided into two lots at Yatung.
Each lot consisted
of 66 bags containing 82,500 dollars. One lot of bags bore the
mark "H.D." and serial numbers 1 to 66, and the other lot bore
the mark "H.N." and srl. nos. 1 to 66.
On May 15, 1957 the
appellant made two applications bearing Nos. 32 and 34 to the
officer-in-charge, Land Customs Station, Kalimpong, for the grant
of permits for passing the goods across the frontier. Application
No. 32 related to the bags marked "H.N." Application No. 34
related to the bags marked "H.D." On May 16, the two consignments
arrived
at
the
land
customs
station,
Kalimpong
and were examined and appraised by the land customs
officer-in-charge of the station. On the duty being paid, the
officer endorsed the two applications, certifying that the duty was
paid and permitting the import of the goods. The consignmflD.ts
loaded in trucks then passed out of the customs house and on the
way to Siliguri were checked at the Teesta Bazar check post at
8.45 p.m. on May 16.
On the night of May 16, they reached
Siliguri and were delivered to M/ s. Amalgamated Transport Co.,
for carriage by air to Dum Dum.
On the morning of May 17,
one consignment of 82,500 dollars packed in 66 bags together with
th6 import application no. 34 was sent by plane from the Sonapur
airstrip to Dum Dum airport and on the same date the consignment reached Dum Dum and was delivered to the appellant at
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Calcutta. On May 18, 1957, the Range Officer, Matidhar seized
the second consignment of 82,500 dollars packed in 66 bags bearing the mark "H.D." together with the application No. 32, when
they were about to be despatched by air from the Sonapur airstrip. The seizure was made under s. 5 (3) of the Land Customs
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Act on the ground that the mark on the bags was "H.D." whereas
the accompanying import application No. 32 related to "H.N."
bags.
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On July 7, 1957, the Collector of Land Customs
Calcutta
issued a notice to the appellant to show cause why the
dollar~
seized on May 18, 1957 should not be confiscated and why a
penalty should not be imposed upon the appellant under ss. 5 (3)
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and 7(_1) of the Land Customs Act, 1924, and section 167(8)
read with s. 19 of the Sea Customs Act, 1878 as made applicable
by s. 23A of the i:oreign Exchange Regulation Act, 1947 as there
was reason to believe that the goods had been imported by the
appella?t by land fro';U Ti!Jet into India on May 16, 1957 through
In do-Tibet border, ( 1) without a valid permit under s. 5 of the
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Land Customs Act, and (ii) without valid permission granted by
the Reserve Bank of India under notification No. F. 3 (84) E.F.
VII/56 dated Ma)'. 4, 1956 issued under sec. 8(1) of the Foreign
Exchange Regulatton Act.
That notification
prohibited the
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SUPREME COURT REPORTS
[i969j 2 s.c.R.;
import lr1to India of silver coins current In the Tibet
re~ion of
Chlrla without the perniissiori of tile Reserve Bank of India. . On
July 30, 1957 the appellant showed cause agaimt the proposed
action by a Jetter stating that the first . consignment . of 82,500
d6llats was packed hi bags fiiafked "H.N." \hat by. inadv:rtence
the carriers M/ s. Amalgarriaied Trarisport to., Had serit import
application .no. 34 with the first consigrinicnt and had kept rl~pli
tation no. 32 with the bags ma.rked "H.,D.", that the two cons1gnm~nts were coviilied by valid Reserve Bank ]icep.ces. and import
passe~. that the seizure of lhe dollars kept .iri "ii.D." pags u11der
s. 5(3) of the Land Custonis Act was not justified and tll.at tHere
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was no ground for confiscating the goods or imposing any penalty.
The appellant was heard by the Collector on August 26, and
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December 11, 1957.
On January IO, 1958, the Collector passed .
an order adjudging that offences under ss. 5 (3) and 7 (1) of the
Land Customs Act ands. 167(8) of the Sea Customs Act, 1878
had been committed and ditectirtg cortfiscation of the goods under
t?ose sections read with s. 23A of the, Foreign Exchange ¥egulal!on Act.
The Collector held that ( 1) the goods were hable to
confiscation under s. 5 (3) of the Land Customs Act as they were
not covered by the accompanying import application no. 32; (ii)
the appellant failed to prove that the first consignment of 66 bags
bore the mark "H.N." or that by inadvertence of the carriers,
application no. 34 had been sent with it, and (iii) had the first
consignment of 66 bags borne the mark "H.N." the Range Officer.
Matidhar and the officers at Dum Dum would !Jave detected and
noted this fact and the appellant could have produced before the
customs officials at Calcutta bags with the mark "H.N." immediately after May 18, 1957.
An appeal against this order was dismissed by the Member, Central Board of Revenue, on May 17,
1958.
A revision petition against the last order was di~missed by
the Secretary to the Government of India, Ministry of Finance,
Department of Revenue on January 16, 1961.
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· Ort November 16, 1962, the appellant filed a writ petition in
the Punjab High Court for quashing the aforesaid decisions and
for setting aside the order of confiscation of the silver dollars.
On May 14, 1964, Shamsher Bahadur, J. dismissed the petition. He
held that there was no error of law apoarent on the face of the
record.
The appellant filed a Letters Patent apoeal against the
order.
On August 25, 1964 the Divisional Bench dismissed the
appeal.
It held that (I) s. 5 (1) of the Land Customs Act, 1924
applied to the case; (2) the fact that the 66 bags bore the mark
"H.D." and the accompanying application no. 32 related to "H.N."
bags showed conclusively that the dollars contained in those bags
were imported without proper licence and imoort permit and without payment of duty and ( 3) the finding of fact that there was
no mistake on the part of the carriers with regard to the despatch
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HIND TRADING co. v. UNION (Bachawat, j,)
537
of the consignments and accompanying documents could not b.:
set aside in a writ application.
fhe present appeal has been ~ed
by the appellant atter obtaining a certificate from the High
Court.
Mr. B. Sen for the appellant contended that the seizure and
confiscation of the goods was not authorized by s. 5 ( 3) of the
Land Customs Act, 1924, ( 2) the finding that the appellant had
committed oHences under that section and other provisions of law.
was perverse and liable to be quashed; and ( 3) the impugned
orders were passed in contravention of the principles of natural
justice.
These contentions were disputed by Mr. R. M. Mehta.
The Land Customs Act, 1924 provided for the levy of dutiej
of customs on articles imported or exported by land from or to
territory outside India.
The Act extended to the whole of India,
( s. 1). Section 2 was the definition section.
Section 3 authorised
the appointment oi land customs collectors and officers.
The
Range Officer, Matidhar, was a land customs officer working under
the Collector of Land Customs, Calcutta, having jurisdiction over
Sonapur where the dollars were seized.
Section 4 authorised the
establishment of la11d customs stations and the determination of
routes by which alone goods imported or exported by land could
pass.
The Central Board of Revenue established Kalimpong as
the land customs station and prescribed the following routes by
which alone dutiable goods could pass out of Tibet into India : (a)
road leadi!_l.g from Yatung (in Tibet) to Kalimpong via Jelapala
pass and Pedong through Sikkim State, (b) road leading from
Yatung (in Tibet) to Kalimpong via Nath_ula pass and Rangpo
through the Sikkim State.
Section 5 provided for permits o'
goods passing across frontier.
Section 6 dealt with personal
baggage.
Section 7 prescribed penalties.
Section 8 prescribed
certain dates and times when the goods were not to be passed. 0
Section 9 made applicable for the p1,1rposes of levy of land customs under the Act certain provisions of the Sea Customs Act
1878 including s. 167(8) with necessary modifications and adapta'.
tions.
Sections 18, 19 and 19A of the Sea Customs Act 1878
and the whole. of the Forei~n Exchange Regulation Act thoug:1
not expressly mcorporated m the Land Customs Act applied of
~heir own force to goods imported or exported by land.
Duty on
imports and exports by land was i~posed by s. 5 of the Indian
Tanff Act, 1934.
The Land Customs Act, 1924 had now been
repealed by the Sea Customs Act, 1962.
It is necessary to read sections 4, 5 and 7 (I ) of the Land
Customs Act, 1924 :-
"Section 4. Establishment of Land Customs Stations
and de!ermination of routes-The Chief Customs
Authonty may,
by notification, in
the Official
Gazette,
538
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SUPREME COURT REl'OR'.IS
[1969) 2 S.C.R.
(a) establish land customs stations for the levy of
land customs in any land customs area, and
(b) prescribe the routes by which alone goods, or
any class of goods specified in the notification may pass
by land out of or into any foreign territory, or to or
from any land customs station from or to any foreign
frontier.
Section 5. Permit for goods passing across frontier-( I) Every person desiring to pass any goods,
whether dutiable goods or not, by land out of or into
any foreign territory shall apply in writing, in such form
as the Chief Customs Authority may by notification in
the Official Gazette prescribe, for a permit for the
passage thereof, to the Land Customs Officer in-charge
of a Land Customs Station established in land customs
area adjoining the foreign frontier across which the
goods are to pass.
(2) When the duty on such goods has been paid
or the goods have been found by the Land Customs
Officer to be free of duty, the Land Customs Officer
shall grant a permit certifying that duty has been paid
on such goods or that the goods are free of duty, as the
case may be:
(3) Any Land Customs Officer, duly empowered
by the Chief Customs Authority in this behalf, may
require any person in charge of any goods which such
officer has reason to believe to have been imported or
to be about to be imported, by land from, or to any
foreign territory to produce the permit granted for such
·goods; and any such goods which are dutiable and which
are unaccompanied by a permit or do not correspond
with the specification contained in the permit produced,
shall be detained and shall be liable to confiscation;
Provided that nothing in this sub-section shall apply to any
imported goods passing from a foreign frontier to a Land Customs Station by a route prescribed in that behalf.
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( 4) The Chief Customs Authority may, by notifiG
cation in the Official Gazette, direct that the provisions
of this section, or any specified provisions thereof, shall
not, in any land customs areas specified in the notification apply in respect of goods of any class or value or
specified.
Section 7. Penajtie:>-(1) Any person whoH
(a) in any case in which the permit referred to in
section 5 is required, passes or attempts to pass any
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mm;· TRADING <:0: v. UNION (Bai:hawat, J.)
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goods by land out of O! in.to. any foreign territ?iY through
any land customs stauon w1'!1out ~uch permit, or · ·
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. (b) conveys or atiempts to conve§ to or from any
foreign territory or to or from 'any -Land Cust.=,s
Station any goods by a route. other than the route,)f
any, prescribed for such passage under this Act, or ·
( c) aids in so passing or conveying any goods,· or
' knowing that any goods have been so passed or con-
. veyed, keeps or conceals such ·goods or permits or pro-
. cures them to be kept or concealed shall be . liable . to
penalty not exceeding, where the goods are not dutiable, fifty or, where the goods or any of them are dutiable, one thousand rupees, and any dutiable ·goods in
respect of which the offence has been committed shall
be liable to confiscation."·
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The scheme cif ss. 4, 5 and 7 ( 1) of the Land Customs Act
with regard to imports by land was as follows : Goods could pass
by land out of foreign territory or from a foreign frontier to a
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land customs station by a prescribed route only, [s. 4(b)J. To
import goods by an unauthorised route or an attempt to do so
was an offence, [s. 7(l)(b)J. No permit could be obtained for
importing goods by an unauthorised route: The goods could be
brought by the tJrescribed route from the foreign frontier to the
land customs station, without a permit [proviso to s. 5(3)J. Sub-
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ject to exemptions, if any under s. 5 ( 4), a permit was required
for the passage of goods through· the _ land customs station.
Passing of goods_ through the. land customs · station without a
permit or an attempt to so pass the ·goods was ·an offence,
Ls. 7(1) (a)J. The importer was required to apply for the {>=it
to the officer-in-charge of the land customs station, [s.·5(l)J. The
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goods were brought to the station for examination and appraisement of duty.
On the duty being paid or on its being found that
the goods were free of duty, the officer issued the permit allowing
the pa5sage of. the goods and certifying that the duty had been
. •- _ paid or the goods were free of duty as the case might be, [ s. 5 ( 1)
and (2)]. Dutiable goods in respect of which an offence was
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committed was liable to confiscation. What is stated above applied
mutatis mutandis to exports by land.
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- - In this setting let us examine the provisions of s. 5(3). That
sub-section required· that all goods imported or about to __ be _
exported must be accompanied by a permit for the passage there- ,
of issue<1 by the officer in charge of a land customs station.· It
was an offence to take the goods through the land customs station
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without a permit. A duly au thorned land customs officer could
enforce this . requirement by as.kin!; any person: in charge of the
goods to produce the permit.· -Dutiable ·goods unaccompanied by
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SUPREME COURT REPORTS .
· [1969)2 s.c.R.
a permit or not -corresponding to _the specificati?ns contained in
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the permit produced had to be detamed and_ was !table to confiscation. It is to be. noticed that the sub-section referred to goods
··unaccompanied by a permit" and to "any person in charge of
any goods." . _It obviously contemp~ated cases wher~ the goods
should be accompanied by the perrmt and the person m charge of
the goods was under a duty to produce the permit. In view of ss; 5
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and 7 ( 1) it was necessary that the goods should be accomp~ed
by a permit when they passed through the land customs station.
Rules under the Act could also prescribe that the goods must be
accompanied by a permit for some time even after such passage.
In such cases s. 5 ( 3) was infringed if the goods were not accompanied by the permit.
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The Central Board of Revenue framed the Chinese Silver
Dollars (Import) Rules on March 29, 1958 in exercise of the
powers conferred by s. 9 ( l) of the Land · Customs -Act, 1924. _
Rule 6(2) provided that on its journey from the Kalimpong land
_
customs station to. its ultimate destination, any consignment of -
chinese silver dollars imported from Tibet into India : must be
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accompanied by a permit, i.e., the importer's copy of the relative ·
import application bearing the endorsement of the officer in
charge of the Kalimpong land customs station• . permitting the
clearance of the consignment.
The permit must be produced at
the land customs check post at Teesta Bazar, along with the con~
signment if the destination was Teesta Bazar or beyond. It must
also be produced on demand by any land customs officer_ at any
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time during the journey of the consignment upto its ultimate destination. · These Rules were framed on the assumption that ind~
pendently of the Rules, the importer was not obliged to keep the
permit with the. dollars after they passed out of the - Kalimpong
land customs station. The Rules were not in force on May 18,
1957_when the dollars were seized by the Range Officer, Matidhar.
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There was no ·provision in the · Act or the Rules in force
_on May 18, 1957 which required the appellant to keep the permit
at Sonapur airstrip with the dollars seized on that date.
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The contention of the Revenue is that s. 5 ( 3) required that all
imported goods must· always, at all times and at all places -be
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accompanied by a permit. - We are unable to accept this conten-.
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tion.
~ter the import, the goods· became a part and parcel of
the mass _ofo_ther like go?ds in India: There was no duty to keep
the permit with the consignment of imported goods for all times·
and at ~II places: Nm: wa;; the importer under a duty ·to keep
the consignment mtact m his hands. -.He could sell portions of it
to different buyers and obviously he could not give the permit to
H
every consumer.
He could import rubies from Burma by land
an~ by_ sea. It was not necessary to keep any permit with.- the
rubies· imported by sea after their. clearance · from· the ·customs
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house.
Nor was the position different 1n case of rubies imported
by land.
A consumer wearing a necklace made of rubies was
not expected to carry the permit for the rubies in her bag.
Under
the Land Customs Act a customs clearance permit was necessary
for the passage of goods imported or about to be exported through
the land customs station.
For this reasons. 5(3) read with s.
7 \ 1) (a) required that the goods so passing through the land
customs station must be accompanied by the permit.
The Rnles
could provide that the imported goods should be accompanied by
the permit even after such passage.
As already stated, the Rules
required that imported chinese silver dollars should be accompanied by the permit during the entire journey up to their ultimate
destination.
In such cases. s. 5 ( 3 I wos infringed if the permit
covering the goods was not produced on demand by any land
customs officer.
Except in such cases, s. 5 ( 3) did not apply, and
it was not necessary to keep the permit with the goods.
We hold
that s. 5 ( 3) was not infringed when the carriers did not produce
the permit covering the goods at the Sonapur airstrip on May 18,
19 5 7 and the goods could not be confiscated under s. 5 ( 3).
Nor were the goods liable to confiscation under s. 7 ( 1) of
the Land Customs Act.
The appellant imported 1,65,000 dollars
from Tibet under two Reserve Bank licences and two import perm its.
There was no distinguishing mark on any dollar.
The
appellant was found in possession of 1,65,000 dollars only.
No
attempt was made to prove that the appellant was in possession
of another consignment of 82,500 dollars.
At the time of import
the dollars were packed in 66 bags marked "H.N." and 66 bags
marked "H.D."
The Range Officer seized 82,500 dollars packed
in 66 bags marked "H.D." There is no evidence to show that the
seized .dollars were not covered by the permits and licences held
by the appellant.
The onus was on the respondents to prove that
the first consignment of 66 bags bore the mark "H.D." Application no. 34 accompanied the first consignment.
There was no
noting cm application no. 34 by the customs officer at Sonapur or
at Dum Dum indicating that they had examined the bags or that
the bags were found to bear the mark "H.D." The summary of
the diary of the Range Officer Matidhar set out in the order of
confiscation does not show that the officer examined the bags. The
note in the diary that the mark checked was "H.D." could have
been made on the basis of the mark "H.D." shown in the accompanying application no. 34~ Before the issue of the show cause
notice on July 17' 1957 the appellant had no occasion to produce
before the constoms authorities any of the 66 bags marked "H.N."
wl11ch had reached Calcutta. No inference has been
drawn
against the appellant from their inability to produce any ·bags
marked "H.N." after July 17. 1957. On the materials on the
record it is impossible to hold that the dollars seized on May 18.
4Sup.C. 1./69- ---2
542
SUPREME COURT REPORTS
[1969) 2 S.C.R.
1957 were smuggled goods.
There was no noting by the customs
officers at Sonapur and Dum Dum on application no. 34. If
the appellant desired to send smuggled "H.D." bags from Sonapur to Dum Dum, they could easily obtain application no. 34
from Calcutta and send it with the consignment seized at Sonapur.
Moreover, the customs officers had not put any mark or initials on
the bags, and there was nothing to prevent the appellant from
putting the mark "H.N." on other bags and using them for the
carriage of the dollars.
The conclusion is irresistible that due to
the inadvertence of the carriers the permits were inter-changed and
that application no. 34 was sent with "H.N." bags and application
no. 32 wa§ kept with "H.D." bags.
No inference of smuggling
could be drawn from the fact that "H.D." bags were found with
application no. 32.
In the circumstances, the finding that the
appellant had smuggled the goods and was guilty of an offence
under s. 7 (I) of the Land Customs Act must be characterized as
perverse.
Nor was it proved that the appellant con1mitted any offence
under ss. 8 ( 1) and s. 23A of the Foreign Exchange Regulations
Act read with ss. 19 and 167 ( 8) of the Sea Customs Act.
An
offence under those sections can be proved by circumstantial evidence, see lssardas Daulat Ram v. Union of India( 1 ). In the
present case there was no evidence either direct or circumstantial
to prove the offence.
The appellant had valid Reserve Bank
licenc~s for the import of 1,65,000 dollars.
·niose licences were
not examined nor seized by the customs officials and no attempt
was made to prove the licences did not relate to the dollars seized
on May 18, 1957. It follows that the dollars were not liable to
confiscation under any provision of law.
Hav.ing regard to the facts on the record no tribunal could
reasonably come to the conclusion that the dollars were liable to
confiscation if they properly understood the relevant enactments.
In the circumstances the order of the Collector confiscating the
goods is liable to be quashed by a writ of certiorari, see Halsbury's
Laws of England, 3rd ed. vol. IT, art. 119, pp. 62-63. In Regina
v. Medical Appeal Tribunal(2 ) the Court held that an assessment
of 20% disablement must, having regard to the facts appearing
on the record, be held to be erroneous in poipt of Jaw and based
upon a misconstruction of Regulation 2(5)
of the National
Insurance (Industrial Injuries) (Benefits) Regulation 1948 and
the award of the Medical Appeal Tribunal was therefore liable to
be quashed by a writ of certiorari. Denning, L. J. observed :-
"No reasonable person, who had proper regard to
regulation 2 ( 5), could have come to such a CQnclusion.
(!) [1962] Supp. 1S.C.R.358.
(2) [1957] I Q.B. 574, 582.
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HIND TRADING co. v. UNION (Bachawat, J.)
543
It is now settled that when a tribunal come to a conclusion which could not reasonably be entertained by them
if they properly understood the relevant enactment, then
they fall into error in point of law : see Edwards (Inspector of Taxes) v. Bairstow, [1956] A.C. 14 : When
the primary facts appear on the record, an error of this
kind is sufficiently apparent for it to be regarded as an
error on the face of the record such as to warrant the
intervention of this Court by certiorari."
This conclusion is sufficient to dispose of the appeal.
It is
therefore unnecessary to examine the contention that the impugned orders were passed in contravention of the principles of natural
C
justice.
In the result, the appeal is allowed with costs.
The order
passed by the High Court is set aside and the writ petition filed
by the appellant is allowed.
The order of confiscation of the
chinese silver dollars is quashed and the respondents are directed
to return them to the appellant.
G.C.
Appeal allowed .