Judgment

SUBBA RAO J. : These four petitions are filed under Art. 32 of the Constitution for quashing the orders of the Assistant Controller of Imports and Exports, the Collector of Customs and Central Excise, Pondicherry, the Board of Revenue, and the Government of India, and for an appropriate direction requiring the respondents to refund the amount realised from the petitioners.

2. Messrs. Universal Imports Agency and the proprietor of the agency are the petitioners in the first three petitioners and Messrs. Victory Traders and the petitioners in the last one. The Chief Controller of Imports and Exports, Pondicherry, the Collector of Customs and Central Excise, Pondi-cherry, the Central Board of Revenue, and the Government of India are the respondents in all the petitions.

3. Messrs. French India Importing Corporation and Messrs. B. S. & Co. intervened in the Writ Petitions.

4. Pondicherry was a French Possession in India. On October 21, 1954 the Government of India and the Government of France entered into an agreement (hereinafter called the Indo-French Agreement), whereunder there was a de facto transfer of the administration of the French Settlements to the Government of India (hereinafter called the merger) as and from November 1, 1954. The de jure transfer was postponed.

5. Messrs. Universal Imports Agency are a proprietary concern registered with the Services Des Contribution, Pondicherry, having its principal place of business at Pondicherry. Sri Mohanlal B. Gandhi is the proprietor of the said Agency. They are established importers and general merchants dealing in ball bearings, mill stores, porcelain ware, glass marbles, beltings and various other goods. They commenced their business at Pondicherry on or about April 14, 1954, under "patente No. 70 of 1954 issued by the Controller of the Contributions Department of the French Government at Pondicherry. In the middle of August 1954, they placed 8 indents with Messrs. Shimada Trading Co., Ltd., Osaka, Japan, for importing porcelain wares, glass marbles and beltings and; the total value thereof amounted to Rs. 57, 41-12-0. About the end of August 1954, they opened three irrevocable Letters of Credit with Messrs. Banque De L Indo-Chine in favour of the said suppliers. The bankers obtained authorization from the Bureau Des Affaires Economique Pondicherry, for the requisite foreign exchange from the open market and sold the same to the petitioners for the amount involved in the Letters of Credit. The petitioners made full payment for the said foreign exchange and the said Bank kept the said foreign exchange and credit irrevocably available with their Overseas Agent at Japan for the benefit of the suppliers against full set of shipping documents. All the said Letters of Credit were valid for three months and under the agreement the suppliers were to ship the goods within the said time. On or about November 1, 1954, the said goods were in different stages of shipment; in some cases they were in the course of shipment, and in others awaiting shipment in a matter of a few days and indeed a large part of the goods had already been placed on board "S. S. Shillong and "S. S. Cambodge and the balance of the goods were in the course of being loaded in "S. S. Sunda . In January and February, 1955 and thereafter the goods arrived at the Port of Pondicherry. The Collector of Customs confiscated all the goods on the ground that they were imported without a licence and gave an option to the petitioners to pay in the lien of confiscation fine amoiunting to Rs. 30,390/-. The petitioners took up the matter with the Government of India without any success and finally they paid the said penalty under protest and cleared the goods.

6. On or about September 1954 the petitioners placed several indents with their overseas suppliers, Messrs. Shimada. Trading Co., Limited, Osaka, Japan, and others and the total C. I. F. value thereof amounted to Rs. 40, 470-14-0. They arranged for the full pay