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HIGH COURT OF CALCUTTA
Harries, Banerjee
ASSISTANT COLLECTOR OF CUSTOMS FOR APPRAISEMENT - Appellant
Versus
SOORAJMULL NAGARMULL - Respondent
A. F. O. O. 65 Of 1951
Decided On : FEBRUARY 19, 1952
The Court held that the Assistant Collector of Customs acted in a judicial or quasi-judicial capacity when levying additional duty and imposing a fine for misdeclaration. The Court found that the respondents were not given a fair hearing or any hearing at all and that the Assistant Collector of Customs failed to follow the most elementary rules of natural justice. The Court also held that Section 198 of the Sea Customs Act was not a bar to the proceedings and that the Court had the jurisdiction to issue the writ of certiorari. The Court dismissed the appeal with costs.
Fact of the Case:
The respondents imported oil from America and declared it as spindle oil. The customs authorities tested the oil and found that it was mineral oil, assessable to duty as such. The respondents were asked to pay additional duty and a fine for misdeclaration. The respondents claimed that the oil was spindle oil and that the duty levied was incorrect. The Assistant Collector of Customs held that the oil was not spindle oil and imposed a fine on the respondents.
Finding of the Court:
The Court held that the Assistant Collector of Customs acted in a judicial or quasi-judicial capacity when levying additional duty and imposing a fine for misdeclaration. The Court found that the respondents were not given a fair hearing or any hearing at all and that the Assistant Collector of Customs failed to follow the most elementary rules of natural justice. The Court also held that Section 198 of the Sea Customs Act was not a bar to the proceedings and that the Court had the jurisdiction to issue the writ of certiorari.
Issues: 1. Whether the Assistant Collector of Customs acted in a judicial or quasi-judicial capacity when levying additional duty and imposing a fine for misdeclaration? 2. Whether the respondents were given a fair hearing or any hearing at all? 3. Whether the Assistant Collector of Customs failed to follow the most elementary rules of natural justice? 4. Whether Section 198 of the Sea Customs Act was a bar to the proceedings? 5. Whether the Court had the jurisdiction to issue the writ of certiorari?
Ratio Decidendi: 1. The Court held that the Assistant Collector of Customs acted in a judicial or quasi-judicial capacity when levying additional duty and imposing a fine for misdeclaration because: - Section 182 of the Sea Customs Act provides that in every case, except the cases mentioned in section 167 Nos. 26, 72 and 74 to 76, both inclusive, in which under this Act anything is liable to confiscation or to increased rates of duty, or any person is liable to a penalty, such confiscation, increased rate of duty or penalty may be adjudged by certain officers. - The use of the word "adjudged" suggests that arriving at a decision that goods should be confiscated or that they should bear an increased rate of duty or that a penalty should be demanded is a judicial matter or certainly a matter which requires a judicial approach. - Section 187 provides that all offences against this Act, other than those cognizable under Section 182 by officers of Customs, may be tried summarily by a Magistrate. This suggests that the goods were undoubtedly confiscated under Section 167, item 8 or 37. Contravening that item is referred to in Section. 167 as an offence for which the penalty is confiscation. 2. The Court found that the respondents were not given a fair hearing or any hearing at all because: - The Assistant Collector of Customs informed the respondents that there had been a misdeclaration and that had been discovered as a result of a test. If there had been a misdeclaration the goods were liable to confiscation or the respondents were liable to a fine, the amount of which would be entirely in the discretion of the customs authorities. - The respondents were not shown the results of any test and indeed they requested the authorities on a number of occasions to let them see the test report, but such was never disclosed. - The Court held that merely asking the respondents to forward all correspondence and documents relating to the import of this oil and any evidence which they had corroborating their explanation that it was spindle oil as declared, does not amount to giving these respondents a fair opportunity of meeting the charge that they had misdeclared the oil. 3. The Court held that the Assistant Collector of Customs failed to follow the most elementary rules of natural justice because: - The Court held that the Assistant Collector of Customs failed to follow the most elementary rule of natural justice, namely, giving a person an opportunity of being heard and giving him a fair trial before adjudging him guilty of an offence and fining him a very large sum of money. - The Court found that the Assistant Collector of Customs acted in a manner in which he failed to follow the most elementary rule of natural justice, namely, giving a person an opportunity of being heard and giving him a fair trial before adjudging him guilty of an offence and fining him a very large sum of money. 4. The Court held that Section 198 of the Sea Customs Act was not a bar to the proceedings because: - The Court held that this proceeding was not in respect of anything purported to be done in pursuance of the Act, as what was done was mala fide. - The Court also held that this was not a "proceeding" within the meaning of that word as used in the section. 5. The Court held that it had the jurisdiction to issue the writ of certiorari because: - The Court held that the right to apply to the High Court for a prerogative writ is given by Article 226 of the Constitution, and it appears to me that that right cannot be taken away by any statute because if it was, the courts would be bound to hold such a statute to be ultra vires Article 226. - The Court also held that the proceedings were held to be mala fide and that Section 198 of the Sea Customs Act was no bar to these proceedings.
Final Decision: The Court dismissed the appeal with costs.
( 1 ) THIS is an appeal from a judgment and order of Bose J. dated February 16, 1951 granting a writ of certiorari quashing certain proceedings of the Sea Customs authorities.
( 2 ) THE respondents imported from America certain oil in bulk which was described in the shipping documents as spindle oil. This oil was imported under a license which allowed them so to do. The oil came in two lots of 6500 and 750 drums and it actually arrived in the port of Calcutta on' March 6, 1950. A bill of entry was submitted to the customs authorities and on March 8 the respondents wrote that. on the authorities allowing them to take delivery they would agree to accept the result of the customs test of the samples of the oil which had been taken and to pay any extra duty leviable and any penalty if imposed should it be found from the test that the oil was not such as had been declared. The letter concludes with these words:"in the event of our failure to comply with the above undertaking, we agree to pay on demand (without any prejudice to our right in the matter) any duty and/or penalty (including fines) which may be imposed by you. "
( 3 ) THE respondents claimed that the rate of duty payable was 2 annas 6 pies per gallon under item 27 (8) of the first schedule of the Indian Tariff Act, such being the rate for lubricating oil of the kind imported.
( 4 ) IT appears that on March 16, 1950 the Customs authorities had this oil tested by chemists on their behalf and as a result of such test the authorities on the same. day wrote to the respondents that the oil in question had been misdescribed by the latter and that a chemical test had disclosed that the oil was mineral oil, assessable to duty as such under item 27 (8), (27 (3) ?), first schedule of the Indian Tariff Act the rate being 27 per cent ad valorem. As the misdeclaration involved a loss of Rs. 75,925/- in duty the customs authorities called upon the respondents to show cause why the goods should not be confiscated and a penalty imposed under Section 167, Clause 37 of the Sea Customs Act. The respondents were requested to submit all correspondence and documents connected with the consignment and all the evidence in their possession corroborating their explanation.
( 5 ) ON March 17, 1950 all the documents connected with the consignment were sent to the Customs authorities and on March 23 the respondents wrote that in consideration of the customs authorities allowing them to take immediate delivery of the goods they undertook to produce documents showing the use of the oil as lubricating oil within three months from the date of the letter, failing which they undertook to pay any extra duty or penalty without prejudice to their rights in the matter. The oil was released and the respondents executed a bond by which they bound themselves to pay the value of the goods in certain events. On March 30, 1950 the respondents paid the additional duty levied, namely Rs. 75,925/ -.
( 6 ) ON April 10, 1950 the respondents wrote that they had cleared the goods after paying the additional duty and they requested the customs authorities to forward to them a copy of the test report and further to look into the matter and make the necessary orders for the refund of the additional duty which had been levied.
( 7 ) ON April 24, 1950 the respondents again wrote for a copy of the report of the analyst on this oil and that request was repeated on May 4,1950. On May 22, 1950 the customs authorities replied stating that the work of testing the samples had notbeen finished and the question of granting a copy of the test report would be considered after a final decision was arrived at.
( 8 ) NO copy of this analyst's certificate was sent to the respondents, but on July 25, 1950 it appears that the Chief Chemist of the Central Revenues granted a certificate with respect to this oil. In the view of 'the Chief Chemist, the oil could not be classified as spindle oil as the official specifications r
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