Bombay High Court
Kantilal Nanchand And Co. vs S.C. Roy, Addl. Collr. (P), C. Ex, Bombay on 12 September, 1978
Author: D.P. Madon
Bench: D.P. Madon
JUDGMENT Madan, J.
1. This Petition under Article 226 of the Constitution of India challenges the legality of an order of confiscation and of personal penalty passed by the Additional Collector (Preventive), Central Excise, Bombay, the First Respondent herein.
2. At all material times the First Petitioner firm carried on business inter alia as jewellers at a shop situated at Mumbadevi Road, Bombay 3. The original Second Petitioner, Kantilal Nanchand Shah, and his son Ashok, who is the Third Petitioner, were two of the partners in the said firm. According to the Petitioners, the other partners were Nanchand, Naichand, the father of Kantilal and Naresh Kantilal. During the pendency of this Petition Kantilal died and his legal representatives other than the Third Petitioner have been added as petitioners, being Petitioners Nos. 2(a) to 2(f).
3. By Act 12 of 1969 certain amendments were made to the Customs Act, 1962 (52 of 1962) with effect from January 3, 1969. Amongst amendments so made was the insertion of a new Chapter, namely, Chapter IVB, in the said Act headed "PREVENTION OR DETECTION OF ILLEGAL EXPORT OF GOODS". This Chapter consists of six sections, namely, sections 11H to 11M. Section 11H is the definition section. Clauses (c), (d) and (e) of that section define "specified area", "specified date" and "specified goods" respectively. These clauses provide as follows -
"11H Definitions. - In this Chapter, unless the context otherwise requires, -
(c) "specified area" includes the Indian customs waters, and such inland area, not exceeding one hundred kilometres in width from any coast or other border of India, as the Central Government may, having regard to the vulnerability of that area to smuggling, by notification in the Official Gazette, specify in this behalf :
Provided that where a part of any village, town or city falls within a specified area, the whole of such village, town or city shall, notwithstanding that the whole of it is not within one hundred kilometres from any coast or other border of India, be deemed to be included in such specified area :
(d) 'specified date', in relation to specified goods, means the date on which any notification is issued under Section 11-I in relation to those goods in any specified area;
'specified goods' means goods of any description specified in the notification issued under Section 11-I in relation to a specified area."
4. Section 11-I confers upon the Central Government the power to specify, by notification in the Official Gazette, goods of such class or description which the Central Government, having regard to the magnitude of the illegal export of goods of any class or description, is satisfied that it is expedient in the public interest to take special measures for the purpose of checking the illegal export or facilitating the detection of such goods which are likely to be illegally exported. Under sub-section (1) of Section 11-J an obligation is cast upon every person who owns, possesses or controls on the specified date any specified goods, the market price of which exceeds fifteen thousand rupees, to deliver within seven days from the date on which any notification is issued an intimation containing the particulars of the place where such goods are kept or stored within the specified area. Under sub-section (2) of Section 11-J every person acquiring within the specified area after the specified date any specified goods, the market price of which or the market price of which together with the market price of any specified goods of the same class or description, if any owned, possessed or controlled by him on the date of such acquisition exceeds fifteen thousand rupees, is, before making such acquisition, to deliver to the proper officer an intimation containing the particulars of the place where such goods are proposed to be kept or stored after such acquisition. Under sub-section (3) of Section 11-J any person intending to shift any specified goods, to which sub-section (1) or sub-section (2) applies, to any place other than the intimated place, is, before taking out such goods from the intimated place, to deliver to the proper officer an intimation containing the particulars of the place to which such goods are proposed to be shifted. Sub-section (4) of Section 11-J prohibits a person from keeping or storing any specified goods, to which either sub-section (1) or sub-section (2) applies, at any place other than the intimated place. Section 11K prohibits the transport of specified goods from, into or within any specified area or loaded on any animal or conveyance in any such area, unless they are accompanied by a transport voucher in a prescribed form prepared by the person owning, possessing, controlling or selling such goods, except where the transport is within a village, town or city, of any specified goods, the market price of which on the date of the transport does not exceed one thousand rupees. Under Section 11L every person who, on or after the specified date, owns, possesses or controls within a specified area any specified goods of a market price exceeding fifteen thousand rupees, is to maintain a true and complete account of such goods in such form and in such manner as may be specified by rules made in that behalf and is further required, as often as he acquires or parts with any specified goods, to make an entry in the said account in relation to such acquisition or parting with. In such a case he is further to state the particulars of the person from whom such goods have been acquired or in whose favour such goods have been parted with. Section 11M requires every person who sells or otherwise transfers within any specified area any specified goods to obtain on his copy of the sale or transfer voucher the signature and full postal address of the person to whom such sale or transfer is made, except where he receives payment by cheque drawn by the purchaser. He is also required to take such reasonable steps as may be specified by rules made in that behalf to satisfy as to the identity of the purchaser or the transferee. This section contains an exception in cases of petty sales of any specified goods if the aggregate market price obtained by such petty sales made in the course of a day does not exceed two thousand and five hundred rupees.
5. Section 113 of the Customs Act sets out the cases in which export goods are liable to confiscation. Clause (1) of that section provides as follows :-
"113. Confiscation of goods attempted to be improperly exported, etc. -
The following export goods shall be liable to confiscation :-
(1) any specified goods in relation to which any provisions of Chapter IVB or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened."
6. The material provisions of Section 114 of the Customs Act are as follows :-
"114. Penalty for attempt to export goods improperly, etc. -
Any person who, in relation to any goods does or omits to do any act which act or commission would render such goods liable to confiscation under Section 113, or abets the doing or omission of such an act, shall be liable, -
(i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding five times the value of the goods or one thousand rupees, whichever is the greater;"
7. Section 119 provides as follows :-
"119. Confiscation of goods used for concealing smuggled goods. -
Any goods used for concealing smuggled goods shall also be liable to confiscation.
Explanation. - in this section 'goods' does not include a conveyance used as a means of transport."
8. By Notification No. 8-Cus., dated January 3, 1969, the Central Government, in exercise of the powers conferred upon it by clause (c) of Section 11H of the Customs Act, specified the inland area fifty kilometres in width from the coast of India falling within the territories of the States of Gujarat, Kerala, Maharashtra and Mysore and the Union Territory of Goa, Daman and Diu as specified area for the purposes of the said Act. On the same day two other Notifications were issued by the Central Government. These Notifications are as follows :-
"Notification No. 7-Cus., dated January 3, 1969. -
Whereas the Central Government, having regard to the magnitude of the illegal export of the goods mentioned in the Schedule hereto annexed is satisfied that it is expedient in the public interest to take special measures for the purpose of checking the illegal export of the said goods, and facilitating the detection of the said goods which are likely to be illegally exported;
9. Now, therefore, in exercise of the powers conferred by Section 11-I of the Customs Act, 1962 (52 of 1962), the Central Government hereby specifies the goods mentioned in the said Schedule as the goods with respect to which special measures for the purpose of checking their illegal export and facilitating the detection of the said goods which are likely to be illegally exported, shall be taken.
1. Silver bullion and coins."
"Notification No. 9-Cus., dated January 3, 1969. -
In exercise of the powers conferred by sub-section (2) of Section 11K of the Customs Act, 1962 (52 of 1962), the Central Government hereby specifies silver bullion and coins as goods for the purpose of clause (i) of that sub-section and directs that no such goods, the aggregate market price of which exceeds one thousand rupees, shall be transported from, into or within any area specified under Section 11H of the said Act unless the transport voucher under sub-section (1) of the said section 11K has been counter-signed by the proper officer.
Provided that no such counter-signature shall be necessary in respect of transportation of any such goods, -
(i) during the hours from 9 a.m. to 8 p.m. from one place to another in the same city, town or village, as the case may be; or
(ii) consequent on a sale or transfer made by a dealer or refiner of such goods if the market price of the goods so sold or transferred does not exceed five thousand rupees.
This notification shall come into force on the 10th January, 1969."
10. According to the allegations made in the Petition, the First Petitioner firm purchased on or about May 24, 1969 in the normal course of its business various silver articles of the value of Rs. 3,70,000/- weighing about 741.088 Kgs. The Petition alleges that all these transactions were entered in the First Petitioner firm's Rojmel and purchase vouchers. It is further the case of the Petitioners that on May 24, 1969 they sold to one Messrs Sun Shine Traders some of the silver articles so purchased by them and that in respect of other silver articles so purchased the Petitioners had decided to send them for sale to one Manubhai Chhaganlal Dosalbhai of Ahmedabad as in the month of May, 1969 the Petitioners had come to know from the said Manubhai that there was a better market at Ahmedabad for silver articles. It is further alleged in the Petition as the margin of profit was likely to be neutralised in the transport charges, the petitioners decided to send the said silver articles by Angadia Service and that for the said purpose the Third petitioner personally went on that day to the firm of Messrs Kantilal Somabhai Angadia, who are doing the business of Angadia Service between Bombay and Ahmedabad and met the Mehtaji of the said firm of Angadia Service and inquired about the charges of the carriage of the said silver articles to Ahmedabad. At that time the Third petitioner was inter alia told that if the goods were delivered before 5.30 p.m. they would be dispatched on the same day to Ahmedabad. The petition then alleges that in view of the difference between the carriage charges for silver articles and for machinery involved in transport by Angadia Service, it was decided to declare the goods in question as machinery and that the said silver articles were put in 24 wooden boxes and dispatched to the said firm of Messrs Kantilal Somabhai Angadia. The Mehtaji of the First Petitioner firm, one Dhirajlal Jivanlal Shah went with the said goods. The said Dhirajlal was to pay the Angadia's charges for the carriage of goods as also to deliver a letter addressed to the consignee, namely, the said Manubhai. Dhirajlal had also taken with him a copy of the letter which was to be delivered to the consignee for the purpose of taking the signature of the Angadia on it. The Mehtaji of Angadia Service, however, informed the said Dhirajlal that as the goods were received after 5.30 p.m. the same could only be sent on Monday the 26th May, 1969, and for this reason the said Dhirajlal did not deliver to the Angadia's Mehtaji the letter addressed to the consignee. It appears that he also did not obtain the signature of the Angadia's Mehtaji on a copy of the said letter. It further appears that officers of the Central Bureau of Investigation, Bombay, had received information on May 26, 1969 that about 20 to 25 boxes containing unaccounted silver of the value of about Rs. 4 lakhs were stored in the office of Messrs Kantilal Somabhai Angadia that they were meant for being transported to Ahmedabad. The said officers conveyed this information to the Customs and Central Excise officer of the Marine and Preventive Division, Bombay. The premises of the said Messrs Kantilal Somabhai Angadia were thereupon searched and the said 24 wooden boxes were seized and taken charge of in the presence of Panchas. On the next day, that is on May 27, 1969, the premises of the First Petitioner firm were also searched, and account books, transport vouchers and other records, including the original of the said letter addressed the said Manubhai of Ahmedabad, were seized and taken charge of under a Panchnama by the officers of the Central Excise. A summons under Section 108 of the Customs Act was thereafter served upon the original second Petitioner as also the third Petitioner and their statements were recorded. The Statements of original second Petitioner were recorded on May 28, 1969 and July 3, 1959 and of the third Petitioner on May 28, 1969, April 6, 1970 and April 7, 1970. Statements of the said Dhirajlal and the Mehtaji of the said firm of Angadia Service and of the said Manubhai of Ahmedabad were also recorded. A Panchnama in respect of the seized silver articles was also made on May 1, 1970.
11. On May 23, 1970 a show cause notice was issued to the original second Petitioner and the third Petitioner. By the said notice they were called upon to show cause why the said seized articles should not be confiscated. In the said show cause notice it was alleged that the silver statues, thalis and kadas out of the said articles seized were bullion within the meaning of the said term in the said Notification No. 9-Cus., dated January 3, 1969 and that the other pieces of silver were classifiable as silver and were concealed in the said wooden boxes with silver spoons in the form of scrap and were, therefore, used for concealing smuggled goods consisting of silver bullion in the form of statues, thalis and kadas and were liable to be confiscated along with the wooden boxes in which they were put inasmuch as the said petitioners had not maintained the accounts in respect of the said seized silver as required by Section 11L(i) of the Customs Act and as they had also contravened the provisions of Sections 11-J(i) and 11-J(ii) of the said Act. By their attorneys' letter dated July 6, 1971 addressed to the Additional Collector (Preventive), Central Excise, Bombay, the original second Petitioner and the third Petitioner pointed out that no extension order under Section 110(2) of the said Act had been served upon them and that no notice or opportunity was given to them prior to the issue of such an order, if one had in fact been passed. They further contended that in view of the judgment of the Supreme Court in Civil Appeal No. 1056 of 1967, Assistant Collector of Customs v. Charandas Malhotra the seized goods had become liable to be returned, and they called upon the Additional Collector of Customs to return the seized goods to them. It appears that an order of extension was in fact passed by the Collector of Central Excise & Customs, Bombay on November 3, 1970. The Additional Collector before whom the matter was pending was then transferred and the case was then posted before the second Respondent, his successor in office, for adjudication.
12. It may be mentioned at this stage that the silver articles seized consisted of a number of plates, glasses, spoons, thalis, kadas, statues of a female, of Rabindranath Tagore, of an elephant and of a rhinoceros and some small pieces of silver scrap. At the hearing before the second Respondent on November 10, 1971 the original second petitioner and the Third Petitioner produced three witnesses. They were Parsuram Haribhai, Pannalal C. Rathod and Pratapbhai B. Gandhi. Parsuram Haribhai has been described by the second Respondent in the heading to his statement as "an expert on silver articles". His statement shows that he was in the silver trade for 25 years, and in the course of his said business he purchased silver bullion and converted them into silver articles. His statement further shows that the seized articles were shown to him, and he has stated that they were statues, thalis, kadas, basulees and broken articles in twisted form. He has further stated that he did not call these articles bullion or coins, and with respect of thalis he called the said articles broken or damaged thalis and not scrap. The next witness Pannalal C. Rathod, deposed that he worked in the firm of Messrs. Sanghavi Dhanruprai Devaji and Company of Bombay which made ornaments in silver and that he had been in the silver line for eight years as a salesman. He further stated that he was familiar with kadas and basulees only and that the other articles shown to him could be said to be statues of elephants, thalis etc. but he did not consider any of these articles as bullion or coins. The third witness, Pratapbhai B. Gandhi was working with the firm of Messrs Pratap and Bros. He said that the said Messrs Pratap and Bros. were dealers in silver articles only and that they purchased silver bullion and converted them into silver articles and that he had been in this trade for about 25 years. The seized articles were shown to him and he said that they were statues, thalis, kadas, basulees and, twisted glass, plates, etc. and that he did not consider them either as bullion or coins and that the twisted articles could not be called scrap.
13. On January 28, 1972 the First Respondent passed his impugned order. By the said order the First Respondent ordered the confiscation of statues, plates and kadas under Section 113(1) of the Customs Act on the ground that there were silver bullion in the shape of statues, plates and kadas. With respect to the wooden boxes and the remaining silver articles, weighing 10,730 Kgs. which consisted of twisted and broken spoons, glasses, thalis and scrap sheets, he held that they were used for concealing smuggled goods, and he ordered their confiscation under Section 119 of the said Act. He, however, gave to the original second Petitioner and the third Petitioner an option to redeem them on payment of a fine of Rs. 5,000/-. He further imposed a personal penalty of Rs. 50,000/- on each of them. In arriving at his conclusion that the said statues plates and kadas were bullion, the Additional Collector relied upon his visual inspection of the said articles and upon the said Panchanama made on May 1, 1970. According to him, these articles were not fully manufactured, the statues were too heavy and could not serve the purpose of an article of art or decoration and that some piece had been cut from some of them for the purpose of testing. He accordingly held that the statues were not genuine articles and were not intended to be used as such and were in fact silver bullion within the meaning of the said term in the said Notification No. 7-Cus., dated January 3, 1969. He came to the same conclusion with respect to the plates and the kadas. He came to the conclusion that the kadas were excessively heavy and any woman who wore them would break her neck bone or ankle bone, as the case may be. The ground upon which the imposed penalty on the original second Petitioner and the third Petitioner was that according to him they had admitted that they had purchased the said articles and that they had not observed the provisions of "Section 11-J(2), 11-L(1), etc." of the Customs Act. What sections the word 'etc.' stands for in the said order has not been set out therein. On the same day notices were issued by the Superintendent, Customs Flying Squad, Bombay, the second Respondent calling upon the original second Petitioner and the third Petitioner to pay the amount of personal penalty within one month. It appears that a show cause notice had also been issued against the said Angadias, but the benefit of the doubt was given to them and the notice against them was discharged. It is against this order of confiscation and levy of penalty that the present Petition has been filed.
14. The main contention of the Petitioners is that by giving to the term 'bullion' an artificial meaning the first Respondent has acted unreasonably and perversely and has thereby assumed jurisdiction which he would not have otherwise possessed. In the Petition the Petitioners have also challenged the validity of the first Respondent's impugned order on the ground that the order of extension passed by the Collector of Central Excise & Customs, Bombay, on November 3, 1969 under Section 11D(2) of the Customs Act was passed without giving them notice and without hearing them and that, therefore, the inquiry which was held on the basis of the said order of extension was vitiating. This point was not urged before me at the hearing.
15. Thus, the main question which arises for determination in this petition is whether the seized articles consisting of statutes, plates and kadas were silver bullion; for, it is not disputed that if they were not silver bullion the first Respondent would have no jurisdiction or power to order them to confiscated or to levy any penalty upon the original second Petitioner and the third Petitioner. The Notification under Section 11 of the Customs Act which I have reproduced above uses the expression "Silver bullion and coins". The expression "silver bullion" is not defined either in the Customs Act or by the said Notification. Therefore to ascertain the meaning of the expression "silver bullion" as used in the Notification the first Respondent has turned to the Statement of Objects and Reasons given by the Finance Minister when he introduced the Bill which finally become the Amending Act 12 of 1969. After setting out and the Statement of Objects and Reasons the first Respondent has stated in his said order as follows :
"It is, therefore, clear that the amendment was warranted because of large scale smuggling of silver out of the country etc. and the object of incorporating Chapter IVB in the Customs Act was to prevent such smuggling and to facilitate detection and confiscation. It is also clear that only genuine articles and ornaments meant to be used for genuine purposes are excluded and not those articles and ornaments which by some device are made to look like silver articles and silver ornaments, but which are not intended to be used as such and which, in effect, remain 'silver bullion'. Therefore, the term 'silver bullion' for the purposes of the above notification will have to be understood in this context."
16. In my opinion, the approach adopted by the first Respondent to ascertain the meaning of the expression "silver bullion" used in the said Notification is unwarranted and unjustified in law. It is now well-settled by judicial decisions that when an expression is not defined in a Statute, the meaning to be given to it is the one which it has in popular or trade parlance. This question has usually come up before Courts with reference to the terms used in entries to Schedules to Act and in Notifications issued under various Acts. In H. R. Syiem v. P. S. Lulla, (1970) 72 Bom. L.R. 534, the question was whether black insulating tapes fell within the meaning of expression "adhesive tape" in entry No. 38 in Part II of the Import Policy Statement in the "Red Book". K. K. Desai, J. held that they did not. In appeal, which was heard by Tarkunde and Vimadalal, JJ, Tarkunde, J. took the same view as K. K. Desai, J. did, while Vimadalal, J. took the contrary view. Kotval, C.J. agreed with Tarkunde, J. In the course of his judgment he observed (at pp. 561-2) :
"... In interpreting these entries or any of the columns of the I.T.C. (that is Import Trade Control) Schedule I do not think that the scientific meaning which can be attached to the various entries should be read into the entries. Rather it appears to me that these entries were made having regard to the custom or practice of the particular trade or industry in which the articles are used and that the enumeration and classification of the various articles of commerce is in the sense in which they are popularly understood in the market, that is to say, by persons engaged in and used to trading in that article."
17. In Commissioner of Sales Tax v. Dawoodbhoy M. Tayabally, (1975) 36 S.T.C. 291, a Division Bench of this High Court held that the question as to what is the meaning to be given to a term used in an entry in a Schedule to the Bombay Sales Tax Act, 1959, had to be gathered from the trade parlance or the common parlance in trade and that the question as to what is the meaning to be given, to a term used in an entry in common parlance is a question of fact to be determined on evidence, and in the absence of such evidence the entries could be construed according to their dictionary meaning. This view was reiterated in Commissioner of Sales Tax v. Associated Dental & Medical Supply Co. (1976) 37 S.T.C. 336, and in Commissioner of Sales Tax v. Telco Industries, (1976) 38 S.T.C. 93.
18. September 12, 1978 :
19. In State of Uttar Pradesh and another v. Kores (India) Ltd. the Supreme Court had to consider two questions; (1) whether carbon paper was paper falling within the purview of the word and 'paper' as used in entry No. 3 of the Notification dated July 1, 1966 issued by the Government of Uttar Pradesh in exercise of the powers conferred upon it by Section 3-A of the U.P. Sales Tax Act, 1948, so as to be liable to sales tax at the point and at the rate specified in the Schedule to the said Notification, and (2) whether ribbon was an accessory or a part of the typewriter. The Supreme Court held that a word which was not defined in an enactment had to be understood in its popular commercial sense with reference to the context in which it occurred. Proceeding upon this principle the Court held that the word 'paper' formed part of the denomination of a specialised article and that it was not decisive of the question whether the article was paper as generally understood. It further held that the word 'paper' in the common parlance or in the commercial sense meant paper which was used for printing, writing or packing purposes and, therefore, carbon paper was not paper as envisaged by entry No. 2 of the said Notification. Applying the same principle Their Lordships of the Supreme Court came to the conclusion that ribbon was an accessory and not a part of the typewriter. In Commissioner of Sales Tax, U.P. v. S.N. Brothers, (1973) 31 S.T.C. 202 S.C. the Supreme Court had to decide with reference to food colours and syrup essences whether food colours were dyes and colours and compositions thereof so as to fall under entry No. 10 in the List appended to the relevant Notification under Section 3-A of the U.P. Sales Tax Act, 1948 and whether syrup essences were "Scents and perfumes" within the meaning of that expression in entry No. 37 of the said list. The Supreme Court observed (at p. 306) :-
"In our opinion the Random House Dictionary cannot serve as a safe guide in construing the words used in the List in the notification in question for the purpose of deciding whether or not the words used in entries Nos. 10 and 37 cover food colours and syrup essences; indeed this dictionary is apt to be a somewhat delusive guide in understanding the meanings of the words and expressions with which we are concerned in the context in which they are used. This dictionary gives all the different shades or meanings attributable to the words referred but that is hardly helpful in solving the problem raised in the present controversy. The words 'dyes and colours' used in entry No. 10 and the words 'scents and perfumes' used in entry No. 37 have to be construed in their own context and in the sense, as ordinarily understood by persons conversant with and dealing in such goods. Similarly, the words 'food colours' and 'syrup essences' which are descriptive of the class of goods the sales of which are to be taxed under the Act (that is, the U.P. Sales Tax Act, 1948) have to be construed in the sense in which they are popularly understood by those who deal in them and who purchase and use them." Dunlop India v. Union of India and Others A.I.R. 1977 S.C. 597 = 1983 E.L.T. 1566 (S.C.) was a case under the Indian Tariff Act, 1934. The question before the Court in this appeal by special leave under Article 136 of the Constitution, was whether V.P. Latex was "rubber raw" taxable under item No. 39 of the First Schedule to the Indian Tariff Act or whether it fell under the residuary entry No. 87. The Supreme Court held that meanings given to articles in a fiscal statute must be as people in trade and commerce, conversant with the subject, generally treat and understand them in the usual course, but once an article was classified and put under a distinct entry, the basis of the classification was not open to question. The Court further held that technical and scientific tests offered guidance only within limits and that once the articles were in circulation and came to be described and known in common parlance, then there was no difficulty for classification under a particular entry.
20. I will now turn to the cases in which the word 'bullion' has come up for interpretation before the Court. In Sri Akhrai Parekh v. The State of Andhra Pradesh, (1960) 11 S.T.C. 483, a Division Bench of the Andhra Pradesh High Court held that the expression "gold or silver bullion" in Section 6 of the Hyderabad General Sales Tax Act, 1950, connoted only pure gold or silver and it did not take in gold or silver mixed with copper or lead. In arriving at this conclusion the Court relied upon the meaning of the word 'bullion' given in the Oxford Dictionary and in Wharton's Law Lexicon. With reference to one of the meanings given in the Oxford Dictionary, namely "impure gold or silver", the Court observed that it was synonymous with gold or silver ore before it was refined. The Mysore High Court also had to consider the meaning of the word 'bullion' used in entry No. 74 of Schedule II to the Mysore Sales Tax Act, 1957, in Causra Jewellery and others v. Commercial Tax Officer, South Kanara (1962) 13 S.T.C. 668. Dissenting from the view taken by the Andhra Pradesh High Court, the Mysore High Court held that the expression 'bullion' in entry 74 could not be given and did not possess any scientific meaning and the only meaning which could be given to it was either the meaning which was ordinarily given to it or the technical meaning which was given to it by traders. The Mysore High Court further held that whether the expression 'bullion' was given the popular meaning or the meaning given to it in trade, that expression meant not only pure gold or silver but also an alloy of gold or silver with such small percentage of some other metal as did not take away from it the character of bullion. The view taken by the Mysore High Court was adopted by the Madras High Court in P. A. R. Vishwanathan and Company v. The State of Madras, (1963) 14 S.T.C. 702. In all these cases the articles in question were gold in the form of scrap or ingots but not ornaments or other articles. In Commissioner of Sales Tax v. Ravindra Heraous Ltd. (1978) 42 S.T.C. 66, a Division Bench of this High Court had to consider in a reference made under the Bombay Sales Tax Act, 1959, whether the word 'bullion' in entry No. 1 of Schedule 8 to the Bombay Sales Tax Act, 1950, included platinum. The Court held that the conclusion of the Tribunal that platinum was covered by the scope of the word 'bullion' as used in the said entry, without there being any evidence as to the common parlance or the trade parlance meaning of the term "bullion', was not correct in law.
21. The position that a word which is statutorily defined must bear the meaning it has in common or trade parlance is thus well-settled. This principle of construction has, however, been completely ignored by the First Respondent who has chosen to proceed upon the Statement of Objects and Reasons to the Customs Act. In doing so the First Respondent has overlooked that it is now well-settled by decisions, including those of the Supreme Court, that a Statement of Objects and Reasons accompanying a Bill when introduced in Parliament cannot be used to determine the true meaning and effect of the substantive provisions of a statute nor can it be used except for the limited purpose of understanding the background and the antecedent state of affairs leading to the legislation, but it cannot be used as an aid to the construction of an enactment. He has forgotten that a statute, as passed by the Parliament, is the expression of the collective intention of the legislature as a whole, and any statement made by an individual of the intention and objects of the Act cannot be used to cut down the generality of the words used in the statute or conversely to erdarge it. It is needless to cite all the authorities on this proposition. Suffice it to refer to but one of them, namely, State of West Bengal v. Union of India, .
22. Let us now see what the position would be if the popular or trade parlance test were applied to the present case. The Petitioners had led the evidence of three witnesses Parsuram Haribhai, Pannalal Rathod and Pratapbhai Gandhi. Their statements recorded by the first Respondent have already been referred to by me earlier. Each of these persons was in the silver trade. One of them, namely, Parsuram Haribhai, has been described by the first Respondent himself as "an expert on silver articles". Each one of them has opined that the silver articles in question could not be considered as bullion or coins. Not a single question has been asked to these witnesses on behalf of the Department. The first Respondent merely dismissed their evidence by stating that they did not have a close look at the statues nor did they lift up the statues and that they had merely opined that the statues were not bullion. He has further said that the Petitioners' advocate had avoided asking any question to these witnesses on the crude and unpolished character, of the statues, thalis, etc. It is somewhat strange to read these observations of the first Respondent. There was nothing to have prevented the Department from asking these questions. The first Respondent's observation that these witnesses did not have a close look at the articles also makes strange reading, because in their statements recorded by the First Respondent himself it is clearly stated that these articles were shown to these witnesses. As against the uncontradicted evidence of these three witnesses, the Department has led no evidence to show that anyone in the trade would consider any of these articles as bullion. The burden of proving that these articles were bullion lay upon the Department inasmuch as Section 123 of the Customs Act, 1962, admittedly did not apply. This position has been accepted by the First Respondent in his impugned order. All that the First Respondent has relied upon is the panchanama of May 1, 1970. A copy of this panchanama has been put in by consent and is exhibit A. There were two panchas for that panchanama, Samul Singh and Mohammed Abdul. The occupation of both of them is stated to be business, but what business they were actually carrying on is, however, not mentioned. There is nothing to show that either of them had any connection with silver or bullion trade or were in any way experts in silver ornaments or in bullion. They have purported to describe the appearance of these articles. The panchanama also records the weight of these articles. This was thus a panchanama about the weight of these articles. It is nowhere stated in the said panchanama that these articles were bullion. All that is stated is that the articles were of an excessive weight and were unpolished. It is also pertinent to note that the statements of these two panchas were at no time recorded by the Department. They were merely panchas who witnessed the weighing of these articles and were not witnesses. It may also be mentioned at this stage that during the hearing of this Petition learned Counsel for the Respondents voluntarily produced these articles before the Court. After producing them he was hard put to support what had been said about the appearance of the statues and the kadas in the said panchanama and in the impugned order, and ultimately gave up the attempt. Thus, the record before the First Respondent clearly shows that these articles were not bullion and could not be and were not considered as bullion by people in the trade.
23. In view of this position, it is really unnecessary to refer to the dictionary meaning of the word 'bullion', but even if one were to refer to the dictionary meaning, none of the dictionaries shown to me in any manner support the contention of the Respondents. In the Concise Oxford Dictionary "bullion" is defined as "Gold or silver before coining or manufacture". Webster's Third New International Dictionary defines 'bullion' as "uncoined gold or silver in the shape or bars, ingots, or comparable masses". The Random House Dictionary also defines 'bullion' as "gold or silver in the form of bars or ingots". The definition given in Jowitt's Dictionary of English Law is as follows :
"Bullion - uncoined gold and silver in the mass. These metals are called so, either when smelted from the native ore, and not perfectly refined, or when they are perfectly refined, but melted down into bars or ingots, or into any unwrought body, of any degree of fineness."
24. Neither the decision of any Court nor any dictionary nor any evidence in case shows or even suggests that an article or ornament made from silver, even if it be crude and unpolished, is bullion or can be regarded or considered as bullion. In ignoring all well-settled principles of Construction and all evidence on the record and in evolving an artificial rule of construction of his own and in applying it to hold that the articles in question were bullion, the First Respondent has committed a patent error of law apparent on the face of record. He has, by this assumed jurisdiction which he did not possess, to confiscate these articles and to levy a penalty upon the original second. Petitioner and the third Petitioner.
25. The First Respondent has also enumerated in his order certain circumstances which he has characterised as suspicious. Considerable, emphasis was placed upon these circumstances by Shri Sukthankar, learned Counsel for the Respondents, in support of his contention that these articles must be considered as bullion. Whether a particular commodity is bullion or not is to be judged from the nature of the commodity itself and not from the circumstances surrounding it. Circumstances, however suspicious, cannot change the intrinsic character and nature of an article. In support of his argument Shri Sukthankar relied upon the decisions in which it has been held that suspicions circumstances can give rise to an inference that the gold found in the possesion of a person was smuggled gold and not gold lawfully acquired. On the analogy of these decisions Shri Sukhankar argued that the suspicious circumstances present in this case show that the articles in question were bullion and not silver articles and ornaments. In advancing this argument learned Counsel lost sight of the fact that when the question is whether gold is smuggled or not, what is at issue is the nature of possession of the gold in question and not as to the form of that gold, as to whether it is in the form of bullion or in the form of ornaments or other articles of gold. Bullion would remain bullion whether it was smuggled into the country or was acquired lawfully, and similarly gold ornaments would remain gold ornaments whether they were smuggled into the country or were lawfully acquired. Attendant suspicious circumstances would only go to show whether the acquisition of bullion or ornaments, as the case may be, was lawful or illegal.
26. Shri Sukthankar next submitted that it was for the Customs authorities to determine whether the articles in question were bullion or not and that if there were two constructions and one of them, which was in favour of the Revenue, was adopted the Court had no jurisdiction to interfere merely because the other interpretation favourable to the subject appealed to the Court as the better one to adopt. In support of this submission Shri Sukthankar relied upon two decisions of the Supreme Court, namely, Collector of Customs, Madras v. K. Ganga Setty and V. V. Iyer of Bombay v. Jasjit Singh, Collector of Customs, and another, . Neither of these two authorities lay down the proposition as broadly as stated by Shri Sukthankar. What has been held in these authorities is that it is primarily for the authorities to determine the head or entry under which a particular article would fall, but if in doing so the authorities adopted a construction which no reasonable person could adopt, that is, if construction was perverse, then it was a case in which the Court was competent to interfere. If, on the other hand, there were two constructions which an entry could reasonably bear, and one of them was in favour of the Revenue and this one was adopted by the authorities, the Court would not interfere merely because the other interpretation favourable to the citizen found favour with the Court. The question here is whether the word 'bullion' in the Notification is reasonably capable of two constructions. As we have seen, all the decided authorities, all the dictionaries and the evidence of all the witnesses led by the Petitioners clearly show that these articles could not be considered as bullion. Merely because according to the First Respondent these articles were bullion could not mean that two constructions were reasonably possible. It will only be that the construction which he has put on the expression 'bullion' was perverse and unjustified in law and by the evidence on the record.
27. Another point urged by Shri Sukthankar, learned Counsel for the Respondents, was that the Customs Act provided an alternative remedy by way of appeal and revision and that the Petitioners were not entitled to come to this Court by way of a writ Petition without exhausting those remedies. Under Section 128 of the Customs Act where a decision has been given or order passed by a Collector of Customs, an appeal lies to the Central Board of Excise and Customs. Under Section 129 where the decision or order appealed against relates inter alia to any penalty levied under the said Act, any person desirous of appealing against such decision order is, pending the appeal, to deposit, with the proper officer the amount of penalty levied. The proviso to this section confers power upon the appellate authority to dispense with such deposit either unconditionally or subject to such conditions as it may deem fit where in any particular case the appellate authority is of the opinion that the deposit of penalty levied would cause undue hardship to the appellant. Under Section 131 the decision of the Board given in appeal is subject to revision by the Central Government. The Petitioners have not filed any appeal to the Board. The question is whether their failure to do so disentitles them from obtaining relief from this Court in these proceedings. In the present Petition the petitioners have averred that they have been wrongly deprived of their property without authority of law in violation of the provisions of Article 31 of the Constitution. They have further averred that the impugned order and the demand of penalty from them are in violation of the fundamental rights guaranteed to them by clauses (f) and (g) of Article 19(1) of the Constitution. It is well settled by decisions, including those of the Supreme Court, that when the fundamental right of a party is infringed, the High Court will not refuse to exercise its jurisdiction under Article 226 of the Constitution on the ground that an alternative, adequate and efficacious remedy was available (see Himmatlal v. State of M.P. ; Collector of Customs of Bombay v. Shantilal and Co.; S. C. Prashar v. Vasantsen Dwarkadas ; and M. S. Sawhney v. Messrs Sylyania and Laxman Ltd. (1975) 77 Bom. L.R. 380). That the allegation of the Petitioners that their fundamental rights have been violated is not a bare unsubstantial allegation but is one which is correct has been already shown above. It was, however, submitted by Shri Sukhankar that even if the Petitioners' fundamental rights were violated, it did not entitle them to come to this Court under Article 226 of the Constitution without first exhausting the statutory remedies open to them under the Sea Customs Act inasmuch as it was a question affecting the jurisdiction of a statutory Tribunal. In support of this submission Shri Sukthankar relied upon a passage from the judgment of S. K. Das, J. in Smt. Ujjam Bai v. State of Uttar Pradesh and another A.I.R. 1962 S.C. 1621. This case was analysed and explained by the Supreme Court in Coffee Board, Bangalore v. Joint Commercial Tax Officer, Madras and another . Hidayatullah, C.J, who spoke for the majority, after referring to the propositions laid down in some earlier decisions of the Supreme Court, said (at p. 876) "These propositions were not accepted by the majority in Ujjam Bai's case, (1963) 1 S.C.R. 778 = (A.I.R. 1962 S.C. 1621). It was observed at p. 941 (of S.C.R.) = (at p. 1668 of AIR) as follows :
'If by these observations it is meant to convey that the protection under Article 265 cannot be sought by a petition under article 32. I entirely agree. But if it is meant to convey that a taxing law which is opposed to fundamental rights must be tested only under Article 265 I find it difficult to agree. Articles 31(1) and 265 speak of the same condition'."
"Das J. (Sarkar J. concurring) put the same thing differently. He observed that if a quasi-judicial authority acts without jurisdiction or wrongly assumes jurisdiction by committing an error as to a collateral fact and the resultant action threatens or violates a fundamental right, the question of enforcement of that right arises and a Petition under article 32 will lie. He added that 'where a statute is intra vires but the action taken is without jurisdiction, then a petition under Article 32 would be competent'. Similar observations are to be found in the opinion of Kapur, J. Therefore, the majority view considered that a breach of fundamental right guaranteed by Article 31(1) is involved in a demand for tax which is not leviable under a valid law."
28. The passage from the decision of Das. J., cited in the later decision is the very passage relied upon by Shri Sukthankar. Sikri, J. (as he then was), who gave a dissenting judgment in Ujjam Bai's case, however, agreed with the view of the majority on the preliminary objection raised by the Respondents in that Petition. The authority relied upon by Shri Sukhankar does not, therefore, in any way lend support to his contentions. It may also be noted that under Article 226 of the Constitution, as substituted by the Constitution (Forty-second Amendment) Act, 1976, the existence of an alternative remedy is not a bar for the enforcement of any of the fundamental rights. In view of the fact that the Petitioners have complained and in my opinion rightly complained, about the infringement of their fundamental rights, it is unnecessary for me to consider whether the remedy provided by the Customs Act is adequate and efficacious or not.
29. The result is that the impugned order of the First Respondent will have to be set aside. After passing the impugned order, notices dated February 11, 1971 were issued by the Second Respondent demanding payment of the personal penalty of Rs. 50,000/- imposed upon each of the original second Petitioner and the third Petitioner. These notices too will be required to be set aside. The Petitioners have further prayed for return of their silver articles, the wooden boxes and books of account and other records of the Petitioners seized by the authorities. An affidavit has been filed in this Petition by D. S. Prabhu, Tax Recovery Officer, City IX, Bombay in which it is stated that one Nanchand Raichand was a partner in the Petitioner firm until about October 25, 1971 and that the said Silver articles were property of the firm at the time when Nanchand was a partner and that Nanchand was in arrears of income tax including interest for the assessment years 1951-52 to 1954-55; 1956-57 to 1961-62; and 1960-70 and that such arrears amounted to Rs. 2,64,591/-. It is further stated in the said affidavit that the original second Petitioner was also in arrears of tax aggregating to Rs. 2,75,963/- and that his wife (now his widow) Shantaben, who has subsequently joined in the Petition as Petitioner No. 2(a), is also in arrears of tax aggregating to Rs. 95,814/-. It is further stated in the said affidavit that Shantaben had lent to the first Petitioner firm sums amounting to Rs. 1,80,696 which was standing to the credit of her account in the books of account of the said firm for S.Y. 2028. The said affidavit shows that prohibitory orders have been issued under Rule 26(1)(i) of the Second Schedule to the Income Tax Act, 1961, in respect of the debt owing by the First Petitioner firm to the said Shantaben. It is further shown in the said affidavit that notices of attachment dated March 16, 1973 under Rule 31 of the second Schedule to the Income Tax Act, 1961 have been issued to the Additional Collector (Preventive) Central Excise, Bombay, attaching the 24 wooden boxes containing the silver articles in question. By this affidavit a request is made to the Court that in the event of the Petition being decided in favour of the Petitioners, appropriate orders to enable the Income Tax Department to take appropriate steps for realization of the arrears of tax by proceeding against the silver articles lying with the Collector of Central Excise (Preventive), Bombay in accordance with the provisions contained in the Income Tax Act should be passed. In view of this affidavit, though the silver articles must be directed to be returned to the Petitioners, the Income Tax authorities must be given an opportunity to proceed against them to recover their dues.
30. In the result, I make the rule absolute in terms of prayers (a) and (b) of the Petition.
31. The Income Tax Department, however, will be at liberty to proceed against the silver articles and ornaments contained in the said 24 wooden boxes for the recovery of any tax dues as stated in the said affidavit of D. S. Prabhu in accordance with the provisions contained in the Income Tax Act, 1961 if they are entitled so to do in law.
32. The Respondents will pay to the Petitioners the costs of this Petition.