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Deechand Sarda Vs. Union of India (Uoi) - Court Judgment

LegalCrystal Citation
Subject;Customs
CourtGuwahati High Court
Decided On
Case NumberCivil Rule No. 276 of 1973
Judge
ActsCustoms Act, 1962 - Sections 112, 125(1), 128, 129 and 129(1); Customs (Amendment) Act, 1969 - Sections 111(P); Assam Sales Tax Act, 1947 - Sections 30(1); Assam Finance (Sales Tax) Act, 1956 - Sections 19(1); Constitution of India - Article 226
AppellantDeechand Sarda
RespondentUnion of India (Uoi)
Prior history
1. By this application under Article 226 of the Constitution of India the petitioner has challenged the order dated 25-7-70 passed by the Appellate Collector of Customs and the order dated 7-12-1972 passed by the Government of India in revision application under the Customs Act, 1962.
2, The petitioner is a cloth Merchant having his business under the name and style of 'M/s, Sardar & Co.' situated at Silchar town. The Customs Preventive Officers seized five pieces of cloth measuring 23.05 metr
Excerpt:
.....finance (sales tax) act, 1956 is also different from the proviso to section 129(1) of the customs act, 1962. the first proviso to sub-section (1) of section 30 of the assam sales tax act, 1947 reads as follows :provided that no appeal shall be entertained by the said authority unless he is satisfied that the amount of tax assessed or the penalty levied, if not otherwise directed by him, has been paid. ' similarly the first proviso to sub-section (1) of section 19 of the assam finance (sales tax) act, 1956, reads as follows :provided that no appeal shall be entertained-by the said authority unless he is satisfied that the amount of tax assessed or the penalty levied, if not otherwise directed by him, has been paid......128 read with section 129 of the customs act, 1962 is at all entertainablc without deposit of the penalty levied and if entertainable whether the appeal may be heard without deposit of the penalty levied ?4. sections 128 and 129 of the customs act, 1962 are quoted below :-* * * *5. it appears that under section 128 any person aggrieved by any decision or order passed under the act may, within three months from the date of the communication, against such decision or order, file an appeal to the appellate collector of customs. section 129 lays down that when the appeal is against the decision or order relating to any duty demanded in respect of goods which are not under the control of customs authorities or any penalty levied under the act, any person desirous of appealing against such.....
Judgment:

1. By this application under Article 226 of the Constitution of India the petitioner has challenged the order dated 25-7-70 passed by the Appellate Collector of Customs and the order dated 7-12-1972 passed by the Government of India in revision application under the Customs Act, 1962.

2, The petitioner is a cloth Merchant having his business under the name and style of 'M/s, Sardar & Co.' situated at Silchar town. The Customs Preventive Officers seized five pieces of cloth measuring 23.05 metres under Case No. 17/CL/Imp/Prev./Sil/69, dated 9-6-69, vide T.R.S. No. 25 of Book No. 349, dated 9-6-69 and Inventory dated 9-6-69. The petitioner challenged that seizure and also by a statement dated 9-6-69 ex- plained to the Customs Preventive Officer the licit sources and the character of these goods. The petitioner was served by the Assistant Collector, Customs, with a show cause notice, being C. No. 50/CL/Sil/Cus/69/9299, dated 14/15-7-69 on the charges mentioned in the show cause memo and he was asked to show cause against the charges mentioned therein. The petitioner showed cause by his petition dated 24-7-69. By adjudication Order No. Div/S/Sil/1581/Cus/69, dated 10-10-69 the Assistant Collector, Customs rejected the explanation of the petitioner and confiscated the seized cloth in question under Section 111(P) of the Customs (Amendment) Act, 1969 and made the confiscation absolute in terms of Section 125(1) of Customs Act, 1962, and also imposed a penalty of Rs. 1,000/- on the petitioner under Section 112 of the Customs Act, 1962 and thereafter the petitioner preferred an appeal on 15-2-72 against the order of absolute confiscation and impo- sition of personal penalty passed by the Assistant Collector of Customs and Central Excise, Silchar before the Appellate Collector of Customs, Calcutta. As it appears the case was fixed for hearing on 25-7-70. The appellant- petitioner made a prayer before the Appellate Collector, however, rejected that prayer and at the same time rejected the appeal itself for non-compliance with the provisions of Section 129(1) of the Customs Act, 1962. A revision application was filed against this order before the Government of India and that application was also rejected. Hence this writ petition against the aforesaid two impugned orders.

3. We have heard the learned counsel of. both the parties. The point that arises for consideration is whether an appeal under Section 128 read with Section 129 of the Customs Act, 1962 is at all entertainablc without deposit of the penalty levied and if entertainable whether the appeal may be heard without deposit of the penalty levied ?

4. Sections 128 and 129 of the Customs Act, 1962 are quoted below :-

* * * *

5. It appears that under Section 128 any person aggrieved by any decision or order passed under the Act may, within three months from the date of the communication, against such decision or order, file an appeal to the Appellate Collector of Customs. Section 129 lays down that when the appeal is against the decision or order relating to any duty demanded in respect of goods which are not under the control of customs authorities or any penalty levied under the Act, any person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied. It has also been provided that where in any particular case the Appellate Authority is of opinion that the deposit of duty demanded or penalty levied will cause undue hardship to the appellant, it may in its discretion dispense with such deposit, either unconditionally or subject to such conditions as it may deem fit.

6. The language of the proviso to Section 129(1) is different from the first proviso to Section 30(1) of the Assam Sales Tax Act, 1947. Similarly the first proviso to Section 19(1) of the Assam Finance (Sales Tax) Act, 1956 is also different from the proviso to Section 129(1) of the Customs Act, 1962.

The first proviso to Sub-section (1) of Section 30 of the Assam Sales Tax Act, 1947 reads as follows :-

'Provided that no appeal shall be entertained by the said authority unless he is satisfied that the amount of tax assessed or the penalty levied, if not otherwise directed by him, has been paid.'

Similarly the first proviso to Sub-section (1) of Section 19 of the Assam Finance (Sales Tax) Act, 1956, reads as follows :-

'Provided that no appeal shall be entertained-by the said authority unless he is satisfied that the amount of tax assessed or the penalty levied, if not otherwise directed by him, has been paid.'

7. As quoted hereinabove, the language of the proviso to Section 129(1) of the Customs Act, 1962 is different from the above provisions of the Assam Sales Tax Act and the Assam Finance (Sales Tax) Act. Under Sub-section (1) of Section 129 the penalty levied has to be deposited pending the appeal. That shows that the appeal is entertainable but during the pendency of the appeal the penalty levied must be paid unless the appellate authority in its discretion dispenses with such deposit unconditionally or subject to such conditions as it may deem fit considering the fact that the deposit of the penalty levied will cause undue hardship to the appellant. So the next question that arises is when the appeal is filed and the appeal is pending, at what point of time the appellant is to pay or deposit the penalty in question.

8. In the instant case we find from the impugned order of the Appellate Collector of Customs that the appeal was taken up on 25th July, 1970 and on that date the Appellate Collector found that there was no justicable reason for dispensing with the deposit of the penalty levied and having so found the Appellate Collector immediately rejected the appeal for noncompliance with the provisions of Section 129(1). There is nothing in express terms as to what should be done if the penalty levied is not deposited during the pendency of the appeal. But on a perusal of the language of the whole section it may largely be interpreted that if the penalty is not deposited during the pendency of the appeal, then the appeal cannot be heard, or in other words, the appeal will be ultimately rejected for nondepositing the penalty levied.

But there is a provision for exercising the discretion by the Appellate Authority and when the appellant prays to the Appellate Authority for exercising that discretion for dispensing with the deposit of duty demanded or penalty levied, it may reasonably be said that after rejection of that prayer made under the proviso to Sub-section (1) of Section 129, the appellant should be given some reasonable time to deposit the duty demanded or the penalty levied and if he fails to do that then the Appellate Authority will have the jurisdiction to dismiss the appeal for non compliance with the provision of Sub-section (1) of Section 129. In our considered opinion the Appellate Authority may not have jurisdiction to immediately dismiss the appeal after rejecting the prayer of the appellant for dispensing with the deposit of the duty demanded or penalty levied without giving him reasonable time to comply with the requirements of Sub-section (1) of Section 129, after the appellant is informed about the order of rejection of his prayer made under the proviso to Sub-section (1) of Section 129. In that view we hold that impugned order rejecting the appeal immediately after rejecting the prayer made by the appellant for dispensing with the deposit of penalty levied under Sub-section (1) of Section 129, is not sustainable in law and as such the order is liable to be quashed.

9. In the revisional order the Revisional Authority has observed that the Appellate Authority is fully competent to reject the appeal for noncompliance with the revisions of Sub-ection (1) of Section 129 of the Customs Act, 1962. Then it has observed that it would serve no purpose to keep the appeal pending indefinitely.

10. It is correct that the Appellate Authority is competent to reject the appeal for non-compliance with Section 129(1) of the Customs Act, 1962, but the language of Sub-section (1) of Section 129 does not fix any limit within what time the deposit is to be made. It simply says that pending the appeal the duty demanded and the penalty levied shall be paid. That being the position after the prayer made under the proviso to Sub-section (1) of Section 129 is rejected, the appellant should be asked to comply with the requirements of Sub-section (1) of Section 129, within a reasonable time as may be fixed by the Appellate Authority and if he fails to do that then the Appellate Authority will have the jurisdiction to reject the appeal for non-compliance with the provision of Sub-section (1) of Section 129 of the Customs Act, 1962.

11. In the result we hold that the Appellate Authority committed an error of law on the face of it in rejecting the appeal immediately after reject- - ing the prayer made under the proviso to Sub-section (1) of Section 129 of the Customs. Act, 1962. The impugned orders of the Appellate Authority and of the Revisional Authority are therefore quashed.

12. The appellantpetitioner is allowed one month's time from today to deposit the penalty levied with the proper officer and if the deposit is made within the stipulated time, then the Appellate Authority shall restore the appeal to its file and dispose of the same in accordance with law.

13. If the penalty levied is not deposited with the proper offices within the time fixed herein, the present petition shall stand dismissed and the Rule shall stand discharged and the impugned orders of the Appellate Authority and the Revisional Authority also will stand.

14. The petition is allowed conditionally and the Rule is made absolute conditionally on the above terms. We, however, make no order as to costs.

15. Records shall be sent down immediately.


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