1. These three appeals raise a common question and the question, is with regard, to the power of the Customs Authorities under Section 167, item 8, of the Sea Customs Act, 1878, to impose a penalty exceeding Rs. 1,000 in respect of goods which have been imported into India contrary to a prohibition against importation of the goods or restriction upon the importation of the goods.
2. Now, Section 167 provides that the offences mentioned in the first column of the following schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences respectively; and the* penalty mentioned in the third column with regard to item 8 is that such goods shall be liable to confiscation and that any person concerned in any such, offence shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees. In each of these three appeals, the customs Authorities have imposed a penalty exceeding Rs. 1,000, their contention is that the penalty they have imposed does not exceed three times the value of the goods and that it is open to them either to impose the penalty which does not exceed three times the value of the goods or which does not exceed Rs. 1,000.
On the other hand, the contention of the other side is that there is a limitation upon the power of the Customs Authorities with regard to the imposing of the penalty and that limitation is that they cannot impose a penalty which exceeds Rs. 1,000. In other words, it is contended that whatever may be the value of the goods, the maximum penalty that the Customs Authorities can impose is Rs. 1,000.
3. This very point came before me for con-, sideration when I was dealing with -- 'State v. Noormohomed Gulam Hussein', Crl. Revn. No. 1203 of 1951 (Bom) (A). In that case, the Collector of Central Excise had imposed a penalty upon the petitioner in the sum of Rs. 10,000 under item 8 of Section 167. The petitioner did not pay the penalty. An application was made for enforcing the penalty by the Collector, and the Chief Presidency Magistrate ordered a distress warrant to issue for recovery of the same by an attachment and sale of the property of the petitioner. A notice was taken out by the petitioner for raising the attachment and that notice was discharged by the learned Chief Presidency Magistrate. It was against that order of the learned Chief Presidency Magistrate that the revlsional application was preferred and the same argument which is now being advanced was advanced before me with regard to the power of the Collector to impose the penalty.
In that judgment I pointed out that item 8 confers jurisdiction upon the appropriate authority to impose a fine which may either be regulated by the value of the goods, in which case it must not exceed three times its value, or it may be regulated by a liquidated amount, in which case it must not exceed Rs. 1,000; and that, if the order of penalty satisfied either of these two conditions, then the order was valid. I also pointed out in my judgment why this alternative was provided. There may be goods which may have very small value; they may be worth a rupee or two. In such cases, if the only penalty which the officer could impose was a penalty not exceeding three times by value of the goods, then his power to impose a penalty would be of a very small amount,
In such a case, the officer could fall back upon the latter part of the item and impose a penalty on the person contravening Sections 18 and 19 in a sum not exceeding Rs. 1,000; or there may be a case where it would be difficult, if not impossible, to value the goods, in which case also the officer could exercise his power under the latter part of the item. I also pointed out that, in asking me to limit the power conferred upon the Customs Authorities, I was being asked to read in item 8 words to this effect; 'shall be liable to a penalty not exceeding three times the value of the goods or not exceeding Rs. 1,000 whichever is less,' and I stated that I saw no warrant for reading those words Sn that item and that the effect of the words used by the Legislature was perfectly clear.
4. Now, In these three appeals, as pointed out, the order has been made by the appropriate authority to levy a penalty which exceeds Rs. 1,000; and in' respect of this order petitions were filed which came up before Mr. Justice. Tendolkar for the issue of a writ against the Customs Authority preventing him from enforcing this order of penalty. Attention of Mr. Justice Tendolkar was drawn to the judgment delivered by me in' -- 'State v. Noormohomed Gulam Hussein', (A). Mr. Justice Tendolkar would have felt himself bound by that decision as it was a judgment of a coordinate authority; but he took the view that a recent judgment of the Supreme Court had overruled my decision and therefore he was bound by the Supreme Court decision in preference to the judgment delivered by me.
Mr. Justice Tendolkar conceded that the Supreme Court had not actually decided this point; but the view which the learned Judge took was that it was an 'obiter dictum' of the Supreme Court and, according to the learned Judge, an 'obiter dictum' was as much binding upon him as an express decision given by the Supreme Court.
5. Before we turn to the Judgment of the Supreme Court, it is necessary to have our minds clear as to what is an 'obiter dictum' which has a binding effect upon a Court. It Is rather significant to bear in mind that In England an 'obiter dictum' has no binding effect either upon a coordinate Court or upon a subordinate Court. An 'obiter dictum', especially of an eminent judicial tribunal like the Privy Council or the House of Lords, would undoubtedly be entitled to the highest respect. But a Judge in England would not feel that he would be bound by an opinion expressed by the higher tribunal. In India, we have -- perhaps advisedly -- made a departure from the principle operating in England with regard to 'obiter dicta'. At a time when the Judicial Committee of the Privy Council was the highest judicial tribunal in the Empire, as it then was, the Courts in India felt that it would be in the interests of judicial uniformity and judicial discipline if not only they accepted the decisions of the Privy Council, Which indeed were binding upon them, but also accepted the 'obiter dicta' of the Privy Council as binding upon them.
The feeling was that, if the Privy Council expressed an opinion on a point which, although not necessary for decision, clearly indicated the opinion formed by the Privy Council on a question of law, then the Courts in India should accept that as an authoritative pronouncement on the particular aspect of the law and treat that pronouncement as binding, The Supreme Court has now taken the place of the Privy Council and we would like to say unhesitatingly that we must show the same respect for the 'obiter dicta' of the Supreme Court that we did for those of the Privy Council. The Supreme Courts, is the highest Judicial tribunal in India to-day and it is as much necessary in the interests of judicial uniformity and judicial discipline that all the High Courts must accept as binding the 'obiter dicta' of the Supreme Court in the same spirit as the High Courts accepted the 'obiter dicta' of the Privy Council.
6. But the question still remains as to what is an 'obiter dictum' given expression to by the Supreme Court which is binding upon the Courts in India. Now, an 'obiter dictum' is an expression of opinion on a point which is not necessary for the decision of a case. This very definition draws a clear distinction between a point which is necessary for the determination of a case and a point which is not necessary for the determination of the case. But in both cases points must arise for the determination of the tribunal. Two questions may arise before a Court for its determination. The Court may determine both although only one of them may be necessary for the ultimate decision of the case. The question which was necessary for the determination of the case would be the 'ratio decidendi'; the opinion of the tribunal on the question which was not necessary to decide the case would be only an 'obiter dictum'.
Mr. Palkhivala's contention is that an 'obiter dictum' is any definite opinion expressed by the higher tribunal whether the point arose before it or not. Mr. Palkhivala has attempted to make a distinction between an opinion and a definite opinion. He says that, if the higher Court says that a certain view may be possible, then It is not a definite expression of opinion, but of the tribunal definitely expresses its opinion, and not merely tentatively, then it is unnecessary for us to consider whether any points arose for determination before the higher authority, and the mere expression of opinion itself, provided it is definite, would become an 'obiter dictum', and, in India, binding upon the Courts if the 'obiter dictum' is that of the Supreme Court. In our opinion, that argument appears to be entirely untenable.
The very reason why the Courts in India agreed to be bound by the 'obiter dicta' of the Privy Council was that the highest judicial authority in the Empire had applied its mind to a question of law which arose before it for its determination; and however unnecessary it was for it to decide that question, having expressed an opinion on that point it became an authoritative pronouncement on that question of law, and the Privy Council, by deciding that question of law, set its seal of approval upon that question of law. It cannot be suggested that the doctrine of 'obiter dicta' was so far extended as to make the Courts bound by any and every, expression of opinion either of the Privy Council or of the Supreme Court, whether the question did or did not arise for the determination of the higher judicial authority.
7. Mr. Palkhivala has relied on the definition of an 'obiter dictum' to be found in Stroud's Judicial Dictionary, which is based upon the case of -- 'Flower v. Ebbw Vale Steel, Iron & Coal Co', 1934 2 KB 132. The passage is at p. 154 in the judgment of Mr. Justice Talbot. The question that arose before the Court of appeal was whether an earlier decision in -- 'Dew v. United British Steamship Co., Ltd.; (1928) 139 LT 628, was binding upon it, and this is what Mr. Justice Talbot says:
'.....It is of course perfectly familiar doctrine that obiter dicta, though they may have great weight as such, are not conclusive authority. Obiter dicta in this context means-what the words literally signify -- namely, statements by the way. If a judge thinks it desirable to give his opinion on some point which is not necessary for the decision of the case, that of course has not the binding weight of the decision of the case and the reasons for the decision.'
Therefore, what according to the learned Judge is an 'obiter dictum' is an opinion on some point which is not necessary for the decision of the case. The emphasis is not only on the opinion, but also on the point. It is not merely an expression of opinion unconnected with the point that arises, but it must be an opinion given on a point which arises for determination. To the same effect is the statement of the law in Halsbury, Vol. XIX, at p. 251. This is how it is put:
'It may be laid down as a general rule that that part alone of a decision of a Court of law is binding upon Courts of co-ordinate jurisdiction and inferior Courts which consists of the enunciation of the reason or principle upon which the question before the Court has really been determined. This underlying principle which forms the only authoritative element of a precedent is often termed the 'ratio decidendi'. Statements which are not necessary to the decision, which go beyond the occasion and lay down a rule that is unnecessary for the purpose in hand (usually termed dicta) have no binding authority on another Court, though they may have some merely persuasive efficacy.'
Therefore, here also emphasis is put upon the fact that 'Obiter dicta' must lay down a rule. It is not sufficient that they should be merely 'dicta' Of a superior Court, but from the 'dicta' one must be in a position to deduce a rule laid down by the higher authority. Our High Court has also consistently taken the same view of the 'obiter dicta' of the Privy Council. It would be sufficient to refer to two or three of the recent decisions of this Court. The first is -- 'Nagappa Balappa v. Ramchandra', AIR 1948 Bom 365.
A Divisional Bench of this Court, consisting of Mr. Justice Kania, Acting Chief Justice as he then was, and Mr. Justice Gajendragadkar, were considering certain observations of the Privy Council with regard to Section 83, Land Revenue Code, and the question was whether these observations were binding upon the Divisional Bench; and Mr. .Justice Gajendragadkar says this (p. 372):
'.....But it is well established that the 'obiter dicta' of their Lordships of the Privy Council are binding on all Courts in India if the said 'dicta' contain a definite expression of their Lordships' opinion: -- 'vide Shrinivas Sarjerao v. Balwant Venkatesh', 37 Born 513. Now there is no doubt that the observations made by the Privy Council, in -- 'Shankarrao Dagadujirao v. Shambhu Nathu' (F), as to the scope and proper effect of the provisions of Section 83, of the Land Revenue Code, contain their Lordships' well considered opinion on that section. The point was obviously argued before their Lordships and the decisions of this Court which took a liberal view of Section 83 were cited before them.'
Therefore, Mr. Justice Gajendragadkar is at pains to point out that the point was argued before the Privy Council, that decisions were cited with regard to that point, & that the Privy Council gave a well-considered opinion on Section 83. It was only under these circumstances that the 'obiter dictum' of the Privy Council with regard to Section 83 was held to be binding upon Courts in India.
8. Then there is a later Judgment reported in -- 'Venkanna Narsinha v. Laxmi Sannappa', : AIR1951Bom57 . That is a judgment of Mr. Justice Bhagwati and Mr. Justice Dixit, and the question that arose for the consideration of that Bench was whether the Hindu residents of North Kanara District were governed by the Bombay school of Hindu law and not by the Madras school of Hindu law. What was urged before this bench was that the Privy Council had decided that they were governed by the Madras school of Hindu law and that decision was binding upon the Bench.
Mr. Justice Bhagwati delivering the judgment of this Bench, rejected that contention and the remarks of the learned Judge are very pertinent and they are to be found at pp. 63-64.
'This decision of the Madras High Court went in appeal before the Privy Council and the Judgment of their Lordships of the Privy Councilis reported in -- 'Somasekhara Royal v. Sugutur Mahadeva Royal' (H). It was conceded by counsel at their Lordships' bar that according to the law of the Madras Presidency which applied to the residents there the adoption of a married man would be invalid and that this law applied to North Kanara while it remained, part of the Madras Presidency. There was no Judicial pronouncement made by their Lordships of the Privy Council in behalf of this question.
It is well-known that 'obiter dicta' of their Lordships of the Privy Council are entitled to the greatest respect, but this was not even an obiter. This statement was made by their Lordships merely on a concession made by counsel at their Lordships' bar and would not have the sanctity of an endorsement of a particular legal position by their Lordships of the Privy Council. The only thing which was pronounced by their Lordships was that such transfer 'of North Kanara District from the Madras Presidency to the Bombay Presidency for administrative purposes was not sufficient to affect the present law of the residents therein unless and until it was shown in the case of any resident that he intended to change and had in fact changed his personal law. This decision of their Lordships of the Privy Council therefore could not be urged to have set its seal of approval on the Dosition contended for by the protagonists of the Madras school of Hindu law.'
Mr. Palkhivala says that this opinion of the Privy Council was based upon a concession made at the bar. We find it difficult to understand what difference in principle exists between a definite opinion arrived at by the Tribunal itself and an opinion based upon a concession made at the bar. If what Mr. Palkhivala is contending for is that every definite opinion of the Privy Council bound the Courts in India, then we have here as much a definite opinion as anywhere else, and yet Mr. Justice Bhagwati refused to be bound by this definite opinion, with respect, on the very ground, first, that this was not a judicial pronouncement made by the Privy Council on that question and that the Privy Council did not give the sanctity of its endorsement of a particular legal position and it did not set its seal of approval on that legal position; and, secondly, also on the ground that this decision ignored the earlier decisions of this Court.
Therefore, implicit in the Judgment of Mr. Justice Bhagwati is the position that it is only when a point arises for determination and the point is determined that an opinion expressed on that point becomes an 'obiter dictum' which is binding upon the Courts in India.
9. The next Judgment to which reference might be made is a recent Judgment of the Full Bench of this Court reported in -- 'Shivaji Gan-pati v. Murlidhar', : AIR1954Bom386 . In that case, we were considering the right of after-born sons to challenge an alienation, and the decision of the Privy Council in -- 'Lal Bahadur v. Ambika Prasad', AIR 1923 PC 264, was relied upon for the contention that an after-born son could not challenge the validity of an alienation when he was not in existence. We pointed out In that Judgment that three points arose for the consideration of the Privy Council: (1) a point of limitation, (2) a point with regard to whether -the alienation was for legal necessity, and (3), the point whether the after-born sons could challenge the alienation. The Privy Council decided the appeal on the ground that there was no legal necessity for the alienation and therefore no other question survived.
But on the question of the right of an after-born son to challenge the alienation, there was an opinion expressed by the Privy Council, in the sense in which Mr. Palkhivala understands an expression of opinion, and yet we came to the conclusion that we were not bound by that opinion as in the course of the judgment the Privy Council did observe that the two mortgage-deeds which were the alienations challenged were always binding on the respondents who were the after-born sons, and in 'making this observation the Privy Council suggested that the respondents could not challenge those two mortgage-deeds because they were not in existence at the date when these mortgage-deeds ware executed.
The reason why we refused to be bound by this opinion was that we failed to see any observation which the Privy Council had made on the rights of after-bom sons with regard to alienations of joint family property. Although this observation was made by the Privy Council, the point waa not determined by the Privy Council, and it is clear from that judgment that no arguments were advanced and the Privy Council contented itself with deciding the question on the nature of the alienation, namely, that legal necessity justified the alienation.
10. Therefore, it would be incorrect to say that every opinion of the Supreme Court would be binding upon the High Courts in India. The only opinion which would be binding would be an opinion expressed on a question that, arose for the determination of the Supreme Court, and even though ultimately it might be found that the particular question was not necessary for the decision, of the case, even so, if an opinion was expressed by the Supreme Court on that question, then the opinion would be binding upon us. It. is from this aspect that we must turn to the decision of the Supreme Court which, it is contended, has over-ruled the decision to which reference has been made.
11. Now, the facts on which the decision of the Supreme Court in -- 'Maqbool Hussain v. State of Bombay', : 1983ECR1598D(SC) , was given may be briefly stated. One Maqbool Hussain imported bars of gold contrary to the provisions of Section 167, item (8), Sea Customs Act. The Collector of Customs ordered confiscation of the gold and gave an option to Maqbool Hussain to pay in lieu of such confiscation a fine of Rs. 12,000. Subsequently, Maqbool Hussain was prosecuted in the Court of the Chief Presidency Magistrate under Section 8, Foreign Exchange Regulation Act, for the same offence, and his contention was that this prosecution contravened the provisions of Article 20. Sub-clause (2), of the Constitution. This contention of Maqbool Hussain was rejected by the Supreme Court. Therefore, what the Supreme Court was called upon to consider was whether Maqbool Hussain had already been prosecuted and punished as required by Article 20(2) and whether he was being put -- to use the American expression -- in 'double jeopardy'.
Now, the Supreme Court, in order to decide what the nature of the enquiry by the Customs Authorities under Section 167, item (8), was and what was the nature of the order passed by the Collector of Customs, had to consider the scheme of the Sea Customs Act, and the conclusion which they came to was that the Customs Authorities were not a judicial tribunal and that the adjudging of confiscation, increased rate of duty or penalty under the provisions of the Sea Customs Act does not constitute a judgment or order of a Court or judicial tribunal necessary for the purpose, of supporting a plea of double jeopardy. It is in this connection that the following observa-tion was made by Mr. Justice Bhagwati in delivering the judgment of the Supreme Court (p. 330):
'.....Even though the customs officers are invested with the power of adjudging confiscation, increased rates of duty or penalty, the highest penalty which can be inflicted is Rs. 1,000.'
This reason is put forward in the Judgment in order to strengthen conclusion that the Customs Authorities are not discharging judicial functions. The argument is that their power to impose a penalty is limited because the Customs authorities are not Magistrates or judicial officers, and it is urged that this observation of the Supreme Court clearly shows that the power of the appropriate authorities under the Sea Customs Act to impose a penalty under Section 167, item (8), is limited to Rs. 1,000. Now, in the first place, it is clear that no question ever arose before the Supreme Court or could possibly arise, with regard to the Interpretation of Section 167, item (8). No penalty was imposed upon Maqbool Hussain under Section 167, item (8). The only order under Section 167, item (8), was an order of confiscation, and in deciding whether Article 20(2) applied or not the question as to the power of the Customs Authorities to impose the penalty under Section 167, item (8), was entirely irrelevant. Therefore, with respect, this Observation is not an 'obiter dictum' in the sense in which we have indicated, it was not an expression of opinion on a point that arose before the Supreme Court. It is -- again with very great respect -- a casual observation made in considering the whole scheme of the Sea Customs Act.
12. But there is a further aspect of the matter to which attention must be drawn. When we look at the various items of Section 167, it is clear that some of the items beyond doubt confer the power upon the Customs Authorities to impose a fine exceeding Rs. 1,000. Take, for instance, item (29) of Section 167. There the power is given to the authorities to impose a penalty 'not exceeding twice the amount of duty (if any) leviable on the said goods.' No limit is laid down in this item, and in conceivable cases the amount may exceed Rs. 1,000; and it would be impossible to argue that this observation of Mr. Justice Bhagwati applied to this item and also other items where similarly power is given to the Customs Authorities to impose a penalty which exceeds Rs. 1,000. Equally, there are items like items 14, 15, 16 and 19, where It is clear that the power conferred upon the Customs Authorities is to Impose a penalty not exceeding Rs. 1,000. Therefore, what-ever may be urged, this cannot be urged -- that under Section 167 the power of the Customs Authorities to impose a penalty is limited to Rs. 1,000.
Therefore, on the face of it, again with very great respect, the observation of Mr. Justice Bhagwati does not seem to be correct. It is, therefore, obvious that the learned Judges of the Supreme Court did not apply their mind to the construction of the various items of Section 167, nor decide what were the powers of the Customs Authorities under the various items. That observation is made in passing with reference to the general scheme of the Act, and, in our opinion, it is entirely untenable to suggest that this general observation constitutes an 'obiter dictum' which is binding upon this Court on a question of the interpretation of Section 167, item (8): a question which never arose before the Supreme Court, which was never considered by the Supreme Court, and which was never decided by the Supreme Court. In our opinion, therefore, the learned Judge was in error when he took the view that this observation in the judgment of Mr. Justice Bhagwati overruled the judgment delivered by me in -- 'State v. Noormohomed Gulam Hussain (A).
13. Now, on the merits, it is clearly open to Mr. Palkhivala to satisfy us, sitting as we are in a Divisional Bench, that the judgment delivered by me in -- 'State v. Noormohomed Gulam Hussain', (A), was erroneous; and what is argued by Mr. Palkhivala is that the second alternative in item (8) of Section 167 controls the first alternative. In other words, what is argued Is that the ceiling put upon the second alternative, namely Rs. 1,000, is also the ceiling put upon the first alternative. In the first place, the clear language of the item cannot support that contention. Secondly, if that were the true position, it is impossible to understand why the Legislature enacted the first alternative at all. If Mr. Palkhivala's contention is that the maximum penalty that the authorities can impose is Rs. 1,000, then it would have been sufficient to provide for the second alternative and it would have been entirely unnecessary to provided for the first.
Realising this difficulty, Mr. Palkhivala has argued that the proper view that we should take of item (8) is that it must 'satisfy both the alternatives: in other words, the penalty imposed must not exceed three times the value of the goods and also it must not exceed Rs. 1,000. Now, if we were to accept this contention, we would be concerting the 'or' used by the Legislature into 'and'. Whereas the Legislature has advisedly given two., alternatives to the Customs Authorities, Mr. Palkhivala would ask us to convert the two alternatives into two cumulative conditions which must be satisfied before a penalty could be imposed. There is no warrant whatsoever for changing the clear language of the Legislature.
14. Mr. Palkhivala has very fairly drawn our attention to the English statute, 39 & 40 Vic. Clause 36, Section 186, where there is an Identical provision with regard to an identical offence, and it is clear that In all probability our own Sea Customs Act with regard to this provision was modelled upon the Victorian statute. In the English statute the same words occur that occur in item (8), but these words are super-added: 'at the election of the Commissioner,' and Mr. Palkhivala's argument Is that the English statute gave, the alternative to the Commissioner and left it to his election which of the two alternatives should apply to a particular case.
In our opinion, our Legislature rightly thought the words 'at the election of the Commissioner' as mere surplusage in view of the fact that they had used the disjunctive word 'or'. In our opinion, the effect of the language used by our Legislature in item (8) is the same as the effect of the language used in the English statute. The word 'or' makes it perfectly clear that the Customs Authorities are given the alternative and it is left to them to impose a penalty which satisfies either the first condition or the second condition. Therefore, if a penalty does not exceed three times the value of the goods, it is a penalty which in law can be inflicted by the Customs Authorities although that penalty may exceed Rs. 1,000. On the other hand, It would be open to the Customs Authorities to fall back upon the second alternative and impose a penalty which may not exceed Rs. 1,000 : that penalty would be irrespective of the value of the goods.
15. Therefore, in our opinion, the decision given in -- 'State v. Noormohomed Gulam Hussein (A)', was correct and we hold that the petition for a writ is not well-founded on the ground that the Customs Authorities have exceeded their power under Section 167, item (8).
16. As we are reversing the judgment of Mr. Justice Tendolkar on a question of law which is of some importance, I propose briefly to state my reasons. Section 167, Sea Customs Act, provides, in so far as it is material that the offences mentioned in the first column of the schedule shall be punishable to the extent mentioned in the third column of the same with reference to such offences; and item (8) of that section provides that
'If any goods the importation or exportation of which is for the time being prohibited or restricted by or under Chapter IV of this Act, be imported into or exported from the 'States' contrary to such prohibition or restriction, or
if any attempts be made so to import or export any such goods, or
if any such goods be found in any package produced to any officer of Customs as containing no such goods, or
if any such goods or any dutiable goods, be found either before or after landing or shipment to have been concealed in any manner on board of any vessel within the limits of any port in the 'States', or
if any goods, the exportation of which is prohibited or restricted as aforesaid, be brought to any wharf in order to be put on board of any vessel for exportation contrary to such prohibition or restriction, such goods shall be liable to confiscation'.
'any person concerned In any such offence shall be liable to a penalty not exceeding three times the value of the goods, or not exceeding one thousand rupees.'
It is evident from the frame of the section that for a variety of serious infractions of the law the Legislature has authorised Customs Officers to pass orders for confiscation of goods and also to impose penalties. The penalty which may be imposed under item (8) may not, however, exceed three times the value of the goods, or may not exceed Rs. 1,000. As a matter of plain construction of the section, it appears clear that the Legislature conferred upon the Customs Officer an option when exercising his power of imposing a penalty. In exercise of that option he may impose a penalty by relating it to the value of the goods in respect of which the offence is committed or he may impose a penalty in a lump sum and not related to the value of the goods. If the penalty is related to the value of the goods, the penalty cannot exceed in amount three times the value of the goods : if it is a lump sum penalty, it cannot exceed Rs. 1,000.
17. It was urged before Mr. Justice Tendolkar that when the Legislature authorised a Customs Officer to impose a penalty, that penalty was subject to a limit that it could not, in any event, exceed Rs. 1,000. It was submitted in support of that argument that the disjunctive 'or' used in the third column against item (8) of Section 167 was intended to be used in the sense of a conjunctive, and that the Legislature, by the use ol the expression 'or not exceeding one thousand rupees', intended to impose a limit upon the power of the Customs Officer, and not to confer an option upon him. The language of the section does not support that contention.
As I have pointed out earlier, a large number of offences, such as importation or exportation, or attempting to import, or concealing of goods or an attempt to evade payment of duties, are made punishable under item (8) and there is no indication in the description of the offences that the Legislature, even though 'ex facie' it gave an option to the Customs Officer to impose a penalty which was related either to the value of the goods or in a lump sum according as he deemed proper, intended thereby to limit the authority of the Customs Officer to impose the penalty to Rupees 1,000. If it was intended by the Legislature to provide by the words 'or not exceeding one thousand rupees' a ceiling which limited the extent of the authority of the Customs officer, the Legislature has evidently not used proper phraseology to make its meaning clear.
Mr. Palkhivala says that the words 'whichever is less' or words of similar import should be added to the penalty clause in item (8) to clarify the meaning, and to bring out the intention of the Legislature. There is no ambiguity, in the language used in the section and the Court would not be justified in adding words to the section to make out a meaning contrary to the one plainly expressed thereby. The intention of the Legislature in enacting a statute must be found from the words used therein, and in the absence of over-riding reasons inherent in the statute the Court is not justified in adding words thereto. The words of item' (8) of Section 167 appear, in my judgment to be explicit and there is no obscurity or ambiguity.
Nor is there any over-riding reason suggested for adding words to the section. The provisions of Section 167 are punitive in character and are intended to be deterrent. They are evidently enacted for the protection of public revenue and also in the interest of public health and security, and in the interest of the economy of the State, and for exercising effective control over anti-State activities, and it is difficult to accept the submission that breaches thereof were intended to be punished by imposition of a penalty not exceeding Rs. 1,000 which, in the context of the serious infractions penalised thereby in respect of property of considerable value, may be regarded as purely nominal. Again, when it is realised that a serious offence may be committed by importation or exportation or other dealings with prohibited articles, dangerous or noxious in character, but of little or no value, the futility of the argument that the penalty to be imposed under item (8) was intended not to exceed three times the value of the goods or Rs. 1,000, which-ever is less, becomes obvious.
18. Counsel for the petitioners attempted to urge, when faced with this Implication of his argument, that the Customs Officer may Impose a penalty even exceeding three times the value of the goods, provided the penalty did not exceed Rs. 1,000. But the acceptance of that argument would necessitate extensive re-writing of the penalty clause. Again, if the Customs officer is entitled to ignore the ceiling of three times the value of the goods provided he does not impose a penalty exceeding Rs. 1,005, the necessity of providing the first alternative cannot be appreciated. The Legislature might very well have, as It has done in other items, provided for imposition of a penalty not exceeding Rs. 1,000 and might thereby have expressed its intention with greater precision if it was the intention that a Customs Officer can irrespective of the value of the goods impose a penalty not exceeding Rupees 1,000 for an offence under Section 167, item (8).
19. Mr, Justice Tendolkar, however, took the view that the words of the section did not have the meaning which plainly they have. In taking that view, the learned Judge regarded himself bound by a judgment of the Supreme Court, reported as : 1983ECR1598D(SC) . Now In that case the only question which fell to be decided was whether the imposition of fine by a Customs Officer in lieu of confiscation of goods under 8 167, item (8), of the Sea Customs Act, could be regarded as prosecution and punishment for an offence so as to invite application of Art, 20, Clause (2), of the Constitution of India. The Supreme Court took the view that the Customs Officer exercising authority under the Sea Customs Act was not a judicial tribunal and 'adjudging of confiscation and increased rate of duty of penalty under the Act did not constitute a judgment or order of a Court or a judicial tribunal necessary for the purpose of supporting' the plea of 'autrefois convict', or, as it is called by the American jurists, the plea of 'double jeopardy'.
It was not necessary for their Lordships of the Supreme Court in that case to construe the penalty clause in Section 167, item (8), Sea Customs Act, in arriving at a conclusion as to the nature of the proceeding. They were only called upon to consider the question whether imposition of fine in lieu of confiscation by a Customs Officer was prosecution and punishment for an offence which prevented a Magistrate from trying the offender for the offence committed by him under Section 23, Foreign Exchange Regulation Act, 7 of 1947, and it was held that by reason of the proceedings taken for confiscation and the imposition of fine in lieu of confiscation under Section 167, item (8), read with Section 183, Sea Customs Act, the offender could not be regarded as 'prosecuted and punished' within the meaning of Article 20(2) of the Constitution, and the Magistrate before whom the proceedings under the Foreign Exchange Regulation Act of 1947 were pending was not deprived of his jurisdiction to try the offender. That conclusion of their Lordships has no bearing on the question to be decided in this appeal.
20. Reliance was, however, sought to be placed upon an observation in the judgment in 'Maqbool Husain's case (K)', at p. 330 of the report, which is as follows :
'....Even though the customs officers are invested with the power of adjudging confiscation, increased rates of duty or penalty, the highest penalty which can be inflicted is Rs. 1,000.'
Now, this observation in the judgment is to be found in a paragraph in which the Supreme Court was summarizing the provisions of the Sea Customs Act relating to the authority conferred upon the Customs Officer to search premises, to arrest offenders and to detain goods and also to levy customs duties and to impose penalties in respect of the commission of offences under that Act for the purpose of ascertaining whether the proceedings of the Customs Officer were in the nature of criminal proceedings before a Court of law or a judicial tribunal, or they were administrative proceedings. For deciding that question their Lordships were not called upon to ascertain the extent of the authority conferred upon the Customs Officer to impose a penalty under Section 167, item (8), Sea Customs Act.
The mere observation, that the 'highest penalty which can be inflicted is Rs. 1,000' without express reference to any item out of the numerous items in Section 167 was not, and could not be, intended to be a considered opinion expressed upon the meaning of item (8). Again implicit in that observation is sufficient indication that it was not intended to be an expression of opinion as to the meaning of item (8) of Section 167. The observation refers to the powers of the Customs Officer relating to adjudging of confiscation and increased rates of duty or penalty. But it is evident that item (8) does not contemplate an order for payment of increased duty by the offender. Under several other items of Section 167 e.g., item 35 there is provision for adjudging payment of increased duty. But there is no power under item (8) of adjudging payment of Increased duty by an offender. The observation, it appears, was made by way of a mere incidental observation as to the scheme of the Act in its relation to the powers of Customs Officers, and even as a general or incidental observation it is not strictly accurate if it is intended to express thereby that in no case can a Customs Officer impose penalty exceeding Rs. 1,000 in respect of any offence described in Section 167, Sea Customs Act.
A reference to items 29, 31, 38, 58, 59, 63, 65 and 73 makes it abundantly clear that the Customs Officers have authority to impose a penalty which may, even in case of ordinary infractions of the provisions contemplated thereby, considerably exceed Rs. 1,000, The observation that the highest penalty which can be imposed by a Customs Officer cannot exceed Rs. 1,000 can obviously have no reference to those items. It cannot be limited to the provisions of item (8) because it re'fers in terms to imposition of duty, Whereas the penalty clause in item (8) does not contemplate imposition of duty at all. It must, in my view, be held that, when their Lordships made the observation on which reliance has been placed, they were only indicating generally what the scheme of the Act is, and not expressing a considered opinion either upon the effect of the penalty clause in item (8) of Section 167 or generally upon the effect of the penalty clauses under the different items of Section 167. The observation, therefore, cannot be regarded as an observation having the effect of an 'obiter dictum' of their Lordships.
It need hardly be said that, if the observation were a considered opinion expressed on a question, decided by them, even if the opinion was not necessary for the ultimate decision of the case before their Lordships of the Supreme Court, we would be bound by that expression of opinion, whatever our view may have been thereon. But in the present case, for reasons already set out, we cannot regard the observation as an 'obiter dictum' of the Supreme Court binding upon us.
21. For the reasons mentioned by me, I agree with the view taken by the learned Chief Justice.
22. There is one other ground which is taken by Mr. Javeri in Appeal No. 70/X of 1954 for supporting the order made by Mr. Justice Tendol-kar, and that ground goes to the merits of the case and a few facts might be stated.
It appears that a consignment of marbles arrived in Bombay on 19-12-1952, and the bill of entry to respect of this consignment was prepared and lodged by the appellants. The contention of the Customs Authorities was that the goods shown in the bills of lading were not marbles covered by entry serial No. 103, but were game requisites covered by serial No. 325, and that the appellants had committed a breach of the Import Trade Control Regulations by importing game requisites without the requisite licence. It was in respect of this contravention that the order was ultimately made by the Collector of Customs on 6-3-1953, imposing a penalty of RS. 20,000 upon the appellants.
The appellants challenged this penalty, first, on the ground which we have already disposed of, that the Collector had no Jurisdiction to impose a penalty exceeding Rs. 1,000. The other ground -on which he challenged this order was that he had committed no contravention of the Import Trade Regulations. Now, it may be pointed out that the law provides an adequate legal remedy to the appellants to challenge the decision arrived at by the Collector of Customs. The Sea Customs Act provides for an appeal against the order of the Collector under Section 188. As a matter of fact, the appellants preferred an appeal under that section to the Central Excise authorities. But that appeal was dismissed because, as provided by Section 189, the appellants did not deposit the sum of Rs. 20,000. That appeal was dismissed on 16-6-1953, and it is only on 24-2-1954, that this petition is preferred. Obviously, there has been gross delay in preferring this petition.
It may conceivably be argued with regard to the first point that a citizen is entitled to come to this Court if a fine is sought to be levied against him illegally on the ground that his property has been sought to be taken away otherwise than in accordance with the law, and if it affects the fundamental right of the citizen, he may come to this Court even after considerable delay. It may also be argued in such a case that, although the law provides for an alternative remedy, the Court will not refuse to give effect to the fundamental rights which are guaranteed under the Constitution. Therefore, in this particular case delay might bo excused as far as the first ground is concerned. But there can be no justification whatsoever for the gross - delay on the second ground. That ground concerns a question of fact, and if this Court can go into that question, the appellants should have approached the Court immediately, and not waited for the length of time they have taken.
But apart from the question of delay, in our opinion, the appellants are not entitled to ask us to go into that question. The only tribunal that has been set out by the Sea Customs Act is, first, the Collector who has made the order, and then the appellate tribunal which has been set up under Section 188, and that section in terms provides that every order passed in appeal under this section shall, subject to the power of revision conferred by Section 191, be final. Therefore, what Mr. Javeri wants us to do is to convert ourselves into an appellate tribunal to consider the question of fact raised in this petition. Mr. Javeri says that the appellants were not in a position to deposit the sum of Rs. 20,000 as provided in Section 189 and therefore they could not avail themselves ' of that remedy provided by law. Now, if an appeal is provided and a certain procedure is laid down for the preferring of that appeal, the appellants must satisfy that procedure and approach the only forum to which they have access.
Therefore, instead of complying with the procedure laid down in Section 189 and instead of ventilating their grievance before the tribunal set up under Section 188, the appellants have come to this Court without following that procedure, looking upon this as a cheaper and easier remedy, and want to ask us to hoar their appeal. Obviously such a procedure is entirely misconceived. But even assuming we were to look into the grievance of the appellants, it seems to us that even on merits they have no case at all. According to them, they applied for an import permit for marbles and not for 'marble' and they suggest that they disclosed to the proper authorities that what they wanted to import was toy marbles and not 'marble' used in the sense of the material used for the construction of buildings.
Now, whatever he may have represented to the proper authorities, the fact remains that the permit which he obtained was a permit with regard to marbles covered by serial No. 103 and item 25(7) of the First Schedule to the Indian Tariff Act, and not a permit covered by entry serial No. 325 which deals with game requisites. Therefore, the very short question that the Customs Authorities had to decide was whether the toy marbles which were imported by the appellants were covered by any proper import permit, and the only answer to that question can be the same as arrived at by the Collector Of Customs. There is no substance even in Mr. Javeri's argument that the representation made by the appellants was honest because, although they have used the expression 'marbles' in the plural, they have indicated to the authorities that they wanted a permit which covered the subject-matter of Serial No. 103 and item 25(7) of the Indian Tariff Act. It is too much to expect that the appellants did not know the distinction between 'marble' as used in Serial No. 103 and 'marbles' as game requisites used in Serial No. 325. There is absolutely no substance whatever in the grievance made by the appellants.
23. The result, therefore, is that the appeal Of the Collector, namely, Appeal No. 78/X of 1954 will be allowed with costs throughout, and the petition of the petitioners will be dismissed with costs, and Appeal No. 70/X of 1954 will be dismissed with costs.
24. Liberty to the appellants' attorneys in Appeal No. 73/X of 1954 to withdraw the sum of Rs. 500 deposited for casts, and liberty to the respondents' attorneys in Appeal No. 70/X of 1954 to withdraw the sum of Bs. 500 deposited by the appellants' attorneys, and to apply the said sum in part satisfaction of the order for costs herein.
25. Order accordingly.