P.S. Kailasam, J.
1. The petitioners, as clearing agents, cleared a consignment of 520 bags of Asbestos Fibre Brand Silbestos belonging to Messrs. Punj & Sons (Private), Limited from ''S.S. Isipingo', which arrived at Madras Harbour on 25th June, 1963. The Customs authorities allowed this consignment duty free on 29th July, 1963 when the clearance was completed. On 25th April, 1964, the Assistant Collector of Customs, Appraising Department, realised that duty of Rs. 3,910-50 ought to have been levied on the goods cleared by the petitioners on 20th July, 1963. Therefore, the Collector addressed a letter to Messrs. Punj & Sons. In his letter, the Collector mentioned that a demand under Section 28(1) of the Customs Act, 1962 has become time-barred, but payment of the amount if made voluntarily would be accepted. The petitioners addressed Messrs. Punj & Sons on 6th May, 1964 referring to the letter of the 25th April, 1964 from the Assistant Collector of Customs and requested Messrs. Punj & Sons to do the needful in the matter. Messrs. Punj & Sons did not make any payment. On 25th August, 1964., the Assistant Collector wrote again to the petitioners that the importers have stated in their letter dated 8th May, 1964 that they were unwilling to pay. He also intimated the petitioners that as they acted as the clearing agent for the importers, it was decided to recover the sum of Rs. 3,910-50 from the petitioners by adjusting it in the petitioners' deposit account. On 24th October, 1964, the petitioners pointed out that the Assistant Collector was not right in proposing to enforce the demand by compulsorily recovering the amount by adjust-ting with the petitioners' account and suggested that they could take proceedings against the importers. On 4th December, 1964, the Assistant Collector informed the petitioners that the sum of Rs. 3,910-50 which was requested for as voluntary payment from the importers has not been received and as the petitioners acted as clearing agents for the importers, it had since been decided to recover the short levied amount legally due to Government from the petitioners. The petitioners were called upon to pay the same within a fortnight from the date of receipt of that letter. On 9th December, 1964, the petitioners protested against the proposal of the Assistant Collector to adjust his account. The petitioners eventually filed Writ Petition Mo. 621 of 1965 as the Assistant Collector continued to threaten to adjust the amount from their account, for a writ of prohibition against the Assistant Collector. As already stated, before the order was served, the amount was adjusted by the Assistant Collector of Customs, which necessitated the petitioners filing Writ Petition No. 513 of 1966 for a writ ofcertiorari for quashing the order of the Assistant Collector.
2. Article 265 of the Constitution of India provides that no tax shall be levied or collected except by authority of law. There can be no dispute that the duty levied by the Customs authorities is a tax, and therefore, can only be levied by authority of law. Section 12 of the Customs Act, 1962 (LII of 1962) provides that duties of customs shall be levied at such rates as may be specified under the Indian Tariff Act, 1934, or any other law for the time being in force, on goods imported into, or exported from India. It is not disputed that the goods cleared by the petitioners on 29th July, 1963 are liable to duty and can be cleared after payment of duty. But by some mistake, the duty had not been levied on the goods. Section 28(1) of the Act provides that when any duty has not been levied, the proper office may, within six months from the relevant date, serve notice on the person chargeable with the duty which has not been levied, requiring him to show cause why he should not pay the amount specified in the notice. The expression ' relevant date ', according to Section 28(3) is ' the date on which the proper officer makes an order for the clearance of the goods. We are not concerned with the proviso to Section 28(1) of the Act. Section 28(2) provides that the Assistant Collector, after considering the representationmade by the person on whom notice is served under Sub-section (1) shall determine the amount of duty due from such person and thereupon such person shall pay the amount so determined. A reading of Section 28 makes it clear that in the case of non-levy, the officer must within six months from the relevant date, which is the date on which the officer made an order for the clearance of the goods, serve a notice on the person chargeable with the duty calling upon him to show cause why he should not pay the amount. After service of the notice, under Sub-section (2) he must consider the representation made by the person to whom notice is issued and then determine the amount and call upon the person to pay the amount. Action under Section 28 could not have been taken, and the Assistant Collector was clearly aware of it, for in his letter dated 25th April, 1964, he had mentioned that a demand under Section 28(1) is time-barred, but a payment if made voluntarily, would be accepted. As proceedings could not be taken under Section 28 no notice required under that section was given or the procedure prescribed under Section 28(1) and (2) followed.
3. Section 147 of the Act authorises the agent to do any act on behalf of the principal which the Act requires the owner or importer to do. Sub-section (3) of Section 147 provides that when any person is expressly or impliedly authorised by the owner, importer or exporter of any goods to be his agent in respect of such goods for all or any of the purposes of this Act, such person shall be deemed to be the owner, importer or exporter of such goods. According to the proviso to the section, where a duty is not levied for any reason other than wilful act, negligence or default of the agent, such duty shall not be recovered from the agent unless, in the opinion of the Assistant Collector of Customs, the same cannot be recovered from the owner, importer or exporter. According to this section, in the case of non-levy of duty, the duty shall not be recovered from the agent unless, in the opinion of the Assistant Collector of Customs, the same cannot be recovered from the owner, importer or exporter. According to this section, in the case of non-levy of duty, the duty shall not be recovered from the agent unless the Collector is satisfied that it cannot be recovered from the owner or exporter or importer. But the recovery of duty that had not been levied can only be subject to the provisions of Section 28. On a reading of Sections 12, 28 and 147 together, it is clear that in cases in which duty had not been levied, the owner should be called upon to pay if the non-levy was not due to the wilful act, negligence or default of the agent. If the amount cannot be recovered from the owner, the Assistant Collector may collect it from the agent. But the collection of the amount not levied can only be subject to the provisions of Section 28, that is, the officer should give notice within six months from the relevant date to the person concerned and follow the procedure laid down in that section. If no notice is issued within six months, the debt becomes time-barred and cannot be recovered.
4. Mr. Ramanujam, learned Counsel appearing for the Customs Department, submitted that by Section 12, the law enables the Customs Department to levy duty on goods imported. In this case the goods were subject to levy of duty and, therefore, the petitioners are liable to pay the duty. He submitted that Section 147 of the Act made the agent also liable under certain conditions. According to him, Section 28 provides one of the remedies in addition to the right of recovery of duty properly leviable, under the ordinary law of the land, i.e., within 30 years from the date on which the duty became leviable. This contention cannot be accepted, for the Act itself, when providing for the levy of the duty, also specifies the manner in which it can be collected. The Customs Act is a Code which defines the procedure and will have to be followed for collecting the duty which had not been levied and the procedure prescribed under Section 28 of the Act will have to be followed. In order to take advantage of Section 28, the Assistant Collector should give notice to the person concerned within six months from the relevant date, and if he fails to do so, he cannot fall back on the general law and try to collect the amount. It is futile for him to contend that even though the remedy under Section 28 is barred, he can avail himself of the general law and proceed against the petitioners.
5. Reference was made to Section 39 of the old Act, Sea Customs Act, 1878(Vlll of 1878). The section provides that in cases in which duty had not been levied, the person concerned should pay the duty on the notice of demand issued to him within three months from the relevant date. It was contended that the liability to pay customs duty was imposed under Section 20 of the old Act corresponding to present Section 12 and that Section 39 of the old Act corresponding to present Section 28 created only a bar of limitation to the recovery of customs duty which had not been levied, which had only extinguished the remedy, but did not extinguish the liability, to pay customs duty. This contention was repelled by a Bench of `the Bombay High Court in Appeal No. 71 of 1963. The Bench held that both Sections 20 and 39 of the old Act must be read together and that if this was done, it would appear that when customs duty had been short levied, not only the remedy to recover the duty became barred after the expiry of the period of three mouths from the relevant date but also the liability to pay the deficiency in duty. I am in respectful agreement with the reasoning and conclusion arrived at by the Bombay High Court. The decision is applicable to the facts of the present case as well. In the result, the contention of the learned Counsel for the petitioners that the respondent was not entitled to adjust the amount had to be accepted.
6. Learned Counsel for the respondent, however, contended that an alternative remedy is available to the petitioners and as the petitioners have not availed of it, the writ petition should be dismissed. It is no doubt true that normally the petitioners should exhaust all remedies before approaching this, Court, but that does not preclude this Court from issuing the writ in appropriate cases. The adjustment of the amount in this case is clearly unjustified and illegal and this is a fit case in which, though alternative remedy has not been availed of, a writ could issue. As the amount had already been adjusted, Writ Petition No. 621 of 1065 has become infructuous, and it is dismissed. But the order of the Collector of Customs adjusting the amount of Rs. 3,910-50 is set aside and Writ Petition No. 513 of 1966 is allowed with costs Rs. 100.