A.N. Ray, J.
1. Messrs. Ramchand Jagdishchand obtained this Rule calling upon the respondents to show cause why a Writ of Certiorari should not be issued for quashing the order dated April 20, 1960 and further for a Writ of Mandamus requiring the respondents to forbear from giving effect to the order and also for a Rule as to why a Writ of Mandamus should not be issued directing the respondents to refund the sum of Rs. 20,818.25 as mentioned in the petition.
2. The petitioner on or about May 22, 1959, placed an order for supply of 8 cases of woollen fabrics with Messrs. K. Jos Otten of Germany through Messrs. T. S. Narang of Bombay at the rate of 20 shilling per yard. The goods arrived at the Port of Calcutta and were thereafter landed at the said port on or about August 28, 1959. On arrival of the goods the petitioner through its Clearing Agent, on September 5, 1959, submitted to the Assistant Collector of Customs, Appraisement, respondent No. 2 above named, the necessary documents, namely, Bill of Lading, Invoice and the Bill of Entry, wherein the real value, quantity and description of the goods were stated along with a declaration that the statements contained in the Bill of Entry were correct. The total value of the goods imported was shown as Rs. 22,893.73 nP.
3. On or about 12/13 February, 1960, a notice was served on the petitioner that the correct c. i. f. value of the goods should be 24 sh. per yard c. i. f. and the petitioner was asked to show cause why the goods should not be confiscated and a penalty should not be imposed. On 18 February, 1960, tie petitioner asked the Assistant Collector of Customs, Appraisement, to be informed on what basis the examination had been conducted by the respondent to arrive at 24 sh. price per yard and further stated that on receipt of the information the petitioner would reply to the notice of the Customs authorities. On 20 February, 1960, the petitioner further informed the Assistant Collector of Customs, Appraisement, that the petitioner desired to be heard in person.
4. On March 14, 1960, a further notice was served on the petitioner wherein it was alleged that on further enquiry it had been found that the correct assessable value of the goods was Rs. 33,728 calculated at the rate of 295. 6d. per yard and it was further alleged in the notice that the basis of the valuation was contained in four documents, namely, (a) copy of advice dated May 22, 1959. made out by T. S. Narang in the name of V. Jamnadas and Co., showing c. i. f. value of 293. 6d. per yard, (b) letter dated December 24, 1959, from T. S. Narang to the Assistant Collector of Customs, Bombay, (c) letter dated February 6, 1960, from T. S. Narang to the Assistant Collector of Customs, Bombay confirming that the c. i. f. values mentioned in letter dated December 24, 1959 ((b) above) were the lowest correct c. i. f. values of the qualities mentioned during the year 1959 and (d) A cable dated February 4. 1959, addressed to T. S. Narang by Messrs. K. Jos Otten of Germany.
5. On March, 22, 1960, the petitioner gave a reply. On March 25, the petitioner was informed by the Principal Appraiser that a personal hearing would be given on March 31, 1960. On March 31, there was personal hearing at which the petitioner's partner was present along with its representative. On April 20, 1960, the respondent No. 1, Deputy Collector of Customs, held that the correct c. i. f. value of the goods was 295. 6d. per yard and that the goods had been deliberately mis-declared. The goods were ordered to be confiscated under Section 167 (37) of the Sea Customs Act with an option to redeem the goods on payment of a fine of Rs. 9,890. A personal penalty of Rs. 1,000 was imposed on the petitioner and was directed to be paid forthwith. On April 26. 1960, the order of the Deputy Collector of Customs was sent to the petitioner. On May 10, 1960, the petitioner under protest and without prejudice to his right paid the Customs duty fixed by the order of the Deputy Collector of Customs aforesaid and the amount of penalty and took delivery of the goods without prejudice to his rights.
6. Counsel on behalf of the petitioner contended first that the Customs authorities had no jurisdiction to apply Section 30 (b) of the Sea Customs Act without exhausting the provisions contained in Section 30 (a) of the Sea Customs Act and therefore the order of the Customs authorities is illegal. The second contention was that the hearing was given by the Assistant Collector of Customs and the Deputy Collector of Customs passed the order without hearing the petitioner.
7. Counsel for the Customs authorities contended that the order was one in assessment and was, therefore, not justiciable under Article 226 of the Constitution. Reliance was placed on the decision in the Glaxo Laboratories (India) Private Ltd. v. A. V. Venkateswaran, reported in : AIR1959Bom372 in support of that contention, A recent decision of the Andhra High Court reported in : AIR1961AP170 , Gopi Kissen Agarwal v. Collector of Customs was also relied upon by the counsel for the Customs authorities in support of the contentions that the assessment made by the Customs authorities cannot have the attribute of a judicial or quasi-judicial proceedings and they are administrative in character and that mere errors of law or wrong interpretation of a statute cannot entitle a party to invoke a writ of Mandamus. In the Andhra case it was held that the determination of the export duty according to Sub-section (a) or Sub-section (b) of Section 30 of the Sea Customs Act was incidental to the effective exercise of the undisputed jurisdiction of the Customs Officer and if he erroneously construed the provision of Section 30 it would amount to error of law and would not touch his jurisdiction. The question in the present case is whether the Customs authorities have any jurisdiction to value under Section 30 (b) without exhausting Section 30 (a) and whether the impugned order is in accordance with law.
8. In the Glaxo Laboratories case, : AIR1959Bom372 there was no question of confiscation or penalty. It was held that the question of assessment in the initial stage is administrative in character. In the present case after the assessment was complete there were proceedings under Section 182 of the Sea Customs Act. It is now well-settled and counsel for the Customs authorities did not contend to the contrary that adjudications I by the Customs authorities under that section arequasi-judicial in character and, at times, are judicial. It is therefore indisputable that the order complained of in the present case was made in quasi-judicial capacity and a writ of Certiorari will lie if there has been excess of jurisdiction.
9. In the recent decision of the Assistant Collector of Customs v. Mercantile Express Co., Ltd., reported in : AIR1961Cal636 it has been held by the Appellate Court that an assessing authority discharging an administrative function is not above the law and the assessing authority is bound to assess the customs duty in accordance with law and if the very basis of assessment is illegal, a Writ of Mandamus will issue commanding the authority to forbear from enforcing the illegal order. Where the authority making the order discharges quasi-judicial function, the remedy of certiorari is available to the aggrieved person. I am, therefore, unable to accept any of the contentions of the counsel for the Customs authorities that the order in the present case is either administrative in character or that a Writ of Mandamus will not go or that a writ of Certiorari will not lie if the order is illegal and without jurisdiction.
10. The next question is whether there has been infraction of Section 30 of the Sea Customs Act. The order of the Deputy Collector of Customs dated April 20 is a speaking order. It is stated there by the Deputy Collector of Customs that the advice No. 4260 dated May 22, 1959, made by Messrs. T. S. Narang in the name of M. V. Jamnadas, Bombay is not true and correct. That was one of the documents No. A on which the Customs authorities relied in order to show that the c. i. f. price at 203 raised to 295 6d. was the correct basis. That invoice will appear at page 5 of the annexures to the petition. The indent is dated May 22, 1959. The cable document No. (d) referred to is dated February 4, 1959. It is clear that an indent placed for the first time in the month of May, 1959, could not he referred to in a telegram dated three months earlier. On discovery of this palpably incorrect' statement the Customs authorities did no longer rely on the advice No. 4260 dated May 22, 1959. The Customs authorities relied on the letter dated December 24, 1959, from Messrs. T. S. Narang written to the Collector of Customs and the second letter dated February, 6, 1960, from the same person to the same authorities. These two letterswill appear at pages 6 and 7 of the annexures to the petition. The letter dated December 24, 1959, written by T. S. Narang to the Assistant Collector of Customs states that 'As per your enquiry we hereby state that the correct c. i. f. values of Woollen Fabrics of our under mentioned qualities during the year 1959, have been as follows: -After that statement the qualities 2/800, 2/1400 and 2/236 are shown with the price 293. 6d. per yard. The letter dated February 6, is also written by T. S. Narang to the Assistant Collector of Customs and is worded as follows: -
'With reference to our letter dated 24th December, 1959, the correct C. I. F. values mentionedtherein are the lowest correct C. I. F. values of the qualities mentioned therein during 1959.'
11. On behalf of the Customs authoritiesthere is an affidavit of Jyotirmoy Dutta affirmed on July 4, 1960. In paragraph 8 of that affidavit the deponent says 'I say that the goods were purchased at the price of 293. 6d. per yard which is the real or correct price'. This is verified as true to knowledge. In paragraph 9 of the said affidavit the deponent states 'The order was for supply of the goods at the price of 295. 6d. per yard as hereinbefore stated.' This paragraph is also verified as true to knowledge. In paragraph II of the affidavit the deponent states 'I say that the real value of the goods was actually Rs. 33.728/- and that the value of the goods was mis-stated in the Bill of Entry'. This statement is also verified as true to knowledge. In paragraph 16 of the affidavit the deponent on behalf of to Customs authorities states that the petitioner never brought to the notice of the Customs authorities that the sale was ex stock and that the price was reduced by the supplier for certain considerations. In paragraphs 24 and 25 of the said affidavit the deponent states that the enclosures B and C referred to above in the notice of the Customs authorities indicated the correct value of the goods and there was no reason to disbelieve them and further that the said enclosures were given by the indenting agents of the petitioner and were based on facts specially known to them as indenting agents. In paragraph 25 of the affidavit the deponent states that in the circumstances stated in the order dated April 20, 1960 no reliance could be placed on the information supplied by Messrs. K. Jos Otten particularly when the under-valuation was manipulated with their collaboration.
12. The deponent on behalf of the Customs authorities in paragraph 9 of the affidavit speaks of an order for supply of the goods at the price of 295. 6d. per yard. There is no such order on the records in this case. The deponent states that the goods were purchased at the price of 293. 6d. per yard and verifies the statement as true. Though there is in fact no order showing that the goods were purchased by the petitioner at the rate of 295. 6d. per yard the Customs authorities have relied on the letters by T. S. Narang dated December 24, 1959, and February 6, 1960, to support their contention that since the writer of the letters states that 293. 6d. is the correct c. i. f. value per yard and further that is the lowest c.i. f. value during the year 1959, the petitioner must have purchased at that rate.
13. Counsel for the petitioner, in my view, rightly contended that there was nothing to show even in these two letters as to what was the price in the particular months in which the petitioner had the transaction and whether those were the prices at Bombay or at Calcutta. The country of origin is not mentioned. It is indisputable that c. i. f. price is bound to be different at different places of arrival. The Customs authorities relying entirely on the documents marked B and C referred to above held that there is no reason to discard them and further held that the question of actual importation in terms of prices indicated in the letter dated December 24, 1959, is immaterial. Counsel for the petitioner contended that the Customs authorities should first have asked the petitioner to produce documents to ascertain the real value before giving any notice regarding penalty.etc. There is good deal of substance in that. It is not necessary in the present application to go into that question in view of the legality of the order of the Deputy Collector being impeached.
14. Under Section 29 of the Sea Customs Act the owner of the goods, imported or exported, is to file a Bill of Entry or Shipping Bill as the case may be and he is further to state the real value, quantity and description of such goods to the best of his knowledge and belief. He is also to subscribe a declaration of the truth of such statement at the foot of such bill. In case of doubt the Customs Collector may require any such owner or any other person in possession of any invoice, broker's note, policy of insurance or other document, whereby the real value, quantity or description of any such goods can be ascertained to produce the same, and to furnish any information relating to such value, quantity or description which it is in his power to furnish. Under Section 30 of the Sea Customs Act real value is defined. Counsel for the Customs authorities contended that inasmuch as the petitioner signed a declaration stating that the value mentioned in the Bill of Entry was correct the petitioner wanted real value to be determined under Section 30 (b) and the petitioner could not therefore challenge the valuation by the Customs authorities under Section 30 (b). This contention is in my opinion unacceptable for the reason that the petitioner never stated the real value under Section 30 (b) of 'the Sea Customs Act. The petitioner gave the value but that does not mean that the petitioner wanted to be assessed under Section 30 (b). The second contention of counsel for the Customs authorities was that in fact the Customs authorities proceeded on the basis of the letters written by T. S. Narang and therefore that conclusion was not to be disturbed inasmuch as it was open to the Customs authorities to go right or wrong in the matter of interpretation of Section 30 of the Sea Customs Act.
15. Real value is defined under Section 30. The question is whether Section 30 (b) can be invoked by the Customs authorities without fulfilling the provisions contained in Section 30 (a) of the Sea Customs Act. In the decision of Superintendent, and Remembrancer of Legal Affairs, Bengal v. H. C. Patel, reported in : AIR1942Cal351 a firm of merchants in Bombay with a branch in Calcutta and another branch in Osaka imported Japanese goods into India for sale in the Indian market. Patel was the Manager of the Calcutta Branch. The Osaka Branch was kept in funds by the Bombay head-office and by the branch in Calcutta. In the year 1939 the Osaka branch entered into forward contracts with Japanese firms for the supply of articles like tin whistles, glassbeads, glass mirrors for shipment to Calcutta and informed the Calcutta office of the purchase and the prices at which the purchases had been made. Subsequently, the Japanese manufacturers intimated to the Osaka Branch that they could not supply the goods at the prices agreed upon and that the prices would be increased. The Osaka branch reported this fact to the Calcutta Branch and the Bombay office in reply agreed to pay the enhanced price. Thereupon the increase in price was paid to the manufacturers in Japan by the Osaka branch and debited to the account of the Calcutta branch. A debit note was sent to the Calcutta branch for this account. When the goods were shipped from Japan invoices were sent from the Osaka branch to the Calcutta branch in which the original prices accepted by the manufacturers were given as the cost of the goods and no mention was made of the subsequent increase in price paid by the Osaka branch under instruction from Calcutta.
16. When goods arrived at Calcutta the bills of entries were submitted to the Customs Authorities giving the real value of the goods as the cost at which the goods were supposed to have been bought and in support of its value the invoices sent from Japan were produced before the Customs Authorities and representations were made to those Authorities that the goods had been purchased at the prices mentioned in the invoices. Information was received from the Censor which led the Customs Authorities at the Calcutta branch to search the premises and in course of that search documents and correspondences were seized. Charges were framed against Patel in respect of the first, second and third consignments which arrived in the months of March, and June 1940. The charge was that Patel committed an offence of cheating the Government of India and its Customs Department by causing false declaration to be made and dishonestly concealing the fact that an increment of 20 per cent had been given to the makers of the said goods prior to their delivery at Calcutta which increment formed part of the real value of the goods as defined under Section 30 (b) of the Sea Customs Act.
17. In that case it was contended on behalf of the Legal Remembrancer that Section 30 (b) clearly applied and that inasmuch as the importer gave as the real value of the goods the price said to have been paid by him and supported his statement by producing the invoices, it was clear that the importer sought to have the real value determined under Section 30 (b) of the Act. This contention was negatived by holding that it was not sufficient to prove that the Customs Officer in fact applied Section 30 (b) of the Act or that the importer sought to have the real value determined under Section 30 (b) of the Act. It was held in that case that it was incumbent to prove that the conditions were fulfilled which entitled the Customs officer to apply Section 30 (b) and not Section 30 (a). In other words it was incumbent on the prosecution to prove that the wholesale cash price less trade discount for which the goods of the like quality are sold or are capable of being sold at the time and place of importation was not ascertainable. It was also held that the mere fact that the importer paid a particular price for particular goods is not sufficient to prove that that price is the real value for the purpose of Section 30 (b) of the Sea Customs Act. Counsel for the Customs Authorities contended that the decision in the Legal Remembrancer's case, ILR 1942-2 Cal 62 : (AIR 1942 Cal 351) was not applicable here in view of the fact that the ratio of the decision is that the prosecution there had to prove that Section 30 (b) applied. I am unable to accept that contention as the ratio of the case or as the distinguishing feature. It is in my opinion clear on theauthority of the decision in the case referred to above that the rule of construction of the Sea Customs Act is that the provisions of Section 30 (b) do not apply until and unless the wholesale cash price etc., as contemplated in Section 30 (a) is not ascertainable.
18. Exts. B and C (the two letters written by Narang) on which the Customs Authorities relied to arrive at the ascertainment of the real value in the present case suffer in my opinion from various infirmities. First, the letters marked B and C do not show as to whether there was any import pursuant to the quotation mentioned there. Secondly, no time of importation is mentioned. Thirdly, the place of importation is not mentioned. Fourthly, the wholesale cash price at which they were sold at the time and place of importation does notappear and finally the letter does not show to which part of the year 1959, the price mentioned relates or whether they were the price ruling at Bombay' or at Calcutta. In the present case the petitioner's time of importation is August 28, 1959. The Deputy Collector of Customs in his orderstated that importation was immaterial. In my opinion the construction of Section 30 of the Sea Customs Act as has been laid down in the Legal Remembrancer's case, ILR 1942-2 Cal 62 : (AIR 1942 Cal 351) applies here and it is only where the wholesale cash price as contemplated in Section 30 (a) is not ascertainable that provisions in Section 30 (b) are attracted. Counsel for the petitioner in my view rightly contended that the order of the Deputy Collector of Customs was illegal first on the ground of construction of Section 30 namely that Sub-section (b) did not apply until Sub-section (a) was exhausted and secondly that the order of the Deputy Collector of Customs was in breach of the statute and wholly without any evidence to arrive at the real value under Sub-section (b). I cannot at this stage help expressing the view that it is peculiar and strange that the Customs Authorities should come to possess the two letters addressed by Narang. Counsel for the Customs Authorities said that there was nothing on the records to show how these enquiries were made or under what circumstances or what was the occasion for Narang to send such letters. In any went even if the Customs Authorities wanted to rely on the letters the question of importation and the time and place of importation and the cash price less trade discount at which the goods of the like kind and quality are sold are all to be found in arriving at the real value under Section 30 (a). No attempt was made to obtain the real value under Section 30 (a). The Customs Authorities proceeded to act under Section 30 (b). I am of opinion that the action is without jurisdiction inasmuch as the Sea Customs Act does not allow the Customs Authorities to invoke the provision of Sub-section (b) without exhausting the provision of Sub-section (a). Furthermore, as has been observed in the case of : AIR1961Cal636 the order of assessment at the stage of appeal under the Act assumes a quasi-judicial character. If there is no evidence at all that is a ground on which certiorari will lie. It is true that the correctness of the decision is not open to review but if there is no evidence at all that is liable to be reviewed by way of certiorari. Inthe present case I am, of opinion that the documents marked Exts. B and C on which the Customs Authorities relied are no evidence to support the order of the Deputy Collector of Customs. There is no finding that price contemplated under Sub-section (a) of Section 30 is not ascertainable. In the absence of such finding provisions in Subsection (b) are not attracted. Furthermore, under Sub-section (b) cost at which goods of the like kind and quality could be delivered at such place are to be found. The impugned order states that importation is not material. It is the imported price that has to be found out under Sub-section (b). The order is therefore made in violation of the provisions, first because there is no finding that price under Section 30 (a) is not ascertainable, secondly, because Section 30 (b) is not attracted without complying with Section 30 (a), and thirdly because the basis of valuation under Section 3o(b), is arrived at without any finding as to importation and the cost at which goods of the like kind and quality could be delivered at the place of importation. For all these reasons I am of opinion that the impugned order is illegal and without jurisdiction.
19. The second contention on behalf of the petitioners is that the case was heard by the Assistant Collector of Customs and the order was made by the Deputy Collector and the latter never heard the petitioner in person. It is not disputed that hearing was given by the Assistant Collectors of Customs. What is contended here is that one officer heard and another officer gave the decision without ever hearing the petitioner. Counsel for the petitioner characterised the order of the Deputy Collector as reduced to an empty formality by reason of personal hearing not being given to the petitioner. In other words the contention was that the officer who heard the petitioner formed an opinion as well as impression on the petitioner's case which had been imparted by the petitioner's-representatives and the same could not be imparted to the Deputy Collector by the petitioner or by the officer who heard in the first instance. The words 'personal hearing' connote personal aspect both as regards the person heard and the person hearing. It will in my opinion be wrong to say that an officer will pass the order in isolation when the hearing is conducted by another officer. When personal hearing is given, the person who hears cannot allow an enquiry to be held or evidence to be taken by another person and then pass the order on reading the records. The person to be heard is there deprived of an opportunity of satisfying the person who passes the order. Counsel for the Customs Authorities relied on an unreported decision of the Bombay High Court in S. Venkatasena v. Shaw Trikamdas appeal No. 375 of 1956. The decision is dated 5-10-1956. In that case an interview was given by the Assistant Collector on the 12th April and on 14th April the petitioner there wrote to the Assistant Collector stating what transpired at the interview. An order was ultimately passed by the Deputy Collector of Customs. The order was challenged. It was contended in that case that the interview was given to the petitioner by the Assistant Collector of Customs and the order had been passed by the Deputy Collector of Customs and that the DeputyCollector of Customs passed the order without hearing the petitioner. It was said that the orderof the Deputy Collector was quasi-judicial and there was obligation on the Deputy Collector to act judicially and he was bound to hear the petitioner but it was held that no duty was cast upon the Deputy Collector by any reason or law or rules of procedure to hear the petitioner orally and that so long as the Deputy Collector was in possession of the records which contained the defence of the petitioner it was taken that the Deputy Collector heard the petitioner before he passed the order. Thus counsel for the Customs Authorities contended that the Deputy Collector of Customs in the present case possessed the entire records which contained the representations of the petitioner and therefore the petitioner was heard. In the recentdecision of Gullapalli Nageswara Rao v. Andhra Pradesh State Road Transport Corporation : AIR1959SC308 it has been held as appears at p. 357 (of SCR) : (at p. 327 of AIR) of the report that if one person hears and another person decides, as the Rules themselves envisaged in that case, such a procedure defeated the object of personal hearing. His Lordship Mr. Justice Subba Rao said :
'This divided Responsibility is destructive of the concept of judicial hearing. Such a proceduredefeats the object of personal hearing. Personal hearing enables the authority concerned to watch the demeanour of the witnesses andclear up his doubts during the course of arguments, and the party appearing to persuade the authority by reasoned argument to accept his pointof view. If one person hears and another decides, then personal hearing becomes an empty formality. We, therefore, hold that the said procedure followed in this case also offends another basic principle of judicial procedure.'
In the present case the Act does not allow such 'divided responsibility'. These observations lay down the principle of natural justice that personal hearing is not an empty formality: I am, therefore, of opinion that the order is impeachable on this ground also.
20. I shall now deal with the third contention of Mr. Meyer counsel for the petitioner that in the event of my conclusion that the petitioner is entitled to succeed the petitioner is entitled to claim refund in terms of prayer (c). In view of the conclusion reached that the order is illegal I quash and set aside the same. It has been held by the Supreme Court in the case of Universal Imports Agency v. Chief Controller of Imports and Exports : 1SCR305 that on finding an order of confiscation and penalty to be illegal the Court hag power to order refund of such penalty or increased duty levied. I, therefore, make the Rule absolute in terms of prayer (a), (b) and (c). The petitioner is entitled to costs of this application. I specify six weeks as the time within which the Customs Authority the respondents herein will refund the amount mentioned in the petition.