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Union of India (Uoi) Represented Through the Secretary, Ministry of Finance and ors. Vs. Atiabari Tea Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 265 of 1959
Judge
Reported inAIR1967Cal235
ActsLand Customs Act, 1924 - Section 5(3); ;Tea Act, 1953 - Sections 3 and 18(1); ;Constitution of India - Article 226 and 226(1A)
AppellantUnion of India (Uoi) Represented Through the Secretary, Ministry of Finance and ors.
RespondentAtiabari Tea Co. Ltd.
Appellant AdvocateAmiya Kumar Mookerjee, Adv.
Respondent AdvocateNani Coomar Chakrabarty, ;Diptikana Bose and ;B.C. Ray, Advs.
DispositionAppeal dismissed
Cases ReferredAjit Kumar Palit v. State
Excerpt:
- .....inspector of central excise, atiabari range, demanded payment by the respondent of lis. 7878 as export duty and rupees 840 as cess. the respondent filed an objection alleging that the goods being lost, no export duty or cess was payable. this objection was rejected, and proceedings were commenced against the respondent for realisation of the alleged dues for export duty and cess. being aggrieved by these proceedings the respondent moved this court under article 226 of the constitution for the issue of appropriate writs directing the appellants to forbear from giving effect to the notice of demand dated april 19, 1954, and june 8, 1955, together with the one issued on july 2, 1955, and not to enforce realisation of the said sums. a rule nisi was issued, which was made absolute as.....
Judgment:

B.C. Mitra, J.

1. This appeal is directed against a judgment and order of Sinha, J. date3 December 8, 1958, whereby a rule nisi obtained by the respondent in a petition under Article 226 of the Constitution, was made absolute.

2. The respondent is the owner of and manages a tea estate known as Atiabari Tea Estate, in the district of Jalpaiguri. Tea from the respondent's garden is sent to Calcutta and sold there, both for export and also for internal consumption, through auction sales held by tea brokers. In July, 1953, the respondent made over to the North Eastern Railway Administration at Garopara, 402 chests of tea containing 42016 Ibs. of black ten, for carriage and delivery to the respondent at Calcutta. The respondent paid the excise duty as required by the Central Excises and Salt Act, before the Lea was removed from the gardens for booking with the railway administration. The railway administration arranged for carriage of the tea through the R. S. N. Co. Ltd. and I. G. N. and Rly. Co Ltd., to Calcutta by river route, part of which was in Eastern Pakistan. The excise department required the respondent to execute a bond and such a bond was executed by the respondent. The bond was addressed to the Collector of Land Customs, Calcutta, and it provided that in consideration of permission granted to the respondent to transport the goods by steamer or rail through Pakistan to places in India, the surety guaranteed to produce and deliver within two months from the dale of despatch, certificates from consignee of due reception of goods by them. There was an undertaking not to divert any goods destined for India en route. There was a further provision that in the ovent of short delivery at the destination in India as compared with the consignments despatched, Surendra Kumac Nag, Manager, Atiabari Tea Estate and Kedarnath Banerjee, Manager, Patka-para Tea Estate, sureties, undertook 'to pay duty and/or cess if any such penalty as may be adjudicated by the Customs Collector under the Land Customs Act. after giving an opportunity to the exporter to explain the cause of the short delivery''.

3. The consignment of tea was put on board the steamer S. S. Pagan, for carriage to Calcutta. On July 22, 1953, the said steamer was involved in an accident near Jagannathganj, in Eastern Pakistan, as a result of which it sank, with its entire cargo on board, including the said consignment of tea. There was thus a total loss of the goods. By a letter dated October 1, 1953, the respondent informed the Collector or Central Excise, Calcutta, of the loss of the said consignment. Particulars and documents relating to the said loss were called for by the Central Excise Department, The respondent alleges that such documents were furnished. On April 19, 1954, the Inspector of Central Excise, Atiabari Range, demanded payment by the respondent of lis. 7878 as export duty and Rupees 840 as cess. The respondent filed an objection alleging that the goods being lost, no export duty or cess was payable. This objection was rejected, and proceedings were commenced against the respondent for realisation of the alleged dues for export duty and cess. Being aggrieved by these proceedings the respondent moved this Court under Article 226 of the Constitution for the issue of appropriate writs directing the appellants to forbear from giving effect to the notice of demand dated April 19, 1954, and June 8, 1955, together with the one issued on July 2, 1955, and not to enforce realisation of the said sums. A rule nisi was issued, which was made absolute as hereinbefore stated. The appellant has preferred this appeal against this order making the rule nisi absolute.

4. The respondent instituted a suit being unit No. 3 of 1954, in the Court of the Subordinate Judge at Jalpaiguri against the Union of India, as owner of the said railway administration, and also the said R. S. N. and Co. Ltd. and I. G. N. and Rly. Co Ltd for compensation for loss of the said consignment of tea. This suit has been decreed in favour of the respondent. In the written statement filed on behalf of the Union of India, it was admitted that the goods were lost in transit in consequence of an accident, as a result of which the steamer sank and the cargo including the consignment of tea was lost. The material allegations in the written statement are as follows:--

'The consignments in suit were made over by the Railway to the Steamer Companies correctly but the steamer 'Pagan' carrying the consignments had met with a serious accident on 22-7-53 near Jagannathgauj East Pakistan, as a result of which the steamer sank with loss of cargo on board which included the consignment in suit. For such accidental loss the defendant cannot in any way, be held liable.'

Similar allegations were also made in the written statment filed on behalf of the T. O. N and Rly. Co. Ltd.

5. Mr. Amiya Mukherjee, learned Advocate for the appellant, contended that on a reference to the Application for Export which is at pp. 32-34 of the Paper Book it would be clear that the respondent applied for carriage of goods through Pakistan territory. He argued that as soon as the goods crossed the customs frontier of India, export duty was payable on the same. In this case, it was argued, a concession was made, namely, that instead of realising export duty, a bond was taken from the respondent. Under the terms of this bond the respondent was bound to pay export duty and cess if there was short delivery. In this case, Mr. Mukherjee argued, undoubtedly there was short delivery as the goods did not arrive at the destination in the Union of India. The respondent, Mr. Mukherjee argued, was called upon by the letter dated October 22/26, 1953. to produce authentic documents in support of the loss of tea in Pakistan. Certain documents were supplied by the respondent by its letter dated November 19, 1953, as evidence of loss. The appellant was not willing to accept these documents as authentic documents furnishing evidence of loss, and thereupon by a letter dated November 27, December 1, 1953, the respondent was called upon to produce a certificate from the carrying company as to the loss of the goods in Pakistan. By its letter dated December 18, 1953, the respondent contended that it had furnished all the necessary documents and wanted to know what documents would be considered to be authentic documents by the Superintendent of Central Excise--Land Customs.

6. Mr. Mukherjee argued that the appellants did not decline to accept the respondent' contention of loss, but they wanted sufficient documentary evidence in support of the loss of the goods in Pakistan. The respondent, it was argued, failed to produce such documents and, therefore it was clearly liable in terms of the bond, to pay the export duty and cess. The bond, Mr. Mukherjee argued, was a contract between the parties and his Court should not in exercise of its jurisdiction under Article 226 of the Constitution, restrain the appellants from enforcing the terms of the bond against the respondent.

7. Mr. Noni Coomar Chakravarty, learned advocate for the respondent, contended that documents were called for from the respondent as evidence of loss of the goods in Pakistan and for no other purpose. The appellants. Mr. Chakravarty argued, wanted to be satisfied beyond doubt, that there was actual loss of the goods as a result of the sinking of the steamer in Pakistan. This question, Mr. Chakravarty argued, could not be agitated by the appellants any longer. In the written statements filed on behalf of the Union of India and the I. G. N. and Rly. Co. Ltd. in the suit mentioned above, it was clearly admitted that the steamer was involved in an accident as a result of which it sank. It was also admitted that there was a total loss of the cargo including the respondent' consignment of tea. This admission by the appellants regarding sinking of the steamer and loss of the cargo, Mr. Chakravarty argued, made the contention now raised on behalf of the appellants relating to evidence of loss, entirely frivolous. The said admission must have been made after being satisfied about the loss, and production of documents by the respondent, could not have improved the position.

8. In our opinion the contentions of Mr. Chakravarty are well founded. Documents undoubtedly were required by the appellants as evidence of loss. But the appellants must have been satisfied about such loss before making the admission in the written statement mentioned above. There is, therefore, in our opinion, no force in the appellants' contention that the respondent was not entitled to resist the claim for export duty and cess on the ground that there was no sufficient evidence of loss of cargo arising from the sinking of the steamer.

9. Mr. Chakravarty next contended that no export duty or cess could be claimed by the appellant in this ease, because it was not a case of export at all. The respondent. Mr. Chakravarty argued, had entered into a contract of carriage of goods from one part of the Union of India to another part, and part of the route through which the goods were to be carried was in Pakistan. But the fact that the goods were carried through Pakistan territory in part, it was argued, did not make it a case of export of goods, so as to make the respondent liable for export duty. Mr. Chakravarty referred to the Application for Export, in which it was stated that the goods were to be taken to G. R. P. Shed in Indian Union through Pakistan territory. Therefore, Mr. Chakravarty argued, that it was not a case of export at all, as the application made it clear that the destination of the goods was a part of the Indian Union. He further argued that the goods at no stage were at the disposal of the respondent so as to raise any question of diversion of the goods to a foreign territory. The goods were handed over to the railway administration owned by the Union of India, and it was the railway administration which arranged with the steamer companies for carriage of the goods by river. There was, therefore, no question of any possibility of diversion of the goods by the respondent or its agent en route. There is good deal of force in this contention of Mr. Chakravarty. But it cannot be overlooked that a bond had been executed by the respondent, and under the terms of the bond, me respondent's liability for export duty and cess was to arise upon the happening of certain contingencies. This bond is a matter of contract between the parties, and this Court could not lightly interfere with the contractual rights of the parties, if such rights could be otherwise enforced in law. The respondent had executed a bond, being fully aware of the circumstances. Even though, therefore, Mr. Chakravarty's contention is sound that it was not a case of export of goods from Union of India, the liability of the respondent arising from the terms of the bond cannot be wiped out or ignored. The question, however, is if in the facts of the case the terms of the bond can be enforced against the respondent.

10. Mr. Prafulla Roy, learned advocate for the appellants in Appeal No. 263 of 1959 (Union of India represented through Secretary, Ministry of Finance and Ors ...... Appellants v. Kadambini Tea Co. Ltd., Respondent) which was heard along with this appeal, the facts involved being identical, contended that the bond was rightly taken by the appellants, as technically and in strict law, there was an export of the goods as soon as it crossed the customs boundary of the Indian Union. He argued that although it must be treated to be a case of export as the goods crossed the customs barrier, export duty was not realised as a concession to the respondent. Instead of realising the export duty a bond was taken from the respondents imposing liability on the happening of certain contingencies. He argued that the contingencies upon which the liability of the respondent was dependent, had happened, namely, short delivery and therefore, the respondent was liable on the terms of the bond.

11. Mr. Roy next argued that the trial Court was in error in holding that in order to amount to export there must be an 'animus' or intention to export. He argued that the intention to export was wholly immaterial in considering whether goods had been exported. Goods might be taken across the customs boundary without any initial intention to export, but with the intention of bringing them back to the Union of India. But after such goods had crossed the customs frontiers they may be diverted or disposed of by the owner or his agents, and such a case must be treated to be a case of export and the owner must be held liable for export duty. The 'animus' or the intention to export cannot, therefore, Mr. Roy argued be treated as a material factor in considering the liability of a party for export duty. In our opinion, Mr. Roy's contentions are well founded. The intention to export is not a material factor to be taken into consideration in the matter of liability for export duty. There may very well be export of goods in fact, without any intention to export them. The factum of export is all that is material and relevant, in considering the question of liability for export duty in respect of goods which have crossed the customs frontier.

12. Mr. Chakravarty however contended that the bond could not be enforced against his client, as it was admitted by the appellants that there was a total loss of the goods as a result of the sinking of the said steamer which was involved in an accident. He argued that if there was no such loss as had occurred, and his client had failed to account for the entire consignment it would have been liable for export duty and cess in terms of the bond. On the face of the admission of loss of goods as discussed above, Mr. Chakravarty argued, his client could not be proceeded against for realisation of export duty and cess in respect of goods which, far from being exported, were on the admission of the appellants totally lost in course of transit.

13. In the facts of this case there can be no doubt or debate on the question of loss of the goods. The steamer sank while in Pakistan and the goods were admittedly lost. Keeping in mind the admission made by the appellants in the written statements mentioned above, it cannot be held that there had been export of the goods either factually or technically. In our opinion, Sinha, J., was right in holding that in the facts and circumstances of this case, the respondent was not liable to pay either export duty or cess. Carriage of goods from one part of Indian Union to another part of Indian Union through Pakistan territory, by itself, would not raise any presumption of exemption from export duty, as there clearly was the possibility of diversion or disposal of the goods in transit. But if there is a total loss of the goods, which loss undoubtedly had occurred, and as there is a clear and unequivocal admission of such total loss, it cannot be held that there had been export of the goods or short delivery as contemplated by the terms of the bond. The bond itself contemplated that in the event of short delivery an opportunity should be given to the exporter to explain the causes of the short delivery. It is clear, therefore, that even on the terms of the bond, the parties contemplated that if sufficient explanation was given regarding short delivery, the respondent would not be held liable for export duty or cess. In this case the explanation which the respondent offered and which was admitted by the appellants, could not conceivably be more conclusive. Therefore, even on the terms of the bond itself the liability of the respondent for export duty and cess cannot be said to have arisen.

14. The next point urged by Mr. Mukherjee was that no writ could be issued against the Union of India. The rule nisi was issued by this Court on September 5, 1955. On the date this rule was issued, Mr. Mukherjee argued, this Court had no jurisdiction to issue a writ against the Union of India. The Fifteenth Amendment of the Constitution by the Constitution (Fifteenth Amendment) Act, 1963, came into force on October 6, 1963, and it was by this amendment that jurisdiction was conferred upon this Court to issue writs under Article 226 of the Constitution against the Union of India in appropriate cases, as set out in the amended Article 226(1-A) of the Constitution. Mr. Mukherjee argued that the writ petition having been moved long before the amendment of Article 226 of the Constitution, the rule nisi could not be issued against the Union of India. This rule was made absolute on December 8, 1958, long before the Fifteenth Amendment of the Constitution came into force. Therefore, Mr. Mukherjee submitted that the trial Court had no jurisdiction to make the rule absolute.

15. Mr. Chakravarty repelled this contention of Mr. Mukherjee by contending that even under Article 226(1) this Court had the power to issue appropriate writs against the Union of India in appropriate case. It was argued that the power to issue the writ was there. Therefore, it was not a case of want of jurisdiction of this Court to issue the writ against the Union of India. In support of this contention, Mr. Chakravarty relied upon a decision of the Rajasthan High Court in Anwar Mohammed v. Managing Officer-cum-Custodian of Evacuee Property, Jaipur, , in which it was held that the amendment to Art. 226 of the Constitution was only procedural in nature and gave one more forum to a petitioner to enforce the right of seeking a remedy under Article 226. The purpose of the amendment was held to be to extend the jurisidction of the High Court to issue writs to Government or authority beyond the territorial jurisdiction, provided the cause of action arose wholly or in part within the limits of the territorial jurisdiction. Relying upon this decision Mr. Chakravarty contended that the amendment was merely procedural. The right to a remedy under Article 226 of the Constitution was already there and by the amendment the procedural law had been changed, so as to provide an additional forum to a petitioner. The amendment being procedural in nature, Mr. Chakravarty argued, it had retrospective effect, and would apply to a pending case. In support of the contention that the amendment would apply to a pending case Mr. Chakravarty relied upon a Full Bench decision of this Court in Ajit Kumar Palit v. State, : AIR1961Cal560 (FB). In that case dealing with the question of applicability of an amendment to an existing statute, my Lord the Chief Justice (Bose, J., as he then was), held that in all proceedings in which cognisance had to be taken in future, the amendment to the statute would apply. It was also held by P. B. Mukharji, J., that pending cases would be governed in future stages by the amended procedure under the amended law. Mr. Charavarty argued that the amendment to Article 226 of the Constitution by the Fifteenth Amendment was only procedural and did not affect the substantive rights and that being so, this amendment must be held to be retrospective in operation. Therefore, it was argued, that in this appeal, the Fifteenth Amendment of Article 226 of the Constitution should be given effect to, as the proceeding was a pending proceeding.

16. In our opinion, this contention of Mr. Chakravarty is well founded. It is true that the rule nisi was issued, and the same was made absolute, before the Fifteenth Amendment of the Constitution came into force. But this amendment has conferred upon this Court the jurisdiction to issue appropriate writs against the Union of India. It is well settled that an appeal is a continuation of the proceedings out of which it arises. The appeal now before us, therefore, is a continuation of the proceedings arising out of the writ petition. In exercise of the jurisdiction, conferred upon this court by the Fifteenth Amendment of the Constitution appropriate writs under Article 226(1) and (1-A) may therfore be issued by this Court in disposing of this appeal, and the issue of the Writ of Mandamus by Sinha, J., is accordingly upheld.

17. For the reasons mentioned above, this appeal fails and is accordingly dismissed. Each parry to pay its own costs.

Bose, C.J.

18. I agree.


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