AST INDIA COMMERCIAL CO., LTD., CALCUTTA AND ANOTHER versus THE COLLECTOR OF CUSTOMS, CALCUTTA

Citation: [1963] 3 S.C.R. 338 · Decided: 04-05-1962 · Supreme Court of India · Bench: A.K. SARKAR · Disposal: Appeal(s) allowed

Cited by 9 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

I 
Moy I. 
338 
SUPREME COURT REPOR'fS [1963] 
EAST INDIA COMMERCIAL CO., LTD., 
CALCUTTA AND ANOTHER 
v. 
THE COLLECTOR OF CUSTOMS, CALCUTTA 
(A. K. SARKAR, K. SmrnA RAo 11.nd 
J. R. MunnoLKAR, JJ.) 
Import-Law enabling Government to iasue notifications 
prohibiting or restricting Import-Import licence-Breach 
of 
conditions-If amounts to import without licence-Law deo/ared 
by High Oourt-lf binding on authorities or tribunals under its 
superintendence-Sea OUBtnma Act, 1878 (8 of 1878), ss. 19, 
167;8)-Imports and Exports (Oontrol) Act, 1947 (18 of 1947), 
••· 3, ti-Oomtitution of India, Arts. 226, 227. 
On October 8, 1948, the appellant company was granted 
a licence to import from the U. S. A. a large quantity of 
electrical instruments. The licence was issued subject to the 
condition that the goods would be utilised only for consump-
tion as raw material or accessories in the licence holder's 
factory and that no portion thereof would be 
sold to 
any party. After the goods arrived in India in February-
March, 1949, the company took delivery of them on pay-
ment of customs duty. On information alleged to have been 
received by the 
authorities concerned that 
the 
goods 
were being sold in the market io breach of the conditions of 
the licence, the Police, after obtaining a search warrant from 
the magistrate seized a large stock of the goods from the 
godown of the appellant. On January 12, 1951, the customs 
authorities filed a complaint before the Magistrate under s. 5 
of the Imports and Exports (Control) Aet, 1947, against the 
second appellant, who was a director of the company, and 
others, on the allegation that the accused persons had, in 
violation of the conditions of the licence, disposed of portions 
of the goods covered by it. The Magistrate discharged the 
accused and his order was confirmed by the Hi~ h Court on 
March 3, 1955, on the ground thats. 5 of the Act penalised 
only a contravention of an order made or deemed to have 
been made under the said Act, but did not penalise the 
contravention of the conditions of licence issued under the 
Act or issued under a statutory order made under the Act, 
On January 
16, 1953, the High Court made an order 
directing the seized goods to be sold and the sale proceeds 
kept with the Chief Presidency Magistrate. On August 28, 
~-; 
3 S.C,R. 
SUPREME COURT REPORTS 
339 
1955, the Collector Cuatoms served a notice on the appel· 
!ants under s. 167(8) of the Sea Customs Act, 1871, 
read 
with s. 3 (2) of the Imports and Exports (Control) Act, 19-4-7 
to show cause why the moneys lying with the Chief 
Presidency Magistrate representing 
the imported 
goods 
should not be confocated and also why penalty should not 
be imposed on them, inasmuch as they had infringed the 
conditions of the licence issued to them by selling a portion 
of the goods imported to others. The appellants filed an 
application under Art. 226 of the Constitution of India 
before the High Court of Calcutta praying for a write of 
prohibition restraining the respondent from proceeding with 
the enquiry on the ground that it was without jurisidiction. 
Held, ( Ptr Subba Rao and Mudholkar, JJ., Sarkar, J., 
dissenting), that: (I) that the application under Art. 226 of 
the Constitution was maintainable, because, if on a true 
construction of the provisions of law under which the notice 
was issued, the respondent had no jurisdiction to initiate 
proceedings in respect of the acts alleged to have been done 
by the appellants, the respondent could be prohibited from 
proceeding with the same. 
(2) 
under s. 167(8) of the Sea Customs Act, 1878, read· 
with s.3(2) of the Imports and Exports (Control) Act, 1947, 
only the goods imported in contravention of an order under 
the latter Act were liable to be confiscated, but the section did 
not expressly or 
by necessarly implication empower the 
authority concerned to consficate the goods imported under a 
valid licence on the ground that a condition of the licence 
not imposed by the order was infringed or violated. The 
infringement of a condition in the licence was not an infringe-
ment of the order and did not, therefore, attract s.167(8) of 
the Sea Customs Act. 
(3) 
public notices issued by the Government of India 
governing the issue of import licences were not orders issued 
under s. 3 of the Imports and Exports (Control) Act. 
(4) 
in the present case, as the goods were imported 
under a valid licence they could not be considered as good

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