GURCHARAN SINGH versus DIRECTORATE OF REVENUE INTELLIGENCE

Citation: [2008] 5 S.C.R. 856 · Decided: 01-04-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Dismissed
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Judgment (excerpt)

[2008) 5 S.C.R. 856 
A 
GURCHARAN SINGH 
"!' ." .... 
v. 
DIRECTORATE OF REVENUE INTELLIGENCE 
(Criminal Appeal No. 576 of 2008) 
B 
APRIL 1, 2008 
[S.B. SINHA AND V.S. SIRPURKAR, JJ.] 
,... 
)>< 
Customs Act, 1962: s.135 - Floating of fictitious firms 
with intention to obtain duty drawback- Cognizance of offence 
c taken under s. 135 - High Court refused to quash proceedings 
under s.482 of the Code - Correctness of- Held: Correct as 
allegation made in complaint prima facie disclosed offence 
under s.135 - Code of Criminal Procedure, 1973 - s.482. 
Accused No. 5 was a Customs Officer. He floated 
D various firms in false and fictitious names. A claim for duty 
drawback amount was made for alleged export of 
readymade garments by the said firms under certain 
~ .. 
' 
assumed names to the extent of Rs.1.04 crores. Appellant 
alongwith other accused made statements under s.8 of 
E the Customs Act corroborating the allegations made 
against them that they had conspired with each other in 
regard to export of inferior quality of readymade garments 
which had been over-Invoiced. 
F 
Cognizance of the said offence was taken by the 
Additional CMM. An application for discharge was filed 
by the appellant which was dismissed. An application for 
'f -
quashing of the said order was thereafter filed before the 
High Court, which was also dismissed. 
G 
In appeal to this Court, appellant contended that duty 
drawback having not been included in s.135 of the 
Customs Act prior to Its insertion in 2003, the impugned 
judgment cannot be sustained; that by insertion of the 
said provision, a new type of offence was created and 
~· 
H 
856 
GURCHARAN SINGH v. DIRECTORATE OF REVENUE 
857 
INTELLIGENCE 
-~ ... 
thus, it cannot be held to be clarificatory in nature; and A 
that if importation of some goods are prohibited, no duty 
could be paid thereon and in that view of the matter the 
provisions of s.135 of the Act would have no application. 
Dismissing the appeal, the Court 
B 
-.1.. 
HELD : 1. S.135 (1 )(a) of the Customs Act, 1962 is in 
two parts. The first part relates to evasion of duty. .The 
second part relates to prohibitions, which in turn relates 
to "prohibited goods". The words have to be assigned 
the same meaning as contained in s.2(33) of the Act. It c 
not only takes withi.n its sweep the goods which are 
prohibited under the Customs Act but al.so under other 
Acts. It cannot be accepted that prohibition must have a 
nexus with the payment of duty and in the event some 
goods are imported which are prohibited goods vis-a-vis D 
payment of duty, then and then only the rigours of s. 135 
.... ~ 
would be attracted. The word "or" has been used therein . 
It must be read disjuhctively and not conjunctively. This 
nature of prohibition would attract the provisions of s. 113 
of the Customs Act. S.113(d) uses the words "contrary to E 
any prohibition imposed by or under this Act or any other 
law for the time being in force". Clause (i) of Section 113(h) 
is in two parts, one is in relation to goods entered for 
exportation under the claim for drawback; The said words 
were inserted by Act25of1978 w.e.f.1stJuly, 1978. Clause 
(ii) of s.113 (h), which is in the second part, however, refers 
F 
y 
to the claim of drawback which does not correspond in 
any material particular to any information furnished by the 
exporter or manufacturer under the Act. A wrongful claim 
of drawback was, therefore, covered both under clause 
(i) and (ii), one dealing with dutiable or prohibited goods G 
and the other with the entry of goods which was even 
otherwise covered. [Paras 13-14] [864-D, E, G, H; 865-A, BJ 
• ."'4 
2. A penal statute must receive strict construction. 
· The Court while interpreting a statute must consider the H 
858 
SUPREME COURT REPORTS 
[2008] 5 S.C.R. 
A purpose for which the Act has been enacted. [Paras 17-
18] [870-B, C] 
Indian Handicraft Emporium and others v. Union of 
India and others (2003) 7 SCC 589; Bairam Kumawat v. 
B Union of India (2003) 7 SCC 628 - relied on. 
3. A person is said to have done anything 
fraudulently if he does that with an intent to defraud but 
not otherwise. The requisite guilty knowledge or mens 
rea under clauses (a) and (b) of s.135(1) of the Customs 
c Act can be established by circumstantial evidence. As 
the allegations made in the complaint prima facie 
discloses an offence under s.135 of the Act, the High 
Court, has correctly refused to quash the proceeding. 
[Paras 16,
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