VIJAY PRAKASH D. MEHTA & ANR. versus COLLECTOR OF CUSTOMS (PREVENTIVE), BOMBAY

Citation: [1988] SUPP. 2 S.C.R. 434 · Decided: 16-08-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed

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Judgment (excerpt)

A 
VIJAY PRAKASH D. MEHTA & ANR. 
\ 
v. 
COLLECTOR OF CUSTOMS (PREVENTIVE), BOMBAY 
AUGUST 16, 1988 
B 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
c 
Customs Act, 1962: ss. 130E(b) & 129E-Statutory right of 
appeal-Neither an absolute right nor an ingredient of natural justice-
Can be circumscribed by the conditions in the grant-Held-Obligatory 
on appellants to deposit duty or penalty levied pending the appeal. 
Section 129A of the Customs Act, 1962 confers right of appeal to 
the Appellate Tribunal. Where, however, the order appealed against 
relates to duty demanded in respect of goods which are not under the 
control of the cnstoms authorities or any penalty levied under the Act, 
s. l29E requires the aggrieved person to deposit with the proper officer 
D 
the duty demanded or the penalty levied, pen!ling the appeal. The pro-
viso thereto, however, empowers the Appellate Authority to dispense 
with such deposit in case of undue hardship. 
The appellants, Indian citizens based in Hong Kong and Singa-
pore respectiveiy, were caught red-handed, while on a visit to India, 
E 
with huge amounts of foreign exchange. They admitted their part in 
systematic illegal export of foreign exchange from the country over the 
past several years. In proceedings under ss. 111 to 114 and ll8 of the 
Act the Addi. Collector of Customs imposed a penalty of Rs.3 lacs on 
each of them. They preferred appeals to the Appellate Tribunal under 
s. 129A. In an application made under s. 129E the Tribunal reduced the 
F 
amount of penalty to be deposited to Rs. I lac for each of them. The 
appellants sought further reduction. Their case was that they had not 
gone out of the country and had' no assets in India. Their passports were 
impounded at the time of arrest. Their visas had lapsed and could not 
be renewed. They had no money and that in a situation of this type the 
condition for deposit of penalty was bad as it whittled down the appel-
G · (ants' right of appeal. The Tribunal after considering the relevant 
factors declined to reduce the penalty further and dismissed the appeal 
for non-compliance with the provisions of s. 129E. 
Dismissing the appeals under s. 130E(b) of the Customs Act, 
H 
HELD: R.i'ght to appeat is neither an absolute right nor an in-
434 
V.P, MEHTA v. COLLECTOR OF CUSTOMS 
435 
gredient of natural justice the principles of which must be followed in 
all judicial and quasi-judicial adjudications. The right to appeal is a 
statutory right and it can b-" circumscribed by the conditions in the 
grant. [439A-B] 
.. 2,_. It is not the law that adjudication by itself following the rules of 
natl!ral justice would be violative of any right, constitutional or statu-
tory, without any right of appeal, as such. If a statute gives a right to 
appeal upon certain conditions, it is upon _fulfilment of those conditions 
that toe right becomes vested and exercisable to the appellant. [440C] 
3. The purpose of s. 129E of the Customs Act is to act in terrorem to 
make the people comply with the provisions of law. The right of appeal 
provided therein is a conditional o.ne. The petitioner could obtain stay of 
realisation of tax levied or penalty imposed in an appeal subject to the 
limitations contemplated therein. Although the section does not ex-
pressly provide for rejection of the appeal for non-deposit of duty or 
penalty yet it makes it obligatory on the appellant to deposit the same 
pending the appeal, failing which the Appellate Tribunal is fully compe-
tent to reject the appeal. The proviso thereto gives a discretion to the 
authority in cases of undue hardships to con.done the obligation· to 
deposit or reduce. It is a discretion vested in an obligation to act judi-
cially and properly. [440E, 439F, 437G, 440C] 
In the instant case, the order of the Tribunal was passed honestly, 
bona fide and having regard to the plea of 'undue hardship' as canvas-
sed by the appellants. AU the relevant factors, namely, the probability 
of the prima facie case of the appellants and the conduct of the parties 
were taken into consideration. The Tribunal noted the several abortive 
and defective attempts made to get extension of time to .deposit the 
security. Firstly, the prayer was to accept Rs.35,000 and secondly to 
accept Rs. 60,000 in two months. It also noted the fact that the appeals 
were filed two years ago. It could not, therefore, be said that there was · 
any improper exercise of jurisdiction or misdirection by the Appe

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