Judgment
As delivered
PETITIONER:UNION OF INDIA
Vs.
RESPONDENT:TARACHAND GUPTA & BROS.
DATE OF JUDGMENT28/01/1971
BENCH:SHELAT, J.M.BENCH:SHELAT, J.M.VAIDYIALINGAM, C.A.
CITATION:1971 AIR 1558 1971 SCR (3) 557CITATOR INFO :R 1978 SC1217 (25)RF 1991 SC1420 (75)
ACT:Civil Courts-Jurisdiction of-Exclusion of jurisdiction-Wheninferred.Import Trade Control Policy-Jurisdiction of statutoryauthority.
HEADNOTE:Under cl. 3 of the Imports (Control) Order, 1955, passedunder s. 3 of the Imports and Exports (Control) Act, 1947,no person shall import any goods of the descriptionspecified in Sch. I except in accordance with a licence,and if it was found that the goods imported did not conformto the description in the licence, then, without prejudiceto any action that may be taken against the licensee underthe Sea Customs Act, such goods would be treated as havingbeen imported without a valid licence in that behalf. UnderEntry 294 of s. 11 of Part IV of Sch. I of the Import TradeControl Policy (July to December 1956), import of motor-cycles and scooters was permitted under an appropriatelicence, but such a licence could not be used for theirimport in a completely knocked down (C.K.D.) conditionexcept by approved manufacturers. That is, there was noabsolute phohibition for their import in C.K.D. condition.The words completely knocked down conditions are not used inany technical sense and have the dictionary meaning of "madeor constructed so as to be capable of being knocked down ortaken apart as for transportation; in parts ready to beassembled". Under Entry 295, except for rubber tyres andtubes, for whose import a separate licence could beobtained, there are no limitations as to the number or kindof parts or accessories of motor cycles and scooters whichcan be imported under a license obtained in respect of thegoods. There are no remarks against this entry as there areagainst Entry 294, that the licence would not be valid forimport of spares and accessories which, if assembled, wouldmake motor-cycles and scootersThe respondents' licence authorised them to import goodscovered by Entry 295, and they imported certain goods whicharrived in two different consignments and on two differentdates. They did not contain tyres, tubes and saddles sothat it was impossible to say that they constituted motorcycles and scooters in C.K.D. condition. The Collector ofCustoms and the Central Board of Revenue in appeal, however,put the two consignments together and held that tradepractice did not require the supply of tyres and tubes andsaddles while supplying motor cycles, and that thereforethey made up mopeds in C.K.D. condition and were, for thatreason, not the articles covered by Entry 295 but articlesprohibited under Entry 294. The goods were directed to beconfiscated with an option to the respondents to pay certain'sums in lieu of confiscation, and personal penalties.The respondent filed a suit in the High Court and the trialJudge dismissed it on the authority of Secretary of State v.Mask & Co. [1948] L.R. 67 I.A. 222, and that the suit wastime barred under art. 14 of the Limitation Act. 1908. Inappeal, the Divisional Bench followed Anand v. Thakore &Co., a decision of that High Court, and allowed the appeal.In appeal to this Court,558HELD: (1) The mere fact that the goods imported by therespondents wereso complete that when put together wouldmake motor-cycles and scooters in C.K.D. condition would notamount lo a breach of the licence or of entry 295. Therestriction not to import motor-cycles and scooters inC.K.D. condition was against an importer holding a licencein respect of the goods covered by entry 294 under which hecould import complete and assembled motor-cycles andscooters, and not against an importer who had a licence toimport parts and accessories under entry295. [565 G-H; 566 E](2)When the Collector examines goods imported under alicence in respect of goods covered by Entry 295, what hehas to ascertain is whether the goods are parts andaccessories, and not whether the goods, though parts andaccessories, are so comprehensive that if put together wouldconstitute motor cycles and scooters in C.K.D. condition,because, it would then mean that there is in the entry alimitation against importation of all parts, and accessoriesof motor-cycles and scooters. Such an approach, would beacting contrary to and beyond entry 295, and in non-compliance of the entry and would lead to the anomalousresult that even if the importer had sold away oneconsignment or part of it, the Collector could still saythat had the importer desired it was possible for him toassemble all parts and make motor-cycles and scooters inC.K.D. condition. [566 A-C, H; 567 A-B](3)This Court in Girdhari Lal Bansidhar v. Union of,India, [1964] 7 S.C.R. 62, laid down that the High Courtunder Art. 226 of the Constitution, could not, on the groundthat it was erroneous, interfere with the decision of theauthority upon whom jurisdiction was conferred to decide thequestion whether the goods fell under one or other entry,that is, under which of two competing entries the goodsfell. This Court also held that the import of parts of aprohibited article was import of the prohibited article, andthat the importer could not be allowed to do indirectly whathe could not do directly, and distinguished the case inAnand v. Thakore & Co. In Anand's case, it was held that thejurisdiction of the Collector was only to ascertain whetherthe goods were spare parts and accessories and not to findout whether if put together they would constitute autocycles in C.K.D. condition. [567 B-C; 568 B-E](4)In the present case also the question before theCollector was whether the respondents' licence covered thegoods imported by them, that is; whether the goods wereparts and accessories. It is not, therefore, one of thosecases where between two competing entries the statutoryauthority applied one or the other and where a civil courtcannot interfere even if the statutory authority committedan error., [572 C-E](5) Exclusion of jurisdiction of Civil Courts is not to bereadily inferred. Such exclusion is inferred when thestatute gives finality to the order of the tribunal on whichit confers jurisdiction and provides for adequate remedy todo what the courts would normally do in such a proceedingbefore it. Even where the statute gives finality such aprovision does not exclude cases where the provisions of theparticular statute have not been complied with or thetribunal has not acted in conformity with fundamentalprinciples of judicial procedure, and a determination by atribunal of a question other than the one which the statutedirects it to decide would be a decision not under theprovisions of the Act. [571 B-E]Firm illuri Subbayya Chetty & Sons v. Andhra Pradesh, [1964]1 S.C.R. 752, Dhulabhai v. Madhya Pradesh, [1968] 3 S.C.R.662, Panthulu v. Andhra Pradesh, [1970] 2 S.C.R. 714,Anisminic Ltd. v. Foreign Com-559pensation Commissioner, [1969] 1 All E.R. 208 and R. v.Fulham, Hammersmith and Kensington Rent Tribunal, [1953] 2All E.R. 4, referred to.(6)Therefore, the decision in the present case was coveredby the exception laid down in Mask & Co.'s case and theprovision excluding the jurisdiction of the civil courtwould not be applicable. Since non-compliance with theprovisions of the Act would be acting in excess of jurisdic-tion the Collector's order was a nullity and Art. 14 of theLimitation Act, 1908, could not be applied. Even if it wasapplicable, the suit would not be barred if the date of theappellate order of the customs authorities was taken intoconsideration. [572 E-F]
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 344 of 1967.Appeal from the judgment and order dated July 8, 1966 ofthe, Bombay High Court in Appeal No. 17 of 1964.V. A. Seyid Muhammad and S. P. Nayar, for the appellant.S. J. Sorabjee, J. R. Gagrat and B. R. Agarwala, for the-respondents.
The Judgment of the Court was delivered by-
Shelat, J. This appeal, by certificate, arises from the res-pondent's suit in respect of fines and penalties recoveredfrom them by the Collector of Customs, Bombay for thealleged contravention of S. 3 of the Imports and Exports(Control) Act, 1947 and. s. 167(8) of the Sea Customs Act,1878.
The respondents held an import licence dated July 10, 1956permitting them to import parts and accessories of motorcycles and scooters as per appendix XXVI of the ImportPolicy Book for July-December 1956. Under the said licence,the respondents, imported certain goods which arrived in twoconsignments, each containing 17 cases, by two differentships. According to the respondents, the goods so importedby them were motor cycle parts which their licenceauthorised them to import. The Customs authorities, on thecontrary. held, on the examination of the goods, that theyconstituted 51 sets of "Rixe Mopeds complete in a knockeddown condition". The Deputy Collector of Customs thereuponheld an enquiry in pursuance of two show cause noticesissued by him.
The result of the enquiry was an order under which theDeputy Collector directed confiscation of the said goodswith 'an option to the respondents to pay certain sums inlieu of confiscation and also personal penalties. Thatorder was passed on the basis that the goods imported werenot parts and accessories of motor cycles and scooterspermissible under entry 295 of the Schedule to the560Import Control Order, but were motor cycles/scooters incompletely knocked down condition, prohibited under remarkII against entry 294, a licence in respect of goods coveredby it would authorise import of motor cycles and Scooters.The order of the Deputy Collector dated November 19, 1957reads as under:
"On examination of the goods and scrutiny of the documentsrelating to the Bills of Entry stated above, it wasascertained that M/s. Tarachand Gupta & Bros. had imported51 sets of "Rixe" Mopeds complete (except tyres, tubes andsaddles) in a knocked down condition. The total number ofconsignments covered by the aforesaid two Bills of Entrywere. sufficient to give exactly 51 sets complete, Rixe'Mopeds' (except for tyres, tubes and saddles which would inany case have required a separate licence). The packing wasalso such as to show that those were nothing but "Mopeds" ina disassembled condition, since each of the cases containscomponents relating to three mopeds. Moreover, it was foundthat major components such as the frames, completely fittedwith electrical wires and control cables and grips had beenimported in equal numbers.-All these went to show that thegoods were not imported as spare parts but as completevehicles in a knocked down condition. The goods weretherefore, considered to be correctly classifiable underitem 75(2) of the I.C.T. corresponding to S. No. 294, IV ofthe I.T.O. Schedule. The licence under which clearance wassought, could not, therefore, be accepted."
The Deputy Collector rejected the respondents' contentionthat the two consignments which arrived in two differentships at different dates should be viewed separately, thatthe machines were incomplete as they were without tyres,tubes and saddles and therefore they could not be said toconstitute motor cycles in knocked down condition. He held,on the other hand, that though the goods were not incompletely knocked down condition it made no difference asthe tyres, tubes and saddles were easily obtainable in Indiaand their absence did not prevent the machines beingotherwise complete. He also found that there was a tradepractice under which traders were supplying motor cycleswithout tyres, tubes and saddles unless the purchaserspecially asked for these parts. According to him, thegoods could not be regarded as spare parts but were 'Mopedsin disassembled condition".
In the suit filed by the respondents in the High Courtagainst the said-order, the Trial Judge held, on theauthority of the561Secretary of State v. Mask & Co.(1) that an order of astatutory tribunal, such as the Collector of Customs underthe Sea Customs Act, which the statute makes final, subject,of course, to an appeal provided under it, can be set asidein a suit before a civil court on two grounds only, namely,where the provisions of the Act have not been complied with,or where the tribunal has failed to act in conformity withthe fundamental rules of judicial procedure. He rejectedthe respondents' contention that the case fell within thefirst ground and held that however erroneous the Collector'sdecision might be since it was within his jurisdiction todecide whether the goods fell under one entry or the other,a civil court had no jurisdiction to grant relief. He alsoheld that the order could not be said to be without or inexcess of jurisdiction and was, therefore, not a nullity.The order consequently required to be set aside if therespondents were to have any relief, and therefore, Art. 14of the Limitation Act, 1908 applied. On that basis he heldthe respondents' suit to be time barred and dismissed it.We may, at this stage,, mention that in 'a similar matterinvolving import of spare parts and accessories under alicence relating to entry 295, the Collector's order, onthe basis that the goods fell under entry 294, as the spareparts in question could, it all the different indents weretaken together, constituted auto cycles in completelyknocked down condition, was held to be bad as "theCollector's approach to the matter was wholly wrong by aDivision Bench of the same High Court in D. P. Anand v. M/s.T. M. Thakore & Co.(2) According to that judgment, thejurisdiction of the Collector was to ascertain whether thegoods, such as they were, were properly imported under thelicence relating to goods under entry 295, i.e., whetherthey were spare parts and accessories, and not to go furtherand find out whether they would, when put together,constitute auto cycles in completely knocked down conditionas envisaged by entry 295, and therefore, the order wasamenable to interference by the High Court. The Trial Judgeheld, on the authority of this judgment that on merits theCollector of Customs was in error in holding the respondentsguilty of importing goods not covered by the licence held bythem and that the Collector would have been bound by thatjudgment had it been delivered before he passed the impugnedorder. He, however, was of the view that whereas the HighCourt in D. P. Anand's case(2) interfered with the order inits writ jurisdiction. a suit could not lie as the impugnedorder was within the jurisdiction of the Collector and themere fact that he applied a wrong entry did not invest thecivil court with the jurisdiction to entertain a suit andset aside such an order.
(1) (1940) 67 I.A. 222(2)Civil appeal No. 4 of 1959, decided on August 17, 1960(H.C)562The Letters Patent Bench of the High Court, following thejudgment in Anand's case,(1) agreed with the Trial Judgethat on merits the Collector was in error. Following thatjudgment, the Bench also, held that the Collector'sjurisdiction was limited to ascertain whether or not thegoods imported by the respondents were spare parts andaccessories covered by entry 295 in respect of which theyundoubtedly held the licence, . and therefore, he could nothave lumped together the two consignments which, thoughimported under one licence, arrived separately and werereceived on different dates and could not have come to theconclusion that the plaintiffs (i.e. the respondents herein)had imported 51 "Rixe" mopeds in a completely knocked downcondition. The, Bench also held that upon the principlelaid down in Anand's case(1) it was not for the Collector toascertain whether the goods, if assembled together, wouldconstitute 51 "Rixe" Mopeds in C.K.D. condition Therespondents were entitled to import the said goods, andtherefore, s. 167(8) of the Sea Customs Act did not applyand the respondents consequently could not have been heldguilty of breach either of that section or s. 3 of theImports and Exports (Control) Act. The Bench also held thatthe decision of this Court in Girdharilal Bansidhar v. Unionof India(2) did not overrule but only distinguished thejudgment in Anand's case,(1) and therefore, the bindingforce of that decision remained unshaken. Regarding thejurisdiction of civil courts, the Division Bench held thatwhere the question is simply whether one or the other entryapplies and the tribunal, to which jurisdiction is entrustedin that behalf, decides it erroneously, even then its order,made final by the statute conferring such jurisdiction,cannot be made the subject matter of a suit. On the otherhand, where its jurisdiction is confined to see whether theimportation is under a particular entry or not, but whiledeciding such a question, the tribunal ,takes into accountextraneous considerations, such as an entry which has nobearing upon the question, the case would fall outside theambit of the powers of th statutory authority. Thequestion, in other words, would then be, whether thetribunal has exceeded its jurisdiction and therefore actedin non-compliance with the provision of the statute underwhich it has to decide the question. The Division Benchdeprecated the attempt on the part of the Collector inconsidering the two consignments together and making out acase that the two, when put together, would make it possibleto regard the goods as' "Rixe" Mopeds in C.K.D. condition.Such 'an attempt, the Bench observed, was "a newclassification conjured up by the authorities to rope in theimports as being illegal which according to the terms of thelicence and entry No. 295 would be clearly legal". . Lastly,the Division Bench disagreed with the Trial Judge who hadheld that the article(1) C.A. No. 4 of 1959 decided on Aug. 17, 1960 (H.C.) (2)[1964] 7 S.C.R. 62.
563in the Limitation Act applicable was Art. 14, on the groundthat once it was accepted that the order was in excess ofjurisdiction it was a nullity, and therefore, there was noquestion of its having to be set aside. Following A.Venkata Subba Rao v. Andhra Pradesh, (1) it held that thesuit fell under Art. 62, and therefore, was within time.Counsel for the Union of India challenged the correctness of,the judgment of the Division Bench and urged that the SeaCustoms Act had clearly vested in the Collector theauthority to decide whether the goods in question fellwithin entry 295 or not and for which the respondents hadbeen granted the licence. His decision, subject, of-course,to an appeal and revision provided under the Act, beingfinal, could not be challenged in a suit save under the wellrecognized exceptions that his decision was not incompliance with the provisions of the Act, or that he hadfailed to follow the fundamental principles of judicialprocedure. The present case, according to him, was one ofimporting "Rixe" Mopeds in C.K.D. condition, not permissibleeither under entry 295 or entry 294, and therefore, was acase where the importer,misusing his licence, had attemptedto do indirectly what he could not do directly. There was,according to him, no question of the Collector 'acting inexcess of his jurisdiction or in non-compliance with theprovisions of the Act, and therefore, the Trial Judge wasright in holding that no suit lay against his action.Before we proceed to consider these contentions it isexpedient first to look at the provisions of the relevantlaw. Under s. 3 of the Imports and Exports (Control) Act,1947, the Central Government by an order can provide forprohibiting, restricting or otherwise controlling inter aliathe import of goods of any specified description and allgoods to which any such order applies are deemed to be goodsof which the import has been prohibited by the Sea CustomsAct, 1878 and all the provisions of that Act are to haveeffect accordingly. The Imports (Control) Order 1955,passed under the power reserved under the Act, by cl. (3)thereof, provides that no person shall import any goods ofthe description specified in Sch. I thereto except underand in accordance with a licence granted by the CentralGovernment or by an officer specified in Sch. 11. Sub-cl.(2) of cl. (3) provides that if it is found that the goodsimported under a licence do not conform to the descriptiongiven in such a licence under which they are claimed to havebeen imported, then without prejudice to any action that maybe taken against the licensee under the Sea Customs Act inrespect of such importation, the licence may be treated ashaving been utilised for importing the said goods.(1) [1965] 2 S.C.R. 577.
564Entries' 294 and 295 of s. II of Part IV of Sch. I of theImport Trade Control Policy for the period July-December1956 are in this connection the relevant entries. Entry 294deals with import ,of motorcycles and scooters. Remark (ii)in its column No. 6 lays down that "Licences granted underthis item will not be valid for the import of motorcycles/scooters in a completely knocked down condition".Remark (iii), however, provides that applications fromapproved manufacturers for import of motor cycles,/ scootersin C.K.D. condition will be considered ad hoc by the ChiefController, Imports in consultation with Development Wing.Entry 295 deals with "Articles (other than rubber tyres andtubes) adapted for use as parts and accessories of motorcycles and motor scooters, except such articles as areadapted for use as parts and accessories of motor cars".Entry 41 in Part V deals with import of rubber tyres andtubes and other manufactures of rubber not otherwisespecified.
Section 167(8) of the Sea Customs Act provides that goodsshall liable to confiscation if the goods, the importationof which is for the time being prohibited or restricted byor under Ch. IV, are imported contrary to such prohibitionor restriction and any person concerned in any suchimportation shall be liable to penalty prescribed therein.Section 188 of the Act makes an order. passed in appealagainst the Collector's order, final subject only to thepower of revision under s. 191.
The position then is, under 'entry 294 above-cited importunder the requisite licence of motor cycles and scooters waspermitted. However, a licence permitting import of motorcycles and scooters could not be used for import of motorcycles and scooters in C.K.D. condition. Even then, theprohibition was not absolute because approved manufacturerscould apply and get licences to import motor cycles 'andscooters in C.K.D. condition, albeit on an ad hoc basis. Itis thus clear that entry 294 deals with the import of motorcycles and scooters and the import, though only by approvedmanufacturers, of motor cycles and scooters in C.K.D.condition. The entry is complete in itself so far as importof motor cycles 'and scooters complete and assembled andalso in C.K.D. condition is concerned. The words"completely knocked down condition" in the entry are notused in any technical sense, and therefore, must be giventheir ordinary dictionary meaning, i.e., "made orconstructed so as to be capable of being knocked down ortaken apart, as for transportation; in parts ready to beassembled". (see Webster's New International Dictionary,Vol. IT. P. 1371 and, also Words and Phrases. PermanentEdition,% Vol. 23, p. 560).
Under entry 295, except for rubber tyres and tubes for whoseimport a separate licence could be obtained under entry 41of565Part V, there are no limitations as to the number or kind ofparts or accessories which can be imported under a licenceobtained in respect of the goods covered thereunder. Primafacie, an importer could import all the parts andaccessories of motor cycles and scooters and it would not bea ground to say that he has committed breach of entry 295 orthe licence in respect of the goods described therein, thatthe parts and accessories imported, if assembled, would makemotor cycles and scooters in C.K.D. condition. There are noremarks against entry 295, as there are against entry 294,that a licence in respect of goods covered by entry 295would not be valid for import of spares and accessorieswhich, if assembled, would make motor cycles and scooters inC.K.D. condition. Apart from that, the. goods in questiondid not admittedly contain tyres, tubes and saddles, so thatit was impossible to say that they constituted motor cyclesand scooters in C.K.D. condition. The first two could notbe imported and were in fact not imported because that couldnot be done under the licence in respect of goods covered byentry 295 which expressly prohibited their import and aseparate licence under entry 41 of Part V would benecessary. The third, namely, saddles were not amongst thegoods imported. No doubt, there was, firstly, a finding bythe Collector that a trade practice prevailed under whichmotor cycles and scooters without tyres, tubes and saddlescould be sold. Secondly, the tyres and tubes could be hadin the market here and so also saddles, so that if animporter desired, he could have sold these goods as motorcycles and scooters in C.K.D. condition. The argument wasthat since there was a restriction in entry 294 againstimports of motor cycles and scooters in C.K.D. condition,the importer could not be allowed to do indirectly what hecould not do directly.
The argument apparently looks attractive. But the questionis what have the respondents done indirectly what they couldnot have done directly. In the absence of any restrictionsin entry 295, namely, that a licence in respect of goodscovered by entry 295 would not be valid for import of partsand accessories which, when taken together, would make themmotor cycles and scooters in C.K.D. condition, therespondents could import under their licence all kinds andtypes of parts and accessories. Therefore, the mere fact,that the goods imported by them were so complete that whenput together would make them motor cycles and scooters inC.K.D. condition, would not amount to a breach of thelicence or of entry 295. Were that to be so, the positionwould be anomalous as aptly described by the High Court.Suppose that an importer were to import equal number ofvarious parts from different countries under differentindents and at different times. and the goods were to reachhere in different consignments and on different datesinstead of two consignments from the same566country as in the present case. If the contention urgedbefore us were to be correct, the Collector can treat themtogether and say that they would constitute motor cycles andscooters in C.K.D. condition. Such an approach would meanthat there is in entry 295 a limitation against importationof all parts and accessories of motor cycles and scooters.Under that contention, even if the importer had sold awaythe first consignment or part of it, it would still bepossible for the Collector to say that had the importerdesired it was possible for him to assemble all the partsand make motor cycles and scooters in C.K.D. condition.Surely, such a meaning has not to be given to entry 295unless there is in it or in the licence a condition that alicensee is not to import parts in such a fashion that hisconsignments, different though they may be, when puttogether would make motor cycles and scooters in C.K.D.condition. Such a condition was advisedly not placed inentry 295 but was put in entry 294 only. The reason wasthat import of both motor cycles and scooters as also partsand accessories thereof was permitted, of the first underentry 294 and of the other under entry 295. A trader havinga licence in respect of goods covered by entry 294 couldimport assembled motor cycles and scooters, but not thosevehicles in C.K.D. condition, unless he was a manufacturerand had obtained a separate licence therefor from theController of Imports who, as aforesaid, was authorised toissue such a licence on an ad hoe basis. Thus the res-triction not to import motor cycles and scooters in C.K.D.condition was against an importer holding a licence inrespect of goods covered by entry 294 under which he couldimport complete motor cycles and scooters and not against animporter who had 'a licence to import parts and accessoriesunder entry 295.
If Dr. Syed Mohamad's contention were to be right we wouldhave to import remark (ii) against entry 294 into entry 295,a thing which obviously is not permissible while construingthese entries. Further, such a condition, if one were to beimplied in entry 295, would not fit in, as it is arestriction against import of motor cycles and scooters inC.K.D. condition and not their parts and accessories. Thereis, therefore, no question of a licensee under entry 295doing indirectly what he was not allowed to do directly.What he was not allowed to do directly was importing motorcycles and scooters in C.K.D. condition under a licenceunder which he could import complete motor cycles andscooters only. That restriction, as already observed,applied to a licensee in respect of goods described in entry294 and not a licensee in respect of goods covered by entry
295.The result is that when the Collector examines goodsimported under a licence in respect of goods covered byentry 295 what he has to ascertain is whether the. goods areparts and accessories,567and not whether the goods, though parts and 'accessories,are so comprehensive that if put together would constitutemotor cycles and scooters in C.K.D. condition. Were he toadopt such an approach, he would be acting contrary to andbeyond entry 295 under which he had to find out whether thegoods imported were of the description in that entry. Suchan approach would, in other words, be in non-compliance ofentry 295.
The question then is whether such a reading of the two entries is in any way contrary to the decisions of this Court. In Girdharilal Bansidhar,(1) the principle laid down was that the High Court in its writ jurisdiction does not sit in appeal over the correctness of the decision of the authorities under the Sea Customs Act on appreciation of entries in the Hand Book or in the Indian Tariff Act. In that case, the appellant, who had a licence to import iron and steel bolts, nuts, etc., imported nuts and bolts which were the components of 'Jackson Type Single bolt oval plate belts fasteners", which were described in the bill of entry as 'store bolts and nuts'. The Customs found that these were in reality the actual components of Jackson Type Single belt oval plate belts fasteners, import whereof was totally prohibited. The Collector, while arriving at his decision, took into account also the fact that washers, the third component of the prohibited article, were imported by a firm owned by the appellant's relations. On these facts, this Court held (1) that importing components of a prohibited article was importing the prohibited article, (2) that the evidence that washers imported by the relations of the appellant was considered by the Collector as evidence to confirm his conclusion that the nuts and bolts imported by him were in reality the components of the prohibited article, and (3) that where the decision of the statutory authority is whether an item falls under one or the other entry, the High Court could not interfere with that decision on the groun d that it is erroneous. That is because when a statute confers power on an authority to decide a particular question, its decision, even if it is erroneous,, is still within its jurisdiction.
What needs to be observed in that decision is that the Collector's decision was, under which of the two competing entries the imported items fell, that is, whether the goods were bolts and nuts or were components of the prohibited article. And the Court there laid down the well established principle that the High Court, under Art. 226, could not interfere with the decision of the authority upon whom jurisdiction to decide the question, whether the goods fell under one or the other entry, was conferred on the ground that it was erroneous. Further, the nuts and bolts imported by the appellant could only be, used as Components of the prohibited article. In other words, the import was of parts of the (1) [1964] 7 S.C.R. 62.
568 prohibited article and therefore of the prohibited article. It was, therefore, that the Court held (1) that the Customs' decision was not incorrect, and (2) that the importer could, not be allowed to do indirectly what he could not do directly.
It will be noticed that the Bombay decision in D. P. Anand's case(1) was not dissented from but only distinguished, and therefore, the High Court in the present case was justified in following it. It is true, however, that counsel for the appellant there relied on that decision in support of his proposition that a ban on a completed article cannot be read as a ban on the importation of its constituents, which, when assembled, would result in the prohibited article, and this Court pointed out in answer that in D. P. Anand's case,(1) the imported components could not have when assembled, made up the completed article because of the lack of certain essential parts which admittedly were not available in India and could not be imported. The real distinction, however, between the two cases was that the decision of the Collector in D. P. Anand's case(1) was not, as was the decision in Girdharilal's case, (2) under which of the two competing entries the imported goods fell but that the imported goods in question, if assembled, together, would not be the goods covered by the entry, and therefore, not the goods in respect of which the licence was granted. Further, the articles in question, even when assembled together, were not prohibited articles as in Girdharilal's case (2). Girdhari- lal's case(2) is clearly distinguishable because it is not as if motor cycles and scooters are prohibited articles as was the case there. The restriction is not against licensees importing motor cycles and scooters under entry 294 and parts and accessories under entry 295 but against the licensees under entry 294 importing motor cycles and scooters in C.K.D. condition. The question in the instant case was not under which of the two entries, 294 or 295, the goods fell, but whether the goods were parts and accessories covered by entry 295.
In Firm Illuri Subbayya Chetty & Sons v. Andhra Pradesh, ( 3 the suit filed by the appellants was for recovery of a sum paid by way of purchase tax under the Madras General Sales Tax Act, 1939. The cause of action was that the amount had been illegally recovered. Relying on s. 18A of the Act, this Court held that the expression "any assessment made under this Act" in that section was wide enough to cover all assessments made by the appropriate authorities under the Act and even if an assessment was incorrect, so long as it was within the jurisdiction of the authorities, it was not non-compliance of the statute, and therefore, was not covered by the principle laid down in the case of Mask & Co.(4) The Court observed:
(1) C.A. 4 of 1959 dt. Aug. 17, 1960(H.C.) (2) [1964] 7 S.C.R. 62.
(3) [1964] 1.S.C.R. 752. (4) [1948] L.R. 67 I.A. 222.
569 "There is no justification for the assumption that if a decision has been made by a taxing authority under the, provisions of a taxing statute, its validity can be chal- lenged by a suit on the ground that it is incorrect on merits and- as such it can be claimed that the provisions of the said statute have not been compiled with."
This principle was repeated in Dhulabliai v. Madhya Pradesh(1) where it was held that where a statute gives finality to the orders of the special tribunal the civil court's jurisdiction must be held to be excluded if there is adequate remedy to do what the-civil courts would normally do in a suit, i.e., to correct an assessment which is erroneous. The Court also pointed out that in the Firm Illuri Subbayya Chetty & Sons' case, (2) it had been said that Mask & Co.'s case(3) was an authority for the proposition that non-compliance with the provisions of the statute would render the entire proceedings before the authority illegal and without jurisdiction. The case of Panthulu v. Andhra Pradesh (4) illustrates as to when an authority can be said to have acted in non- compliance with the provisions of the statute under which it derives its authority. Section 3(2) of the Madras Estates Land (Reduction of Rent) Act, XXX of 1947 authorised the State Government to fix the rates of rent in respect of each class, of ryoti land in each village in the State after considering the recommendations of the special officer and the remarks of the Board of Revenue. Section 8(1) provided that no order passed under s. 3(2) could be challenged in a civil court. The suit filed by the-- appellants disputed the legality of the notification reducing the rates of land in respect of the dry delta ryoti lands in a village on the ground that the class of land had been determined to be delta ryoti lands on the basis only of the settlement register which did not contain any entry with respect to the village in question, that the settlement register could not be treated as conclusive and that proper factual enquiry was necessary. 'Me High Court held that the suit was not main- tainable by reason of s. 8(1). Dua, J., speaking for the Bench. held that under s. 2 the special officer had to determine the average rate of cash rent per acre for each class of ryoti land such as wet, dry or garden. 'Ibis could only be done on relevant material. The special officer, however, had based his determination on a report of his assistant, who had considered the entry in the settlement register of another village. That meant that the special officer had made his determination on irrelevant evidence, i.e., on the register which did not contain any data with respect to the land in the village in question. On these facts he hold that the (1) [1968] 3 S.C.R. 662.
(3) [1948] L.R.67 I.A. 222.
(4) [1970] 2 S.C.R.714 570 .determination by the special officer was based on no evidence with the result that it was in violation of the fundamental principles of judicial procedure. A fortiori, the order of the Government made, under s. 3(2) on the basis of the recommendations of the special officer was not in conformity with the provisions of the Act and was therefore outside the purview of s. 3(2) and consequently s. 8(1) was inapplicable. Thus, sec. 8(1) was held not to apply because the Government's determination could not be said to be one under S. 3 (2).
The words "a decision or order passed by an officer of Customs under this Act" used in S. 188 of the Sea Customs Act must mean a real and not a purported determination. A determination, which takes into consideration factors which the officer has no right to take into account, is no determination. This is also the view taken by courts in England. In such cases the provision excluding jurisdiction of civil courts cannot operate so as to exclude an inquiry by them.. In Anisminic Ltd. v. The Foreign Compensation Commission(1) Lord Reid at pages 213 and 214 of the Report stated as follows :
"It has sometimes been said that it is only where a tribunal acts without jurisdiction that its decision 'is a nullity. But in such cases the word "jurisdiction" has been used in a very wide sense, and I have come to the conclusion that it is better not to use the term except in the narrow and original sense of the tribunal being entitled to enter on the enquiry in question. But there are many cases where, although the tribunal had jurisdiction to enter on the enquiry, it has done or failed to do something in the course of the enquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith . It may have made a decision which it had no power to make. It may have failed in the course of the enquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to art, so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled ,to decide that question wrongly as it is to decide it rightly."
(1) [1969]1 All E.R. 208.
571 To the same effect are also the observations of Lord Pearce at page 233. R, v. Fulham, Hammersmith and Kensington Rent Tribunal(1) is yet another decision of a tribunal properly embarking on an enquiry, that is, within its jurisdiction, but at the end of it making an order in excess of its jurisdiction which was held to be anullity though it was an order of the kind which it was entitled to make in a proper case.
The principle thus is that exclusion of the jurisdiction of the civil courts is not to be readily inferred. Such exclusion, however, is inferred where the statute gives finality to the order of the tribunal on which it confers jurisdiction and provides for adequate remedy to do what the courts would normally do in such a proceeding before it. Even where a statute gives finality, such a provision does not exclude cases where the provisions of the particular statute have not been complied with or the tribunal has not acted in conformity with the fundamental principles of judicial procedure The word "jurisdiction" has both a narrow and a wider meaning. In the sense of the former, it means the authority to embark upon an enquiry; in the sense of the latter it is used in several aspects, one of such aspects being that the decision of the tribunal is in non-compliance with the provisions of the Act. Accordingly, a determination by a tribunal of a question other than the one which the statute directs it to decide would be a decision not under the provisions of the Act, and therefore, in excess of its jurisdiction.
The respondents' licence admittedly authorised them to import goods covered by entry 295. They could, therefore, legitimately import, on the strength of that licence, all and several kinds of parts and accessories of motor cycles and scooters. The only question, therefore, before the Collector was whether the respondents' licence covered the goods imported by them, i.e., whether the goods were parts and accessories. If they were, the imports were legitimate and no question of their being nut covered by the licence or the respondents having committed breach of s. 3 of the Imports and Exports (Control) Act or s. 167(8) of the Sea Customs Act could possibly arise. What the Collector, however, did was that he put the two consignments together and held that they made up 51 'Rixe' Mopeds in C.K.D. condition and were, for that reason, not the articles covered by entry 295 but articles prohibited under remark
(ii) of entry 294. But entry 294 deals with the motor cycles and scooters complete and assembled. Remark (ii) against that entry prohibits an importer who held a licence to import motor cycles and scooters from importing motor cycles and scooters in C.K.D. condition. Remark (ii) containing that prohibition had nothing to do with entry 295 which did not (1) [1953] 2 All E.R. 4 572 contain any limitations or restrictions whatsoever against imports of parts and accessories.
That being so, if an importer has imported parts and acces- sories, his import would be of the articles covered by entry
295. The Collector could not say, if they were so covered by entry 295, that, when lumped together, they would constitute other articles, namely, motor cycles and scooters in C.K.D. condition. Such a process, if adopted by the Collector, would mean that he was inserting in entry 295 a restriction which was not there. That obviously he had no power to do. Such a restriction would mean, that though under a licence in respect of goods covered by entry 295 an importer could import parts and accessories of all kinds .and types, he shall not import all of them but only some, so that when put together they would not make them motor cycles and scooters in C.K.D. condition. In the present case even that was not so because he would have to buy tyres, tubes and saddles to convert them into motor cycles and scooters into C.K.D. condition. That would be tantamount to the Collector making a new entry in place of entry 295 which must mean non-compliance of that entry and acting in excess of jurisdiction during the course of his enquiry even though he had embarked upon the enquiry with jurisdiction., In our view that was precisely what the Collector did. This is, therefore, not one of those cases where between ,two competing entries the statutory authority applied one or the ,other, though in error, and where, a civil court cannot interfere.
In this view the order was in non-compliance of the provisions ,of the statute, and therefore.. was covered by the exceptions laid down in Mask & Co.'s case(1). It was not an order in respect of which the Collector was invested with jurisdiction. That being so, 'the provision excluding the jurisdiction of the civil courts was not applicable. Indeed, the order was a nullity and Art. 14 of the Limitation Act of 1908 could not be applied to hold the suit time barred. Even if Art, 14 applied, it would not be time- barred, if, as the High Court pointed out, the date of the appellate order was taken into consideration. The judgment of the Division Bench of the High Court, there- fore, must be upheld. Consequently, the appeal fails and is dismissed with costs.
V.P.S. Appeal dismissed. (1) [1948] L.R. 67 IA. 222. 573
