Supreme Court upholds Customs authority's orders, rejects challenges under Article 32

PIONEER TRADERS AND OTHERS, PONDICHERRY Versus CHIEF CONTROLLER OF IMPORTS AND EXPORTS, PONDICHERRY AND OTHERS

PIONEER TRADERS AND OTHERS, PONDICHERRY Versus CHIEF CONTROLLER OF IMPORTS AND EXPORTS, PONDICHERRY AND OTHERS - 1983 (13) E.L.T. 1376 (SC) Issues Involved:
1. Validity of the orders of confiscation and penalties imposed by the Customs authority.
2. Applicability of para 6 of S.R.O. 3315.
3. Maintainability of petitions under Article 32 of the Constitution.
4. Jurisdiction of the Customs authority.
5. Misconstruction of statutory provisions.

Detailed Analysis:

1. Validity of the Orders of Confiscation and Penalties:
The petitioners contended that the orders for confiscation and penalties imposed by the Customs authority were arbitrary and illegal. They argued that the goods were imported based on firm contracts and authorizations obtained before November 1, 1954, and thus should not be subject to the Sea Customs Act, 1878, and the Imports and Exports (Control) Act, 1947, which were extended to Pondicherry after that date. The Collector of Customs, however, refused to accept this explanation and ordered confiscation of the goods, imposing penalties as an alternative. The Central Board of Revenue dismissed the appeals but reduced the penalties. The Government of India also rejected the revisions filed by the petitioners.

2. Applicability of Para 6 of S.R.O. 3315:
The petitioners relied on para 6 of S.R.O. 3315, which saved the effect of all laws in force in the French Establishments immediately before November 1, 1954, with respect to things done or omitted to be done before such commencement. They argued that the contracts and authorizations obtained before November 1, 1954, should be protected under this provision. The Supreme Court in the case of Universal Imports Agency v. Chief Controller of Imports and Exports (1961) 1 SCR 305 had held that para 6 protected such transactions. However, the Customs authority and the Central Board of Revenue did not give the benefit of para 6 to the petitioners, leading to the confiscation of goods and imposition of penalties.

3. Maintainability of Petitions under Article 32 of the Constitution:
The Union of India raised a preliminary objection to the maintainability of the petitions under Article 32, citing the decision in Ujjambai v. State of Uttar Pradesh (AIR 1962 SC 1621). It was argued that the orders of confiscation and penalties were quasi-judicial orders passed by a competent authority under a taxing statute, and a petition under Article 32 could not be maintained solely on the ground of misconstruction of a statutory provision. The Supreme Court, by a majority, upheld this objection, stating that the validity of such orders could not be questioned under Article 32 if they were passed with jurisdiction and the statute was intra vires.

4. Jurisdiction of the Customs Authority:
The petitioners argued that the Customs authority acted without jurisdiction as the Sea Customs Act should not apply to imports made on the basis of contracts concluded before November 1, 1954. However, the majority of the Supreme Court held that the Customs authority had inherent jurisdiction to decide the matter and that a misconstruction of para 6 of S.R.O. 3315 did not amount to a lack of jurisdiction. Therefore, the orders of confiscation and penalties could not be challenged under Article 32 on this ground.

5. Misconstruction of Statutory Provisions:
The petitioners contended that the Customs authority and the Central Board of Revenue misconstrued para 6 of S.R.O. 3315. The Supreme Court, referring to the decision in Ujjambai's case, held that a misconstruction of a statutory provision by a quasi-judicial authority acting within its jurisdiction did not give rise to a breach of fundamental rights enforceable under Article 32. The Court noted that the appropriate remedy for such misconstruction would be through appeals, revisions, or petitions under Articles 226 and 227, not under Article 32.

Separate Judgment by Das Gupta J.:
Das Gupta J. dissented on the preliminary objection, arguing that if the importations were made on the basis of contracts concluded before November 1, 1954, the Sea Customs Act would not apply, and the Customs authority would have no jurisdiction. He stated that an inferior tribunal could not give itself jurisdiction by deciding a collateral fact wrongly. He concluded that the writ petitions would be maintainable if the petitioners could establish that the importations were made on the basis of contracts concluded before November 1, 1954. However, he found the materials produced by the petitioners insufficient to establish this case and noted the need for further evidence.

Order:
In accordance with the majority judgment, the petitions were dismissed with costs, with one set of hearing costs.