1975 (7) TMI 161 - HC - Customs

Court quashes notice, issues writ of certiorari, restrains respondents. Rule made absolute. Stay of order for six weeks.

Hoare Miller & Co. Ltd. Versus The Assistant Collector of Customs and Ors.

The court quashed the notice dated 5th October, 1967, issuing a writ of certiorari and restraining the respondents from proceeding under the said notice. ... - Issues Involved:1. Validity of the prohibition order issued by the Chief Controller of Imports and Exports.2. Jurisdiction under Section 3 of the Imports and Exports (Control) Act, 1947 to restrict indirect exports.3. Specification of goods intended to be prohibited under Section 3 of the Imports and Exports (Control) Act, 1947.Issue-wise Detailed Analysis:1. Validity of the Prohibition Order Issued by the Chief Controller of Imports and Exports:The petitioner contended that the prohibition of export was by the Controller and not by the Central Government, asserting that only the Central Government was competent to impose such prohibition under the Imports and Exports (Control) Act, 1947. The respondents argued that the order was made by the Central Government and merely authenticated by the Chief Controller of Imports and Exports, referencing the decision in C. T. A. Filial v. H. P. Lohia, which held that orders authenticated by certain officials are considered orders by the Government. The court noted the Authentication (Orders and Other Instruments) Amendment Rules, 1965, which allowed the Chief Controller to authenticate orders. However, no documents were produced to show the Chief Controller's authority to make the order on behalf of the Central Government. The court did not express a definitive opinion on this point due to the view taken on other aspects of the matter.2. Jurisdiction Under Section 3 of the Imports and Exports (Control) Act, 1947 to Restrict Indirect Exports:The petitioner argued that Section 3 did not authorize restrictions on indirect exports, claiming such restrictions were vague. The court examined the language of Section 3, noting it authorizes the Central Government to make provisions for prohibiting, restricting, or otherwise controlling imports and exports 'in all cases or in specified classes of cases.' The court concluded that the expression 'all cases' is broad enough to cover both direct and indirect exports, thereby rejecting the petitioner's contention and upholding the jurisdiction under Section 3.3. Specification of Goods Intended to be Prohibited Under Section 3 of the Imports and Exports (Control) Act, 1947:The petitioner contended that the order was invalid as there was no specification of the goods intended to be prohibited. The respondents argued that the identification of goods by their destination (to Rhodesia) sufficed as 'goods of specified description' under Section 3. The court analyzed whether identifying goods by their destination fulfilled the requirement of 'specified description.' It referenced several decisions emphasizing the need to consider the mischief the legislation intended to remedy. However, the court distinguished between the purposes of Section 11 of the Customs Act, 1962 and Section 3 of the Imports and Exports (Control) Act, 1947, noting that the latter does not refer to the purposes mentioned in Section 11(2) of the Customs Act. The court held that the expression 'specified description' in Section 3 should be strictly construed, relating to the qualities of the goods rather than their destination. Citing the decision in Karl Ettlinger & Co. v. Chagandas & Co., the court concluded that the prohibition of 'all goods' was beyond the authority given by Section 3, rendering the show cause notice without jurisdiction.Conclusion:The court quashed the notice dated 5th October, 1967, issuing a writ of certiorari and restraining the respondents from proceeding under the said notice. The Rule was made absolute to the extent indicated, with no order as to costs. There was a stay of operation of the order for six weeks.