1971 (1) TMI 53 - SC - Customs

Supreme Court affirms Division Bench, upholds jurisdiction of Civil Court in Collector's decision appeal.

UNION OF INDIA Versus TARACHAND GUPTA & BROS.

UNION OF INDIA Versus TARACHAND GUPTA & BROS. - 1983 (13) E.L.T. 1456 (SC) , 1971 AIR 1558, 1971 (3) SCR 557 Issues Involved:1. Jurisdiction of the Civil Court over decisions made by the Collector of Customs.2. Interpretation and applicability of Entries 294 and 295 under the Import Control Order.3. Whether the goods imported fell under the license held by the respondents.4. Application of the Limitation Act to the respondents' suit.Detailed Analysis:Jurisdiction of the Civil Court:The primary issue was whether the Civil Court had jurisdiction to entertain a suit challenging the Collector of Customs' decision. The Trial Judge ruled that the Civil Court could only intervene if the provisions of the Act were not complied with or if the tribunal failed to act in conformity with fundamental judicial procedures. The Division Bench of the High Court, however, held that the Collector's decision could be challenged if it was based on extraneous considerations, thus exceeding his jurisdiction. The Supreme Court upheld this view, stating that the Collector's order was in non-compliance with the statute and hence, a nullity, making the exclusion of Civil Court jurisdiction inapplicable.Interpretation and Applicability of Entries 294 and 295:The respondents imported goods under a license for parts and accessories of motor cycles and scooters (Entry 295). The Collector classified the goods as motor cycles in completely knocked down (C.K.D.) condition under Entry 294, which was prohibited. The Division Bench, following the precedent in D.P. Anand's case, held that the Collector's jurisdiction was limited to ascertaining whether the goods were parts and accessories under Entry 295, not whether they could be assembled into motor cycles. The Supreme Court agreed, emphasizing that Entry 295 did not contain restrictions against importing parts that could be assembled into motor cycles, unlike Entry 294. The Collector's approach was deemed erroneous and beyond his jurisdiction.Whether the Goods Imported Fell Under the License:The Collector's decision was based on the finding that the imported goods, when assembled, constituted motor cycles in C.K.D. condition, thus not covered by the license. The High Court and the Supreme Court disagreed, stating that the license under Entry 295 allowed the import of all parts and accessories, and there was no restriction against importing parts that could be assembled into motor cycles. The Supreme Court noted that the Collector's decision effectively added a restriction to Entry 295, which was not permissible.Application of the Limitation Act:The Trial Judge applied Article 14 of the Limitation Act, 1908, holding the suit time-barred. The Division Bench, however, applied Article 62, following the precedent in A. Venkata Subba Rao v. Andhra Pradesh, and held the suit within time. The Supreme Court upheld this view, stating that since the Collector's order was a nullity, Article 14 did not apply, and even if it did, the suit was not time-barred considering the date of the appellate order.Conclusion:The Supreme Court upheld the judgment of the Division Bench of the High Court, dismissing the appeal. The Court confirmed that the Collector of Customs acted beyond his jurisdiction by considering extraneous factors and misinterpreting the entries under the Import Control Order. The Civil Court had jurisdiction to entertain the suit, and the suit was within the limitation period. The respondents' import of parts and accessories was legitimate under their license, and the Collector's order was a nullity.