TaxTMI 
TaxTMI 
TaxTMI 
1993 (9) TMI 292
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....grieved by that portion of the order by which its notification came to be quashed has preferred Writ Appeals Nos. 740 to 744 of 1991, with the leave of this court. The Union of India as also the Deputy Director, Enforcement Directorate, who were respondents in the writ petitions have preferred the second set of writ appeals in Writ Appeal Nos. 809 to 813 of 1991 As all these appeals arise from the same order, they are being disposed of by this common judgment. The case put forward by the writ petitioner is as hereunder : She is a citizen of the United States of America by birth and origin holding a U. S. passport. She was married to one Jagdish Chandani of Indian origin in 1967, when he was permanently residing in the U.S.A. He shifted his residence from the U.S.A. to India. After marriage, the petitioner was residing in the U.S.A. with her parents who were citizens of America by birth and origin and she had already been employed. Prior to her marriage, all her savings from her earnings had been deposited from time to time in the bank account maintained with Winters National Bank and Trust Company, Dayton Ohio, U.S.A., and she continued to operate the same even after her marriage....
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....that the petitioner who was not a citizen of India had come to India to stay with her spouse temporarily and she did not fit into any of the clauses of section 2(p) of the Act and that the Act applied only to citizens of India and also to' those citizens of India who are outside India and that the petitioner being a temporary resident of India was excluded from the operation of the Act. It was also held that the Explanation of annexure "H" was not only irreconcilable but would also render the definition of "person resident in India" under section 2(p) of the Act ineffective and what the definition of section 2(p) of the Act does not permit, is sought to be achieved indirectly, by sub-section (c) of annexure "H" and the notification could only explain the section, but it cannot go so far as to enlarge the provisions of the statute and, therefore, the notification in question was per se ultra vires the Act. The facts that the petitioner is a U. S. citizen and that her husband is an Indian citizen staying in India and the visa for the petitioner is being extended from time to time right from 1967 are not disputed. Even accord-ing to the petitioner, her stay in India was from 1967 to ....
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....on dealings in foreign exchange and sub-section (1) mandates that no person in India other than an authorised dealer and no person resident in India other than an authorised dealer shall outside India purchase or otherwise acquire, borrow, etc., any foreign exchange except with the previous general or special permission of the Reserve Bank. The other sub-sections impose other restrictions. Sub-section (1) of section 8 reads as hereunder : "(1) Except with the previous general or special permission of the Reserve Bank, no person other than an authorised dealer shall in India, and no person resident in India other than an authorised dealer shall outside India, purchase or otherwise acquire or borrow from, or sell, or otherwise transfer or lend to or exchange with, .any person not being an authorised dealer, any foreign exchange : Provided that nothing in this sub-section shall apply to any purchase or sale of foreign currency effected in India between any person and a money-changer" Section 14 of the Act enables the Central Government to acquire foreign exchange and it enables the Central Government by notification in the Official Gazette, order every person in India and every per....
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....ed in the writ petitions and it is annexure "G". Likewise, by the notification dated June 15, 1977, the Deputy Secretary to the Union of India granted certain exemption and by the notification dated May 21, 1979, an Explanation was added to the said notification. It is again this Explanation that has been attacked by the petitioner in these writ petitions. The notifications issued by the Reserve Bank dated January 1, 1974, as amended by the notification dated May 21, 1979, read as hereunder : "In pursuance of sub-section (1) of section 8 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), and in supersession of its Notification No. E.R.A. 23/47-R.B., dated July 8, 1947, the Reserve Bank is pleased to direct that the prohibition imposed by that sub-section shall not apply to the maintenance of and operations on an account, expressed in a foreign currency, by foreign citizens in or resident in India but not permanently resident therein. Explanation.-For the purpose of this notification,- (a)a person of Indian origin shall be presumed to be a person permanently resident in India if he has come to and stays in India other wise than for the performance of his duties under a c....
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....st instance and then go to the aspect whether in spite of the notification being upheld whether the impugned order is still bad. It was contended by the learned advocate for the appellants that, while finding out whether a person comes within the purview of section 2(p)(iii) of the Act, there is absolutely no scope for any one to have any notion of permanent residence or domicile and further at the stage of finding out whether a non-citizen comes within the purview of the said section or not, there is absolutely no scope also to make use of the notifications issued by the Reserve Bank or the Union of India under sections 8 and 14 of the Act. It was urged that only if a person fits into section 2(p)(iii), then it has to be further found out whether he has the benefit of the exemption granted by the Reserve Bank or the Union of India. In other words, it was stated that only if a person who is not a citizen of India fits into any of the particular categories detailed from (a) to (d) of section 2(p)(iii) of the Act and thereby could be called "a person resident in India", we should go to the further aspect whether such a person has been granted exemption by the Reserve Bank or the Uni....
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....r than that, there could hardly be any scope for anyone to ventilate' any kind of grievance in respect of this legal fiction. The learned advocate for the writ petitioner-respondent herein invited our attention to the decision of the Patna High Court in Bata India Ltd. v. Assistant Collector of Central Excise [1978] ELT 211, to support his contention that by virtue of this Explanation, even a person who would not come within the purview of section 2(p)(iii)(c) of the Act, would be roped into the ambit of the said section though otherwise he does not. It may be noticed that in that case, though under the provisions of the Central Excises and Salt Act, 1944, Bata India Ltd could not be held to be a manufacturer liable to pay excise duty in respect of footwear produced by small manufacturers, by virtue of the Explanation provided in the notification issued under rule 8(1) of the Excise Rules, the said Bata India Limited was deemed to have manufactured the said footwear manu-factured by the small manufacturer but affixed with the brand or trade name of Bata India Ltd. It is in that context that the Patna High Court held that by virtue of the notification the Central Government could i....
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....anently resident therein is exempted. It could have also been further stated that if a person or either of his parents or grandparents who were born in undivided India or a lady who is a wife of an Indian citizen or a person of Indian origin though a non-citizen of Indian origin has come to stay in India for the performance of his or her duties under a contract of employment of a specified duration or for carrying out any specific job or assignment, the duration of which does not extend beyond a period of three years is not a person permanently resident in India. Otherwise, the said person should be taken as a person permanently resident in India. This appears to be the purport of the use of the phrase "person of Indian origin" in clause (a) as also the deeming provisions incorporated in clauses (b) and (c) of the Explanation. Even apart from the above said reasoning it may be noticed that an inclusive definition Or a legal fiction is resorted to when either the framers of any particular Act or Rules or notification want that the word used must be given some meaning other than its popular sense and thereby enlarge the meaning of the words or phrases occurring in the body of the st....
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.... in the Explanation though in the ordinary dictionary sense it may refer to altogether a different person. When it has been specifically mentioned that the three different clauses incorporated by the Explanation to the notification are for the purpose of the said notification, there is absolutely no scope to make use of the same while interpreting section 2(p)(iii)(c) of the Act. While referring to the construction of the Explanation incorporated in the C. P. and Berar Letting of Houses and Rent Control Order, the Supreme Court in M. K. Salpekar v. Sunil Kumar Shamsundar Chaudhari, AIR 1988 SC 1841, has pointed out that the Explanation incorporated in the said clause in relation to residential house operated within a very narrow area and did not cover the entire field governed even by the main sub-clause and did not accept the contention advanced that by the addition of the Explanation even residential buildings have been excluded from the purview of the sub-clause. It was also pointed out that it was manifest that the Explanation operated within a very narrow area and did not cover the entire field governed by the main sub-clause and by the use of the expression shall be deemed a....
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....alf of the petitioner that there must be animus manendi to bring her within the meaning of the said phrase. A good deal of arguments were advanced on both the sides on the aspect as to what is the meaning of "residence" or "resident" as per the various dictionaries and also as to how the said words occurring in different statutes have been interpreted by various High Courts including the Supreme Court. It appears to us that making reference to the same is an unnecessary exercise in these appeals for interpreting section 2(p)(iii)(c) of the Act. It may in the first instance be noted that "person resident in India" has been defined in this section-2(p) as "means" and various categories mentioned in (i), (ii), (iii) and (iv) have been detailed. It is fairly well settled that the Legislature has power to define a word even artificially and when a word is defined to mean such and such, the definition is prima facie restrictive and exhaustive and only when the definition is declared to be exclusive of such and such it is prima facie extensive. Justice B. P. Singh in his book of Principles of Statutory Interpretation, fifth edition, at page 121, has referred to the said aspect. In Kishan....
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....of the person to stay in India for an uncertain period. It may also be noticed that Parliament has also used the word "other" before the word "purpose" and it has to be seen whether sub-clauses (a), (b) and (c) of section 2(p)(iii) are specified instances indicating the intention of the person to stay in India for an uncertain period and not being satisfied by mentioning such specified instance, whether Parliament has also thought of mentioning that any other purpose apart from the categories detailed earlier, where the intention to stay in India for an uncertain period is indicated would also bring such a person within the purview of section 2(p)(iii) of the Act. The learned advocates for the appellants contended that the clause "in such circumstances as would indicate his intention to stay in India for an uncertain period" used in sub-clause (d) has absolutely no application whatsoever to the earlier sub-clauses. On the other hand, it was urged by the learned advocate for the respondent-petitioner that they would qualify the, earlier sub-clauses also. It is in this context that we have to find out whether the principle of noscitur a sociis could have some kind of application to u....
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....ght under an intel-ligible classification and it is also conceivable that the Government might well have thought that these small scale factories should not be eligible for the concession contemplated by the notification where they manufacture paper catering to industrial purposes, there is a purpose in the limitation prescribed and there is no reason why the rationally logical restriction should not be placed on the proviso based on this classification. In view, the only reasonable way of interpreting the proviso is by understanding the words "coated paper" in a narrower sense consistent with the other expressions used therein. Though the contention urged by Sri K. Parasaran in the said appeal that the expression "coated paper (including waxed paper)" used in the proviso excluding operation of the exemption granted under the notification should be given restricted meaning in the context in which it appears in the proviso was termed as ingenious their Lordships accepted that contention and held that though the word "coated paper (including waxed paper)" could refer to that type of paper made use of both for industrial purpose and cultural purpose, it was held, having regard to the....
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....or an uncertain period. If, the intention of the person to stay in India is for an uncertain period, though by the visa that is issued in his favour his stay is permitted only for a certain period, it would be a case which falls within the purview of section 2(p)(iii) of the Act. A Division Bench decision of this court in Enforcement Directorate v. Father J. M. Stevens [1985] ILR Kar 1590 ; [1986] 60 Comp Cas 670 was also brought to our notice for interpretation of this clause occurring in section 2(p) of the Act. It appears that this decision is of no assistance to either of the parties in the present case for more than one reason. That was a case where the action was taken for contravention of the provisions of the Act for a period prior to the amendment of the notification issued by the Reserve Bank of India on May 21, 1979. Therefore, the appellate board in that case came to the conclusion that, that person was not a person domiciled in India and, therefore, the exemption in the notification applied to him in all its force and their Lordships agreed with this finding of the appellate board. It was also pointed out, no foundation had been laid in that case or facts brought on re....
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....ra Swamy, learned senior counsel for the Reserve Bank of India stated that such persons do not carry such tag when they go outside India whereas, Sri Shylendra Kumar, senior standing counsel for the Central Government contended that even when such a person goes outside India, he would carry such a tag and the learned advocate for the petitioner, Sri Chander Kumar contended that the person does not carry such a tag when he goes outside India. It appears the matter does not give scope for any kind of doubt in view of the Explanation given to the said section. It reads : "A person, who has, by reason only of paragraphs (a), (b) or (d) of sub-clause (iii) been resident in India, shall, during any period in which he is outside India, deemed to be not resident in India." Therefore, the non-citizen who comes within the purview of sub-clause 2(p)(iii)(c) would Continue to have the tag "person resident in India" even when that person is outside India. But the person who comes under the other categories do not carry that tag on account of this Explanation. The learned single judge has held that as the notification issued by the Reserve Bank of India was ultra vires, it was not necessary f....
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....section 2(p)(iii) of the Act, it is clear that the petitioner squarely fits into the category specified in section 2(p)(iii)(c) of the Act and, hence, it has to be held that she is a person resident in India. It was contended on behalf of the respondent by her learned counsel, Sri Chander Kumar, that in order to bring his client's case within the prohibitions imposed by the various sections, in respect of which violation, penalties have been levied, it must be established that his client was in India at the time of the alleged violations and if those transactions have taken place when she was outside India, then "she would not be within the prohibitions imposed by the various sections. As noticed at an earlier stage as per the Explanation to section 2(p) of the Act, it is only the persons who by reason only of sub-clauses (a), (b) or (d) of section 2(p)(iii) have been resident in India shall during any period he is outside India be deemed to be not resident in India. Therefore, it is clear but for this Explanation even persons coming under the purview of sub-clauses (a), (b) or (d) of section 2(p)(iii) of the Act would have been considered as "persons resident in India" even durin....
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....tioner that the notification issued by the Reserve Bank was ultra vires the Constitution, found favour with even the learned single judge and also having regard to the fact that even on the facts there is no scope for the writ petitioner to canvas an argument that under no circumstance could the authority have levied any penalty on her, it appears to us that only on the basis that the petitioner (respondent herein) had a more efficacious remedy by way of an appeal, and she ought not to have approached this court, the writ petition cannot be rejected. Under the circumstances, it is clear that the finding of the learned single judge that the authority could not have levied any penalty on the writ petitioner cannot be accepted. The learned advocates were also heard regarding the quantum of penalty levied. The learned senior standing counsel for the Central Government made it very clear that he is interested only in sustaining the levy of penalty and so far as the quantum of penalty is concerned he would leave it to the court. It was also urged on behalf of the writ petitioner that now the restrictions imposed in relation to the regulation of foreign exchange have been very much libe....