TaxTMI 
TaxTMI 
1966 (3) TMI 75
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.... Kanoria was one of the partners of the firm. The Company and the Managing Agents had a common address in Calcutta. Motilal Kanoria used to sign on behalf of the Managing Agents and also generally to deal with the affairs of the Company. All transactions in this case were by Motilal Kanoria and he had signed the documents to which reference will be made presently. In February 1955 the Government of India approved of the proposal of the Company to manufacture hackle and combing pins and sanctioned the import of plant and machinery for the purpose. The Company was permitted to apply to the Chief Controller of Imports, New Delhi for a licence. The letter of Government is Ex. 2 dated February 4, 1955. On February II. 1955 the Company applied to the Chief Controller of Imports, New Delhi, on the proper application form, for an import licence. In that application the Company stated that the machinery was to be installed or used at their Mills at Konnaggar, Eastern Railway (Ex. 1). On May 26, 1955 a licence was issued (Ex. 3). The licence read as follows-- "This licence is issued subject to the conditions to the goods licensed as detailed in the Policy Book for the current licensing pe....
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....cence is granted to you subject to the following conditions:- (a) In case the project involves any capital issue and if such capital issue is not sanctioned the licence is liable to cancellation. (b) That if any sanction to the project is necessary under the laws of the Central, Provincial or a State Government the same should be obtained and the position reported to this office by the licensee; in the absence of such sanction being received the licence is liable to cancellation. 4. The licence is liable to cancellation if particulars as to progress of time in accordance with the detailed instructions contained in the accompanying slip are not furnished. 5. The Government do not guarantee for supply of raw materials required for manufacture of the goods. On June 19, 1956 the Company asked for "revalidation" of the licence and the licence was extended to May 31, 1957. This extension is mentioned in the licence above reproduced at No. 4. On December 13, 1956 the Company entered into an agreement (Ex. 25) with Shalimar Wood Products (P) Ltd. of Calcutta for the sale of the machinery imported by the Company. The sale, it is submitted, was at invoice price and there was n....
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.... (Control) Order, 1955 and sentenced him to a fine of Rs. 200/- or simple imprisonment for one month. On revision the High Court acquitted him but certified the case as fit for appeal to this Court and the present appeal is the result. As the prosecution is in respect of an offence under s. 5 of the Imports and Exports (Control) Act, 1947, we shall begin by examining what the ingredients of that offence are. Under the scheme of that Act there is a power to prohibit or restrict imports and by s. 3 the Central Government is enabled to make provision, by order published in the Official Gazette, for prohibiting, restricting or otherwise controlling them. Section 5 prescribes penalty for contravention of an order. The section, as amended by Act 4 1960, is set down here "5. If any person contravenes or attempts to contravene, or abets a contravention of, any order made or deemed to have been made under this Act or any condition of a licence granted under any such order, he shall, without prejudice to any confiscation or penalty to which he may be liable under the provisions of the Sea Customs Act, 1878, as applied by sub- se....
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.... from the administrative point of view and which are not inconsistent with the provisions of the said Act. (b) Where a license is found to have contravened the order or the terms and conditions embodied in or accompanying a licence, the appropriate licensing authority or the Chief Controller of Imports may notify him that, without prejudice to any penalty to which he may be liable under the Imports and Exports (Control) Act, 1947 (18 of 1947), or any other enactment for the time being in force he shall either permanently or for a specified period be refused any further licence for Import of goods." By this order the licensing authority was given the power to include conditions in a licence. On December 7, 1955 an order was issued (Notification No. 17/55 dated December 7, 1955). It consolidated all the rules in one place and by clause 12 read with Schedule IV repealed the earlier two orders and some others but while effecting this repeal it added a saving clause-- "Provided that anything done or any action taken, including any appointment made or licence issued under any of the aforesaid Orders, shall be deemed to have been done or taken under the corresponding provision....
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....d the clause may be set down here: "7. Amendment of Licence.- The licensing authority may, of its own motion or on application by the licensee, amend any licence granted under this Order in such manner as may be necessary to make such licence conform to the provision of the Act or this Order or any other law for the time being in force or to rectify any errors or omissions in the licence; Provided that the licensing authority may, on request by the licensee, amend the licence in any manner consistent with the Import Trade Control Regulations." Much of the argument in this case is based on the dates of these notifications and of the amendment of the section 5 of the Act, considered in relation to the dates on which the several facts in this case took place. The Presidency Magistrate applied the Order of 1955 because the licence was "revalidated" on June 27, 1956, and according to him, this was apparently done under powers derived from clause 7 of that Order. According to the Presidency Magistrate the Company had imported the plant and machinery for its own use (vide No. 7 of the licence) and this was an express condition of the licence. He also pointed out that the licence ....
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....cense it cannot be said that by breach of the condition there has been any breach of Order 231 I.T.C./43 or of the subsequent Notification No. 2-I.T.C./ 48. It may be mentioned that the difficulty apparently was realised in Pakistan and therefore the Imports and Exports (Control) Act, 1947, was first amended by an ordinance and then by the Imports and Exports (Control) Act, 1950, of Pakistan. Section 3(2) of that Act provides that 'no goods of the specified description shall be imported or exported except in accordance with the conditions of a license to be issued by the Chief Controller or any other Officer authorised in this behalf by the Central Government. The penal section 5, refers not only to contravention of an order or Rule made under the Act but also to the contravention of any condition imposed by the License........ It is clear that unless the penal section itself includes the contravention of a condition of the license as an offence, it is not possible to hold that the licensees by merely committing breach of a condition imposed by a license has committed the offence which consists in contravention of an order made or deemed to be made under this Act. In this view, the....
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....ter the coming into force of the Order of 1955. The Division Bench therefore held that no offence was committed. Adverting also to the fact that there was confusion as to which of the two-the Company or Motilal Kanoria-was the accused the learned Judges held that the Presidency Magistrate was further wrong in convicting Kanoria although the prosecution was really against the Company. The questions that arise in this case are really two and they are : (a) whether by disposing of the plant and machinery without permission an offence was committed; and (b) if so, by whom ? In our judgment both these questions must be answered in favour of the State of West Bengal. It was overlooked in the High Court that under the proviso to clause 12 of the Order of 1955 the licence, although granted before that Order was brought into force, came under its terms. The words of that proviso refer to a 'licence issued' under any of the earlier orders as something done or action taken under the corresponding provision of the 1955 Order. The corresponding conditions were those we have extracted from the Order of 1955 and set down earlier. By the terms of the licence (item No. 7) the licensee u....
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....l) Act for the breach of clause 5 of the Order of 1955. Mr. D. N ' Mukherjee seeks to distinguish between the transference of the licence and that of the machinery. This argument is not acceptable to us. The licence created its own conditions that the goods would be used by the licensee and the transfer of goods in circumstances is tantamount to transfer of the licence. It would be refining matters too finely to distinguish between the transfer of the licence and the transfer of the goods. Even if a distinction can be drawn the licence was for the actual use of the licensee. When the goods were sold condition No. 7 was broken and so would be a breach of the 1955 Order which had come into force. The final question is whether Kanoria can be said to have committed any offence and whether he was prosecuted at all. The section as amended in 1960 makes the abetment of contra- vention an offence. If the amendment applied because the prosecution was after the amendment (a point we need not decide) Kanoria would be definitely guilty at least of abetment. In our opinion it is not necessary to decide this point because Kanoria is guilty as a principal offender and the section as it originally....