TaxTMI 
TaxTMI 
1960 (8) TMI 81
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....Chief Controller of Imports and Exports, Pondicherry, the Collector of Customs and Central Excise, Pondicherry, the Central Board of Revenue and the Government of India are the respondents in all the petitions. Messrs. French India Importing Corporation and Messrs. B. S. & Co. intervened in the Writ Petitions Pondicherry was a French Possession in India. On October 21, 1954, the Government of India and the Government of France entered into an agreement (hereinafter called the Indo-French Agreement), whereunder there was a defacto transfer of the administration of the French Settlements to the Government of India (hereinafter called the merger) as and from November 1, 1954. The de jure transfer was postponed. Messrs. Universal Imports Agency are a proprietary concern registered with the Services Des Contribution, Pondicherry, having its principal place of business at Pondicherry. Sri Mohanlal B. Gandhi is the proprietor of the said Agency. They are established importers and general merchants dealing in ball bearings, mill stores, porcelain ware, glass marbles, beltings and various other goods. They commenced their business at Pondicherry on or about April 14, 1954, under  ....
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.... Banque De L' Indo-Chine. Their bankers duly obtained authorization from the Bureau Des Affairs Economique, Pondicherry, for the requisite foreign exchange and sold the same to the petitioners for the amount involved in the cheques, and the said foreign exchange was kept available to the suppliers. On or about November 1, 1954, the goods ordered were in different stages of shipment and in some cases the goods were in the course of shipment and in others awaiting shipment in a matter of a few days. In January and February, 1955, the goods arrived at the port of Pondicherry. The Collector of Customs treated the imports of the goods as unauthorized and confiscated the same and gave the petitioners an option to pay in lieu of confiscation a penalty amounting to Rs. 20,700/- The petitioners carried the matter to the Government without any success. Ultimately the petitioners paid the penalty under protest and cleared the goods. The petitioners again in the middle of August 1954 placed several indents with their overseas suppliers for importing hair belting, torches, belt fasteners, electric lighting torch bulbs and primus stoves, and the total C. I. F. value was Rs. 52,572-12-0. T....
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....etitioners an option to pay in lieu of confiscation fine aggregating to Rs. 91,100. After filing appeals to the Central Board of Revenue and, thereafter, a revision to the Government of India with no success, the petitioners cleared the goods after paying the penalty under protest. It is clear from the foregoing facts that the petitioners entered into, before the merger, firm contracts of sales by import with foreign sellers, made available foreign exchange either under Letters of Credit or otherwise, and the goods were shipped either before or after the merger, though they reached their destination after the merger. The said goods were confiscated by the Collector of Customs under the following circumstances. Under the Indo-French Agreement, the entire administration of the French Settlements was vested with the Government of India from November 1, 1954, though de jure transfer had been postponed. In pursuance of the Indo-French Agreement, the Ministry of External Affairs published a Notification No. S. R. O. 3315 dated October 30, 1954, purporting to be under s. 4 of the Foreign Jurisdiction Act, 1947, and called the French Establishments' (Application of Laws) Order, 1954, (....
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....e petitioners raised many contentions in support of their petitions. It is not necessary to enumerate them as the petitions can effectively be disposed of on the basis of one of the contentions. The said contention may briefly be stated thus: The petitioners have the fundamental right to hold and to carry on their import trade and that the Notification No. S. R. O. 3315 dated October 30, 1954, on the basis of which the orders of confiscation were issued has a saving clause which excludes the operation of the said Notification in respect of transactions whereunder the confiscated goods were purchased and imported. The said saving clause embodied in paragraph 6 of the Order reads: " Unless otherwise specifically provided in the Schedule, all laws in force in the French Establishments immediately before the commencement of the Order, which correspond to enactments specified in the Schedule, shall cease to have effect, save as respect things done or omitted to be done before such commencement ". Relying on this paragraph, it is contended that the transactions entered into by the petitioners with the fo....
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....and exports in respect of certain goods and imposes punishment for infringement of the provisions of the Act. Under s. 167(8) of the said Act, read with s. 3(2) of the Imports and Exports Trade (Control) Act, 1947, if any goods, the importation or exportation of which is prohibited or restricted, are imported into or exported out of India contrary to such restrictions or prohibitions, the goods concerned are liable to be confiscated and the persons involved are also liable to penalty. The Foreign Exchange Regulation Act, 1947, provides for the regulation of payments, dealings in foreign exchange and securities, and the import and export of currency and bullion. It prohibits dealings in foreign exchange except by persons authorized to deal in the same and it further provides penalties for contravention of any of the provisions of the Act. Briefly stated, the Indian law as disclosed by the aforesaid Acts is that imports into India without a licence are prohibited, the goods so imported in contravention of the restrictions imposed are liable to be confiscated and that foreign exchange cannot be obtained otherwise than under the provi- sions of the Act. Persons infringing the laws are ....
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....ough their bankers, entered into firm contracts with foreign dealers on C. I. F. terms. In some cases irrevocable Letters of Credit were opened and in others bank drafts were sent towards the contracts.' Under the terms of the contracts the sellers had to ship the goods from various foreign ports and the buyers were to have physical delivery of the goods after they had crossed the customs barrier in India. Pursuant to the terms of the contracts, the sellers placed the goods on board the various ships, some before and others after the merger, and the goods arrived at Pondicherry port after its merger with India. The prices for the goods were paid in full to the foreign sellers and the goods were taken delivery of by the buyers after examining them on arrival. Before the merger if the Customs Authorities had imposed any restrictions not authorized by law, the affected parties could have enforced the free entry of the goods in a court of law. On the said facts a short question arises whether paragraph 6 of the Order protects the petitioners. While learned counsel for the petitioners contends that " things done " take in not only things done but also their legal consequences, learn....
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....e Act, the making of the rate was also saved by the words " anything duly done " under the repealed enactments. This case illustrates the point that it is not necessary that an impugned thing in itself should have been done before the Act was repealed, but it would be enough if it was integrally connected with and was a legal consequence of a thing done before the said repeal. Under similar circumstances Lindley, L. J., in Heston and Isleworth Urban District Council v. Grout (2) confirmed the validity of the rate made pursuant to a notice issued prior to the repeal. Adverting to the saving clause, the learned Judge tersely states the principle thus at p. 313: " That to my mind preserves that notice and the effect of it ". On that principle the Court of Appeal held that the rate which was the effect of the notice was good. It is suggested that the phraseology of the saving clause of the English Statutes and of the General Clauses Act of 1897 are of wider import than that of paragraph 6 of the Order and, therefore, the English decisions are not of any assistance in considering the scope of the saving clause of the Order. It is further stated that the English decisions apply only t....
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....ort without which it cannot be effectuated, and the sale and resultant export form parts of a single transaction." The same principle has been restated by the learned Chief Justice in State of Travancore. Cochin v. Shanmugha Vilas Cashew Nut Factory ([1954] S.C.R. 53). The learned Chief Justice stated at p. 63 thus: " The phrase " integrated activities " was used in the previous decision to denote that a sale, that is, a sale which occasions the export, cannot be dissociated from the export without which it cannot be effectuated and the sale and resultant export form parts of a single transaction". Applying the said principles to an import sale it may be stated that a purchase by import involves a series of integrated activities commencing from the contract of purchase with a foreign firm and ending with the bringing of the goods into the importing country and that the purchase and resultant import form parts of a same transaction. If so, in the present case the bringing of the goods into India and the relevant contracts entered into by the petitioners with the foreign dealers form part....
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....n the result, the orders of the respondents 2, 3 and 4 are quashed and they are directed to refund to the petitioners the amounts illegally collected from them. The petitioners in all the petitions will have their costs. SARKAR J.- I think that these petitions should fail. Sometime in the latter half of 1954, the petitioners had in Pondicherry, then a French establishment in India, entered into certain agreements with foreign suppliers for the import into Pondicherry of diverse goods. It is said that at that time licences were not required for such imports from the French authorities. It appears however that these authorities granted a certain amount of foreign exchange for the imports. The importers who failed to secure an allotment of foreign exchange from the French authorities often obtained it from the open market through banks. The French authorities however prohibited the banks in Pondicherry with effect from July 1, 1954, from acquiring without their permission, foreign exchange in the open market for their constituents for financing imports. The petitioners had with the consent of the French authorities obtained through the banks foreign exchange from the open market....
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....at they applied to Pondicherry as from November 1, 1954, would seem to be plain from the Order passed by the Government of India on October 30, 1954, under the Foreign Jurisdiction Act, 1947, to take effect from the date of the transfer of administration, namely, November 1, 1954, called the French Establishments (Application of Laws) Order and being Ministry of External Affairs Notification No. S.R.O. 3315. This Order had been passed in view of the Indo-French agreement and the transfer of administration provided thereby. Its validity is not challenged. Paragraph 3 of the Order provided that the enactments mentioned in the Schedule to it and all Orders made under those enactments and in force on November 1, 1954, would apply to the French Establishments subject to the subsequent provisions of the Order. The enactments mentioned in the Schedule included the Sea Customs Act and the Imports and Exports (Control) Act. It is not in dispute that the Order under the Defence of India Rules mentioned earlier was in force on this date. The Application of Laws Order therefore made the Sea Customs Act, the Imports and Exports (Control) Act and the Order made under the Defence of India Rule....
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.... Therefore, it is said, the imports by the petitioners would be within the saving clause in paragraph 6 as things done before the commencement of the Application of Laws Order, to which the Sea Customs Act, the Imports and Exports (Control) Act and the Order made under the Defence of India Rules would riot apply. This argument also seems to me to be ill-founded. These Acts and the Order were applied to Pondicherry as from November 1, 1954. The effect of that was to prohibit imports thereafter and to render the goods imported in contravention of that prohibition liable to confiscation. What is an import-and this is what was prohibited-has therefore to be decided by reference to these Acts and the Order. They defined import as bringing goods into India, which in the present case would include the French Establishments by virtue of paragraph 4 of the Application of Laws Order. Therefore goods brought across the customs' barrier into Pondicherry would be goods imported into Pondicherry. To the goods so brought into Pondicherry after November 1, 1954, the Acts and the Order made under the Defence of India Rules must apply irrespective of whether the goods were brought under contr....
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....ment nor any right accrued thereunder. It strikes me that if the saving of a thing done under the repealed enactMent also necessarily saved what is called the effect of it or rights acquired from it, it would not have been necessary to expressly provide also for the saving of the rights acquired under the repealed enactment. Therefore, it seems to me that the saving of things done does not automatically save the effect of them or rights acquired therefrom. The argument that the saving clause operated to protect the imports was based on two English cases, namely, The Queen v. Justices of the West Riding of Yorkshire (1) and Heston and Isleworth Urban District Council v. Grout (2). These cases considered the terms of statutes analogous to s. 6 of our General Clauses Act, providing that a repeal of one enactment by another shall not affect anything duly done or suffered under the repealed enactment or any right acquired thereunder. These provisions were therefore materially different from the saving clause now before us, as they expressly saved rights acquired under a repealed statute. The first mentioned case held that as the two statutes were substantially for the same purpose....
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....n No. 3314 dated October 30, 1954, issued by the External Affairs Ministry of the Government of India, that all laws in force in the French Establishments and not repealed by para. 6 of the Application of Laws Order, would continue to be in force until repealed. Further, the saving clauses considered in the English cases preserved unaffected by the repeal, only things done under the repealed enactment and the rights acquired thereunder. The saving clause that we are considering saves things done before the commencement of the Application of Laws Order whether the thing was done under any law or not; it does not purport to preserve a right acquired under a statute repealed. In Hamilton Gell v. White , it was observed that s. 38 of the English Interpretation Act, 1889, which corresponds to s. 6 of our General Clauses Act, " was not intended to preserve the abstract rights conferred by the repealed Act......... It only applies to specific rights given to an individual upon the happening of one or other of the events specified in the statute." Likewise in Abbott v. Minister for Lands it was observed about a saving clause which protected rights accrued under repealed enactments....
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....clause in the English Interpretation Act, 1889, and to obtain guidance from the decisions based on these statutes. I have therefore come to the conclusion that the saving clause in paragraph 6 of the Application of Laws Order does not protect the imports made by the petitioners, from the operation of the Indian laws applied to the French Establishments. I would dismiss these petitions. SHAH J.-Petition No. 123 of 1957: Prior to November 1, 1954, Pondicherry was one of the French Establishments in India administered by the Government of France. Under the French administration, except specified categories like gold, rock- salt and certain medicinal preparations, all commodities could be imported into the Pondicherry Port without a licence. The French Administration exercised control on im- port of commodities into Pondicherry indirectly by making allotment of the requisite foreign exchange. The Government of France made an overall allotment of foreign exchange for the French Establishments in India, and persons desiring to import goods in Pondicherry and other French Indian settlements were, on applications addressed to the Chief Commissioner, French Settlements, granted foreig....
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.... with the aid of foreign exchange in the open market. An agreement for the de facto transfer of the ad- ministration of the French Establishments in India was executed between the Government of India and the Government of France on October 21, 1954. This agreement became effective on November 1, 1954. In exercise of the powers conferred by s. 4 of the Foreign Jurisdiction Act, 1947, on October 31, 1954, the Government of India issued two orders- S. R. O. 3314, the French Establishments ( Administration) Order, 1954, and S. R. O. 3315, the French Establishments (Application of Laws) Order, 1954. By S. R. O. 3315, certain enactments specified in column (3) of the Schedule which included the Sea Customs Act, 1878, The Reserve Bank of India Act, 1934, The Imports and Exports Trade (Control) Act, 1947, The Foreign Exchange Regulation Act, 1947 and The Indian Tariff Act, 1934, were applied to the French Establishments of Pondicherry, Karaikal, Mahe and Yanam, with the modification that references in the enactments, notifications, orders and regulations which were applied to the French Establishments, to India or to the States were to be construed as referring to the French Establishme....
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....currency and shipped after November 1, 1954, and ordered before August 15, 1954, were also permitted to be cleared it without penalty". The goods indented by the petitioners were confiscated by the customs authorities exercising powers under s. 167(8) of the Sea Customs Act, on the ground that the same had been imported without a valid licence and in contravention of the Department of Commerce and Industries Notification No. 43-1 T.C./43 dated July 1, 1943, (as amended) read with sub-s. 2 of s. 3 of the Imports and Exports Trade (Control) Act, 1947. The petitioners were by orders passed between February 28 and March 4, 1955, given an option to clear the goods for " home consumption " on payment of customs duty and fine specified in the order. These orders were confirmed in appeal by the Board of Revenue and by the Government of India in exercise of revisional jurisdiction. In the meanwhile the petitioners paid the duty and the fine imposed by the customs authority and cleared the goods. The Union Government having rejected the Revision applications, the petitioners submitted this petition under Art. 32 of the Constitution for a writ or direction in the nature of certiorari re....
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.... 4 of the Imports and Exports Trade (Control) Act, 1947. The rules and orders made under r. 84 of the Defence of India Rules were on November 1, 1954, operative as if they were made under the Imports and Exports Trade (Control) Act, 1947, and when that Act was extended to the French Establishment of Pondicherry, these rules and orders became also applicable to that area. By s. 19 of the Sea Customs Act, the Central Government may by notification prohibit or restrict the bringing by sea, goods of any specified description into India across any customs frontier as defined by the Central Government. By s. 2(b) of the Imports and Exports Trade (Control) Act, 1947, import is defined as bringing into India by sea, land or air. Import of goods therefore means carrying goods across the customs frontier declared by the Government of India. There is no dispute that under s. 19, the Port of Pondicherry was declared a customs frontier. Admittedly, the goods indented by the petitioners were brought into India, i.e., imported into India after November 1, 1954. Importation of these goods without a licence in that behalf being prohibited under a notification under the Imports and Exports Trade (Co....
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....d obtained no license from any competent authority for importing or even for indenting the goods. It was urged that the orders S. R. O. 3314 and S. R. O. 3315 issued under the Foreign Jurisdiction Act should be construed in the light of the agreement between the Government of India and the Government of France. By S. R. O. 3314, provision is made by the Government of India for the administration of the erstwhile French Establishments. By cl. 5 of that notification, all laws in force in the French Establishments or any part thereof immediately before the commencement of the order and not repealed by cl. 6 of the French Establishments (Application of Laws) Order, 1954, shall continue to remain in force until repealed or amended by a competent authority. The law, if any, relating to the import of goods into India applicable in the French Establishments prior to November 1, 1954, stood expressly repealed by cl. 3 of S. R. O. 3315 which provided that the enactments specified in column 3 of the Schedule as in force before the commencement of this order shall be applied to and shall be in force in the French Establishments subject to (a) any amendments to which the enactments are for t....
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....tier at Pondicherry were subject to the provisions of the Sea Customs Act and the Imports and Exports Trade (Control) Act; and goods shipped after November 1, 1954, in pursuance of indents before that date were not expressly saved from the operation of the restrictive provisions of those Acts. On and from November 1, 1954, the law if any relating to the import of goods operative in the French territory was superseded and the goods having been brought into the Pondicherry Port after November 1, 1954, the import was governed by the Sea Customs Act and the Imports and Exports Trade (Control) Act and not by any law of the French territory. The supersession of the French laws by the application of the statutes set out in schedule III was, on November 1, 1954, complete, " save as respects things done or omitted to be done ". Does the expression " things done " include consequences which may have ensued in future but for the supervention of the merger agreement ? Ex facie, by cl. 6, the French law is kept alive in respect of " things done or omitted to be done " i.e., things done or omitted to be done in the past; it has not the effect of keeping alive that law in respect of things to be ....