TaxTMI 
TaxTMI 
1952 (2) TMI 1
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.... was not such as had been declared. The letter concludes with these words: "In the event of our failure to comply with the above undertaking, we agree to pay on demand (without any prejudice to our right in the matter) any duty and/or penalty (including fines) which may be imposed by you." 3.The respondents claimed that the rate of duty payable was 2 annas 6 pies per gallon under item 27(8) of the First Schedule of the Indian Tariff Act, such being the rate for lubricating oil of the kind imported. 4.It appears that on March 16, 1950 the Customs authorities had this oil tested by chemists on their behalf and as a result of such test the authorities on the same day wrote to the respondents that the oil in question had been misdescribed by the latter and that a chemical test had disclosed that the oil was mineral oil assessable to duty as such under item 27(3), First Schedule of the Indian Tariff Act the rate being 27 per cent ad valorem. As the misdeclaration involved a loss of Rs. 75,925 in duty the Customs authorities called upon the respondents to show cause why the goods should not be confiscated and a penalty imposed under Section 167 Clause 37 of the Sea Customs Act. ....
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....Item 27(3) of the Indian Customs Tariff as "mineral oil, other sorts". 10.On October 12, 1950 the respondents replied that the decision that the oil came within item 27(3) was erroneous and that the oil came within item 27(8) of the Indian Customs Tariff. They again asked for a refund of the excess duty levied and contended that the bond which they had executed was not in the circumstances enforceable. Their letter concludes with this paragraph : "The order putting the oil into item 27(3) was passed without jurisdiction as there was no evidence on which the decision was taken, or none disclosed to us even after the order, nor were we heard on the evidence." 11.On November 17, 1950 the Customs authorities wrote to the respondents informing them that on a chemical test the oil was found to be correctly assessable to duty at the rate of 27 per cent ad valorem under item 27(3) of the Indian Customs Tariff as mineral oil not otherwise specified and not under item 27(8) lubricating oil as declared in the bill of entry. The letter ends by calling upon the respondent to pay Rs. 4,65,473-12-0 which was in fact a fine for the improper declaration. 12.On November 21, 1950 the resp....
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....16, 1950, they had been asked to submit all correspondence and documents connected with the import of this oil and any evidence which they had corroborating their explanation. In the submission of the learned Solicitor General such was sufficient to comply with the rules of natural justice even if we held that the authorities were acting in a judicial or a quasi-judicial capacity. 19.I have no doubt whatsoever that the Assistant Collector of Customs in this case was acting in a judicial or a quasi-judicial capacity. Section 182 of the Sea Customs Act provides that in every case, except the cases mentioned in Section 167, Nos. 26, 72 and 74 to 76, both inclusive, in which under the Act anything is liable to confiscation or to increased rates of duty, or any person is liable to penalty, such confiscation, increased rate of duty or penalty may be adjudged by certain officers. 20.The use of the word "adjudged" suggests that arriving at a decision that goods should be confiscated or that they should bear an increased rate of duty or that a penalty should be demanded is a judicial matter or certainly a matter which requires a judicial approach. 21.Section 187 of the Sea Customs ....
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....sione & c. cum rege, to make an end or fine with the king for such a transgression." 27.It is to be observed that the Act refers to a misdeclaration in Section 167(37)—as an offence and that section imposes a penalty for the offence, namely, confiscation and a fine is levied in lieu of confiscation. The Sea Customs Act by Section 187 gives powers to Customs officers and magistrates to try offence under the Act. Quite clearly magistrates in trying such offences would be acting in a judicial capacity and I can see no reason whatsoever for holding that Customs officers acting in a similar capacity would be acting otherwise than in a judicial or at least a quasi-judicial capacity. As I have said earlier an appeal and a revision is provided for decisions of Customs judicially or in a quasi-judicial capacity. 28.The matter was considered by a Bench of the Bombay High Court in the case of Ganesh Mahadev Jamsandekar v. The Secretary of State for India in Council I.L.R. 43 Bom. 221. It was urged in that case that the Collector of Customs was not acting in a judicial capacity, but both the members of the Bench who decided that case were clearly of opinion that a Collector in adjudgin....
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....d all evidence corroborating their explanation. Why an officer of the standing of the Assistant Collector of Customs should refer to "correspondences and evidences" it is somewhat difficult to say, but such is the language he uses. 31.It must be remembered that by this letter the Customs authorities informed the respondents that there had been a misdeclaration and that had been discovered as a result of a test. If there had been a misdeclaration the goods were liable to confiscation and the respondents were liable to a fine, the amount of which would be entirely in the discretion of the Customs authorities. The respondents were not shown the results of any test and indeed they requested the authorities on a number of occasions to let them see the test report, but such was never disclosed. It appears to me that merely asking the respondents to forward all correspondence and documents relating to the import of this oil and any evidence which they had corroborating their explanation that it was spindle oil as declared, does not amount to giving these respondents a fair opportunity of meeting the charge that they had misdeclared the oil. As will be seen later if these respondents ha....
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....laration of the respondents should be accepted. 36.The first certificate from the chemist who sampled this oil on behalf of the Customs Authorities is dated March 15, 1950. The chemist who first sampled was Sri B. N. Banerjee. He gave the flash points as 217°F' and stated that "the samples are oily in consistency and immiscible with water. They are not suitable for use as illuminant in wick lamps. They are amber coloured oil". The Chemical Examiner for the Customs authorities also signed this certificate as correct. On the face of the certificate the following words appear: "The test results may kindly be seen. Assessment may please be confirmed". Under these words appear initials which are illegible and the date 15th March 1950. 37.It must be remembered that the respondents claimed the oil to be lubricating oil and that duty should be payable under item 27(8) of the First Schedule of the Indian Tariff Act. That item covers: "Lubricating oil, that is, oil such as is not ordinarily used for any other purpose than lubrication, excluding any mineral oil which has its flashing point below two hundred degrees of the Fahrenheit thermometer by Abel's close test." 38.The....
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....e Assistant Collector was still dissatisfied and he points out that the amount of revenue involved was very large and further that the spindle oil imported was not according to Government specification and for these reasons he decided to have the matter referred to the Chief Chemist of the Central Revenues. As I have already stated, the report of that officer is dated July 25 and he found the flash point to be over 200°F and found the oil unsuitable as iluminant in wick lamps. He then points out that - "For spindle oils the official specifications prescribe a minimum flash point of 150oC (302°F by the Pensky-Martens Closed Tester). In view of these, the low flash point of the samples under reference, viz. 210°F will preclude its being classed as a spindle oil. The Chief Chemical Examiner then states :- "It would appear to be classifiable as a diesel oil. But the responsibility for ascertaining whether or not it is used as such in diesel engines will rest with the Appraising Department." 44.This certificate as I have said was never disclosed and it appears to me quite clearly that this is not a certificate to the effect that this is not a lubricating oil within item 2....
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....idavit insists that it had a strong kerosene smell. This affidavit is the first disclosure to the respondents of this fact though there are references to it in the notes in the record. It appears to me that the nasal organs of Customs authorities where large sums of revenue involved are far more sensitive than the nasal organs of analytical chemists who are called upon to analyse samples of oil and to state whether such is lubricating oil or some other form of oil. 47.The materials before the Assistant Collector of Customs clearly show that no offence had been committed and I am constrained to say that the Collector of Customs, against the whole of the evidence, came to a contrary conclusion and he seems to have been influenced not by the report of the analytical chemists, but rather by official government specifications which could not affect the case. An officer in a note to the Collector dated March 24, 1950 makes that quite clear. In that note he points out that these specifications merely show the specifications of different types of oil purchased by the authorities and then adds :- "It cannot therefore be said that the flash point of a lubricating oil must necessarily b....
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....tion of the Collector of Customs that what is lubricating oil, unless defined in the act, is what is regarded in the trade as such and not what is regarded by government for their own purposes. Further he disregarded the minimum flash point as given in item 27(8) of the First Schedule to the Tariff Act and substituted for his own purposes quite arbitrarily the minimum limit imposed in these government specifications, though it had been pointed out to him in his own office that he had no right whatsoever so to do. There is no escape from the conclusion that this finding was not bona fide and must be regarded as mala fide. I have anxiously considered whether the decision was only an erroneous one due possibly to obstinacy, stupidity or even ignorance, but I am unable so to hold. The view of the experts for the Customs at Calcutta were wholly disregarded as they favoured the view of the respondents. The Assistant Collector persisted in a view, though it had been pointed out to him that he could not arbitrarily fix what were the essentials of lubricating oil, and caused the respondents to be informed that chemical analysis supported the view when it was clear that it did not. With full....
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.... or other proceeding for any act done in pursuance or execution or intended execution, nor as I think, for any neglect or default in the execution, of any Act of Parliament or public duty or authority." 55.Warrington, L. J. appears to have agreed with that view. Scrutton, L. J. observed :- "As to the Public Authorities Protection Act, 1893, the writ of mandamus, like that of certiorari and prohibition, is a high prerogative writ, and a very valuable right in the Crown for keeping subordinate tribunals within their jurisdiction. Clear words are necessary to impair such a right, and the words of this Act, "action, prosecution, or other proceeding against any person," are no such clear words as to have that effect. There is less inconvenience in coming to this decision because the court has always a discretion to refuse the writ of mandamus after an undue lapse of time. The same view was taken by a divisional court consisting of Lord Hewart, C. J. and Avory and Swift, JJ. in the case of Rex. v. London County Council 151 L. T. 590 in which they held that an application for certiorari was not a proceeding within the meaning of that word as used in the Public Authorities Protect....
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....en away, the right to it remained notwithstanding the very express but still general words of this section. However that might be according to English law, where there is no such revision procedure as in India, their Lordships see no reason for narrowing the express words of the Indian Act. Certiorari according to the English rule is only to be granted where no other suitable remedy exists. If the order of the magistrate were a judicial order, it would have been made in the exercise either of his civil or of his criminal jurisdiction, and procedure by way of revision would have been open. Even were it to be said that the order was of that quasi-judicial kind to which certiorari has sometimes been applied in England or in India, the Press Act may quite reasonably have intended to take it away, and there is no reason why full effect should not be given to its language. It was contended in the High Court and before this Board, that it was beyond the competency of the Indian Legislature to enact Section 22 and possibly even to enact the Press Act. This argument which was mainly founded upon the language of Norman J. in Re. Ameer Khan (1870) 6 B. L. R. 451, received some encour....
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....nclined to hold that Section 198 is not a bar to these proceedings. 59.Further, can Section 198 of the Act apply if the proceedings are held to be mala fide as Bose, J. has held them to be, and as I hold them to be ? Can a mala fide act be an act which the Assistant Collector purported to do in pursuance of the Sea Customs Act? Where an officer taking a mistaken view makes an order which is not under the Act he can be said to have made the order purporting to act under the Act, though he in fact did not act under the Act. But can such be said of an officer who does not act in good faith and makes the order for reasons wholly unconnected with the Act. It seems to me very difficult to hold in such a case that the order was one which he purported to make under the Act. In such a case he merely uses the Act as a cloak to shield himself and to give his act an appearance of legality which he must have known that act could never possess. That being so I think it must be held that Section 198 of the Sea Customs Act was no bar to these proceedings. 60.Lastly, it was argued by the learned Solicitor General that in any event the court should not grant a certiorari because the respondent....
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.... other hand it seems to me a matter of the highest possible importance that where a quasi judicial function is being exercised, under such circumstances as it had to be exercised here, with the result of depriving people of their property especially if it is done without compensation, the persons concerned should be satisfied that nothing unfair has been done in the matter, and that ex parte statement have not been heard before the decision has been given without any chance for the persons concerned to refute those statements. That seems to me a matter of the greatest possible public importance, and if I am right in the view that I have expressed as to the functions of the Minister being of a quasi-judicial character, I think it follows that in the special circumstances of this case, as I understand them to be, the court has no option but to quash the order, as my brother has suggested." 63.In that case the learned Lord Justice was not satisfied that any injustice had in fact been done. Nevertheless he was of opinion that a certiorari should issue because as he put it, it was a matter of the highest possible importance that where a quasi-judicial function is being exercised the ....
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....General, ex parte Carmichael (1928) I. K. B. 291 held that a certiorari would issue although there was an alternative remedy. Avery, J. at page 299 of the report observed that though there was an alternative remedy by way of an appeal, nevertheless a certiorari should issue. He observed. "But even if that remedy is open to her (that is an appeal, it is undoubtedly good law that if the application for a certiorari is made by a party aggrieved then it ought to be granted ex debito justice, and the court has not the general discretion which it would have when the application is made by one of the public who is not personally concerned. That was decided long ago in the case of Rex. v. Surrey Justices (1870) L. R. 5 Q. B. 466, and on that principle, even although she has the remedy by appeal in this case, I am prepared to agree that the certiorari should go, seeing that the application is being made by the applicant as the party aggrieved." 68.A similar view was taken by a divisional court in England constituting of Viscount Caldecote, C. J. and Humphreys and Wrottesley, J. J. in the case of Rex. v. Wandsworth Justices, ex parte Red (1942) I. K. B. 281 in which it was held that wh....
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....se to his ordinary remedies, but if it found that there is a breach of a fundamental principle of justice, the High Court certainly will not hesitate to issue a writ of certiorari. This case was of course decided before the Indian Constitution came into force. 70.There can, I think, be no doubt that a court can refuse to issue a certiorari if the petitioner has other remedies equally convenient and effective. But it appears to me that there can be cases where the court can and should issue a certiorari even where such alternative remedies are available. Where a court or tribunal which is called upon to exercise judicial or quasi-judicial functions discards all rules of natural justice and arrives at a decision contrary to all accepted principles of justice then it appears to me that the court can and must interfere. If public policy affects the issue of a writ as attested by Mau-gham, L. J. in the case which I have cited then clearly public policy demands in this case that we should issue a writ immediately and not compel the respondents to proceed by way of appeals to the Customs authorities or by revision to the executive government or by the more cumbrous procedure of a prope....
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.... to enter on the case at all. Want of evidence on which to convict is the same as want of jurisdiction to take evidence at all. This, clearly, is erroneous, A Justice who convicts without evidence is doing something that he ought not to do, but he is doing it as a Judge, and if his jurisdiction to entertain the charge is not open to impeachment, his subsequent error, however grave, is a wrong exercise of a jurisdiction which he has, and not a usurpation of a jurisdiction which he has not.'' The learned Lord Chief Justice said with reference to this passage: "That passage, as I understand it, has nothing to say about a case such as this, where there has been a denial of natural justice to a party who has been convicted." To the argument that the applicant had not this remedy open to him, because he had another remedy, his Lordship observed; "I am not aware of any reason why, in such circumstances as these, if the applicant prefers to ask for an order of certiorari to quash the conviction obtained in the manner I have described, the court should be debarred from making an order. In this case, it has been admitted by the justices that a mistake was made. This court is in a position....
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.... void and of no effect. Lord Macnaughton at p. 539 observed. "It is obvious that the so-called determination of the board is void and of no effect. It is hardly necessary to die any authority on a point so plain. The learned counsel for the appellant referred to two well-known club cases before Sir George Jessel M. R. Fisher v. Keane and Labouchere, v. Earl Wharncliffe. It may be worthwhile to mention a later case before the same learned judge, in which he refers to the case of Wood v. Wood, in the Exchequer and expresses regret that he was not acquainted with that case when those club cases were decided, see Russel v. Russel. "It contains", he says "a very valuable statement by the Lord Chief Baron as to his view of the mode of administering justice by persons other than Judges who have judicial functions to perform which I should have been very glad to have had before me on both those club cases that I recently heard, namely, the case of Fisher v. Keane and the case of Labouchere v. Earl of Wharncliffe". The passage I mean is this, referring to the committee, "They are bound in the exercise of their functions by the rule expressed in the maxim 'audi alteram partem' that no man....
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....e orders and the demands made by the Customs authorities based on evidence which the petitioner was not given any opportunity to meet. 85.The question therefore is whether this court has jurisdiction to grant the writ of certiorari, for if this court has no jurisdiction to issue the writ, whatever injustice might have been done to the petitioner, the court cannot rectify the wrong in these proceedings. 86.It appears from Blackstone (1844) edition (vol. 3 page 703) that "this writ originally issued out of the Court of Chancery, or a superior court of the common law, directed in the King's (or Queen's) name to the judges or officers of inferior courts of record, commending them to return the record of a case pending before them, to the end the party might have the more sure and speedy justice. This writ might be had either in criminal or civil cases." 87.It appears that in course of time the scope of the writ was extended. In Parlakimedi's case 70 I. A. 129, Viscount Simon L. C., said "This writ does not issue to correct purely executive acts but, on the other hand, its application is not narrowly limited to inferior "courts" in the strictest sense. Broadly speaking it may b....
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.... am of opinion that the words "judicial power" as used in Section 71 of the Constitution mean the power which every covering authority must of necessity have to decide controversies between us subjects, or between itself and its subjects, whether the right relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action." Latham, C. J. in Role Company (Australia) Pty. Ld. v. The Common Wealth (69 C. L. R. 185 at pp. 198-99) explained the definition : "I am not satisfied that the words of Griffith, C. J. are properly interpreted when it is said that they mean that a power to make binding and authoritative decisions as to facts is necessarily judicial power. I direct attention to the concluding words "is called upon to take action". In my opinion these words are directed to action to be taken by the tribunal which has power to give a binding and authoritative decision. The mere giving of the decision is not the action to which the learned Chief Justice referred. If a body which has power to give a binding and authoritati....
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....te decision may be determined not merely by the application of legal principles to ascertained facts but by considerations of policy also". 95.Their Lordships it appears were reluctant to lay down a final and conclusive test of what 'judicial power' means. 96.In Boulter v. Kent Justices (1897) A. C. 569, Lord Herschell expressed the view that in view of the fact that an objector who opposes the grant of a liquor licence by justices sitting as a confirming authority, is expressly made a party to litigation by Statute the latter proceedings are therefore judicial, for there is a lis inter parties. Lord Herschell seems to have thought that if there is a lis between A & B and C has to decide the dispute—C is vested with a Judicial power a view which was adopted by this Court in Patri Shaw v. R. N. Roy, 54 C.W.N. 855. 97.But having regard to the Privy Council decisions one is forced to admit that there is no conclusive test for distinguishing judicial activities from administrative activities. This is so because it seems there is no sharp dividing line between the two. In many cases they are inextricably mixed up. 98.Dr. Robson in his book on Justice and Administrative Law....
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....words 'to act judicially'. 101.It seems that if a matter is required to be approached with a judicial mind, then the decision on it is a judicial or quasi-judicial decision. There are not only the formal courts of law, but also the administrative tribunals, the Committees or the Councils or the members of trade unions, of members' clubs, and of professional bodies established by statute or Royal Charter, which for the sake of convenience are referred to as domestic tribunals. There are again tribunals called ad hoc tribunals—the procedure of which, as prescribed by the legislature, is of the most informal nature : Such tribunals may act on their own knowledge and on their own inspection and give decision without hearing either party, unless a party claims to be heard (See R v. Brighton and Area Rent Tribunal, (1950) 1 All E.R. 946. Many persons exercise judicial functions besides those who are called Judges. Mere names are not a safe guide for discovering where the judicial function exists. But an analysis of what takes place when a Judge in a court of law decides a dispute before him may help us perhaps to discover what in fact is meant by judicial activity or spirit, and thu....
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.... 'acting judicially' involves the exercise of all these qualities of mind. The person who has to give the decision must approach the subject with a judicial mind. But still we have not the test which clinches the matter. 107.The ultimate decision may be reached, as the Judicial Committee have observed, not merely by the application of legal principles to ascertained facts, but by consideration of policy also. For myself I will be content for the present to accept the suggestion laid down by Dr. Robson for understanding what is meant by the expressions 'judicial approach' and 'acting judicially'. Once we understand that, there is no further difficulty. We simply apply the law laid down in Advani's case. 108.My Lord the Chief Justice has noted in his judgment all the relevant sections of the Sea Customs Act from which he came to the conclusion that in this matter the Customs authorities acted in a quasi-judicial capacity. I cannot add anything to it. But for the sake of completeness of this judgment I may point out that Section 182 provides for 'adjudication of confiscations and penalties'. The confiscation, increased rate of duty or penalty may be adjudged. There has to be an ....
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....s. Parliament must be taken, in the absence of any declaration to the contrary, to have intended it to follow the procedure which is its own, and is necessary if it is to be capabble of doing its work efficiently." (See Sawyer on Constitutional Cases in Australia p. 411-12). 109.The word 'adjudge' and the marginal note 'adjudication of the confiscation and penalties' leave no doubt that officers in the section named, namely the Deputy Commissionet or Deputy Collector of Customs or the Customs Collector have got to act judicially. They have got to 'adjudge'. Section 186 provides that the award of any confiscation, penalty or increased rate of duty under this Act by an Officer of Customs shall not prevent the infliction of any punishment to which the person affected thereby is liable under any other law. Section 187 provide that all offences against this Act other than those cognizable under Section 182 by Officers of Customs may be tried summarily by a Magistrate. Section 182 mentions certain major offences under the Act. It is inconceivable that the lesser offences under the Act are triable by a Magistrate—who acts judically,— whereas the greater offences may be the subject ....