Asoke Exporters and Importers vs Collector of Customs

Sinha, J.—The Petitioners are a firm of importers. In or about July, 1951, the Petitioners'' firm imported 100 cases of Japanese art silk yarn 120 Diafuki brand, per s.s. "Tairea" from Kobe in Japan to Calcutta. In respect of such imported goods the owner has to state in his bill of entry the "real value" of the goods together with other particulars mentioned in Section 29 of the Sea Customs Act (VIII of 1878). Section 30 of the Sea Customs Act runs as follows:

For the purposes of this Act the real value shall be deemed to be-

(a) the wholesale cash price, less trade discount for which goods of the like kind and quality are sold, or are capable of being sold, at the time and place of importation or exportation, as the case may be, without any abatement or deduction whatever, except (in the case of goods imported) of the amount of duties payable on the importation thereof: or

(b) where such price is not ascertainable, the cost at which goods of the like kind and quality could be delivered at such place, without any abatement or deduction except as aforesaid.

The goods arrived in the port of Calcutta in or about the first week of July, 1951. The Petitioners in their bill of entry gave the "real value" on the basis of the invoice price, that is to say, in terms of Section 30(b). This was accepted by the appraiser who assessed the goods on that footing and the Petitioners as owner of the goods proceeded to clear the same and took them away, as they were entitled to do, under Sections 86 and 87 of the Sea Customs Act.

The appraisement was done on or about July 9, 1951, and the goods were taken away shortly thereafter. u/s 36 of the Sea Customs Act, the "real value" which is stated in the bill of entry can no longer be amended after the goods had been removed from the Customs house. On or about October 1, 1951, the Petitioners wrote to the assistant collector of customs for appraisement, Calcutta, to the effect that although the duty was paid as per invoice value, it ought to have been made out as per market value, as it was done in Bombay, and therefore the excess duty paid ought to be refunded. The assistant collector rejected this prayer. An appeal was preferred before the collector of customs who by his order, dated February 29, 1952, rejected the appeal. This rule was taken out on September 10, 1952.

Mr. Roy appearing on behalf of the Petitioners, argues that the assessment ought to have been done u/s 30(a) and not u/s 30(b), and as the assessment was done wrongly, it should be set aside and the Respondent should be directed to deal with the matter in accordance with law.

In the order passed by the assistant collector, dated July 10, 1951, he states that "art silk yarn has been correctly assessed "to duty on the basis of invoice value u/s 30(b), Sea Customs "Act, in accordance with the practice prevailing at this port". In appeal, the Collector, inter alia, stated as follows:

Art silk yarn is assessable to duty u/s 30(b), Sea Customs Act, at this port. It may be observed that certain conditions like the existence of a substantial and reasonably continuous wholesale market have to be satisfied before an article is placed on the market value list and assessed u/s 30(a), Sea Customs Act,...* * * The assessment of art silk yarn u/s 30(b) at this port is in accordance with the orders in force and I see no reason to modify the order passed by the assistant collector for appraisement.

In this application I have before me the affidavit of the appraiser who originally appraised the goods as also of Mr. Puri, the collector of customs, who heard the final appeal. The appraiser Mr. D. Krishnamurty says that he has been an appraiser in the Customs House since 1950 and has been appraising silk and rayon or artificial silk yarns and other articles. He further says that he had kept himself fully acquainted with the market conditions and the market rates. With regard to this particular case, he points out that the Petitioners had made a bill of entry on the basis of Section 30(b) of the Sea Customs Act which was accepted and payment received thereon. He proceeds on to say "the question of applicability of "Section 30(a) or Section 30(b) did not really arise". He further says that the wholesale price in respect of the goods imported by the Petitioner was not ascertainable. The market conditions were well-known to him and he says that it was not necessary for him to make any special market enquiry before assessment of the duty. He, however, goes on to say as follows:

I submit that the wholesale cash price must imply reasonably continuous wholesale market for the goods in question.

I need not go into the details of the affidavits filed, but they are substantially to the effect that a controversy had arisen amongst the Calcutta merchants about the applicability of Section 30 and that the customs authorities formed the view that artificial silk yarns had a market in Bombay but none in Calcutta. It is, therefore, the practice in Calcutta to assess all such yarns u/s 30(b) and there was a standing order to that effect.

In my opinion, the interpretation put on Section 30 by the appraiser, assistant collector or the collector, is not correct. Taking the appellate order first, I find that, according to Mr. Puri, two conditions must be satisfied before Section 30(a) will apply. Firstly, there must exist a substantial market for wholesale sales, and, secondly, there must be reasonably continuous sales in such a market. The collector seems to have misconceived the position. Section 30(a) requires the ascertainment of the wholesale cash price less trade discount for which the goods or goods of the like kind and quality are sold or are capable of being sold at the time and place of importation or exportation, as the case may be. In Vacuum Oil Company v. Secretary of State for India in Council (1932) L.R. 59 IndAp 258, the Appellants imported at Bombay large quantities of lubricating oil of a particular manufacture and mark. They sold it retail direct to numerous customers, never to dealers. It was held that the word "wholesale" in Section 30(a) of the Act was used in contradiction to "retail" and that, accordingly Section 30(b) and not Section 30(a) applied and the duty was payable upon the basis of the cost price at Bombay to the Appellants, including freight, insurance and landing charges. It will be observed that the goods that were imported were very substantial but nevertheless as they were sold retail and not wholesale, it was not possible to ascertain the wholesale cash price at the place of importation and accordingly it was held that Section 30(b) applied.

In 42 CWN 257 (Privy Council) , the facts were as follows. The Appellants were importers of Ford vehicles to India and were monopolists in respect thereof. In India, they sold only to authorised dealers or distributors and they charged them at wholesale rates. The distributors, in their turn, sold to the public at retail prices. It was contended that Clause (a) applied or was intended to apply only in case of goods for which there was at the place of importation a market in the strict sense applicable only to staple commodities. Sir George Rankin delivering the judgment of the Judicial Committee stated as follows:

But in their Lordships'' view this is a misinterpretation of Clause (a). The application of the clause does not depend upon any hypothesis to the effect that at the time and place of importation an indefinite amount of further goods added to the available supply has had effect upon the wholesale price... As a rule, therefore, the price appropriate to the goods under assessment will under the clause be deduced, if at all, from actual prices relating to other goods of like kind and quality. But if there is an actual price for the goods themselves at the time and place of importation, and if it is a "wholesale cash price, less trade discount," the clause is not inapplicable for want of sales of other goods. The clause can be applied distributively to each of the motor cars in this consignment, and even if they are regarded collectively, the clause is not defeated.

It, therefore, seems to be clear that what is to be ascertained is not whether there is a market for the goods at the place of importation but whether the particular goods under enquiry can be sold in the market at a wholesale cash price, that is to say, the particular goods or goods of the like kind and quality. The enquiry is as to whether such goods are sold or are capable of being sold. Let us take the example of goods of a very well-known make and let us imagine that at some given point of time, for some reason or other, there is a great scarcity in the supply of such goods from the manufacturers. It may be that because of a strike at the factory or because of difficulties of transportation or the existence of war conditions, the available quantity of goods at the place of importation is few and far between. Under such circumstances, if any goods of that description does come to the port of importation it will have an immediate market and purchasers would be only too glad to obtain the goods at a wholesale price. In such circumstances, neither of the two tests suggested by the collector would apply, because the goods are not substantial in number and the supply is not continuous. Does it follow that it has no wholesale cash value in the market? In my opinion, it cannot be said that under the circumstances Section 30(a) cannot apply and Section 30(b) will necessarily apply. The determination as to whether Section 30(a) or Section 30(b) applies must depend on the facts of each case. There must necessarily be an infinite variety of goods that can be imported or exported, and whether such goods or goods of a similar quality, at a given point of time, can be sold at a wholesale cash price at the place of importation or exportation, will depend, as I have said, upon the facts of each particular case, the quality of the goods, the state of the market, the prevailing prices, the nature of that particular transaction and so forth. The matter cannot be decided upon the footing of a practice or a standing order applicable to artificial silk yarn generally.

There is no doubt that the ascertainment of these facts is a duty cast upon the customs authorities and that such duty is ministerial. I should be very reluctant to disturb the findings of the customs authorities on such a point, provided, however, that it is based upon a proper conception of the law. As I have pointed out, the customs authorities have unfortunately fallen into an error in construing the provisions of Section 30.

Having arrived at this point, I must at once state that the Petitioner is faced with a very great obstacle which must ultimately determine the result of this application. As I have said, the appraisement was made as early as July 9, 1951. It was on the footing of the bill of entry filed by it with the customs authorities which set out the "real value" upon footing of Section 30(b). That basis has been accepted, the money paid and the goods taken away. The question is whether, if I set aside the order of assessment now and command the Respondents to proceed u/s 30(a), they could possibly carry out the order. It is one of the fundamental principles of issuing a writ of mandamus that a public officer should not be commanded to do something which it is impossible for him to perform. If he has to proceed now to find out whether Section 30(a) or Section 30(b) will apply, he will have to find out as to what was the wholesale cash price prevailing in the Calcutta port in respect of this particular consignment on or about July 9, 1951. That consignment no longer exists. We do not know the particular quality of it excepting what appears in the shipping documents. The goods may not have been in conformity with the description of it appearing in the documents, they might have been damaged goods, or goods of inferior quality. In my opinion, it would be impossible today, without possession of the goods, to arrive at its wholesale cash price that prevailed in the Calcutta port on July 9, 1951. Even if the goods were available today, they might have deteriorated and it would not be easy to make, such retrospective appraisement. It is, however, nobody''s case that the goods are forthcoming. For this state of things, it is the Petitioner who is to blame. Mr. Roy argues that if the Respondents have committed an error of law they must set it Tight, for, it was their duty to have appraised the goods in accordance with the law. On the other hand, it was the duty of the Petitioner also to declare the "real value" and make payment in accordance with the law. This is an application under Article 226. I am not concerned with any questions that may advise in the nature of payment of damages and, therefore, I am not concerned with what would have happened in a suit for the recovery of the money or for damages. The Petitioner has invoked the equitable jurisdiction of this Court, but I find that due to its own laches, a state of things has come into existence which makes an order of the description that is being asked for, impossible of being carried out. The application must therefore fail.

Mr. Roy argues that if the goods were burnt or stolen while in the custody of the Respondents, that would not be a reason for refusing him relief. Now, if the goods were stolen or burnt for no fault of the Petitioner, other considerations might have arisen. It might also be said that under such circumstances the authorities could at once say that the wholesale cash price was unascertainable and therefore proceed u/s 30(b). If that he the inevitable consequence of sending this back to the Respondents, I do not see the point in making such an order. If I know that the only effect of sending this back would be for the Respondents to say that the goods not being there, they have no alternative but to proceed u/s 30(b) which they have already done, there does not seem to be any point in setting aside the order already made and reopening the entire case. Such an order would be of no material value to anybody and be ineffective. It is well-known that in this jurisdiction, an order is never made which will be ineffective.

So far as certiorari is concerned, Mr. Roy has not pressed that aspect of the matter inasmuch as it has now been held by the appeal Court that the Respondents in carrying out their duties under the Sea Customs Act were acting in a ministerial capacity. For the reasons aforesaid, I am unable to grant any relief to the Petitioner in this application.

The Rule is accordingly discharged but there will be no order as to costs.