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Judgment
Manohar Pershad, J.—This is a petition on behalf of Baroness (sic)helmine von Maltazan, under Article 226 of the Constitution of India for the issue of a writ Certiorari or any other appropriate order or directing the respondent to forbear from (sic)rcing the demand contained in the letter, dated 30th August, 1954, or to prohibit the respondent from any steps to recover the amount.
The facts which give rise to this petition are that the petitioner is the widow of the late Baron (sic), B. Von. Maltazan who died at Nagpur in an air crash on 12th December 1953. The late Baron J. B. von. Maltazan was carrying on business of exporting manganese (sic)ore, for about 4 years before his death. After collecting and accumulating the quantity of manganese ore for over a year he exported about 8000 tons of manganese ore from the port of Visakhapatnam in October, 1952, having obtained the requisite export licence from Government of India. The shipments were made pursuant to and in fulfilment of the contracts made by him with Messrs. Continental Ore Corporation, New York, who were the consignees under the shipment. At the time the goods were delivered, to the customs authorities in Visakapatnam port, the shipping bills were shown & produced to the authorities by Messrs. Best and Co., Ltd., the agents of the consignor. On the value declared by the consignor a duty of Rs. 1,85,816 was demanded by the respondent-authority and was duly paid. Subsequently a sum of Rs. 4,542-6-0 was refunded to him on 25th March, 1953, on account of short shipment of 195 tons. In declaring the value for assessment of duty the late Baron estimated the mineral content at 48 per cent.
The ore according to practice and procedure was submitted to Messrs. Briggs and Co., Ltd., Calcutta, and on the analysis made by them the actual manganese content was ascertained to be 45.3 per cent. Thus it turned out that more than the duty properly chargeable had been paid by the late Baron. He, therefore, made an application on 23rd December, 1952, to the collector of Customs, Hyderabad and Visakhapatnam, claiming a refund of Rs. 18,743-1-0. No orders seem to have been passed on that application and on 11th January, 1954, the Collector of Customs, Hyderabad, sent a letter stating that steps were being taken to finalise the assessment of manganese and that orders will be issued.
On 1st, October, 1952, two notices were served upon Messrs. Best and Co., Ltd., the agents of Baron (Petitioner) u/s 39 of the Sea Customs Act of 1878 informing him that there was a short levy of duty to the tune of Rs. 9,317-11-0 and Rs. 27.845-8-0 and asking them to pay the same. On 3rd September, 1954, a letter was sent by the respondent to Messrs. Best and Co., Ltd., demanding from the petitioner the differential amount of Rs. 4,875-10-0 and stating that the assessment has been finalised and if the petitioner was aggrieved, she might prefer an appeal to the Central Board of Revenue, New Delhi, after the payment of the amount demanded. The petitioner gave a notice through a lawyer, dated 20th November, 1954, to the respondent asking for information as to the material, the grounds and other particulars on which the demand was made. The respondent gave a reply on 1st December 1954, stating that the value estimated is the one determined u/s 30(b) of the Sea Customs Act, i.e., the (sic)lvalue at which goods of the like kind and quality are capable of being delivered at the time and place of exportation. It is this demand of Rs. 4,875-10-0 which is challenged in this petition.
Sri Rama Rao, the learned counsel for the petitioner, has, advanced various arguments. It is contended first that the levy and demand of Rs. 4,875-10-0 is illegal ultra vires, unconstitutional, and not bona fide. The second contention is that it is not competent for the authorities to resort to section 30 (b) of the Sea Customs Act when price was ascertainable u/s 30 (a). It is next contended that none of the requirements of Section 30 (a) is satisfied and the burden of proof that no other goods of the like kind and quality were available for sale or purchase is on the respondent, but the respondent has failed to discharge that burden.
The other contention advanced is that even if it is accepted that section 30 (a) is not applicable, the method adopted by the respondent in ascertaining the real value was incorrect and arbitrary. The next argument advanced is that there is no provision in the Sea Customs Act for any provisional assessment and when once an assessment was made and no action is taken u/s 32 of the said Act, that assessment would be final assessment and u/s 39 in case of short levy, the extra duty could be demanded only on the grounds specified and within three months of the assessment.
In support of the contentions the learned counsel for the petitioner placed his reliance on the case of The Vaccum Oil Co. Vs. The Secretary of State for India in Council, AIR 1938 15 (Privy Council)
On behalf of the other side it is contended, first that when the petitioner has got right of appeal u/s 188 of the Sea Customs Act and also another remedy by way of revision u/s 191 of the said Act, she is not entitled to invoke the extraordinary and discretionary powers of this Court under Article 226 of the Constitution. Reliance is placed on the case of S. Athimoolam Achari Vs. The Deputy Commercial Tax Officer, Kovilpatti, Tirunelveli Dt.,
It is next contended that it is not correct to say that the levy and demand of Rs. 4,875-10-0 wag illegal and ultra vires. As regards the argument that section 30(b) of the Sea Customs Act is not applicable, it is contended that the authorities concerned have rightly field that section 30 (b) is applicable and not section 30 (a). Conceding that at the time of agreement between the parties there was no provision for provisional assessment. It is contended that the provisional assessment was made at the instance of the petitioner''s husband and for his benefit and when the petitioner''s husband has taken advantage of this it could not now be said that it was unjustified and illegal. Adverting to the argument relating to the burden of proof it is contended on behalf of the respondent that it was only after the authority was satisfied that all the requirements of S. 30 (a) were fulfilled that they started to ascertain the real value and that the calculation could not be held to be arbitrary. Conceding that the demand under S. 39 of the said Act has to be made within 3 months, it is contended that in the instant case the demand is not for the refund of the amount, but for the balance and the difference. In order to appreciate the arguments of the learned counsel a reference to the relevant provisions of the Sea Customs Act is necessary But before discussing the relevant provisions of the said Act, we would like to deal with the objection of the respondent which relates to the maintainability of the petition, for if is held that the writ petition is not maintainable we need not go into the merits of the petition. What is contended on behalf of the respondent is that the petitioner has got another remedy available to him, i.e., she has got right of appeal under S. 188 of the Sea Customs Act and a revision under S. 191 of the said Act which he urges disentitles her to relief under Art. 226 of the Constitution of India. In this connection the learned counsel dre(sic) our attention to the case of S. Athimoolam Achari Vs. The Deputy Commercial Tax Officer, Kovilpatti, Tirunelveli Dt., On behalf of the petitioner, it is urged that the contention that because a remedy under the impugned Act was available to the petitioner it disentitle him to a relief under Art. 226 of the Constitution of India has been negatived by the decision in the cases of State of The State of Bombay and Another Vs. The United Motors (India) Ltd. and Others, and Himmatlal Harilal Mehta Vs. The State of Madhya Pradesh and Others, We do not agree with the contention of the learned counsel for the respondent that because a remedy under the Act is available to the petitioner, it disentitle him to a relief under Art. 226 of the Constitution. No doubt the relief under Art. 226 the Constitution of India is discretionary nature and it would be an abuse of Art. 2 to ask the Court to interfere under that Article if there is an adequate and specific reme(sic) other than by a writ, and if such a reme(sic) is equally convenient and not of an onerc(sic) and burdensome character. But to say general terms that because a remedy is available to him, no writ would lie under Art. (sic) would not be proper. In the instant case, doubt, two remedies are open to the petition one by way of appeal under S. 188 and the other a revision under S. 191 of the said Act. But before the petitioner could avail of the remedies she has to deposit the entire amount under S. 191 of the said Act. Such a procession can hardly be described as an adequ(sic) alternative remedy. It may be that in so cases the amount of deposit may be so hea(sic) that the petitioner may not be in a position deposit the same. It would in such cause amount to taking away the right of appeal by another process, namely, imposing a condition for the deposit, of the amount. The case relied upon by the learned counsel for the respondent does not help his contention. That was a case under Art. 226 of the Constitution for the issue of a writ of prohibition directing the other side to forbear from assessing the petitioner to sales-tax for 1950-51. Objection was taken on behalf of the respondent that the petitioner had adequate, remedy under the Act itself and therefore the writ could not be issued. The contention of the respondent was accepted, as the condition precedent for preferring the appeal was the payment of the tax admitted, and not the payment of the entire amount. It was not a case where the remedy was onerous or was of a burdensome character. We do not wish to go into a further discussion of this point, as in our opinion, the petitioner has no case on merits. The relevant provisions for the purpose of this petition are Ss. 29, 30, 32, 39 and 137. When goods are brought for shipment the owner has to declare the real value of the goods under S. 29 which reads:
On the importation into, or exportation from, any customs port of any goods, whether liable to duty or not, the owner of such goods shall, in his bill of entry, or shipping bill, as the case may be, state the real value, quantity and description of such goods to the best of his knowledge and belief and shall subscribe declaration of the truth of such statement it the foot of such bill.
In case of doubt, the Customs Collector may require any such owner or any other person in possession of any invoice, broker''s (sic)ote, policy of insurance or other document, whereby the real value, quantity or description of any such goods can be ascertained, to produce the same and to furnish any information relating to such value, quantity or deception which it is in his power to furnish, and thereupon such person shall produce such document and furnish such information.
Provided that, if the owner makes and subscribes a declaration before the Customs Collector to the effect that he is unable, from want of full information, to state the real value or contents of any case, package or parcel of goods, then the Customs Collector all permit him, previous to the entry thereof, (1) to open such case, package or parcel, and examine the contents, in presence of an Officer of Customs, or (2) to deposit such case, package or parcel in a public warehouse appointed under S. 15 without warehousing (sic) same, pending the production of such information.
The statement of the owner need not, however, be accepted by the Customs Official of the Customs Collector is satisfied that the value given by the shipper is the real value, the matter ends there, and the goods are lowed to pass. In case of doubt, the Customs Collector may require any such owner or any person in possesion of any invoice, broker''s note, policy of insurance or other document, whereby the real value, quantity or description of any such goods could be ascertained to produce the same, and to furnish any information relating to the said value, quantity or such description which it is in his power to furnish as is provided under S. 29. If the owner subscribes to a declaration before the Customs Collector, to the effect that he is unable, for want of full information, to state the real value or contents of any case, package or parcel of goods, then the Customs Collector shall permit him previous to the entry thereof, first to open such package or parcel of goods and examine the contents. Then he proceeds to determine the real value.
Section 30 deals with the procedure to determine the real value. It reads:
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 reduction whatever, except in the case of goods-imported) of the amount of the 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.
It is clear from the above provisions that two ways are provided for determining the real value. Section 30 (a) would apply where it would be possible to ascertain the wholesale cash price and if the price is not ascertainable then S. 30 (b) would come into play.
What is contended is that the wholesale cash price appearing under S. 30 (a) is not the price which the exporter realises on a wholesale disposal of the goods by him, out the price which is actually paid by him. It is next urged that under CI. (b) where such price is not ascertainable the real value is the cost at which the goods of like kind and quality should be delivered without abatement and deduction for the purpose of taxation. In other words, the contention put forward comes, to this that the wholesale cash price is the same as the cost of goods on the basis that the goods should be taken as being sold to the exporter at the price which cost him to place them for shipment. We are very reluctant to accept contention of the learned counsel for the petitioner. We think the expression used clearly indicates that it must mean the wholesale cash price for which the goods of a like kind and quality are sold or are capable of being sold at the time. and place of exportation. The words clearly indicate that it must be the price which the exporter here would be able to realise on a wholesale disposal of goods by them. The expression could not be construed as meaning the price which the exporter may have paid for purposes of exporting the goods. To accept the contention of the learned counsel for the petitioner would amount to this, that the value paid at the time of declaration which was not accepted, by the authority would have to be accepted as determining the real value under S. 30 (a). If that was the idea there was no necessity for the introduction of sub-cl. (a) of S. 30 of the Act as in every case the exporter would be entitled to have it decided that the real value of the goods exported was the costs of exportation to him. It may well be, as it appears to be the case on the language of the section that the legislature has adopted one test for cases covered by Cl. (a) and is satisfied with the next best test in other cases, to which the first case cannot be applied. The argument of the learned counsel for the petitioner is based on the assumption that the test in both cases must be the same for which the language does not afford any warrant. We therefore repel the contention of the learned counsel for the petitioner that the wholesale cash price is the actual cost price. The cases relied upon by the learned counsel for the petitioner does not help his contention. The first case relied upon is the case of ILR 47 Bom 174: The Vaccum Oil Co. Vs. The Secretary of State for India in Council, In this case lubricating oil under the name of mobile oil was imported by an American Corporation having their principal place of business at Rochester in the United States of American. They had established agencies in India and Ceylon. The practice in importing their oils into India was to invoice them at the same price at which they invoiced them to several firms of the oils in other countries. It appears that the Customs Authorities for some period accepted the invoice price fixed by the shipper but later differences arose between the shipper and the Customs Authorities in regard to the customs duty payable in respect of the mobil oil imported into India. The contention of Customs Authorities was that the shippers were bound to pay customs duty on the rate at which they sold their mobil oil to their customs in India and refused to accept the invoice prices submitted by the shipper. When the Customs Authorities detained the goods of the shipper and refused to accept the invoice, the shipper filed a suit for wrongful detention and illegal assessment. The suit was dismissed by Mr. Justice Kajiji. The matter was taken up in appeal and the question in the appeal was what was the appropriate construction of S. 30 of the Sea Customs Act of 1878. Sir Norman Macleod C.J., and Shah J., held that the expression "wholesale cash price" in S. 30, Cl. (a) of the Sea Customs Act, means the wholesale cash price for which the goods of like quality and kind are sold, or capable of being sold to any person at the time and place of importation, it does not mean the cost of goods to the importer on the basis that the goods should be taken as being sold to the importer at the price which it cost him to lay them down at the place of importation. This case went in appeal to the Privy Council vide AIR 1932 168 (Privy Council) , and their Lordships held that the words "wholesale price" are used in the section in contradistinction to a retail price and that not only on the ground that such is the well recognised meaning of the words, but because their association with the words "trade discount" indicates that sales to the trade are those in contemplation, and also because only by attaching that meaning to the word is the "wholesale" price relieved of the loading, representing post-importation expenses, which, as a matter of business, must always be charged to the consumer, and which in the other word of the section already alluded to are so care fully eliminated.
The other case relied upon is the case of AIR 1938 15 (Privy Council) The appellants import Ford Motor Vehicle into India from Canada and the question raised in the appeal related to the amount of customs duty payable upon 256 Ford Motor Car consigned to the appellants which arrived in Bombay. The appellants have monopoly of supply of Ford Vehicles to India. They some times self, direct to their own employees or to the Government for sale to India to various dealers or distributers. The appellants issue from time to time a price list and the term of the business are that the retail price to be charged by the distributors to the public in that stated in the price list. The distribution has to pay this price before obtaining delivery. The delivery is given by the appellants free on rail. 256 Ford Motor Cars were assessed to customs duty by the Collector of Custom under CI. (a) of S. 30 of the Sea Customs Act. The appellants disputed this assessment contending that for the motor cars in question there was no such wholesale cash price ascertainable and that the duty should have been assessed under Cl. (b) of S. 30. The appellant paid under protest the sum demanded assured the Secretary of State in Council in the High Court of Bombay for a return of (sic) 15,118-11-0 overpaid, and for certain declarations as to the correct basis of assessment. The trial Judge Tyabji J., held that the motor ca(sic) were in the circumstances assessable under Cl. (a) of S. 30. Upon appeal by both the parties to a Division Bench, it was held the assessment made by the Customs Authorities was correct and the appellant''s suit was dismissed with costs. The Ford Motor C(sic) went in appeal to the Privy Council which was dismissed and it was held:
If there is an actual price for the good imported themselves, at the time and place importation and if it is a wholesale cash priceless trade discount. Cl. (a) of S. 30 of the S(sic) Customs Act is not inapplicable for want sale of other goods of the like kind and quality.
What we have to see is whether the was any scope for application of S. 30 (a). The allegation of the authorities concerned was the wholesale price was not ascertainable whereas the plea of the petitioner was that was ascertainable. We cannot accept the contention of the learned counsel for the pe petitioner that toe wholesale price was, ascertainable having regard to her own statement in para 8 (b) of her affidavit where she says that either in Visakhapatnam nor anywhere in the area was there any market where the goods of the like kind and quantity were at all available for sale and purchase. She further says that there was no market at all for manganese are as such for local buyers in India. We are, therefore, definite that S. 30 (a) is not applicable and S. 30 (b) applied. In this view of the matter the contention of the learned counsel loses its force that the burden of proof that there were no other goods of like nature to be sold was on the authorities concerned the other argument of the learned counsel for the petitioner is that even if S. 30 (b) is applicable there is nothing on record to show that the authorities concerned tried to know the first price. From the statement filed in this court by the respondent it would appear that they have taken into account the shipping (sic)lls of the manganese declared by other consignors on different dates ranging from 3rd October, 1952 to 31 October, 1952 and they give taken the lowest value per unit of 3rd October, 1952 and made the assessment. It cannot, therefore, be said that the authorities have not tried to assess the cost price.
Now we have to see whether the (sic)ce assessed is arbitrary. What is urged is that at one place the authorities have acceptation the statement of the petitioner and at other place they have taken the statement the analyst and ignored the statement of the petitioner. We do find some force in this condition. It is true that the authorities concerned in the one case have accepted the statement of the petitioner and in the other taken an account the statement of the analyst. No (sic)bt in both cases, the analyst had given a statement, but the department had selected statement of the analyst in one case and statement of the petitioner in the other reason has been given for this action. The learned counsel for the respondent also could satisfy us on this point and it appears to that the authorities concerned have select that which suited best to their purpose. But in this, circumstance alone it cannot be said the calculation was arbitrary.
After this, we turn to the argument other the amount demanded by the authorise is the refund amount or the amount of difference. The learned counsel for the petitioner drew our attention to the entries in working sheet for finalisation of provi(sic)ally assessed shipping bill for manganese and contended that out of the amount of 4,875-10-0 which is demanded by the authors now Rs. 4.542-6-0 is the amount of refund short payment and this amount was refund to the petitioner on 25th March, 1953 and present demand for refund of the said (sic)unt is of 30th August, 1954, which could be claimed by the authorities being barred under S. 39 of the Sea Customs Act. In order appreciate the argument of the learned counsel a reference to S. 39 is necessary which runs thus:
When customs duties or charges have been short-levies through inadvertence, error collusion or misconstruction on the part of the officers of Customs, or through mis-statement as to real value, quantity or description on the part of the owner, or when any "such duty or charge, after having been levied, has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge so sport-levied, or to whom such refund has erroneously been made, shall pay the deficiency or repay the amount paid to him in excess, on a notice of demand being issued to him within three months from the date of the first assessment or making of the refund; and the Customs Collector may refuse to pass any goods belonging to such person until the said deficiency or excess be paid or repaid.
It is obvious therefore that S. 39 relates to payment of duties short-levied or erroneously refunded. No doubt in the working sheet Rs. 4,542-6-0 are shown as the refunded amount, but in the demand notice of 30th August, 1954, this amount is claimed as the amount of difference. To us also the amount claimed appears to be the amount of difference. Admittedly, there was provisional assessment and it was assessed at Rs. 1,85,816-0-0. This amount was collected. As it was found that it was in excess of the provisional assessment the amount of Rs. 4,542-6-0 was refunded to the petitioner, but when the final assessment was made, it was found that a total amount of Rs. 1,90,691-10-0 was leviable. After deducting the amount actually collected, the authorities made a demand for the difference and while showing the difference, they showed the items of Rs. 334-4-0 and Rs. 4,542-6-0 (amount refunded) instead of showing the actual amount collected and claiming the difference. It is however, clear that the amount claimed is not the amount of refund, but the actual amount of the difference. That apart, there is no question of any error, inadvertence, collusion or misconstruction on the part of the officers of Customs to invoke S. 39. We are definite that S. 39 does not apply.
We next proceed to the argument relating to the provisional assessment. What is contended on behalf of the petitioner is that under the Sea Customs Act, as it stood then that is, at the time of the agreement, there was no provision for any provisional assessment and whatever assessment was made it was one and final and when the respondent refunded the amount as amount paid in excess the same cannot now be claimed under the pretext of final assessment. On behalf of the respondent it is conceded that at the time of agreement there was no provision for provisional and final assessments but it is contended that in practice there used to be a provisional and final assessment and now the Act has been amended and provision has been made for provisional assessment also
It is next contended that the provisional assessment was made at the instance of the petitioner''s husband and when the petitioner''s husband has taken advantage of the provisional assessment the petitioner cannot now turn round and challenge it and say that the provisional assessment was not justified under the provisions of the Act. As it is admitted on behalf of the parties that there was no provision for provisional assessment at the time of the contract, we have to confine ourselves only to the effect of the provisional assessment. Strictly speaking in the absence of any provision for provisional assessment, such an assessment would not be justified, but the question that arises is what is the effect and whether the petitioner can challenge the provisional assessment. The provisional assessment, we may point out, was made at the instance of the petitioner''s husband. Though such a provisional assessment was not permitted by the provisions of the Sea Customs Act, yet when the petitioner''s husband has taken advantage of the same, the petitioner cannot, in our opinion, now turn round and challenge it. We, therefore, repel this contention also.
It is also contended that if the goods were not valued properly and if no duty was paid the customs authorities would have stopped the shipment under S. 32 or taken action under S. 137 of the said Act. To appreciate the argument a reference to Ss. 32 and 137 is essential.
Section 32 enjoins:
If it appears that such goods are properly chargeable with a higher rate or amount of duty than that to which they would be subject according to the value, thereof as stated in the bill of entry or shipping bill, such officer may detain such goods.
In every such case the detaining officer shall forthwith give notice in writing to the owner of the goods of their detention, and of the value thereof as estimated by him; and the Customs Collector shall, within two clear working days after such detention, or within such reasonable period as may with the consent of the parties be arranged, determine either to deliver such goods on payment of duty charged according to the entry of such owner, or to retain the same for the use of the Central Government.
If the goods be retained for the use of the Central Government, the Customs Collector shall cause the full amount stated in the bill as their real value to be paid to the owner in full satisfaction for such goods in the same manner as if they have been transferred by ordinary sale, and shall, after due notice in the Official Gazette or some local newspaper and without unnecessary delay cause them to be put up to public auction in wholesale lots for cash on delivery.
If the Customs Collector deems the highest offer made at such sale to be inadequate, he may either adjourn the sale to some other day, to be notified as aforesaid, or buy in the goods, and without unnecessary delay dispose of then for the benefit of the Central Government.
If the proceeds arising from such sale exceed the sum paid to the owner, together with (in the case of goods imported) the duty the which the goods are liable and all charges incurred by the Central Government in connection with them, a portion not exceeding one half of the overplus shall, at the discretion on the Chief Officer of Customs, be payable to the officer who detected the undervaluation of the goods.
Nothing in the section shall prevent the Chief Officer of Customs, when he has reason to believe that any such undervaluation was solely the result of accident, or error, from permitting the owner of the goods on his application for that purpose to amend su(sic) entry, on payment of such increased ra(sic) of duties on the excess of the amended over the original valuation, or on su(sic) other terms as the Chief Officer of Customs may determine. Section 137 reads:
No goods, except passengers baggage shall be shipped or water-borne to be ships for exportation until:
(a) the owner has delivered to the Customs Collector or other proper officer a shipping-bill of such goods in duplicate, in such form and containing such particulars in ad(sic)tion to those specified in S. 29 as may from time to time be prescribed by the Chief Customs Officer;
(b) such owner has paid the duties any payable on such goods; and
(c) such bill has been passed by the Customs Collector.
Provided that the Chief Customs Officer may, in the case of any Customs-port or what by notification in the Official Gazette, subject to such restrictions, and conditions any as he thinks fit, exempt goods or any specified goods or class of goods or any special person or class of persons from all or any the provisions of this section.
Section 32 provides for a procedure where so goods are undervalued by the owner S. 137 refers to clearance for shipment. (sic) true that neither under S. 32 nor under S. any action was taken by the respondent. (sic) this question does not arise in the instant because there was a provisional assessing and the assessee had agreed to pay the bala(sic) amount after the final assessment.
We are, therefore, of opinion that petitioner had failed to make out a case under Art. 226 of the Constitution of India petition, therefore, fails and is dismissed costs. Counsel''s fee Rs. 200/-.