Tata Oil Mills Company Ltd. and anr. Vs. Union of India (Uoi) and anr. - Court Judgment

Excerpt:
sale on high sea basis - actual user cannot be held to blame if he has merely purchased the imported goods after their clearance from customs--imports (control) order 1955 : clauses 8 & 10. - code of criminal procedure, 1973 [c.a. no. 2/1974]. section 41: [ swatanter kumar, cj, smt ranjana desai & d.b. bhosale, jj] arrest of accused - held, a police officer or a person empowered to arrest may arrest a person without intervention of the court subject to the limitations specified under the provisions of the code. the provisions of section 41 of the code provides for arrest by a police officer without an order from a magistrate and without a warrant. a distinct and different power under section 44 of the code empowers the magistrate to arrest or order any person to arrest the offender. under section 44 of the code, that power is vested in the court of the magistrate when an offence is committed in his presence. if the legislature has taken care of providing such specific power under section 44 of the code, then there could be no reason for such a power not to be specified under the provisions of chapter xii of the code. in terms of section 41, a police officer may arrest a person without a warrant or order from the magistrate for any or all of the conditions specified in that provision. language of this provision clearly suggested that the police officer can arrest a person without an order from the magistrate. thus, there appears to be no reason why on the strength of section 156(3) of the code, any restriction should be read into the power specifically granted by the legislature to the police officer. of course, freedom of investigation is the essence of these provisions but in order to suppress the mischief it is sufficiently indicated under different provisions of the code that the arresting officer should exercise his power or discretion judiciously and should be free of motive. some kind of inbuilt safeguard is available to the accused in the cases where the magistrate directs investigation under section 156 (3) of the code by taking recourse to the provisions of section 438 of the code by approaching the court of session or the high court for such relief. thus, during the course of investigation of a criminal case, an accused is not remediless and that would further buttress the above view. [jagannath singh v dr. ajay upadyay & anr 2006 cri lj 4274; 2006 (5) air bom r held per incuriam]. - 4. shri desai, learned counsel appearing on behalf the petitioners, urged that the facts set out hereinabove clearly establish that the issuance of show cause notices against the petitioners by respondent no. 2 was clearly on a misconception.pendse, j.1. by this petition filed under article 226 of the constitution of india, the petitioners are challenging the legality of show cause notices issued by respondent no. 2 and copies of which are annexed as exhibits d, f, h, i, l and s to the petition. the facts giving rise to the filing of this petition are required to be briefly stated to appreciate the grievance of the petitioners.2. the petitioners are engaged in the business of manufacturing soaps at several plants all over the country since last 40 years. 'tallow' is a basic requirement for manufacturing soaps and as such the soap industry in india has been using imported tallow for the manufacture of soaps ever since 1948. prior to june 5, 1981, the import of mutton tallow was canalised, while all other fallows, such as- animal tallow free from mutton tallow could be imported under the open general licence. on june 5, 1981, a public notice was issued whereby appendix 8 to the import policy was amended and instead of existing item '44 which was restricted to mutton fallows, the item substituted was 'tallow of any animal origin including mutton tallow'. even subsequent to june 5, 1981, beef tallow and animal tallow were imported by various persons and the same were duly cleared by the customs authorities. in december, 1981, when the question arose as to the invalidity of such imports, the central board of excise and customs held that the imports were valid and authorised. the importers approached the petitioners for purchase of imported tallow and the petitioners agreed to purchase the imported tallow after its clearance by the customs authorities. the petitioners did not make any arrangement for clearance of the goods and the delivery was made by the importers at the premises of the petitioners after due clearance from the customs authorities. the petitioners merely agreed to purchase the tallow on 'high seas basis' and that system was adopted because that does not attract payment of sales tax. it is not in dispute that purchasers on 'high seas basis' do not get any title to the imported goods till its clearance by the customs authorities. in respect of all purchases made by the petitioners, the import was made openly and duly cleared by the customs authorities.3. the respondent no. 2 issued identical show cause notices dated january 25, 1984, march 24, 1984, april 2, 1984, june 8, 1984, june 16, 1984 and march 12, 1985, the copies of which are annexed as exs. d, f, h, i, l and s to the petition. the impugned notices were issued under clause 10 of the imports (control) order, 1955 for proposed action under clause 8 of the said order. it would suffice if reference is made to notice dated january 25, 1984, copy of which is annexed as ex. 'd' to the petition. the notices were addressed to m/s. t.b.r. exports, m/s. impex international corporation and to the petitioners. in paragraphs 1 to 4, allegations are made against m/s. t.b.r. exports and m/s. impex international corporation for contravening the provisions of the imports (control) order. paragraph 5 of this notice recites that prima facie beef tallow has been imported unauthorisedly and illegally in contravention of provisions of clause 3 read with clause 8 of the imports (control) order. paragraph 6, for the first time, refers to the petitioners and reads as under :-'m/s. impex international corporation, bombay gave a copy of letter no. op/pn-1077 dt. 14-1-1983 purported to have been sent by m/s. tata oil mills co., bombay to purchase on high seas sale basis 425.000 mts. of beef tallow prima facie unauthorisedly imported 'and have prima facie abetted therein.'in paragraph 7, the respondent no. 2 called upon the petitioners, in exercise of the powers vested under clause 8 of the imports (control) order, to show cause why the petitioners; their partners/proprietors should,not be debarred from importing any goods and receiving import licenses /ccps and allotment of imported goods through stc, mmtc or any other similar agency on account of abovementioned charges. the petitioners have approached this court by filing this petition on july 5, 1984 to challenge these various show cause notices.4. shri desai, learned counsel appearing on behalf the petitioners, urged that the facts set out hereinabove clearly establish that the issuance of show cause notices against the petitioners by respondent no. 2 was clearly on a misconception. the learned counsel argued that the import licenses were not issued to the petitioners, nor they were held or acquired by the petitioners. the petitioners did not seek or hold any letter of authority in respect of operation of licence, nor did they enter into any contract with the foreign purchasers for the purchase of tallow. the letters of credit were not opened by the petitioners, nor did they file any. bills of entry in respect of clearance of tallow. the petitioners agreed to purchase beef tallow on 'high seas basis' only with a view to avoid payment of sales tax. the learned counsel urged that the petitioners being actual users were entitled to purchase imported tallow and by that action, it is impossible to suggest that the petitioners have abetted the licence-holder in contravening the terms of the licence. in my judgment, the submission of the learned counsel is correct. the petitioners were, in no way, concerned with the import of tallow and it is not in dispute that till the time of the clearance of the beef tallow, the petitioners have no control or title to the imported item. once the item was cleared from the customs barrier, the petitioners were entitled to purchase being actual users, and it is futile for the respondents to claim that the petitioners abetted the contravention of the licence with the licence-holder by the fact of purchase of the item after clearance. in my judgment the show cause notices issued by respondent no. 2 are entirely misconceived.5. there is also another aspect of the matter which cannot be overlooked. clause 8 confers power on the central government or the chief controller of imports and exports to debar a licensee or importer or any other person from importing the goods or receiving licenses or allotment of imported goods. the power to debar is to be exercised provided one of the conditions in any sub-clauses of clause 8 is attracted; i enquired from shri bulchandani, learned counsel appearing on behalf of the respondents, as to which sub-clause was contravened by the petitioners to confer jurisdiction on respondent no. 2 to issue show cause notices. shri bulchandani very fairly stated that the show cause notice does not state which sub-clause was contravened, but the respondent no. 2 must have in mind sub-clause (2) of clause 8 which inter alia provides that action would be taken if the person fails to comply with or contravenes or attempts to contravene or abets contravention of any condition of the licence or an application for licence. it is difficult to understand how any actual user who has purchased the item after being cleared by the customs authorities can be dubbed as an abettor with the licence-holder for contravening the provisions of the licence. if the petitioners are to be abettors, then the customs authorities which cleared the goods should also be branded as abettors: in my judgment, the claim of the respondents that the petitioners abetted the contravention of the provisions of the licence is entirely unsustainable.6. shri bulchandani submitted that respondent no. 2 has issued show cause notices calling upon the petitioners why action should not be taken and at this juncture, this court should not entertain the petition and quash the show cause notices but leave the determination to respondent no. 2. the submission cannot be accepted because the respondents are unable to establish under which 'provisions of law the respondent no. 2 had issued the show cause notices. the petitioners have established beyond doubt that the charge of abetment referred to, in the. show cause notice by respondent no. 2 is wholly unsustainable and, therefore, respondent no. 2 had no jurisdiction t(c) issue show cause notices. the expression 'abetment' has been defined under the general clauses act as one known in the indian penal code and under the indian penal code, the person is said to abet when such person instigates or participates in commission of the offence. in my judgment, it is a far cry to suggest that the petitioners have abetted contravention of the licence by purchasing, the tallow after it was- cleared by the customs department. in my judgment, show cause notices were issued without any authority and deserve to be quashed.7. accordingly, the petition succeeds and the rule is made absolute in terms of prayer (a). in the circumstances of the case, there will be no order as to costs.