Central Bureau of Investigation Vs. Subodh Kumar Dutta and Another - Court Judgment

Excerpt:
criminal - bribe - sections 5 (1)(d) and 5 (2) of prevention of corruption act of 1947 and section 30 of prevention of corruption act, 1988 - respondent no. 1 was allegedly caught accepting bribe of rs. 700 - respondent no. 1 charged for offence under section 5 (1)(d) and 5 (2) of act of 1947 by special court - on appeal high court quashed proceedings pending in special court on ground that cognizance had not been taken in accordance with law - provisions of sub-section 2 of section 30 shows that anything done or any action taken or purport to have been taken under or in pursuance of the prevention of corruption act, 1947 shall be deemed to have been taken under or in pursuance of the corresponding provision of the act of 1988 - order of the high court in view of the clear provisions of section 30 (supra) cannot be sustained and we, therefore, accept this appeal and set aside the order of the high court impugned before us - [k. subba rao, c.j.,; m. hidayatullah,; r.s. bachawat,; raghuvar dayal, jj.] the mysore health cess act 1962 provided in s. 3 for the levy and collection of a health cess at the rate of nine naye paise in the rupee, inter alia, on the items of the state revenue mentioned in schedule a. item 1 of schedule a mentioned duties of excise leviable by the state under any law for the time being in force in any area of the state on alcoholic liquors for human consumption (and opium etc.) manufactured or produced in the state and for countervailing duties levied on similar goods manufactured or produced elsewhere. the mysore excise act, 1901 empowered the state government to grant exclusive or other privilege of selling by retail any country liquor or intoxicating drugs to any person or persons on such conditions and for such period as it thought fit. according to s. 18 of the act the privilege of sale in a specified shop was to be disposed of periodically by public auction held by the excise authorities. as a result of such public auctions held subject to the terms and conditions notified by the state government the appellants were granted the exclusive privilege of selling country liquor in certain arrack shops, beer taverns and toddy shops in consideration of their agreeing to pay specified 'shop rent' thereon at the rate of nine naye paise in the rupee. the appellants challenged the levy of the health cess on the shop rent in writ petition before the high court and thereafter appealed to this court with the following contentions : (1) that the mysore legislature was not competent to enact the impugned act because no entry in list it or list iii authorities a tax on tax or a health-tax and that if the intention was to levy a surcharge on existing items of revenue the state legislature could have easily used the words 'surcharge' or 'additional revenue'. (2) even if the impugned tax was valid the act did not empower the levy of health cess on shop rent because shop 'rent was not an excise duty falling within schedule a -of the impugned act or entry 51 of list ii. held:per subba rao, c. j., sikri and dayal, jj. (i) by the impugned act the state legislature was levying a health cess on a number of items of state revenue or tax and it adopted the form of calling it a cess and prescribed the rate of nine naye paise in the rupee on the state revenue or tax. section 4 of the impugned act makes it quite clear that the cess is leviable and recoverable in the same manner as items of land revenue, state revenue or tax. in the context, the word on' in s. 3 does not indicate that the subject matter of taxation is land revenue or state revenue but that 9% of the land -revenue or state revenue is to be levied and collected, the subject matter remaining the same as in the law imposing land revenue or any duty or tax. if we read ss. 3 and 4 together the fact that the words 'surcharge' or 'additional duty' halve not been mentioned does not detract from the real substance of the legislation. accordingly the mysore legislature was competent to enact the law under the various entries of list ii which enable it to levy land revenue or the duties of excise or the other taxes mentioned in s. 3(iii) of the impugned act. [560 a-c] (ii) for a duty to be a duty of excise it must be shown that the duty has been levied on goods which have been produced or manufactured, the taxable event being production or manufacture of goods. however,, it is not easy to decide in a particular case whether the particular levy is a levy in respect of manufacture or production of goods. this question has to be decided on the facts of each case but in deciding it certain principles must be borne in mind. first, one of the essential characteristics of an excise duty is uniformity of incidence. secondly, the duty must be closely related to production or manufacture of goods. it does not matter if the levy is made not at the moment of production or manufacture but at a later stage. if a duty has been levied on an excisable article but this duty is collected from a retailer it does not necessarily cease to be an excise duty. thirdly, if a levy is made for the privilege of selling an excisable article and the excisable article has already borne the duty and the duty has been paid, there must be clear terms in the charging section to indicate that what is being levied for the purpose of the privilege of sale is in fact a duty of excise. [562 e-f; 563 h] there is no presumption that if no other taxable event has intervened, the levy must be treated to be connected with production or manufacture. the levy in the present case was a payment for the exclusive privilege of selling today from certain shops. the licencee paid what he considered to be equivalent to the value of the right. secondly, it had no close relation to the production or manufacture of toddy. thirdly, the only relation it had to the production or manufacture of toddy, was that it enabled the licencee to sell it. but he might sell little, less or more than he anticipated, depending on various factors. fourthly, toddy had already paid one excise duty in the form of tree tax., but he need not tap himself. fifthly, the duty was not uniform in incidence because the amount collected had no relation to the quantity or quality of the produce but had only relation to what the petitioner thought be could recoup by the sale of the excisable articles. what be recouped would depend upon the amount of sales and the conditions prevailing during the licensing year. sixthly, there were no express words showing that what was being realised by the appellants was an excise duty. seventhly the privilege of selling was auctioned well before the goods came into existence. [564 b-e] for the above reasons the duty was not an excise duty within the meaning of item (1) of schedule a of the health cess act or entry 51 of list 11 of the constitution. the state of mysore had therefore no authority to levy and collect health cess on shop rent. [567 g-h] per bachawat j (concurring) : a charge for licence to sell an excisable article may be a fee or a tax. if it is a tax, it can satisfy the test of a duty of excise when it is so connected with the manufacture or production of an article as to be in effect a tax on the manufacture or production. otherwise such a tax does not fall within the classification of a duty of excise. in the present case the shop rent was not connected with the production or manufacture of arrack, beer or toddy and was therefore not a duty of excise. the state legislature was not competent to make a law levying a surcharge on the shop rent under entry 5 1, list h. [584 c- f] per hidayatullah, j. (dissenting) : the persons who bid at these auctions were themselves the producers or manufacturers. they bid for the exclusive privilege or selling which in so far as government was concerned was a means of collecting the anticipated excise duty at one go from a producer or manufacturer before the goods became a part of the general stock of goods in the country. in other words the person who was charged was the producer or manufacturer and the duty was levied from him before he could sell or obtain liquor which had not borne excise duty so far. the duty was therefore clearly a duty of excise whether the matter was considered in the light of economic theory, legislative practice or judicial authority. [572 d- e] case law considered.1. special leave granted.this appeal by the central bureau of investigation (hereinafter referred to as 'the cbi') arises from the judgment of the high court of calcutta dated 22-12-1995, allowing criminal revision filed by respondent no. 1 and quashing the proceedings of special case no. 1 of 1988, pending before the learned 2nd special judge at alipore.2. on the basis of an fir, registered on 28-11-1987 by the cbi on the complaint of subodh chandra de, a trap was laid by the officers of the cbi on 30-11-1987 and respondent no. 1 shri subodh kumar dutta was allegedly caught accepting a bribe of rs. 700/-. the cbi filed a charge sheet against respondent no. 1 for an offence under section 5(1)(d) read with section 5(2) of the prevention of corruption act, 1947 on 11-2-1988, after completion of the investigation. cognizance of the offence was taken by the learned special judge under the west bengal special courts act, 1949 on 9-7-1988.3. it is an admitted case of the parties that the special court which took cognizance of the offence had been constituted under the west bengal special courts act, 1949 and not under the criminal law amendment act, 1952. after cognizance had been taken by the learned special judge, the prevention of corruption act, 1947 came to be repealed by the prevention of corruption act, 1988, with effect from 9-9-1988. respondent no. 1 thereupon filed a criminal revision petition in the high court under sections 401/482, cr. p.c., seeking quashing of the proceedings in the case pending against him before the special court in which the principal ground raised was the violation of the fundamental right of the accused to a speedy trial under article 21 of the constitution of india. during the arguments, it appears the high court also permitted respondent no. 1 to raise a plea that the special court trying the bribe case had no jurisdiction to take cognizance of the offence under the prevention of corruption act, 1947 as that court had not been constituted pursuant to section 3 of the prevention of corruption act, 1988 which had repealed the 1947 act. the learned single judge appears to have been impressed with this submission made on behalf of respondent no. 1. it appears that none appeared for the state before the learned single judge at the time of hearing of the petition.4. the learned single judge noticed the provisions of section 26 of the prevention of corruption act, 1988 which reads as follows:special judges appointed under act 46 of 1952 to be special judges appointed under this act. every special judge appointed under the criminal law amendment act, 1952, for any area or areas and is holding office on the commencement of this act shall be deemed to be a special judge appointed under section 3 of this act for that area or 'areas and, accordingly, on and from such commencement, every such judge shall continue to deal with all the proceedings pending before him on such commencement in accordance with the provisions of this act.and opined that the cognizance taken by the special court on 9-7-1988 under the 1947 act, was not saved. the learned single judge, therefore held that the cognizance had not been taken in accordance with law and without referring to the merits of the other contentions raised in the revision petition, allowed the same and quashed the proceedings pending in the special court in special court case no. 1 of 1988. hence, this appeal by special leave.5. mr. bhatt, the learned additional solicitor general, appearing for the appellant, cbi concedes that the special court which had taken cognizance, had been constituted under the west bengal act of 1949 and not under the criminal law amendment act of 1952 but submits that both on the date of the commission of offence i.e. 30-11-1987 and on the date when the cognizance was taken by the special court i.e. 9-7-1988, the 1947 act was very much in force and the special court had the jurisdiction to take cognizance of the offence. the 1947 act came to be repealed by the prevention of corruption act, 1988 with effect from 9-9-1988, after the cognizance had been validly taken by the special court under the 1947 act. learned additional solicitor general submits that under section 30 of the prevention of corruption act, 1988 anything done and any action taken under the prevention of corruption act, 1947 before the repeal, has been specifically saved. section 30 of the 1988 act reads thus:repeal and saving:(1) the prevention of corruption act, 1947(2 of 1947) and the criminal law amendment act, 1952 (46 of 1952) are hereby repealed.(2) notwithstanding such repeal, but without prejudice to the application of section 6 of the general clauses act, 1897 (10 of 1897), anything done or any action taken or purported to have been done or taken under or in pursuance of the acts so repealed shall, in so far as it is not inconsistent with the provisions of this act, be deemed to have been done or taken under or in pursuance of the corresponding provisions of this act.6. a bare look at the provisions of sub-section 2 of section 30 shows that anything done or any action taken or purport to have been taken under or in pursuance of the prevention of corruption act, 1947 shall be deemed to have been taken under or in pursuance of the corresponding provision of the prevention of corruption act, 1988. in view of this specific provision, the cognizance of the offence taken by the special court stood saved. it appears that the attention of the learned single judge of the high court was not invited to section 30 (supra) for had it been so invited, we have no doubt that the proceedings which were saved by the 1988 act would not have been quashed. the learned single judge has only referred to section 26 of the 1988 act and we agree that under that section, the cognizance taken by the special court was not saved. section 26 of the 1988 act has no application to this case. the order of the high court in view of the clear provisions of section 30 (supra) cannot be sustained and we, therefore, accept this appeal and set aside the order of the high court impugned before us. since, the high court did not express any opinion on the other points raised in the revision petition, we deem it appropriate to remand the matter to the high court for deciding the criminal revision petition, filed by respondent no. 1, afresh on merits after hearing the parties in the light of the observations made by us above. it shall be open to the respondent to raise all such pleas as are available to him in law, including the effect of superannuation of the respondent. the high court, we request, may dispose of the matter expeditiously. no costs.