F.M. Potia vs Dilipsingji

This is a petition under Article 226 of the Constitution for quashing and setting aside of the order dated April 7, 1958 made by the Assistant Collector of Customs as also the appellate order dated September 28, 1959 whereby the Additional Collector of Customs, being the 2nd Respondent, confirmed the order dated April 7, 1958.

The relevant facts are to be gathered not only from the pleadings but also from the annexures to the pleadings. The Petitioners who are timber merchants purchased dunnage wood from ''s.s. Steel Traveller'' and ''s.s. Hoegh Silverbeam'' in the beginning of January, 1953. Though in the petition it is mentioned that these steam-ships were mid-stream and the delivery was taken mid-stream it is now admitted that the steamships were at all material times berthed at Alexandra Docks. The Petitioners were desirous of carrying the purchased goods after discharge of the goods from these steamships by their own cargo boat bearing No. 5413 to Tank Bunder for clearing the same for home consumption. It was necessary for the Petitioners in this connection u/s 76 of the Sea customs Act, to obtain a "boat note". Under the section the boat note is compulsorily required to contain particulars of the goods discharged and waterborne by the boat and to be signed by officer of vessel wherefrom the goods are discharged. Upon arrival of the boat the "boat note" is directed to be delivered to a customs officers authorized to receive the same. On January 3, 1953, the Petitioners applied for two boat notes for carrying the goods of each of the steamships to Tank Bunder. The Customs Officer B. Shankar was in charge of issuing of boat notes and issued one boat note in connection with the goods to be discharged from ''s.s. Hoegh Silverbeam''. He informed Shantilal of the petitioners that the printed boat notes were exhausted and he then had none with him to issue in connection with the goods to be discharged from ''s.s. Steel Traveller''. The Petitioners on the same day took delivery of the purchased goods both form ''s.s. Steel Traveller'' and ''s.s. Hoegh Silverbeam'' and carried the goods by their own cargo boat to Tank Bunder. The goods were however, not unloaded till January 5, 1953. The Petitioner''s case is that the unloading of the goods had commenced on Monday, January 5, 1953 at about 9 a.m. in respect of the goods taken delivery of them ''s.s. Hoegh Silverbeam''. At about 9.30 a.m. another boat note in respect of the goods of ''s.s. Steel Traveller'' was also obtained from Customs Officer B. Shankar. The other goods were thereafter unloaded on the wharf and carried to the yard maintained by the Customs authorities in connection with clearance for home consumption and assessment of import duty.

In connection with the goods purchased by the Petitioners and unloaded at Tank Bunder, having received certain information, one Nanak Sing, an Assistant Collector of Customs informed the Petitioners at about 11 a.m. on January 5, 1953 that part of these goods had been carried away by the petitioners to a yard owned by them and stocked there so as to avoid payment of import duty in respect of such goods. The case of the Petitioners throughout was and is that they had in all unloaded at Tank Bunder ten lorry loads of dunnage wood and the aggregate quantity of wood unloaded was about 43 tons only. The charge of the department against the Petitioners was that they hand unloaded 13 lorry loads and 3 lorry loads of the weight of about 22.69 tons had been carried away directly by the petitioners to their own yard and that payment of duty in respect of this part of purchased goods had been evaded by the petitioners. The further charge against the petitioners was that they had carried goods taken delivery from ''s.s. Steel Traveller'' to Tank Bunder without having obtained a boat note, and without all the particulars duly recorded in such a boat note.

Having regard to all the above facts the goods were seized and between January 5, 1953 and August 3, 1953 investigation was carried out by the department. Statements of informations and other witnesses were recorded. Statements were obtained also from the Customs Officer B. Shankar and a Customs peon of the name of Namdev Ganpat Koli. Thereafter by a memo for showing cause dated August 3, 1953 relevant facts were recorded and the Petitioners were informed that the facts disclosed a deliberate attempt to import dunnage wood and to pass the same without payment of duty and that the Petitioners were guilty of offences under clauses (3), (29), (36) and (39) of section 167 of the Sea Customs Act. The Petitioners were given usual notice to submit their explanation and to show cause. By their advocate''s letter dated October 12/13, 1953 the petitioners called upon the Assistant Collector of Customs inter alia to furnish all the particulars and the copies of all relevant papers including statements obtained from officers and employees of the department from others. The statements obtained from the officers and the informants and other parties were supplied to the Petitioners who thereafter submitted their written explanation dated March 24, 1954 to the Assistant Collector of Customs.

Thereafter an advocate of the Petitioners appeared before the then Assistant Collector of Customs and requested that he should be permitted to cross-examine the persons whose statements were recorded in the absence of the Petitioners. The application was made to show the untruth of the facts as contained in the statements furnished by the officers, informants and other witnesses. The Assistant Collector however refused to accede to that request and to give any opportunity to the petitioners and/or their advocate to cross-examine any of the persons who had given the statements.

About 3-1/2 years thereafter R. K. Habbu, a new incumbent of the officer of the Assistant Collector of Customs made the impugned order dated April 7, 1958. He found the Petitioners to be guilty of offences mentioned in clauses (29), (36) and (39) of section 167 and made a composite order of confiscation of the Petitioner''s goods for the offences under all the three sub-clauses. He also gave an option u/s 183 to the Petitioners to pay fine of Rs. 15.00 in lieu of confiscation. He also made a further order imposing personal penalty in the sum of Rs. 150 each under clauses (29) and (39) of section 167.

The Petitioners filed an appeal against the order dated April 7, 1958 and or about September 8, 1958. The Petitioners'' case as appearing in paragraph 8 of the petition in respect of what transpired at the hearing of the appeal on September 26, 1959 is as follows :-

"The Petitioner''s Advocate again submitted inter alia that the then Assistant Collector of Customs had erred in refusing to accede to the Petitioner''s Advocate''s request to cross-examine the witnesses and asked for an opportunity to do so which was refused."

The Respondents have made an affidavit in reply through the 1st Respondent in these proceedings. But in dealing with these allegations of facts made in paragraph 8 of the petition they have not contended that the allegations are false. These allegations of facts having not been denied in the affidavit in reply in my view this petition must be decided on the footing that the above facts are true.

By his order dated September 28, 1959 the 2nd Respondent, the Additional Collector, rejected the appeal. In his order 2nd Respondent recited that at the hearing the Petitioner''s advocate repeated the arguments contained in the appeal. He then stated that he had considered all the facts and circumstances of the case and saw no reason to interfere with the orders passed by the Assistant Collector. This is the only reasoning to be found in the decision of the 2nd Respondent in appeal.

The Petitioners challenge the validity of both the above orders inter alia on the ground that both the authorities refused to accede to the request of the Petitioners'' Advocate for cross-examination of witnesses on the basis of those statements and evidence findings were made against the Petitioners as contained in the above two orders. The Petitioners therefore contained that principles of natural justice have been violated in the matter of these proceedings and that the consequent orders are nullity and of no effect at all. The Petitioners point out that if they were allowed to cross-examine the customs officers, the customs peon and other witnesses they would have been able to destroy the evidence on the sole basis whereof findings were made against the Petitioners.

As I have already mentioned the allegations of facts on the basis whereof the Petitioners are found guilty under clause (36) and (39) of section 167 of the Sea Customs Act are that the Petitioners had removed three lorry loads of dunnage wood weighing about 22.69 tons after the same were landed at Tank Bunder with the intention of defrauding the revenue. The Petitioners had removed these goods for home consumption without having them duly examined through the customs house. Now, these charges are very serious quasi-criminal charged and involve facts about which the enquiry officers could never arrive at finding except on the basis of strong positive evidence and record. Obviously the findings against the petitioners in respect of these charges must have been arrived at by placing reliance on the statements furnished to the inquiry officers inter alia by the informants as also the customs officer and customs peon. As I have already mentioned above admittedly the petitioners were refused any opportunity to cross-examine the evidence as contained in the statements furnished to the enquiry officers. At the stage of inquiry before the order dated April 7, 1958 and again at the stage of the appeal against that order the Petitioner''s advocate made requests for allowing an opportunity to the Petitioners for cross-examination of the evidence as contained in the statements of witnesses but the same was refused. In this connection, Mr. Rangnekar for the Respondents contents that in the grounds of appeal as a matter of fact no grievance was made about the failure of the Assistant Collector of Customs to afford opportunity to cross-examine this evidence. Though there is no denial in the affidavit in reply to the allegations of facts as made in this connection in paragraph 8 of the petition, Mr. Rangnekar also contends that having regard to the absence of any ground in the memo of appeal I must proceed to decide this petition on the footing that the Petitioners'' advocate had never made any request to the Additional Collector of Customs, the 2nd Respondent, at the hearing of the appeal for allowing the Petitioners an opportunity to cross-examine these witnesses. I have not appreciated these contentions. Categorical emphatic allegations of facts are made in paragraph 8 of the petition and no denial in respect thereof has been made in the affidavit in reply. I therefore negative these contentions made by Mr. Rangnekar and proceed to make any findings herein on the footing that even at the appeal stage the Petitioners were refused an opportunity to cross-examine the relevant evidence on the basis whereof findings have been made by the both authorities in this case.

It is now well established that in quasi-judicial proceedings failure to afford opportunity to cross-examine relevant and material evidence on the basis whereof findings are made must vitiate the whole proceedings. The statements on the basis whereof findings have been made against the Petitioners are not of the nature of department notes or confidential information, which need not be disclosed to the Petitioners. These are statements in respect whereof failure to afford opportunity to cross-examine deprived the Petitioners of all opportunity to prove that their case was true. In the result the conclusion to which I have come is that the order dated April 7, 1958 was entirely nullity. It was therefore not possible for the 2nd Respondent as appellate authority to confirm such an order in appeal without making his own investigations. The appellate authority having been requested to allow opportunity to cross-examine the relevant evidence on the basis whereof findings have been made against the Petitioners also refused that application. In my view it was not possible for the appellate authority merely to confirm without any findings on his own the first order, which was a nullity. In any case the appellate authority having refused opportunity to cross-examine relevant evidence made its own findings if any also in proceedings which were vitiated by violation of principles of natural justice. The resultant order in appeal also must accordingly be held to be nullity.

In this connection it should be recorded that there are admissions on relevant matters on records which go a long way to show that the findings made against the Petitioners in connection with the offence under clause (29) may be justifiable. If the order made on April 7, 1958 and confirmed in appeal was not a composite order and the sentence given in respect of offence under clause (29) of section 167 was separable from the sentence given in respect of the offences under clauses (36) and (39) of section 167 and no useful purpose can be served by discussing this question.

In the result the impugned orders must be quashed and set aside. In the result the rule is made absolute in terms of prayer (a) and the impugned orders dated April 7, 1958 and September 28, 1958 are quashed and set aside. Respondents to pay costs of this petition.