Pioneer Traders and Others v. Chief Controller of Imports and Exports

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: 1963 AIR 734

Decision Date: 27 September 1962

Coram: K.N. Wanchoo, Bhuvneshwar P. Sinha, P.B. Gajendragadkar, K.C. Das Gupta, J.C. Shah

Pioneer Traders and others filed a petition before the Supreme Court of India seeking enforcement of their fundamental rights under Article 19(1)(f) and Article 32 of the Constitution. The petition was decided on 27 September 1962 by a bench consisting of Justice K.N. Wanchoo, Chief Justice Bhuvneshwar P. Sinha, Justice P.B. Gajendragadkar, Justice K.C. Das Gupta and Justice J.C. Shah. The respondents were the Chief Controller of Imports and Exports. The case was reported as 1963 AIR 734 and 1963 SCR Supplement (1) 349. The dispute arose out of the administrative integration of the French Establishments, particularly Pondicherry, with India following the transfer of jurisdiction on 1 November 1954. The petitioners, who held licences issued by the French Administration, had placed orders in England for certain goods before 15 August 1954 and had obtained foreign exchange in accordance with the procedures approved by the French authorities. Before the shipments could reach Pondicherry, the Government of India issued S.R.O. 3315 under section 4 of the Foreign Jurisdiction Act 1947, thereby extending the Sea Customs Act 1878, the Imports and Exports (Control) Act 1947 and other statutes listed in the schedule to the French Establishments. A press communique subsequently directed all French licence‑holders to seek validation of their licences from the Controller of Imports and Exports prior to the shipment of goods. Because the goods were already in transit, the petitioners applied for validation after the ship had left, but the Controller refused the request and the goods arrived in Pondicherry after the effective date of the integration, 1 November 1954. The Collector, acting under section 167(8) of the Sea Customs Act 1878 in conjunction with section 3(2) of the Imports and Exports (Control) Act 1947, confiscated the goods and imposed penalties, offering the petitioners the alternative of paying the penalty in order to clear the merchandise. The petitioners appealed to the Central Board of Revenue, invoking paragraph 6 of S.R.O. 3315, which they contended protected imports made under circumstances similar to theirs. The Board dismissed the appeals, merely reducing the penalties, and subsequent revision petitions to the Government of India were also rejected. Relying on the earlier Supreme Court decision in Messrs Universal Imports Agency v. Chief Controller of Imports and Exports, the petitioners argued that paragraph 6 of S.R.O. 3315 effectively shielded such imports. Consequently, they approached the Supreme Court under Article 32 for a writ enforcing their fundamental right to trade. The Union of India, however, raised a preliminary objection questioning the maintainability of the writ petitions.

in reliance upon the earlier decision of this Court in Smt Ujjambai v The State of Uttar Pradesh, the Court held, speaking through the Chief Justice Sinha and Justices Gajendragadkar, Wanchoo and Shah, that the ruling in the Ujjambai case was applicable to the present petitions and therefore the writ petitions filed under Article 32 of the Constitution could not succeed. The Court explained that the specific questions that had been examined and decided in the Ujjambai case had not been raised in the earlier suit of Messrs Universal Imports Agency; consequently, the Court had no occasion in that earlier case to consider whether the quasi‑judicial authority then involved possessed jurisdiction to entertain the matter. Because of this, the petitioners could not evade the effect of the Ujjambai decision by arguing that the tax authorities in the present circumstances lacked any inherent jurisdiction. The Court further observed that the observations made by Justice Das and Justice Kapur in the Ujjambai decision, insofar as they related to the Universal Imports Agency case, were to be regarded as per incuriam. The Court then referred to the reported judgments of M s Universal Imports Agency v The Chief Controller of Imports and Exports [1961] 1 S C R 305, Smt Ujjambai v The State of Uttar Pradesh [1963] 1 S C R 778, and Kailash Nath v State of U P [1957] 1 S C 790, noting that these authorities were discussed, explained and applied in reaching its conclusions.

Turning to the interpretation of Paragraph 6 of the Statutory Rules Order 3315, the Court held that, when properly construed, this provision must be understood as having been inserted into each of the statutes listed in the Schedule as well as into the Sea Customs Act, thereby replacing the original Section 2 of that Act. Because of this construction, there was no room for the argument that the Ujjambai case was inapplicable on the ground that it involved any mis‑construction of the provisions of the Sea Customs Act. The Court further held that an order issued by a Customs authority which imposed confiscation of goods and levied a penalty under Section 167(8) of the Sea Customs Act 1878 constituted a quasi‑judicial order, and that Customs officials were required to exercise judicial discretion when deciding questions of confiscation and penalty. The judgment of Leo Roy Frey v The Superintendent District Jail, Amritsar [1958] S C R 822 was cited in support of this principle.

Justice Das Gupta then expressed his view that, if the importations in the present cases had been effected on the basis of contracts concluded before 1 November 1954, the Sea Customs Act would not apply because Paragraph 6 of S R O 3315, as interpreted by this Court in the Universal Imports Agency case, would remove the jurisdiction of the Customs authorities derived from that Act. Accordingly, the Customs authorities would have been without jurisdiction to issue the confiscation and penalty orders, and the writ petitions under Article 32 would have been maintainable. The Court stressed that an inferior tribunal could not create its own jurisdiction by incorrectly deciding a collateral fact. The Court also referred to the judgments of Universal Imports Agency v The Chief Controller of Imports, State of U P [1963] 1 S C R 778, State Trading Corporation of India v State of Mysore [1963] 3 S C R 792, and Rex v Shoreditch Assessment Committee [1910] 2 K B 859, observing that where a judicial or quasi‑judicial authority lacks jurisdiction in law, the failure of a party to raise that jurisdictional issue before the authority does not confer jurisdiction upon it.

not also give it jurisdiction. and ORIGINAL JURISDICTION: The matter concerned Petitions numbered 314 to 342 of the year 1961. Each petition was filed under article 32 of the Constitution of India for the purpose of enforcing the Fundamental Rights guaranteed by that article. The petitioners were represented by counsel N C Chatterjee, R Ganapathy Iyer and G Gopalakrishnan. The respondents were represented by counsel C K Daphtary, Solicitor General of India, together with B R L Iyengar and R H Dhebar. The judgment was delivered on 27 September 1962. The bench comprised Chief Justice Sinha, and Judges Gajendragadkar, Wanchoo and Shah; the opinion of the bench was delivered by Justice Wanchoo, while Justice Das Gupta delivered a separate judgment. Justice Wanchoo noted that the twenty‑nine petitions filed under article 32 raised common questions of law and fact and therefore would be heard together. All of the petitions had been instituted by two commercial firms which, for the first time, obtained trading licences – referred to as patentes – in September 1954 to conduct business in the Union Territory of Pondicherry. Because the factual matrix of each petition was essentially the same, the Court chose to present a general statement of facts to frame the issues. The two firms had not conducted any trade in Pondicherry before September 1954. Each firm secured a separate patente at that time; the proprietor of one firm resided in New Delhi, while the proprietor of the other firm resided in Bombay. The administration of Pondicherry had been transferred from French control to the Union of India effective 1 November 1954. Prior to that date Pondicherry had been governed by the Government of France and functioned as a free port, whereby imports were generally unrestricted except for a limited class of goods that are not relevant to these petitions. Nevertheless, any merchant who wished to carry on trade within Pondicherry was required to obtain a patente before commencing operations. The law provided five distinct categories of patentes, one of which specifically authorised the holder to engage in the importation of goods that were not subject to the limited restrictions applicable to certain commodities.

The patente granted the importer the legal right to bring such goods into Pondicherry, but the exercise of that right was conditioned on the procurement of foreign exchange, which was subject to statutory limits and was administered by the Department of Economic Affairs located in Pondicherry. At the relevant time, foreign exchange could be obtained in two permissible ways: (i) at the official exchange rate through the Department of Economic Affairs, or (ii) in the open market at whatever rate was then prevailing. Both methods were regarded as valid avenues for acquiring foreign exchange prior to 1 November 1954. In addition, the import process required the issuance of authorisations that specified the maximum amount of foreign exchange that could be purchased, either at the official rate or through the open market. The petitioners argued that, although they secured their patentes in September 1954, they placed orders for imports before 15 August 1954. Subsequent to obtaining the necessary authorisations from the French authorities, they procured foreign exchange in the open market in order to finance those imports. In total, the two firms had entered into twenty‑nine distinct transactions that formed the subject‑matter of the present petitions.

In the transactions concerned, the petitioners sometimes paid advance sums and settled the remaining balance by means of bills of exchange drawn on a “documents against payment” basis. Although the purchase orders had been placed before 15 August 1954 and the necessary foreign exchange had subsequently been obtained in the open market, the shipments could not be dispatched immediately because an unexpected dock strike occurred in England and on the European continent, and because there was a shortage of shipping space. As a result, the majority of the consignments arising from the twenty‑nine orders were not shipped until after 1 November 1954. Only three of the consignments were able to be dispatched in October 1954, that is, before the administration of Pondicherry passed into the hands of the Government of India. All of the goods, however, arrived in Pondicherry after the date of 1 November 1954.

On 1 November 1954, in accordance with an agreement between the Government of India and the Government of France, the administration of Pondicherry was transferred to the Government of India. Following this transfer, the Government of India issued two statutory orders, namely, S.R.O. Nos. 3314 and 3315. The order numbered 3315 was issued under section 4 of the Foreign Jurisdiction Act, No. XLVII of 1947, and it extended the provisions of the Sea Customs Act, 1878, the Reserve Bank of India Act, 1934, the Imports and Exports (Control) Act, 1947, the Foreign Exchange Regulation Act, 1947, and the Indian Tariff Act, 1934 to Pondicherry. This statutory order incorporated a saving clause stipulating that, unless a special provision was made in the schedule, all laws then in force in the French Establishments that corresponded to the enactments listed in the schedule would cease to have effect, except with regard to acts performed or omitted before the commencement of the order.

In consequence of these two statutory orders, the Government of India released a press communiqué on 1 November 1954 to explain their effect. The communiqué declared that imports into and exports from the French Establishments would henceforth be regulated in accordance with the provisions of the Imports and Exports (Control) Act, 1947. It further advised that, for orders placed outside the Establishments and finalized through a licence granted by the competent French authorities in accordance with the laws and regulations that were in force prior to 1 November 1954, the licence‑holders should apply to the Controller of Imports and Exports for validation of their licences. The licence‑holders were also instructed not to arrange shipment of goods until their licences had been validated by the Controller.

Acting on the basis of this communiqué, the petitioners attempted to halt the shipment of the goods until the authorisations they possessed could be validated by the Chief Controller of Imports and Exports in Pondicherry. However, the suppliers of the goods informed the petitioners that such a halt was impossible because the goods were already in the process of being shipped and it was too late to stop the shipment.

The petitioners first sought validation of their authorisations, but the Chief Controller of Imports and Exports at Pondicherry declined to grant such validation. The petitioners characterized this refusal as arbitrary. When the goods finally arrived at Pondicherry after 1 November 1954, the petitioners applied to the Collector of Customs at Pondicherry for permission to clear the shipment. The Collector refused to allow clearance and issued notices requiring the petitioners to show cause why the goods should not be forfeited on the ground that the import had violated the Imports and Exports (Control) Act, 1947 and the Sea Customs Act, 1878. In response, the petitioners submitted a show‑cause statement asserting that the purchase orders had been placed before 15 August 1954 and that the imports had been carried out strictly in accordance with the law applicable in Pondicherry prior to 1 November 1954, and consequently could not be regarded as unauthorised. The Collector of Customs rejected this explanation, ordered confiscation of the goods, and alternatively imposed penalties for their clearance. The penalties imposed amounted to more than Rs 64,000/‑ against one firm and more than Rs 96,000/‑ against the other firm. The petitioners appealed the penalty orders to the Central Board of Revenue; the Board dismissed the appeals, although it reduced the penalties to just over Rs 35,000/‑ for one firm and Rs 60,000/‑ for the other. Subsequently, the petitioners filed a revision before the Government of India, but the Government rejected the revisions on 23 January 1957. While the record does not specify the exact date, it appears that the petitioners eventually paid the reduced penalties, cleared the goods, and did not pursue further judicial relief, indicating a degree of acquiescence to the orders. Nonetheless, the petitioners later claimed that they continued to make representations to the Government of India without success, the last of which they received in August 1961.

In the intervening period, other importers in Pondicherry filed petitions in this Court in 1959 contesting both the confiscation order and the alternative penalty order issued by the Collector of Customs under similar factual circumstances, as referenced in Messrs Universal Imports Agency v. Chief Controller of Imports and Exports. The Court delivered its judgment on 23 August 1960, holding that paragraph 6 of S.R.O. 3315, previously cited, preserved the effect of all laws that were in force in the French Establishments immediately before the commencement of the order, even if those laws were later repealed by the order, with respect to “things done” or omitted to be done before that commencement. Accordingly, the Court concluded that authorisations granted by the French authorities prior to 1 November 1954 protected the imported goods—whether the exchange was made through official channels or the open market—from the operation of the Imports and Exports (Control) Act, 1947 and similar statutory provisions. The Court emphasized that the phrase “things done” should be interpreted broadly to include the legal consequences flowing from actions completed before the specified date.

The Court observed that authorisations issued for import were sufficient to shield the imported goods, whether the foreign exchange was obtained through official channels or the open market, from the operation of the Imports and Exports (Control) Act, 1947 and from other similar statutory provisions. This conclusion was based on the interpretation of paragraph 6 of S.R.O. 3315, which preserved the effect of “things done” before 1 November 1954. Because firm contracts had been entered into and authorisations had been granted before that date, the later arrival of the goods in Pondicherry after 1 November 1954, as a direct consequence of those contracts and authorisations, was considered a “thing done” within the meaning of paragraph 6. The Court held that the expression “things done” must be given a reasonable construction and, when so construed, it encompasses not only the acts themselves but also the legal consequences that flow from them. Consequently, the Court determined that the imported goods in the cases before it were not subject to confiscation under the Imports and Exports (Control) Act or any comparable provisions of other laws, since the contracts were executed prior to 1 November 1954 and the exchange of currency had been arranged either officially or through the open market, wholly or partially, under authorisations granted by the French Government. The subsequent importation after the said date was merely the result of actions performed before the cut‑off date and therefore fell within the protection afforded by paragraph 6. As a result, the Court ordered that the penalties collected be refunded.

The decision was delivered in August 1960. Following that judgment, the petitioners addressed a letter to the Government of India in September 1960 requesting a refund of the penalties imposed in their own cases. The Government replied in February 1961, indicating that no refund could be granted. The petitioners wrote again in June 1961, and the Government issued a final reply in August 1961. Subsequent to these exchanges, the present writ petitions were filed in October 1961. The petitioners rely on the earlier decision of this Court in Messrs Universal Imports Agency and argue that their circumstances are identical to those in that case, entitling them to a refund of the penalties. They seek a writ of certiorari to set aside the orders that imposed the penalties, beginning with the orders of the Collector of Customs, Pondicherry, and extending to the revision orders of the Government of India, and they also request a direction for the respondents to return the penalty amounts collected. The Union of India opposed the petitions on several grounds, but the Court deemed it unnecessary to catalogue all those grounds because the Union raised an objection to the maintainability of the petitions based on the precedent set in Smt Ujjambai v. State of Uttar Pradesh. Accordingly, the Court will refer only to the relevant portions of the Union’s counter‑affidavit.

The Court examined the counter‑affidavit submitted on behalf of the Union of India, which was sufficient to explain the preliminary objection raised by that side. According to the Union, negotiations concerning the de facto transfer of the French‑Indian Establishments to the Government of India were resumed in August 1954, and these negotiations produced an agreement dated 20 October 1954 between the Government of India and the Government of France to settle the future status of the French Establishments in India. The agreement provided that the administration of the French Establishments, including Pondicherry, would pass to the Government of India effective 1 November 1954. Consequently, the Government of India issued two statutory orders, namely S. R. O. 3314 and S. R. O. 3315, on 30 October 1954, with effect from 1 November 1954. The first order was designated the French Establishments (Administration) Order, and the second was named the French Establishments (Applications of Laws) Order, 1954, by which the Sea Customs Act, 1878, the Imports and Exports (Control) Act, 1947, and several other statutes were extended to the transferred territories. The Court noted that certain individuals, including the petitioners, did not have any legitimate business in Pondicherry before the transfer and acted dishonestly with the intention of circumventing the laws that were being extended to the French Establishments upon their accession to the Indian Union. These persons obtained apparently authentic‑looking documents on which they claimed to have placed firm orders with foreign firms for the import of goods that were prohibited under the Indian Import Control Regulations. After the application of S. R. O. 3314 and S. R. O. 3315 and the takeover of administration on 1 November 1954, a press communiqué dated the same day instructed that orders placed outside the French Establishments and completed through licences granted by the competent French authorities under the pre‑November 1954 regulations must be validated by the Controller of Imports and Exports appointed for Pondicherry. The licence‑holders were further advised not to arrange shipment of goods until such validation was obtained. A subsequent press communiqué issued on 5 January 1955, in response to representations made under Article 17 of the Indo‑French Agreement, informed the public that imports made through open market transactions after 1 November 1954 would be deemed unauthorised. However, considering the hardship that genuine importers might suffer—those who had placed orders in the ordinary course of trade and whose suppliers had already shipped goods before the merger—the Collector of Customs, Pondicherry, was authorised to grant certain concessions to bona‑fide importers. The Court recorded that the Collector was empowered to allow goods shipped before 1 November 1954, but ordered before 15 August 1954, to be cleared without penalty, regardless of their origin or value, as a specific concession.

One of the concessions announced for importers was that any goods shipped before 1 November 1954, provided that the orders for those goods had been placed before 15 August 1954, could be cleared without any penalty irrespective of the goods’ origin or value. The petitioners attempted to rely on this concession and therefore presented to the Collector of Customs, Pondicherry, evidence that they had placed firm orders before 15 August 1954. They explained that, although shipments of the goods could have been made in three instances before 1 November 1954, the remaining shipments had been delayed because of dock strikes in England and in continental countries. The Collector examined the case and, in his order, observed that although the petitioners claimed the orders were placed before 15 August 1954, the two firms involved could not commence business in Pondicherry until September, the month in which they obtained a patent authorising them to conduct business legally in the territory. The Collector further noted that, in ordinary commercial practice, commitments are not made without corresponding communications with suppliers concerning price, payment terms and other conditions; however, the petitioners had produced no such correspondence. Additionally, the Collector found that the petitioners had not previously carried on any similar trade within the Indian Union. On the basis of these findings, the Collector concluded that the petitioners had failed to prove that the goods had in fact been ordered before 15 August 1954, and accordingly ordered the confiscation of the goods and imposed a penalty in lieu of the confiscation. The petitioners appealed this order to the Central Board of Revenue; the Board upheld the confiscation and penalty, reducing the penalty only to a limited extent. The Board’s order did not address whether the goods had actually been ordered before 15 August 1954, but it held that the goods had been imported without a licence at a time when a licence was required, and therefore the appeal could not succeed. The petitioners thereafter sought revision before the Government of India, but that revision was also dismissed. The petitioners raised a preliminary objection that the orders imposing the penalty were quasi‑judicial orders issued by a competent authority exercising jurisdiction under a taxing statute, and they asserted that the statute, read with S.R.O. 3315 of 1954, was not ultra vires. Their sole ground of challenge was that paragraph 6 of S.R.O. 3315 had been mis‑interpreted by the authorities, resulting in a penalty that could not have been imposed had the paragraph been correctly understood. Consequently, the petitioners questioned the validity of the penalty order on the basis of this alleged mis‑construction of paragraph 6, and they contended that the order could not be challenged by a petition under article 32 of the Constitution because of the precedent set by the Court’s decision in Ujjambai’s case (1). On behalf of the Union of India, it was argued that the petitions filed under article 32 were therefore not maintainable and should be dismissed.

The petitioners contended that the precedent cited as Ujjambai's case.(1) was not applicable to the facts of their petitions. They acknowledged that the orders imposing penalty were indeed quasi‑judicial in nature, but asserted that those orders had been issued without jurisdiction and thereby infringed the petitioners’ fundamental rights under Art. 19 (1) (f) and Art. 19 (1) (g). Consequently, they argued that the orders could be challenged by a petition under Art. 32 and that the decision in Ujjambai's case.(1) should not govern the present proceedings.

The Court noted that it was necessary to examine the effect of the decision in Ujjambai's case.(1). That case had been heard by a seven‑judge Bench, which rendered its final judgment by a majority of five to two. The two principal questions that arose for determination were: (1) whether an order of assessment made by an authority under a taxing statute that was intra vires could be attacked on the sole ground that it was based on a misconstruction of a provision of the Act or of a notification issued thereunder, thereby repugnant to Art. 19 (1) (g); and (2) whether the validity of such an order could be questioned in a petition under Art. 32 of the Constitution. As observed by Das, J., the questions were inter‑connected and essentially revolved around whether the validity of an order made with jurisdiction under an intra vires Act or a properly issued notification could be challenged in a petition under Art. 32 solely on the basis of a misconstruction of the statutory provision or notification.

The Court further recorded that, in Ujjambai's case, it was not disputed that when a statute or any of its provisions was ultra vires, any action taken under that ultra vires provision by a quasi‑judicial authority that violated or threatened to violate a fundamental right gave rise to a question of enforcement of that right, and therefore a petition under Art. 32 would lie. It was also undisputed that where the assessing authority attempted to tax a transaction whose taxation fell within the constitutional prohibition, the violation of the fundamental right was deemed established, and such cases were treated on par with those where the provision itself was ultra vires. Additionally, the Court held that where the statute was intra vires but the action taken under it was without inherent jurisdiction, a petition under Art. 32 would lie. Finally, it was undisputed that when the action taken was procedurally ultra vires, the situation was treated as an action taken without inherent jurisdiction and would be open to challenge by a petition under Art. 32. The controversy, therefore, centered on the question of what position applied to an order made by a quasi‑judicial authority in the undisputed exercise of its jurisdiction under a provision of law that was clearly intra vires.

In this matter the Court examined whether an order issued by a quasi‑judicial authority, which was undeniably made within the authority’s jurisdiction and under a statutory provision that was clearly intra vires, could be challenged before the Supreme Court by means of a petition under Article 32 on the sole ground that the order was based on an erroneous construction of the statute or of a notification issued under it. The five judges who formed the Bench answered both questions in the negative. Justice Das held that an assessment order passed by an authority under a tax statute that is intra vires and exercised in the undisputed scope of its jurisdiction cannot be attacked on the basis that it rests on a mis‑interpretation of the Act or a notification made thereunder, and that the validity of such an order cannot be questioned in a petition under Article 32 of the Constitution. Justice Kapur stated that if the statute itself is not challenged for constitutionality, then every part of it, including the provisions that empower the levy of a tax and prescribe the mode and procedure for assessment and appeal, is constitutionally valid. Consequently, a determination made by a sales‑tax officer acting within his jurisdiction is equally valid and legal. Even if the officer’s construction of the provision is erroneous, the matter falls within the authority’s complete jurisdiction under the statute, rendering the decision a valid act despite the error. An assessment order issued by a quasi‑judicial tribunal under a statute that is ultra vires, however, is wholly unauthorized, lacks any legal existence, infringes fundamental rights under Articles 19(1)(f) and (g), and therefore can be challenged under Article 32. By contrast, an order under an intra vires statute is not unconstitutional, enjoys the protection of law, does not violate any fundamental right, and cannot be impugned under Article 32. Justice Sarkar agreed with the conclusions of Justices Das and Kapur. Justice Hidayatullah added that when a law is validly made in conformity with fundamental rights and an officer enforces it within his jurisdiction, other considerations arise; if the officer, in the course of his duties, misinterprets a provision, the appropriate remedies are appeal and revision, and where available, recourse to Articles 226 and 227 of the Constitution, rather than a petition under Article 32.

The Court explained that an erroneous decision cannot be said to create a violation of any fundamental right, and therefore the existence of a right of appeal or revision does not merge with the enforcement of fundamental rights. Such mistakes may be rectified only through the ordinary processes of appeal and revision; Article 32 does not, as previously noted, give this Court an appellate or revisional jurisdiction. Consequently, when the law is valid and the decision is made within jurisdiction, the protection afforded by Article 265 remains intact. The Court recognized a single, very narrow exception to this principle. That exception arises when, due to a misinterpretation, a State officer or a quasi‑judicial tribunal acts wholly beyond the scope of the law that it is enforcing; if, in those circumstances, the action results in a breach of a fundamental right, then a petition under Article 32 may be entertained. Justice Mudholkar then summarised his conclusions. He held that the question of enforcing a fundamental right arises only when a tax is imposed under a law that is (a) void under Article 13, or (b) ultra vires the Constitution, or (c) in the case of subordinate legislation, is ultra vires the parent enactment or conflicts with any other law in force. A similar question also arises when a tax is assessed or levied by an authority that is (a) not the one empowered by the taxing statute, or (b) acting contrary to the procedure prescribed by that statute, or (c) exercising the powers in a colourable manner. No fundamental right is infringed, and therefore no question of enforcement arises, when a tax is properly assessed and levied in good faith by a competent authority under a valid law, following the prescribed procedure, even if the assessment is based on an erroneous construction of the law, unless that erroneous construction leads to a tax that exceeds legislative competence or violates any provision of Part III or any other constitutional provision. Moreover, a mere misinterpretation of a statutory provision does not render the decision of a quasi‑judicial tribunal void for lack of jurisdiction; the decision remains legally valid until it is corrected by the appropriate remedy. As long as such a decision remains in force, despite its error, it must be regarded as authorised by law, and a person held liable for tax under that decision cannot treat it as a nullity or claim that the demand is unauthorised, even if a correct construction would show that the statute did not empower such a levy. Justice Mudholkar therefore agreed with Justice Das in reaching this view.

In this case the Court noted that the majority of the learned judges were of the view that the two questions presented to them should both be answered in the negative. In contrast, Judges Subha Rao and Ayyangar expressed the opposite opinion. They held that no valid distinction could be drawn between an order issued by an authority that lacked jurisdiction because the authority was not properly constituted under the Act, and a wrong order issued by an authority due to a mis‑construction of the relevant provisions of the Act. According to them, if either type of order impinged upon a fundamental right, the order could be challenged by a petition under Article 32 on the ground that a mis‑construction had resulted in a violation of a fundamental right under Article 19(1)(f) or Article 19(1)(g). The Court then observed that, although the reasons given by the members of the majority differed slightly, they were united in the conclusion that an assessment order made by an authority that possessed jurisdiction under a valid taxing statute could not be attacked as being repugnant to Article 19(1)(g) merely because the order was based on a mis‑construction of a provision of the Act or of a notification issued under the Act. The validity of such an order therefore could not be questioned in a petition filed under Article 32 of the Constitution, although the order might be subject to challenge on appeal or in revision where the statute authorized such remedies, or by a petition under Articles 226 and 227 in appropriate circumstances. The Union contended that the orders in the present proceedings were orders of an authority that possessed jurisdiction and acted in a quasi‑judicial capacity, and that even if those orders were founded on a mis‑construction of paragraph 6 of S.R.O. 3315, they could not be challenged by a petition under Article 32, irrespective of any other remedies that the petitioners might possess against them. It was further argued that, in principle, there was no distinction between an assessment order issued under a taxing statute and an order of confiscation with an alternative penalty, because both were orders of a quasi‑judicial authority within the ambit of an intra‑vires taxing statute; consequently, when such orders were passed with jurisdiction, they could not be challenged under Article 32 on the sole ground that they were based on a mis‑construction of a statutory provision or a notification thereunder. The Court accepted that it was not disputed that an order of a customs authority imposing confiscation and penalties under section 167(8) of the Sea Customs Act (No 8 of 1878) was quasi‑judicial in nature and that the customs authority bore the duty to act judicially in determining questions of confiscation and penalty, as reflected in the earlier decision of Leo Roy Frey v. The Superintendent District Jail, Amritsar. However, the petitioners urged that, notwithstanding this position, the orders in the present case were issued without inherent jurisdiction and therefore should be open to challenge.

In the matter presently before the Court, the petitioners argued that the orders issued against them were made without any inherent jurisdiction and therefore could be challenged. They relied upon the observations of Kapur, J. in the case of Ujjambai’s case, especially as those observations related to the decision in Messrs. Universal Imports Agency. Kapur, J. had remarked that the decision in that case was “an instance of want of jurisdiction to tax transactions which the law excludes from the taxing powers of the authority levying the tax.” He further noted that the issue of whether Article 32 of the Constitution could be invoked against a quasi‑judicial determination had not been raised in that case.

With due respect, it may be observed that because the question of the applicability of Article 32 to quasi‑judicial determinations was not raised at all in Messrs. Universal Imports Agency, the Court was never placed before to consider whether the authority in that case possessed inherent jurisdiction to decide the matter. The majority judgment on which the petitioners place their reliance makes no reference to the question of inherent jurisdiction, even though the authority in that case had ordered confiscation of imported goods and alternative penalties. The only passage that the petitioners highlighted was a sentence in the majority judgment which read: “We would, therefore, hold that paragraph 6 of the Order saves the transactions entered into by the petitioners and that the respondents had no right to confiscate their goods on the ground that they were imported without licence.”

The petitioners contend that when the majority said the authorities had no right to confiscate the goods, it meant that the authorities lacked inherent jurisdiction to do so. However, a careful reading of the majority judgment does not support that conclusion. The judgment does not state that the authorities were without inherent jurisdiction to confiscate the goods or to impose penalties in lieu thereof. It is true that the majority judgment, citing (1) [1963] 1 S.C.R. 778 and (2) [1961] 1 S.C.R. 305, observed that the respondents had no right to confiscate the goods, but that observation followed immediately after a declaration that paragraph 6 of the Order saved the transactions. Consequently, when the majority said the authorities had no right to confiscate the goods, the meaning was that the authorities had mis‑interpreted paragraph 6 and acted on that mis‑interpretation; on a correct construction of paragraph 6, they could not lawfully confiscate the goods.

Thus, the majority decision was not based on an absence of inherent jurisdiction. The petitioners, therefore, cannot invoke the decision in Ujjambai’s case to argue that the authorities who confiscated the goods and imposed alternative penalties in the

The Court noted that the present matters could not be said to involve an inherent jurisdiction to confiscate goods. It clarified that the earlier decision of this Court in the case of Messrs Universal Imports Agency was not founded on the proposition that the authority which had confiscated the goods lacked an inherent power to do so. Rather, the judgment in that case was predicated on the finding that, while exercising its jurisdiction, the authority had misinterpreted S.R.O. 3315. The Court further observed that the question of whether a writ petition under Article 32 of the Constitution could be entertained on the basis of such misinterpretation had never been raised before this Court and therefore had not been examined. Consequently, the Court respectfully disagreed with the observation made by Kapur J in the Ujjambai case that the decision in Universal Imports Agency exemplified a lack of jurisdiction to tax transactions that the law specifically excluded from the taxing authority’s powers. The Court also considered the citation of that decision in the list of judgments referenced by Das J, who had argued that those cases illustrated instances where executive authorities acted without jurisdiction, and held that such inclusion was likewise unjustified. Since the issue of the competence of a writ petition on this ground was never raised or considered in Universal Imports Agency, it would be inaccurate to state that the decision was predicated on an absence of jurisdiction of the concerned authority.

The Court then turned to the broader jurisprudential context, noting that after the decision in Kailash Nath v. State of U.P., certain writ petitions had been entertained on the basis that the jurisdiction of the Court under Article 32 could be invoked even where a quasi‑judicial tribunal had misinterpreted the law governing its action. However, in light of the Special Bench’s decision in the Ujjambai case, the Court held that those earlier precedents no longer retained their validity. The next issue for consideration was whether the present dispute involved a misconstruction of a statutory provision that was intra vires for an authority acting under a taxing statute. The petitioners contended that the relevant taxing statute was the Sea‑Customs Act and that any misinterpretation, if it existed, concerned paragraph 6 of S.R.O. 3315. The Court disagreed with this contention. It explained that S.R.O. 3315 applied the Sea‑Customs Act, together with other Acts, to the French Establishments, including Pondicherry. The order consisted of six paragraphs: the first identified the order and its commencement date; the second defined the term “French Establishments” to which the order applied; the third enumerated twenty‑two Acts listed in the Schedule that would extend to the French Establishments, subject to certain non‑material conditions; and sub‑paragraph (2) of paragraph 3 extended the application of all the listed provisions. The Court’s analysis of these paragraphs set the stage for its further examination of the operative effect of paragraph 6.

The Court explained that paragraph 4 of S.R.O. 3315 prescribes the method for construing any reference contained in an enactment, notification, rule, order or regulation when that reference is applied to the French Establishments. Paragraph 5 then authorises any court, tribunal or authority that is required or empowered to enforce, within the French Establishments, any enactment listed in the Schedule to interpret that enactment with such alterations as are necessary or proper, provided that the substance of the enactment is not affected; the Court noted the citations (1) A. 1. R. (1957) S. C. 790 and (2) [1963] 1 S. C. R. 778 in this context. The Court next turned to paragraph 6, which it had already set out, and observed that S.R.O. 3315 extended the Sea Customs Act together with twenty‑two other Acts to the French Establishments, including Pondicherry. The Court described paragraph 6 as being analogous to a repealing and saving clause that is normally found in legislation that repeals and reenacts an earlier law. Consequently, the Court held that it would not be improper to read paragraph 6 as if it were incorporated into each of the twenty‑two Acts that were brought within the ambit of S.R.O. 3315. In this view, the construction of paragraph 6, deemed to have been inserted into every Act mentioned in the Schedule, amounts to a construction of the Sea Customs Act itself. The Court recalled that the original section 2 of the Sea Customs Act provided for repeal of earlier enactments and for saving provisions, although that section no longer exists because it was repealed by the Repealing Act No. 1 of 1938. Accordingly, the Court reasoned that paragraph 6 of S.R.O. 3315 effectively occupies the place of the original section 2 of the Sea Customs Act. Therefore, interpreting paragraph 6 as if it had been inserted into the Sea Customs Act in lieu of the original section 2 is, in effect, an interpretation of the Sea Customs Act. On that basis, the Court rejected the contention that the decision in Ujjambai’s case (1) does not apply because there was no misconstruction of any provision of the Sea Customs Act. The Court further noted that it is not disputed that the Collector of Customs possessed inherent jurisdiction to adjudicate the matter, and that the only challenge to his order – and to the subsequent orders passed on appeal and revision – is the allegation that they misinterpret paragraph 6 of S.R.O. 3315. Finally, the Court observed that it has been urged that there was no misconstruction of paragraph 6 of S.R.O. 3315 in the present cases and that Ujjambai’s case (1) should not apply to the petitions. The Court acknowledged that, literally, it may be correct to say that there was no actual miscoyn (1) [1963] 1 S. O. R. 778 of paragraph 6 of S.R.O. 3315 by the Collector of Customs; however, the Court emphasized that, as previously indicated, the petitioners had attempted to present their case to the Collector within the terms of the relevant statutory provisions.

In this case the petitioners relied on a press communique dated 5 January 1955 that announced certain concessions for genuine importers. They attempted to demonstrate that they had placed firm orders before 15 August 1954, that they had secured the necessary foreign‑exchange after obtaining the required authorisations, and that three of the consignments had been shipped before 1 November 1954 while the remaining twenty‑six could not be shipped before that date for reasons beyond their control. Their purpose was to avail themselves of the concessions mentioned in the press communique. The petitioners, however, did not raise before the Collector of Customs the argument that even if they had not placed the orders before 15 August 1954, they would still be entitled to the benefit of paragraph 6 of S.R.O. 3315 provided they had placed the orders before 1 November 1954, had obtained authorisations from the French authorities before that date, and had arranged the requisite foreign‑exchange either through official channels or the open market. The Collector examined the petitioners’ claim that they had placed firm orders before 15 August 1954 and, for reasons already explained, concluded that this claim could not be true. Consequently, the Collector refused to grant them the benefit of the press communique and, in those circumstances, could not proceed to consider whether the petitioners might still be protected by paragraph 6 of S.R.O. 3315 if the orders had been placed after 15 August 1954. On appeal, the Board did not base its decision on this point. It held that because the goods had actually been imported after 1 November 1954, when licence restrictions were in force, the goods were liable to confiscation as imports made without a licence. This ruling effectively denied the petitioners the advantage of paragraph 6 of S.R.O. 3315 and, by implication, amounted to a misconstruction of that provision. The Court observed that the matter could be examined in two ways. If it were held that the petitioners’ case rested solely on the ground that they had placed orders before 15 August 1954 and were therefore entitled to the press‑communique benefit, the Collector’s finding—based on three reasons he gave for not accepting the petitioners’ claim—constituted a factual determination. A writ could not be issued on the basis of such a finding, even if it were erroneous. Moreover, if that was the only argument advanced by the petitioners before the authorities and the authorities had decided against them on that principal factual issue, it could not be said that the authorities were wrong in their view, and consequently no question of any further relief arose.

In considering whether the petition under Article 32 of the Constitution is maintainable, the Court observed that a petition is less likely to be maintainable when it is based on a mistake of fact rather than a mis‑construction of a legal provision. The Court noted that, in the present case, it could not be said that the Collector had erred in his factual conclusions. The petitioners contended that, even if they had not placed firm orders before 15 August 1954, they should still be able to rely on the judgment of this Court in the case of Messrs Universal Imports Agency (1) because they had placed orders after obtaining the patents in September, had obtained the necessary authorisations and had arranged for foreign exchange before 1 November 1954. For the petitioners to succeed on that basis, the Court held that the Board would have to be deemed to have rejected that argument by implication. Such a rejection could arise only if paragraph 6 of S.R.O. 3315 had been mis‑constructed; if the paragraph had been correctly interpreted, as held by this Court in the Universal Imports case (1), the goods in question would not have been confiscated.

The Court therefore set out two possible positions. First, if the petitioners rely solely on the press communique asserting that they placed firm orders before 15 August 1954, their claim has already been rejected on factual grounds, and there is no reason to depart from the Collector’s factual findings. Second, if the petitioners now rely on the reasoning advanced in the Universal Imports Agency case (1) before the Board, the Board must be considered to have turned down that claim by implication, and such a turn‑down could occur only through a mis‑construction of paragraph 6 of S.R.O. 3315. The Court noted that this situation is closely analogous to the position in Ujjambai’s case (2), where a assessing authority acted within its jurisdiction on a mis‑construction of a provision that was intra vires, and the assessment could not be challenged on the ground that it was based on a mis‑construction. Accordingly, the Board, as a quasi‑judicial authority exercising judicial functions within its jurisdiction, must be deemed to have implicitly rejected the petitioners’ contention based on paragraph 6 of S.R.O. 3315, and that rejection rests on the mis‑construction identified in the Universal Imports Agency case (1). The petitioners, however, cannot

The Court held that the orders could not be questioned in a petition under article 32 of the Constitution because the statutes relied upon – namely the act reported in (1) [1661] 1 S, C. R. 305 and the act reported in (2) [1963] 1 S. C. R. 778 – when read together with S.R.O. 3315 were not ultra vires. The only ground asserted for a violation of a fundamental right was that the Board had, by implication, mis‑constructed paragraph 6 of S.R.O. 3315. In that view the decision in Ujjambai’s case (1) was applicable with full force to the present petitions. Accordingly, the Court concluded that the validity of the orders impugned could not be questioned in a petition under article 32. The petitions were consequently dismissed, and the petitioners were ordered to pay one set of hearing costs. Justice D‑A‑S‑S Gupta then addressed the substance of the sixteen petitions filed under article 32. The petitioner, a merchant operating under the name Messrs Eastern Overseas (Pondicherry), sought relief from the orders issued by the Collector of Customs, who, acting under section 167(8) of the Sea Customs Act read with section 3(2) of the Import and Export Control Act, 1947, had directed the confiscation of goods that the petitioner had imported into Pondicherry. The Collector also gave the petitioner the option to pay a fine in lieu of confiscation. The fines demanded in the sixteen cases amounted to a total of Rs 96,400. The petitioner appealed these orders to the Central Board of Revenue; the appeal was unsuccessful, although the Board reduced the total fine payable to Rs 60,235. Following the Board’s decision, the petitioner applied to the Government of India for a revision of the orders, but the revision applications were rejected.

The petitioner's case was that in each of the sixteen instances he had entered into firm contracts with foreign suppliers before 1 November 1954 for the supply of the goods that were later shipped to Pondicherry. It was on the basis of those pre‑existing contracts that the goods were imported. By the time the goods arrived in Pondicherry, the Sea Customs Act had become applicable to the territory as a result of S.R.O. No. 3315, dated 30 October 1954. This order was issued under section 4 of the Foreign Jurisdiction Act, 1947, in accordance with the Indo‑French Agreement, which transferred the administration of Pondicherry to the Government of India effective 1 November 1954. Paragraph 6 of that order, however, contained a saving clause which stipulated that, unless specifically provided in the Schedule, all laws in force in the French establishments immediately before the commencement of the order, which correspond to enactments specified in the Schedule, shall cease to have effect, except as they respect acts done or omitted to be done before such commencement. The text of the saving clause reads: “Unless otherwise specifically provided in the Schedule, all laws in force in the French Establishments immediately before the commencement of the order, which correspond to enactments specified in the Schedule, shall cease to have effect, save as respect things done, or omitted to be done before such commencement.” The Court had previously held in Universal Imports Agency v. Chief Controller of Imports and Exports that importations into Pondicherry after 1 November 1954 would benefit from this saving clause when the importation was made in pursuance of a contract concluded prior to that date. The petitioner therefore contended that, because the Sea Customs Act did not apply to his imports under the saving clause, the confiscation orders and penalties imposed were illegal and infringed his fundamental right under article 19(1)(f) of the Constitution.

In this matter, the Court observed that the order issued by the Controller of Imports and Exports provided that any importation of goods into Pondicherry occurring after 1 November 1954 would be covered by the saving clause contained in the order, on the condition that such importation was carried out pursuant to a contract that had been concluded before that date. Relying on the earlier decision of this Court in the case previously cited, the petitioner argued that the Sea Customs Act could not be applied to the sixteen importations because each of them stemmed from contracts entered into prior to 1 November 1954. Accordingly, the petitioner contended that the confiscation orders and the penalty orders that had been imposed on his property were illegal. He further maintained that these orders infringed his fundamental right to trade guaranteed by article 19(1)(f) of the Constitution, and that the present petitions were filed to protect that right. The respondent, on the other hand, disputed the factual premise of the petitioner’s case, asserting that the petitioner had not demonstrated that the imports were indeed made under contracts concluded before the statutory cut‑off date. In addition to that substantive defence, the respondent raised a preliminary objection, relying on the authority of the decision of this Court reported in Smt. Ujjam Bai v. The State of U.P. (1961) 1 SCC 305, to the effect that a petition under article 32 of the Constitution would not be maintainable. The respondent’s argument was that the confiscation and penalty orders had been issued by an authority exercising powers granted by a valid statute, that the authority was acting within its jurisdiction and that the orders therefore could not be challenged in a writ petition under article 32, even if the authority had misinterpreted paragraph 6 of S.R.O. 3315. Opposing the preliminary objection, counsel for the petitioner contended that in all sixteen matters a quasi‑judicial authority had acted without jurisdiction, and that the ruling in Ujjam Bai’s case, rather than barring the writ, actually supported the petitioner’s position. The Court noted that, for purposes of deciding the preliminary objection, it must accept as true the petitioner’s allegation that the imports were carried out under contracts concluded before 1 November 1954. If that premise is accepted, the consequence is that the Sea Customs Act would not apply to those imports, and consequently the Collector of Customs, whose jurisdiction is derived from that Act, would lack authority to issue any order in respect of the goods. The Court expressed the view that the argument raised by the petitioner possessed considerable merit and that the preliminary objection raised by the respondent ought to be rejected. The majority judgment in Ujjam Bai’s case was held to be clear authority for the proposition that an order of confiscation or penalty made by an authority under a statutory provision that is intra vires cannot be questioned in a petition under article 32 of the Constitution.

In this matter the Court observed that a constitutional provision cannot be attacked on the ground that it was passed under a misinterpretation of the law, so long as the order in question was made “in the undoubted exercise of its jurisdiction.” The citation to the first Ujjam Bai case appears as (1) [1963] 1 S. C. R. 778. The Court further noted that the same decision also provides clear authority for the proposition that “if a quasi‑judicial authority acts without jurisdiction or wrongly assumes jurisdiction by committing an error as to a collateral fact and the resultant action threatens or violates a fundamental right, the question of enforcement of that right arises and a petition under Art. 32 will lie.” This proposition was recently restated by a five‑judge Bench of this Court in The State Trading Corporation of India v. The State of Mysore (Writ Petitions Nos. 65 and 66 of 1960). In that case an objection was raised, relying on Ujjam Bai’s case, to the maintainability of writ petitions under Article 32 of the Constitution. Sarkar, J., speaking for the Court, rejected the objection and observed: “It was however said that the petitions were incompetent in view of our decision in Ujjam Bai v. State of Uttar Pradesh (1) in as much as the Taxing Officer under the Mysore Acts had jurisdiction to decide whether a particular sale was an inter‑State sale or not and any error committed by them as a quasi‑judicial tribunal in exercise of such jurisdiction did not offend any fundamental right. But we think that case is clearly distinguishable.” Das, J., then reiterated that “if a quasi‑judicial authority acts without jurisdiction or wrongly assumes jurisdiction by committing an error as to a collateral fact and the resultant action threatens or violates a fundamental right, the question of enforcement of that right arises and a petition under Art. 32 will lie.” He added that where a statute is intra vires but the action taken is without jurisdiction, a petition under Article 32 remains competent. The Court applied that reasoning to the present facts, stating that there is no dispute that the taxing officer lacked jurisdiction to tax inter‑State sales because the Constitution prohibits a State from imposing such tax. Consequently the officer could not create jurisdiction for himself by mistakenly deciding a collateral fact, and the officer’s conduct amounted to the error described in the cited authorities, including the passage from Rex v. Shoreditch Assessment Committee (1) which eloquently observes: “No tribunal of inferior jurisdiction can by its own decision finally decide on the question of the existence or extent of such jurisdiction; a Court with jurisdiction confined to the city of London cannot extend such jurisdiction by finding as ….” Therefore, the Court concluded that the decision in Ujjam Bai is not applicable to the present case and that the writ petitions are fully maintainable.

The Court noted that the Collector of Customs possessed jurisdiction solely in matters falling within the Sea Customs Act, yet he had assumed jurisdiction on the erroneous premise that the Act applied to the importations under consideration, a premise that the law does not support. Relying on the authority of this Court’s decision in Messrs. Universal Imports Agency v. The Chief Controller of Imports and Exports, the Court held that the Sea Customs Act was inapplicable and that the law which had been in force in the French Establishments immediately before 1 November 1954 would govern all imports into Pondicherry made on the basis of contracts concluded before that date. Accepting, as a preliminary assumption for the purpose of resolving the objection, that the importations were indeed made under contracts concluded before 1 November 1954, the Court was forced to conclude that the Sea Customs Act could not be invoked in these cases. Consequently, the Collector of Customs, based on the foregoing assumption of facts, had no jurisdiction to issue any order concerning the goods. The Court further observed that the Collector’s personal belief, while acting in a quasi‑judicial capacity, that the Sea Customs Act applied could not alter the legal limitation on his jurisdiction. The petitioner had not, before the Collector, pressed the argument that the contracts were concluded before 1 November 1954; rather, his case before the Collector was that the contracts had been concluded before 15 August 1954. The Collector rejected that proposition, finding it unestablished, and consequently ordered confiscation with an alternative of paying a penalty. It appeared probable that, in the appeals before the Central Board of Revenue and the revisional applications before the Government of India, the petitioner again relied on the 15 August 1954 date and did not plead the later date of 1 November 1954. The Member of the Central Board, in disposing of the appeals, recorded that there was no doubt that the goods had been imported into Pondicherry at a time when a licence was required and that the appellant did not possess such a licence; on that basis he affirmed the Collector’s orders, modifying only the fine in lieu of confiscation by reducing it. The Government of India likewise found no reason to disturb the Board’s orders. Nevertheless, the Court held that these subsequent findings could not change the legal position that, had the importations been based on contracts concluded before 1 November 1954, the Sea Customs Act would not apply and neither the Collector nor the Central Board of Revenue would have had jurisdiction to make any confiscation or penalty order.

The Court observed that if the importations were actually effected under contracts that were concluded before 1 November 1954, the Sea Customs Act would not apply to them. Consequently, neither the Collector of Customs nor the Central Board of Revenue would possess jurisdiction to issue any confiscation order or to impose a penalty. The Court explained that when a judicial or quasi‑judicial authority lacks legal jurisdiction to pass an order, the failure of a party to present the relevant factual circumstances before that authority does not create jurisdiction for it. In the present matter, the Collector had assumed jurisdiction on the premise that the Sea Customs Act governed the transactions. However, as the Court has assumed for the purpose of analysis that the contracts were concluded before 1 November 1954, the Sea Customs Act does not govern those imports. Therefore, the Collector’s assumption of jurisdiction was misplaced and his actions were without legal authority. The Court further held that the mere fact that the Collector’s jurisdictional claim was based on an erroneous view does not alter the conclusion that he acted beyond his powers. As a result, the writ petitions would be maintainable provided that the petitioner can persuade the Court that the imports were indeed based on contracts concluded before 1 November 1954. On this basis, the Court rejected the preliminary objection raised against the petitions. The Court noted that in the earlier Universal Imports Agency case no objection was raised to the maintainability of the writ petition, and therefore that case did not address the question of the Collector’s jurisdiction. The Court observed that, so long as the law articulated in the majority judgment of that case remains valid, the Sea Customs Act must be held inapplicable to imports made under contracts concluded before 1 November 1954. Accordingly, the Court reiterated that the Collector acted without jurisdiction in the present circumstances.

The Court mentioned that Justice S K Das, in his judgment in Ujjam Bai’s Case (2) (1) [1962] 1 S. C. R. 305. (2) [1963] 1 S. C. R. 778, referred to the Universal Imports Agency decision as an illustration of a quasi‑judicial authority exercising power without jurisdiction. The Court also recalled that Justice Kapur cited the same precedent and described the situation as an instance of a lack of jurisdiction to tax transactions that the law expressly excludes from the taxing authority’s powers. The Court emphasized that the citation of the Universal Imports Agency case served to underline the principle that an authority cannot levy a tax or penalty when the statutory provision in question is inapplicable to the transaction. It further noted that this principle had been applied consistently in subsequent judgments, thereby reinforcing the view that the Collector’s actions were ultra vires. Turning to the merits of the petitions, the Court stated that the documentary materials produced by the petitioner were insufficient to establish that the contracts in the various cases were concluded before 1 November 1954. Counsel for the petitioner, identified as Mr Chatterjee, prayed for an opportunity to adduce further documentary evidence in order to persuade the Court of the truth of the petitioner’s claim. Regarding the evidentiary burden, the Court reiterated that the petitioner must establish, on a pre‑ponderance of evidence, the date of conclusion of each contract alleged to fall before the statutory cut‑off. The Court observed that the documents already placed on record did not disclose the dates of contract formation, nor did they contain any affidavits or statutory declarations addressing that issue. Consequently, the Court found that the current record did not satisfy the evidential threshold required to sustain the writ petitions.

Regarding the petitioner's request for permission to introduce additional documentary evidence, the judge reflected that he might have been inclined to grant that request. Nevertheless, he concluded that undertaking any discussion of the Chat question or revisiting the materials already placed on the record would accomplish no useful purpose, because the other members of the bench had already determined that the preliminary objection should succeed and, as a result, had not proceeded to examine the merits of the petition. The judge further observed that the same factual and procedural position existed in the thirteen other petitions filed by M/s. Pioneer Traders, which were heard together with the petitions already considered. Consequently, his conclusion with respect to those thirteen petitions was identical to the conclusion he reached in the present petition. In line with the judgment of the majority of the Court, the judge ordered that all of the petitions be dismissed and that costs be awarded. The order specified that a single set of hearing costs would be granted, meaning that the cost award would apply collectively to all of the dismissed petitions. Thus, the dismissal of the petitions was confirmed, and the decision was recorded with reference to the cited authority (1) [1961] 1 S. C. R. 305.