ORDER
Jaspal Singh, J.
1. The writ seeks quashing of the order dated November 14, 1996 passed by the Assistant Commissioner of Customs, Air Cargo Unit & New Customs House (respondent No.3) and the consequent distrain/arrest of the Commercial Boeing Aeroplane (737-400 VT MGF MSN 24344) (hereinafter referred to as the Aircraft).
2. What is it that has lead to the filing of the writ petition?.
What follows is the background.
3. Under the provision of Chapter V of the Finance Act, 1989 inland air travel tax is levied on passengers embarking on journeys by air out of India. The tax so. levied is at the rate of 15% of the air fare. It is initially collected by the carrier and is required to be thereafter deposited in the schedule bank by filing T.R. 6 challan alongwith the monthly return and the prescribed form. One of such carrier happened to be M/s.Modiluft Ltd. As required, it too collected the tax from the passengers but committed default in depositing the same in the Punjab National Bank nominated for the purpose. Faced with this situation the authorities issued notices requiring the carrier to deposit the tax and to file the monthly returns. Those notices evoked no response. Consequent thereupon action was taken by the authorities by invoking section 46 of the Act read with rule 14(4) resulting ultimately in the distrain/arrest of the Aircraft in question. What needs to be noticed is that the Aircraft had been leased out by the petitioner company to M/s. Modiluft Ltd. (respondent No.4). The lease, it is claimed, was in terms of an agreement entered into between it and Modiluft Ltd. dated September 19, 1995 and was upto 28th October, 1996. The grievance of the petitioner company is that since after the expiry of the lease period the Modiluft Ltd. had ceased to have any de jure or de facto rights or control over the Aircraft and by October 30, 1996 it had duly reverted to the petitioner, it could not be subject to any distrain or arrest in consequence of default, if any, committed by Modiluft Ltd.
4. Respondents No.1 to 3, however, have taken the stand that the action taken by them was fully justified as on the day of distrain/arrest of the Aircraft it belonged to and was under the control of Modiluft Ltd. and that consequently in terms of section 46A of the Act no fault could be found with the action taken.
5. Before I proceed to examine what was urged before me, what more needs to be mentioned by way of introduction is that as per Modiluft Ltd. on the day of distrain/arrest the Aircraft did not belong to it and that it had already been handed over to the petitioner company.
This then is the bird eye view of the canvass. Time now to examine in detail the issues involved. However, before I do so let us have a look at the relevant provisions which were read and re-read during arguments.
“Carrier” is defined in clause (c) of Section 41 of the Act referred to above. It means the person or authority undertaking the carriage of a passenger on an inland journey and includes any agent, representative or other person acting on behalf of such person or authority. Section 42 provides for the levy on all passengers embarking on every inland journey at the rate of 15% of the fare paid by such passengers for every such journey. Sub Section (2) of Section 42 tells us as to how that inland air travel tax is to be collected.
6. Admittedly respondent No.4 Modiluft Ltd. was the carrier and was authorised by the Central Government to collect the inland air travel tax and to pay the same to the credit of the Government under sub section (2) of section 42.
7. What happens when the inland air travel tax is collected but is not paid to the credit of the Central Government? As per section 43A of the Act if the carrier so fails he shall pay an interest on the amount of tax not so paid for the entire period for which payment of such tax has been delayed, at such rate, not below 20% and not exceeding 30% per annum as the Central Government may by notification in the Official Gazette specify in this behalf. Admittedly the rate so specified is 20%. Besides this liability to pay interest every carrier or every person who fails to pay the inland air travel tax to the credit of the Central Government under sub section (2) of section 42 shall also be liable in addition to the payment of such tax and the interest leviable thereon to pay penalty which as per sub section (3) of section 46 of the Act shall not be less than one-fifth but which may extend to three times of the amount of the tax not so paid to the credit of the Central Government.
8. And, what happens when a carrier or other person fails to pay inland air travel tax or interest or penalty as required by sub-section (2) of section 42, section 43A or section 46A? In such a situation the authorities may resort to action as provided in section 46 of the Act and, since it was section 46 of the Act which witnessed lot of fire work, let me, for a proper appreciation of the whole matter reproduce the same. It runs as under:
“46A(1). Where the inland air travel tax or interest or penalty is not paid by a carrier or other person as required under the provisions of sub section (2) of section 42, section 43A or section 46, the authority specified in the rules (hereinafter referred to as the authority) may, after the tax, interest or penalty has been determined under the rules, proceed to recover the amount of such tax, interest or penalty by one or more of the modes specified in sub-section (2) sub section (3) or sub-section (4).
(2) The authority may require any person from whom any amount is due to the carrier or other person, to deduct the tax, interest or penalty so determined from the said amount and such person shall comply with any requisition by the authority and shall pay the amount so deducted to the credit of the Central Government.
Provided that nothing in this sub-section shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 60 of the Code of Civil Procedure, 1903.
(3) The authority may prepare a certificate signed by it specifying the amount due and send it to the Collector of the district in which the carrier or other person owns property or resides or carries on business and the said Collector, on receipt of such certificate, shall proceed to recover from the said carrier or other person, the amount specified thereunder as if it were an arrears of land revenue.
(4) The authority may distrain or arrest any aircraft and any other property belonging to or under the control of the carrier or other person, as the case may be, and detain the same until the tax, interest or penalty so determined is paid; and in case any part of the tax, interest or penalty or of the cost of the distress or arrest or of the keeping of the aircraft or other property distrained or arrested, remains unpaid for the space of thirty days next after any such distress or arrest, may cause the said aircraft or other property to be sold and with the proceeds of such sale may satisfy the tax, interest or penalty and the costs including the cost of sale remaining unpaid, and shall render the surplus, if any, to the carrier or other person.”
9. It may also be mentioned that there are inland air travel Rules as well. These Rules show that the tax is to be collected by a carrier authorised under sub-section 2 of section 42 of the Act at the time of issuing of ticket to passengers or his agent or embarking on inland journey.
10. As per Rule 5(2) where any tax collected by a carrier has not been paid or has not been paid in full into the treasury, the Assistant Collector of Customs may, within a period of two years from the relevant date, serve notice upon the carrier concerned requiring him to show cause as to why he should not pay the amount specified in the notice and the interest, if any, payable thereon and the Assistant Collector of Customs, after considering the representation, if any, made by the carrier on whom the notice is so served under sub rule (1) shall determined the amount of tax to be paid by the such carrier.(not being in excess of the amount specified in the notice) And thereupon the carrier shall pay the amount of tax so determined and the interest, if any, payable thereon. (See Sub rule (3) of rule 5).
11. Rules 9 and 10 go to show that in every case in which any person is liable to penalty under section 46 of the Act, such penalty may be adjudged by the Assistant Collector of Customs only after such person is informed of the grounds on which it is proposed to impose a penalty and such person shall not only be given an opportunity of making a representation against the grounds for imposition of penalty mentioned therein but shall also be given a reasonable opportunity of being heard in the matter.
12. The Rules provide for an appeal as well and since I will be dealing with the effect of that Rule on the maintainability of the writ petition I may, as well, reproduce that Rule. It is as under:
“11.Appeal. (1) Any person aggrieved by any decision or order passed under the Act, or these rules by the Assistant Collector of Customs may, within three months from the date of communication of such decision or order, appeal to the Collector of Customs (Appeals) Delhi:
provided that the appellate authority may, if satisfied that the appellant was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months, allow it to be presented within a further period of three months.
(2) The appellate authority may, after giving an opportunity to the appellant to be heard if he so desires, and after making such inquiry as may be necessary pass such order as it thinks fit, confirming modifying or annulling the decision or order appealed against:
provided that no order enhancing any penalty shall be passed by the appellate authority;.
Provided further that where the appellate authority is of the opinion that any tax has not been paid or has not been paid in full into the treasury under rule 6 or has been erroneously refunded under sub-rule (4) of rule 4, no order directing the payment of such tax shall be passed unless the appellant is given notice within the time limit specified in sub-rule (2) of rule 5 to show cause against the proposed order.”
13. What further needs to be noticed is Rule 14. It relates to recovery of sums due to the Government. This is what it says:
“14. Recovery of sums due to Government-(1) Where any tax, interest or penalty is not paid by a carrier, the Assistant Collector of Customs may, after the tax, interest or penalty has been determined under the rules, proceed to recover the amount of such tax, interest or penalty by one or more of the modes specified in sub-rule (2), sub rule (3) or sub-rule (4).
(2) The Assistant Collector of Customs may require any person, from whom any amount is due to the carrier, to deduct the tax, interest or penalty so determined from the said amount and such person shall comply with the requisition by the Assistant Collector of Customs and shall pay the amount so deducted to the credit of the Central Government:
Provided that nothing in this sub-rule shall apply to any part of the amount exempt from attachment in execution of a decree of a civil court under section 6 of the Code of Civil Procedure, 1903 (5 of 1908).
(3) The Assistant Collector of Customs may prepare a certificate signed by him specifying the amount due and send it to the Collector of the district in which the carrier owns property or resides or carries on business and the said Collector, on receipt of such certificate, shall proceed to recover from the said carrier the amount specified thereunder as if it were an arrear of land revenue.
(4) On a specific authorisation being granted by the Collector of Customs, the Assistant Collector of Customs may distrain or arrest any aircraft and any other property belonging to, or under the control of the carrier and detain the same until the tax, interest or penalty so determined is paid; and in case any part of the tax, interest or penalty or of the cost of the distress or arrest or the keeping of the aircraft of other property distrained or arrested, remains unpaid for the space of thirty days next after any such distress or arrest, may cause the said aircraft or other property to be sold and with the proceeds of such sale may satisfy the tax, interest or penalty and the costs including the cost of sale remaining unpaid, and shall render the surplus, if any, to the carrier.”.
14. I have referred to Rule 11 which provides for appeal because it was contended by Mr.Wali that the Rules having provided for appeal and revision the writ petition ought to be dismissed on this short ground alone.
15. Undoubtedly the jurisdiction of the High Court under Article 226 of the Constitution is couched in vide terms and the exercise thereof is not subject to any restriction except territorial restrictions which are expressly provided. But then, resort to the jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. The rule is that a party who applies for the issue of a writ’ should, before he approached the court, have exhausted other remedies open to him under the law. Time and again the Supreme Court has warned, if I may use this expression, that High Court should be slow in encouraging parties to circumvent the special provisions made providing for appeals and revisions in respect of orders which they seek to challenge by writ petition under Article 226. This would be more so where the High Court may have to enter upon a determination of questions which call for a detailed examination of evidence and questions of fact. Should I then proceed to uphold the objection raised by Mr.Wali and dismiss the writ petition on this short ground alone. I would have, perhaps, but for the fact that when the matter came up before the Division bench at the time of admission the learned Judges, in their wisdom felt that the points raised needed to be determined and as such issued rule. True, they did not direct themselves to the existence of Rule 11 which provides for appeal and to rule 12 which invests the Collector of Customs with power of revision. But then rule having been issued by the Division Bench with the observations that the points raised in the writ petition required consideration and consequent thereupon my having heard arguments on merits, I think it would neither augur well for judicial discipline nor would it serve interests of justice to throw away the petition on this ground and at this stage. It is this which makes me go ahead with the writ petition.
16. The perusal of the writ petition would go to show that the impugned order of November 14, 1996 of distrain/arrest of the aircraft stands challenged on the following grounds: (a) the petitioner was never in default; (b) the petitioner had no obligation to discharge the liability; (c) the impugned order had been passed without any notice to the petitioner or without giving any hearing to it; (d) the lease had expired and the petitioner had already resumed possession of the Aircraft by October 30, 1996 and lastly, (e) the authorities cannot distrain or arrest property belonging to other parties.
17. It is the case of the petitioner that the Aircraft had been leased out by it to Modiluft Ltd. by means of an agreement. The petitioner does not dispute that Modiluft Ltd. was carrier within the meaning of the Act and that it had collected tax from the passengers embarking on inland journeys in the aircrafts used by Modiluft Ltd.. Even M/s.Modiluft Ltd. has not denied in its counter that the tax was being collected and that there was default in complying with Rules 6 and 7. Ofcourse, M/s. Modiluft Ltd. has taken the plea that the non-deposit of tax and/or delayed deposit of tax was on account of certain defaults committed by M/s. Dewtsche Lufthansa A.G. which had entered into various agreements with it. What further needs to be noticed is that as per M/s. Modiluft it did receive a notice dated 26/27th September, 1996 from the Customs Department about the unpaid air travel tax dues. But then more significant is the fact that it was not argued on behalf of M/s.Modiluft Ltd. that the recoveries sought were not legal or that the Act or the Rules framed thereunder had not been followed or that there was no obligation on its part to discharge or that it had not been given any hearing.
18. Under Rule 6, the tax collected by the carrier in any month is required to be deposited in the Government treasury before the expiry of thirty days from the end of the month in which the tax is collected. As per rule 7 the carrier is required to file a monthly return alongwith the receipt copy of Bank challan in the prescribed form before the expiry of thirty days from the end of the month, i.e. simultaneously with the deposit of tax. Non filing or late filing of the return renders the carrier liable for penal action as would be borne out from rule 8(a)(2) and as far as non deposit or delayed deposit of tax is concerned it renders the carrier liable for penal action under section 46 of the Act. Admittedly as per Notification No. 4/94 dated August 12, 1994 interest is also leviable on delayed payment at the rate of 20% per annum. The carrier did not observe any of the Rules noticed above and that is why the authorities had to resort to section 46A read with Rule 14 distraining the Aircraft.
19. M/s. Modiluft Ltd. being the carrier, action was to be taken against it. There is nothing on the record to show that the department was made aware of the agreement entered into between the petitioner company and M/s. Modiluft Ltd. In any case neither with regard to the taxes recovered from the passengers embarking on inland journeys nor with regard to filing of monthly returns or the deposit of such taxes had the petitioner company any role to play. It was a matter between the department and the carrier and the department very rightly proceeded only against the carrier.
20. It was argued by Mr.Anand that the department did not follow the mandate of Rule 5(3) or the mandate of Rule 14 and that consequently it could not proceed under section 46A. The mandate of these Rules, as per Mr.Anand, is that wherever any tax has been collected by a carrier and has not been paid a show cause notice has to be served on the carrier and it is only after considering the representation, if any, made by the carrier that the amount of tax is to be determined alongwith interest, if any, payable thereon, and that, recovery can be made only after the tax, interest or penalty has been determined under the Rules. The argument was that neither any show cause notice had been served nor any order determining the tax, interest, or penalty had been passed and that consequently no action could be taken with regard to the amounts alleged to be due.
21. It may be noticed that in the writ petition it is no where alleged by the petitioner that the impugned order is bad on account of want of any such determination under the Rules. What is equally important to notice is that even the carrier that is M/s. Modiluft Ltd. has nowhere taken such a stand. Rather, as noticed above, the carrier has not challenged the claim but has only taken the stand that the taxes etc. could not be paid on account of the lapse on the part of M/s.Lufthansa and that, in any case, on the relevant date the Aircraft was with the petitioner company. In any case I do not think it is open to the petitioner company to make any such challenge. More so when there is no such challenge by the carrier itself. Of course, no notice was given to the petitioner company with regard to the claim. There was no such requirement. It was a matter between the authorities concerned and the carrier. All said and done respondents No.1 to 3 have taken a stand that the department had issued various show cause notices to M/s. Lufthansa in accordance with Rules. One such show cause notice is of 4th June, 1996. The other is of July, 1996. There are other show cause notices on record. (See Annexures R-2 to R-14). Reference in this connection may also be made to R-16 and R-18. No objection to all these notices was taken by M/s. Modiluft Ltd. M/s. Modiluft Ltd. itself has admitted having received show cause notice. What is more, and as already noticed above, M/s. Modiluft has not challenged the legality of the claim.
22. It was further argued by Mr.Anand that at the time when the Aircraft in question was detained it was not in possession of M/s. Modiluft Ltd. and that as its possession had reverted to the petitioner company it was neither at that time “belonging to” nor “under the control of” the carrier and as such it could not be distrained/arrested. In this connection my attention was drawn to sub section (4) of Section 46A of the Act and so also to sub rule (4) of Rule 14 of the Rules. The said provisions go to show that the authority may distrain or arrest any aircraft “belonging to” or “under the control of” the carrier. I may also at this stage notice that as per Mr.Anand the words “belonging to” and “under the control of” would go to show that the carrier must have, at the relevant time, more than mere possession of the Aircraft.
23. “Belonging to” does not seem to me to be a technical term of legal art. In Webster “belong to” is explained as meaning inter alia “to be owned by, be the possession of”. As per Oxford Dictionary “belong” means: “To be the proprietor or rightful possession of”. The first limb of the definition communicated in Webster’s and so also in the Oxford Dictionary may not be applicable in the case in hand but then though the word “belong” no doubt is capable of denoting an absolute title, let us not confine it to connoting that sense. Even that which is in a person’s possession as of right could be signified by that word. In any case, the sub section and the sub rule in question speak of “control” as well and though a word of wide and ambiguous import, “control” is wide enough to include many types of possessions which are not commensurate with full ownership and thus these words cannot in a legal sense be taken to mean as ownership of property only..
24. However, the question still remains. Did the Aircraft “belong” to or was it “under the control” of M/s. Lufthansa Ltd. on November 14, 1996? As already noticed above the case of the petitioner is that its lease agreement with M/s. Modiluft Ltd. having expired the Aircraft had reverted back to it on 0001 hours on October 30, 1996. In this connection my attention was drawn to Annexure C and D, letters of October 25, 1996. By Annexure D addressed by the petitioner it was asserted that Modiluft could not fly the Aircraft after midnight on October 29, 1996. By that letter one Philip Whitehead was appointed as petitioner’s agent and was requested to exercise control over the Aircraft on behalf of the petitioner. The same day Philip Whitehead sent a message to Peter Simpson and empowered him to ensure that the Aircraft did not fly with effect from 0001 hours on the 30th October, 1996. He was also directed to continue to maintain the Aircraft in readiness for service pending further instructions. After having sent that message Philip Whitehead informed the director of the petitioner company on 28th October, 1996 itself that instructions had been passed to “our engineers” to ensure that the Aircraft “does not fly after 0001 hours on 30th October, 1996 until further notified by Air UK. What do these letters show? They merely show that the petitioner company had merely empowered Philip Whitehead to ensure that the Aircraft did not fly after 0001 hours on the 30th October, 1996 and that in turn Philip Whitehead had asked Peter Simpson to ensure “that the Aircraft does not fly until further notice”. How did peter Simpson ensure it? We do not know. We also do not know as to what actual steps were taken by him to take control of the Aircraft or its possession. There is no document on the record to show that Modiluft Ltd. had handed over actual physical possession/control of the Aircraft to the petitioner company. The lease agreement entered into between the petitioner and M/s. Modiluft Ltd. deals with the return of the Aircraft. Paragraphs 16.1, 16.2, 16.3, 16.4 and 16.5 of the said agreement show that the Aircraft could be redelivered only after fulfillling the main conditions like removal from the registry of civil airport, final inspection, two hours test flight, fuel receipt and certificate of redelivery. There is nothing on the record to prove that any of those conditions was fulfillled. There is not even an affidavit of Philip Whitehead to the effect that the possession/control of the Aircraft has been taken over. On the other hand the detention memo of November 14, 1996 goes to show that it was received by one A.Jacob’s General Manager (Q.C.) and B.S.Yadav, an executive engineer of M/s.Modiluft. The sealing certificate is also signed by the representative of M/s. Modiluft. It further appears that after the distrain/arrest of the Aircraft a request was made by none other but by M/s. Modiluft Ltd. for permission to have access to the Aircraft, and to carry out routine maintenance work including engine run up and taxi. That letter is Annexure R-21 and is from one B.S.Yadav, General Manager, Maintenance of M/s.Modiluft Ltd. It is dated 18th November, 1996. This being the position it cannot be said that the Aircraft at the relevant time did not belong to or was not under the control of M/s.Modiluft Ltd.
25. It was last contended that even if it be assumed that the Aircraft belonged to or was under the control of Ms. Modiluft Ltd. at the relevant time, the lease agreement between the petitioner and M/s.Modiluft Ltd. had expired, M/s.Modiluft Ltd. had thereby ceased to have any saleable interest in the Aircraft, and, as such, the authorities concerned cannot put the Aircraft to sale etc. with a view to make recoveries allegedly due from M/s. Modiluft Ltd.
26. As already noticed, Union of India was not a party to any agreement entered into between the petitioner and Ms. Modiluft Ltd. It was not even informed about the terms of the agreement. The parties must have entered into the agreement with full knowledge of the Act and the statutory Rules framed thereunder which clearly provide for distrain\arrest of an Aircraft belonging to or under the control of the carrier. The provision for distrain\arrest of an Aircraft “belonging to” or under the “control” of the carrier, sends the message loud and clear and it is that the carrier need not necessarily have any proprietary or saleable interest in such an Aircraft. The petitioner must be assumed to have known this legal position at the time when it entered into the agreement and also when, in consequence of the said agreement, it left the Aircraft under the control of Ms. Modiluft Ltd. The provision has a rationale. Once a carrier is authorised to collect Inland Travel Tax from the passengers, the only guarantee to recover the same from the defaulting carrier would be the Aircraft or other property belonging to or under its control. Neither the Act nor the Rules speak of the need for any saleable interest of the carrier in such aircraft and purposely so. What is not in the Act or the Rules cannot be imported from other enactments or Rules under them, more so when the Act or the Rules in question are designed to meet certain contingencies or happenings like the present one where the Carrier has swallowed Crores of rupees. If the plea of Mr.Anand is accepted the authorities would be left in a lurch and, perhaps, without remedy by parties like M/s.Modiluft Ltd. I, therefore, discern nothing repugnant in the Act or in the relevant Rules.
27. For the reasons recorded above, I find no merit in the writ petition. The same is hereby dismissed but with no order as to costs.