Posted On by &filed under Bombay High Court, High Court.

Bombay High Court
Mansukhlal Raichand Shah vs Union Of India on 26 July, 1979
Equivalent citations: 1989 (22) ECR 570 Bombay, 1989 (42) ELT 378 Bom
Bench: M Pendse


1. The petitioner is a person of Indian origin and prior to January 1973, he was a permanent resident of Kenya. The petitioner was working as a partner in the firm of M/s. Raichand Khimji & Company of Kenya from October 24, 1968. The firm, which was duly registered under the laws governing partnership in Kenya purchased a Mercedez Benz Car on July 23, 1970, for a price of 30,000/- shillings. The car was purchased in the name of the firm and was used till December 1970, by all the partners of the firm. It is the claim of the petitioner that he was exclusively using the car from January 1971 onwards. The petitioner claims that by an agreement dated 25th December 1971, the petitioner retired from the partnership concern and his retirement was to be effective from December 31, 1971. The petitioner claims that under this agreement the car was allotted to the share of the petitioner. The petitioner further claims that in fact he used the car from January 1972 onwards and paid the repair bills sometime in February 1972. The car was transferred in favour of the petitioner on May 2, 1972. The retirement of the petitioner from the partnership concern was published in the Government Gazette, Kenya, on 25th August, 1972. The petitioner, thereafter, boarded a ship and came to Bombay on January 2, 1973 with the car. On arrival the petitioner filed a bill of entry under Section 47 of the Customs Act, 1962, and claimed exemption from duty on the said car in terms of notification dated 6th April, 1972. The said notification was issued by the Ministry of Finance in exercise of the powers under Section 25(1) of the Customs Act and the notification inter alia exempted the goods mentioned thereunder from the whole of the duty of the customs leviable under the Indian Tariff Act. The notification provided that the goods imported into India by any person of Indian origin, who was a permanent resident at Kenya and who wishes to repatriate to India, for permanent settlement would be entitled to exemption on certain conditions. The notification provided that one motor car for each family for their private use, if that car was in the use of the repatriate either as owner thereof, or as a partner of a director of a partnership concern in Kenya, for not less than one year before the date of his arrival in India would be exempted from the customs duty. The petitioner claims that he is entitled to the advantage of this notification. The Customs authorities did not accept the contention and levied the duty. The appeal preferred by the petitioner to the Assistant Collector was rejected and so also to the revision preferred to the Government of India, by an order dated 15th April 1974. The petitioner has filled this proceeding under Article 226 of the Constitution to challenge the validity and legality of the imposition of customs duty.

2. Mr. Rana, the learned Counsel appearing in support of the petition contended that the Customs Authorities were in error in depriving the petitioner of the advantage of the notification. Mr. Rana submitted that the petitioner was a partner in a firm till December 31, 1971 and the car was transferred in the name of the petitioner as an owner by an agreement of retirement. The petitioner has not produced the agreement of retirement but has relied upon the notification published in the Government Gazette and contended that he retired from the partnership from 31st December, 1971. In the absence of the agreement it is not possible to accept that the car was allotted to the share of the petitioner on December 31, 1971, on retirement from the partnership firm. The learned Counsel appearing for the department is right in his submission that the car was transferred in the name of the petitioner only on May 2, 1972, and that would be the relevant date from which the petitioner can claim ownership of the car. Mr. Rana relied upon the declaration by the partners of M/s. Raichand Khimji & Company and declaration is made before the Public Notary of Kenya on January 16, 1976. By this declaration the partners asserted that the petitioner retired from the firm on December 31, 1971 and the car in question was allotted to his share on that day. It is not possible to place reliance on the declaration as the same was obtained after the disputes started between the petitioner and the department. The learned Counsel appearing for the department has on the other hand placed reliance upon the earlier declaration made by the partners on June 5, 1972. In this declaration the partners have nowhere stated that the car in dispute was allotted exclusively to the share of retiring partner on December 31, 1971. In view of this, it must be presumed that the car was allotted exclusively to the share of the petitioner only on May 2, 1972.

3. Mr. Rana then submitted that even assuming that the petitioner was owner of the car on May 2, 1972, still he would be entitled to claim advantage of the notification. The learned Counsel submitted that the conditions imposed by the notification requires that the repatriate should be the owner for not less than one year before the date of arrival in India and it does not mean that the repatriate should be an owner for a continuous period one year prior to his arrival. Mr. Rana submits that the petitioner who was a partner of the firm owned car from July 1970 for a period of more than one year and that period should be attached to the period from which he becomes the owner of the car to hold that the petitioner was entitled to the advantage of notification. It is not possible to give such construction to the terms of the notification. The wording of the notification is very clear and repatriate who desires to claim exemption must establish that he was owner of the car for a period of one year immediately to the date of his arrival. It is not open for a repatriate to contend that the department should take into consideration the period even prior to one year, of his arrival for considering the ownership of the petitioner. In my judgment the department was right in holding that the petitioner is not entitled to claim exemption under notification dated November 6, 1972 and levying of duty was perfectly legal.

4. In the result, the petition fails and the rule is discharged with costs.

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