CASE NO.: Appeal (crl.) 192 of 1961 PETITIONER: SACHIDANANDA BANERJEE A.C.C. CALCUTTA RESPONDENT: SITARAM AGARWALA DATE OF JUDGMENT: 05/10/1965 BENCH: K. SUBBARAO & K.N. WANCHOO & J.C. SHAH & S.M. SIKRI & V. RAMASWAMI JUDGMENT:
JUDGMENT
With
Criminal Appeal Nos.183 of 1962 and 123 of 1962 with Criminal Appeal Nos.
41-42 of 1964
The Judgment was delivered by K. SUBBA RAO, J
Per K. Subba Rao, J. I regret my inability to agree on the construction of
Section 167(81) of the Sea Customs Act, 1878. The facts have been stated by
my learned brother, Wanchoo, J., and I need not restate them. Clause (81)
of Section 167 of the Sea Customs Act reads :
“If any person knowingly, and with intent to defraud the Government of any
duty payable thereon, or to evade any prohibition or restriction for the
time being in force under or by virtue of this Act with respect thereto
acquires possession of, or is in any way concerned in carrying, removing,
depositing, harbouring, keeping or concealing or in any manner dealing with
any goods which have been unlawfully removed from a warehouse or which are
chargeable with a duty which has not been paid or with respect to the
importation or exportation of which any prohibition or restriction is for
the time being in force as aforesaid”; …… The penalty clause thereof
reads :” such person shall on conviction before a Magistrate be liable to
imprisonment for any term not exceeding two years or to fine, or to both”
. This clause introduces a criminal offence. It is triable by a Magistrate.
The person convicted is liable to imprisonment for a term not exceeding two
years or to fine or to both. The rule of construction of such a clause
creating a criminal offence is well settled. The following passage from the
judgment of the Judicial Committee in The Gauntlet (1872) L.R. 4 P.C. 184,
191 may be quoted :
“No doubt all penal statutes are to be construed strictly, that is to say,
the court must see that the thing charged as an offence is within the plain
meaning of the words used, and must not strain the words on any notion that
there has been a slip, that there has been a casus omissus, that the thing
is so clearly within the mischief that it must have been intended to be
included, and would have been included if thought of. On the other hand,
the person charged has a right to say that the thing charged, although
within the words, is not within the spirit of the enactment. But where the
thing is brought within the words and within the spirit, there a penal
enactment is to be construed, like any other instrument, according to the
fair common-sense meaning of the language used, and the court is not to
find or make any doubt or ambiguity in the language of a penal statute,
where such doubt or ambiguity would clearly not be found or made in the
same language in any other instrument.”
The clause, therefore, must be construed strictly and it is not open to the
court to strain the language in order to read a casus omissus. The court
cannot fill up a lacuna : that is the province of the Legislature. The
second rule of construction equally well settled is that a court cannot
construe a section of a statute with reference to that of another unless
the latter is in pari materia with the former. It follows that decisions
made on a provision of a different statute in India or elsewhere will be of
no relevance unless the two statutes are in pari materia. Any deviation
from this rule will destroy the fundamental principle of construction,
namely, the duty of a court is to ascertain the expressed intention of the
Legislature. I am led to make these general remarks, as an attempt was made
by the learned Counsel for the appellant to persuade us to interpret the
words of the clause in the light of the decisions of the English courts on
an analogous provision in an Act intended to prevent smuggling. It is not
possible to state that the English and the Indian Acts are in pari materia,
though their general purposes are the same and though there is some
resemblance in the terminology used in them. The English decisions,
therefore, must be kept aside in construing the relevant provisions of the
Indian statute.
2. Now coming to the relevant clause, the following material ingredients
constitute an offence thereunder : (1) a person must have a knowledge that
there is a prohibition or restriction against doing any of the enumerated
acts with respect to goods imported or exported contrary to the restriction
or prohibition imposed against their import or export; (2) he must have
acted with an intention to evade such a restriction or prohibition; there
is no offence unless the said two elements of mens rea namely, knowledge
and intention, are established. It is not enough if a person has only
knowledge of such a prohibition or restriction; in addition he shall have
the intention to evade such a prohibition or restriction against the import
or export of goods, as the case may be. A person who knowingly purchases
smuggled goods from an importer cannot have an intention to evade a
prohibition against import, for the prohibited goods have already been
imported. A person who receives goods with the knowledge that they are
stolen goods cannot possibly have an intention to commit theft, for the
theft has already been committed, though he may have the intention to
receive the stolen goods. Knowledge of an offence cannot be equated with an
intention to commit the offence. Such a construction effaces the
distinction between the two distinct elements of mens rea, knowledge and
intention, laid down in the clause.
3. The only possible way out of the inevitable effect of the plain words
used in the said clause is to give a meaning to the expression “import”
which the word cannot bear. To accept the argument of the learned Counsel
for the appellant is to hold that the process of import continues through
innumerable transactions between different persons without reference to
time or place and whether the goods existed or ceased to exist. Ordinarily
the process of import commences the moment the goods cross the customs
barrier. That is the meaning given to that word by this Court in J. V.
Gokal & Co. v. Assistant Collector of Sales-Tax – 1960 (2) SCR 852, 857,
858. But the said clause gives that expression a wider meaning. The
enumerated dealings with the goods prohibited or restricted covered a field
beyond the point of import normally understood by the expression. But all
the said dealings have an intimate nexus with the import of goods under the
Act. Goods may be imported through the machinery provided under the Act;
yet, a person may evade the restrictions by fraud or otherwise. Goods may
also be illegally imported into India outside the machinery so provided.
This is done stealthily at different points of the vast sea line of our
country. But in either case different persons may take part in carrying,
removing, depositing, harbouring, keeping or concealing or in any other
manner dealing with any goods so imported. They are the necessary acts to
complete the process of import. Such acts may be done by persons between
whom there was a pre-arranged plan before the goods were brought into
India. Different persons may also take part in such dealings with the
requistite knowledge or intention for the purpose of completing the import
vis-a-vis the importer. Under the said clause, therefore, the process of
import does not end immediately the prohibited goods are brought into
India, but continues till the goods are delivered to the importer,
physically or constructively. The importer who smuggles the goods is
certainly guilty under the clause, because he imports them in derogation of
the prohibition or restriction. Any person who deals with the goods in the
context of the import as explained above in any one of the connected ways
with the requisite knowledge and intention would equally be guilty of the
offence. But the subsequent transactions in regard to the said goods are
outside the process of the enlarged definition of the expression “import”.
It would be incongruous to hold that a purchaser from the importer or a
purchaser from the said purchaser, and so on, has an intention to evade the
prohibition or restriction, though he may have the intention to receive the
smuggled goods. How does such a purchaser evade the prohibition against
import which has already been effected ? The contrary construction will
lead to the anomaly of a purchaser, even after 20 years of the import,
being attributed the intention to evade the prohibition against import.
Suppose before the purchase of the goods by a stranger the prohibition was
lifted. In such a situation, does the purchaser commit an offence ? If the
contention is sound, he does. This illustrates that the crux of the offence
is the import of goods with the requisite intent contrary to the
prohibition. For the said reasons the intention to contravene the
prohibition cannot be imputed to subsequent dealers in the said goods after
the importer parts with them.
4. It is said that if the construction suggested by the learned Counsel for
the appellant be not accepted, many a person who purchases smuggled goods
will escape punishment. A fair reading of the Act discloses that the Act
makes a distinction between a customs offence and a criminal offence. The
smuggled goods in the hands of whomsoever they are found can be confiscated
and, therefore, the States can always trace the smuggled goods to their
ultimate destination. The smuggler and the persons concerned in the
smuggling are guilty of both customs and criminal offences. The
Legislature, either intentionally or otherwise, has not made the dealings
in such goods by persons other than those mentioned in Clause 81 of Section
167 of the Sea Customs Act a criminal offence. When the clause does not
bring them in, the court cannot, by construction, bring such a class of
persons within the said clause. It is for the Legislature to do so and we
are told that it has recently amended the section.
5. I, therefore, agree with the High Court that it has not been established
that the respondents have dealt with the goods with an intention to evade
any restriction or prohibition imposed on the import of the said goods.
In the result, all the appeals should be dismissed.
In Criminal Appeal Nos. 192 of 1961 and 183 of 1962
6. [Judgments per : Wanchoo, J.]. – These two appeals on certificates
granted by the Calcutta High Court arise out of the same trial of the two
respondents for an offence under Section 167(81) of the Sea Customs Act,
No. 8 of 1878, (hereinafter referred to as the Act) and will be dealt with
together. The facts are not in dispute and have been found as below.
7. On August 25, 1958, a constable attached to the Detective Department,
noticed Sitaram Agarwala respondent and another person at the crossing of
Hariram Goenka street and Kalakar street. The constable had certain
information with respect to these persons and decided to follow them. These
two persons got into a bus and the constable also boarded the same bus.
They got down at the junction of B. K. Pal Avenue and J. M. Avenue and so
did the constable. They then went to Narendra Dev Square which is a kind of
park. The constable kept watch over them from a distance. After a short
time these two men came out of the park and stood on the western foot-path
of J. M. Avenue. Shortly thereafter a small taxi came there from the South
and stopped. Respondent Wang Chit Khaw (hereinafter referred to as the
Chinese accused) was in that taxi. He came down and shook hands with
Sitaram Agarwala and the three got into the taxi. When the taxi was about
to start, the constable disclosed his identity to the driver and asked him
to stop. He also asked the three persons to accompany him to the thana.
Thereupon Sitaram Agarwala and the other man who was with him came out of
the taxi and tried to run away. The constable cought hold of them and put
them in the police wagon which happened to come up just then. The Chinese
accused also tried to run away. The constable appealed to the members of
the public to help him in securing the Chinese accused and he was secured
with the help of two college students and one other youngman. As the
Chinese accused was running away he threw away three packets which were
picked up. In the meantime Sergeant Mukherjee came there on a motor-cycle
from the opposite direction and detained the Chinese accused. The three
packets thrown away by him were also handed over by the three youngmen to
the Sergeant. Thereafter all the three persons who were arrested were taken
to the police station along with the three packets. It was found in the
police station that the three packets contained 23 gold bars of about
sixteen tolas each with Chinese inscription thereon. On search of the
person of Sitaram Agarwala, a sum of Rs. 49, 320/- in notes of various
denomination was found on him. The customs authorities were informed and
took charge of the gold bars. Eventually, the gold bars were confiscated
under Section 167(8) of the Act and thereafter the police after
investigation prosecuted the two respondents and the third man in respect
of the offence under Section 167(81) of the Act.
8. These facts were held to be proved by the Magistrate so far as the
Chinese accused and Sitaram were concerned. He therefore convicted them.
The case against the third man was held to be doubtful and he was
acquitted. The two convicted persons then filed separate appeals in the
High Court. The High Court accepted the findings of fact recorded by the
learned Magistrate and came to the conclusion that on the facts proved
there was no doubt that Sitaram had gone with a large sum of money to meet
the Chinese accused in order to purchase the gold bars which had been
recovered from the packets thrown away by the Chinese accused.
9. The High Court then addressed itself to the question whether on the
facts proved the conviction of the two respondents could be sustained in
law. The charge against Sitaram Agarwala was that on the date in question
and at the time and place which appeared in the evidence he had gone there
by previous arrangement to purchase the smuggled gold bars from the Chinese
accused and was therefore concerned in dealing with smuggled gold and
thereby committed an offence under Section 167(81) of the Act. The charge
against the Chinese accused was that he had in his possession 23 smuggled
gold bars which he wanted to sell to Sitarm Agarwala and another person by
previous arrangement and as such he was concerned in dealing with smuggled
gold and was guilty under Section 167(81) of the Act. So far as Sitaram
Agarwala was concerned, the High Court held that by merely going to the
park in order to purchase smuggled gold by previous arrangement, it could
not be said that Sitaram Agarwala was in any manner dealing with smuggled
gold. The High Court was of the view that there was a mere attempt to
purchase smuggled gold on the part of Sitaram Agarwala, but as the purchase
was not completed it could not be said that Sitaram Agarwala was concerned
in dealing with the smuggled gold. The High Court therefore ordered the
acquittal of Sitaram Agarwala respondent. As to the Chinese accused, the
High Court held that though he was found in possession of smuggled gold,
which he knew to be such, and had attempted to sell that gold
surreptitiously, Section 167(81) required knowledge that the article in
question was smuggled and intention to defraud the Government of any duty
payable thereon or to evade any prohibition or restriction for the time
being in force under or by virtue of the Act. In view of the intent
necessary, the High Court was of the view that before a person could be
convicted under Section 167(81) it must be shown that he was either a
direct importer or concerned in some way in the import of the smuggled
article. In other words, the High Court thought that the section dealt with
goods while they were being smuggled; it did not include in its scope a
person who subsequently obtained the smuggled goods and then dealt with
them, though the smuggled goods themselves might be liable to confiscation
when seized. Consequently the High Court ordered the acquittal of the
Chinese accused also. As the interpretation of Section 167(81) was
involved, the High Court granted certificates; and that is how the two
appeals have come up before us.
10. The facts are not in dispute in this case and have been set out above.
Thus the question that arises before us is the interpretation of Section
167(81) and two aspects of that section have to be considered. The first
aspect is the ambit of the words
“in any way concerned in any manner dealing with any goods with respect to
the importation of which any prohibition or restriction is for the time
being in force as aforesaid”
. The second aspect is with respect to the intent necessary under the
section and whether that intent can arise where smuggling is over and
smuggled goods are in the possession of persons other than those actually
concerned in the smuggling and are then dealt with by them in some manner
or other.
11. We may briefly indicate the scheme of the Act in order to appreciate
the purpose behind Section 167(81). The object of the Act is to provide
machinery for the collection inter alia of import duties and for the
prevention of smuggling. With that object customs frontiers are defined,
(Ch. I); customs officers are appointed with certain powers, (Ch. II);
ports, wharves, customhouses, warehouses and boarding and landing-stations
are provided for, (Ch. Ill); prohibitions and restrictions of imports and
exports are envisaged, (Ch. IV); levy of and exemption from custom duties
and the manner in which it has to be done is provided, (Ch. V); drawbacks
i.e. refunds are provided in certain circumstances, (Ch. VI); arrival and
departure of vessels is controlled, (Ch. VII and Ch. VIII); provision is
made for the discharge of cargo, (Ch. IX), and clearance of goods for home
consumption (Ch. X); provision is also made for warehousing and
transhipment., (Chapters XI, XII); provisions are also made for exportation
or shipment and re-landing (Ch. XIII); special provisions have been made
relating to spirit (Ch. XIV) and coasting trade (Ch. XV). Then comes Ch.
XVI dealing with offences and penalties. Offences enumerated in Ch. XVI are
of two kinds; first there are contraventions of the Act and rules
thereunder which are dealt with by customs officers and the penalty for
which is imposed by them. These may be compendiously called customs
offences. Besides these there are criminal offences which are dealt with by
Magistrates and which result in conviction and sentence of imprisonment
and/or fine. These two kinds of offences have been created to ensure that
no fraud is committed in the matter of payment of duty and also to ensure
that there is no smuggling of goods, without payment of duty or in defiance
of any prohibition or restriction imposed under Ch. IV of the Act.
12. It is necessary for our purpose to set out two provisions of Section
167 which is in Ch. XVI. These are Section 167(8) and 167(81). Section
167(8) is in these terms :-
“167. The offences mentioned in the first column of the following schedule
shall be punishable to the extent mentioned in the third column of the same
with reference to such offences respectively :-
———— Offences Section of this Penalties Act to which Offence has
reference
———– (8) If any goods, 18 & 19 such goods shall be liable to the
importation or confiscation; and any person exportation of which concerned
in any such offence is for the time being shall be liable to a penalty not
prohibited or exceeding three times the value restricted by or under of the
goods, or not exceeding Chapter IV of this Act, one thousand rupees.”
ibe imported into or exported from India contrary to such prohibition or
restriction; or etc. etc.
Section 167(81) with which we are particularly concerned reads thus :
———-
“(81) If any person knowingly General such person shall and with intent to
defraud the on conviction Government of any duty payable before a thereon,
or to evade any Magistrate be prohibition or restriction for the liable to
time being in force under or by imprisonment for virtue of this Act with
respect any term not thereto acquires possession of, or exceeding two is in
any way concerned in years or to fine, or carrying, removing, depositing to
both;”
harbouring, keeping or concealing or in any manner dealing with any goods
which have been unlawfully removed from a warehouse or which are chargeable
with a duty which has not been paid or with respect to the importation or
exportation of which any prohibition or restriction is for the time being
in force as aforesaid; orxx xx xx
It will be seen that Section 167(8) deals with what we have called customs
offences while Section 167(81) deals with criminal offences. It is well-
settled by the decisions of this Court that goods which have been imported
against the prohibition or restriction imposed under Ch. IV of the Act are
liable to confiscation at any time after import and this liability extends
even in the hands of third persons who may not have had anything to do with
the actual import. So long as it is proved that the goods had been imported
against the restrictions imposed under Chapter IV, the goods remain liable
to confiscation whenever found even if this is long after the import is
over and even if they are in possession of persons who had nothing to do
with the actual import. It is also well-settled by the decisions of this
Court that the second part of the penalty relating to any person applies
only to a person concerned in the importation or exportation of the goods
and does not apply to a person found in possession of the smuggled goods
who had nothing to do with the importation or exportation thereof : (see
Shivanarayna Mahato v. Collector of Central Excise and Land Customs) C.A.
288 of 1964, decided on August 14, 1965. 1999-(110)-ELT -0292 -SC
SACHIDANANDA BANERJEE, A.C.C., CALCUTTA v. SITARAM AGARWALA.
Criminal Appeal Nos. 192 of 1961, 183 of 1962 and 123 of 1962 with Criminal
Appeal Nos. 41-42 of 1964 (On appeals from Calcutta High Court Criminal
Appeal Nos. 360 of 1959 and 345 of 1959, decided on 11-8-1961, Crl.
Revision No. 137 of 1960, decided on 29-8-1961 and Bombay High Court
Criminal Appeal Nos. 1640 of 1962 and 1359 of 1962, decided on 25-3-1963
and 13-2-1963 respectively), decided on October 5, 1965.
IN THE SUPREME COURT OF INDIA
CONSTITUTION BENCHREPRESENTED BY : S/Shri Niren De, Addl. Solicitor General
of India, D. R. Prem, Senior Advocate (S/Shri R. H. Dhebar and B. R. G. K.
Achar, Advocates with them) and Shri Yogeshwar Prasad, for the Appellants.
S/Shri S. C. Mazumdar, M/s. P. K. Chatterjee and S. P. Varma, M/s. B. M.
Mistry and P. R. Vakil, M/s. J. B. Dadachanji. O. C. Mathur and Ravinder
Narain, Advocates of M/s. J. B. Dadachanji & Co., M/s. B. R. Agarwala, G.
L. Advocate and H. K. Puri, Advocates for M/s. Gagrat and Co., for the
Respondent.
[Judgment per : K. Subba Rao, J.]. – I regret my inability to agree on the
construction of Section 167(81) of the Sea Customs Act, 1878. The facts
have been stated by my learned brother, Wanchoo, J., and I need not restate
them.
Clause (81) of Section 167 of the Sea Customs Act reads :
“If any person knowingly, and with intent to defraud the Government of any
duty payable thereon, or to evade any prohibition or restriction for the
time being in force under or by virtue of this Act with respect thereto
acquires possession of, or is in any way concerned in carrying, removing,
depositing, harbouring, keeping or concealing or in any manner dealing with
any goods which have been unlawfully removed from a warehouse or which are
chargeable with a duty which has not been paid or with respect to the
importation or exportation of which any prohibition or restriction is for
the time being in force as aforesaid”;
The penalty clause thereof reads :” such person shall on conviction before
a Magistrate be liable to imprisonment for any term not exceeding two years
or to fine, or to both”
. This clause introduces a criminal offence. It is triable by a Magistrate.
The person convicted is liable to imprisonment for a term not exceeding two
years or to fine or to both. The rule of construction of such a clause
creating a criminal offence is well settled. The following passage from the
judgment of the Judicial Committee in The Gauntlet (1872) L.R. 4 P.C. 184,
191 may be quoted :
“No doubt all penal statutes are to be construed strictly, that is to say,
the court must see that the thing charged as an offence is within the plain
meaning of the words used, and must not strain the words on any notion that
there has been a slip, that there has been a casus omissus, that the thing
is so clearly within the mischief that it must have been intended to be
included, and would have been included if thought of. On the other hand,
the person charged has a right to say that the thing charged, although
within the words, is not within the spirit of the enactment. But where the
thing is brought within the words and within the spirit, there a penal
enactment is to be construed, like any other instrument, according to the
fair common-sense meaning of the language used, and the court is not to
find or make any doubt or ambiguity in the language of a penal statute,
where such doubt or ambiguity would clearly not be found or made in the
same language in any other instrument.”
The clause, therefore, must be construed strictly and it is not open to the
court to strain the language in order to read a casus omissus. The court
cannot fill up a lacuna : that is the province of the Legislature. The
second rule of construction equally well settled is that a court cannot
construe a section of a statute with reference to that of another unless
the latter is in pari materia with the former. It follows that decisions
made on a provision of a different statute in India or elsewhere will be of
no relevance unless the two statutes are in pari materia. Any deviation
from this rule will destroy the fundamental principle of construction,
namely, the duty of a court is to ascertain the expressed intention of the
Legislature. I am led to make these general remarks, as an attempt was made
by the learned Counsel for the appellant to persuade us to interpret the
words of the clause in the light of the decisions of the English courts on
an analogous provision in an Act intended to prevent smuggling. It is not
possible to state that the English and the Indian Acts are in pari materia,
though their general purposes are the same and though there is some
resemblance in the terminology used in them. The English decisions,
therefore, must be kept aside in construing the relevant provisions of the
Indian statute.
2. Now coming to the relevant clause, the following material ingredients
constitute an offence thereunder : (1) a person must have a knowledge that
there is a prohibition or restriction against doing any of the enumerated
acts with respect to goods imported or exported contrary to the restriction
or prohibition imposed against their import or export; (2) he must have
acted with an intention to evade such a restriction or prohibition; there
is no offence unless the said two elements of mens rea namely, knowledge
and intention, are established. It is not enough if a person has only
knowledge of such a prohibition or restriction; in addition he shall have
the intention to evade such a prohibition or restriction against the import
or export of goods, as the case may be. A person who knowingly purchases
smuggled goods from an importer cannot have an intention to evade a
prohibition against import, for the prohibited goods have already been
imported. A person who receives goods with the knowledge that they are
stolen goods cannot possibly have an intention to commit theft, for the
theft has already been committed, though he may have the intention to
receive the stolen goods. Knowledge of an offence cannot be equated with an
intention to commit the offence. Such a construction effaces the
distinction between the two distinct elements of mens rea, knowledge and
intention, laid down in the clause.
3. The only possible way out of the inevitable effect of the plain words
used in the said clause is to give a meaning to the expression “import”
which the word cannot bear. To accept the argument of the learned Counsel
for the appellant is to hold that the process of import continues through
innumerable transactions between different persons without reference to
time or place and whether the goods existed or ceased to exist. Ordinarily
the process of import commences the moment the goods cross the customs
barrier. That is the meaning given to that word by this Court in J. V.
Gokal & Co. v. Assistant Collector of Sales-Tax – 1960 (2) SCR 852, 857,
858. But the said clause gives that expression a wider meaning. The
enumerated dealings with the goods prohibited or restricted covered a field
beyond the point of import normally understood by the expression. But all
the said dealings have an intimate nexus with the import of goods under the
Act. Goods may be imported through the machinery provided under the Act;
yet, a person may evade the restrictions by fraud or otherwise. Goods may
also be illegally imported into India outside the machinery so provided.
This is done stealthily at different points of the vast sea line of our
country. But in either case different persons may take part in carrying,
removing, depositing, harbouring, keeping or concealing or in any other
manner dealing with any goods so imported. They are the necessary acts to
complete the process of import. Such acts may be done by persons between
whom there was a pre-arranged plan before the goods were brought into
India. Different persons may also take part in such dealings with the
requistite knowledge or intention for the purpose of completing the import
vis-a-vis the importer. Under the said clause, therefore, the process of
import does not end immediately the prohibited goods are brought into
India, but continues till the goods are delivered to the importer,
physically or constructively. The importer who smuggles the goods is
certainly guilty under the clause, because he imports them in derogation of
the prohibition or restriction. Any person who deals with the goods in the
context of the import as explained above in any one of the connected ways
with the requisite knowledge and intention would equally be guilty of the
offence. But the subsequent transactions in regard to the said goods are
outside the process of the enlarged definition of the expression “import”.
It would be incongruous to hold that a purchaser from the importer or a
purchaser from the said purchaser, and so on, has an intention to evade the
prohibition or restriction, though he may have the intention to receive the
smuggled goods. How does such a purchaser evade the prohibition against
import which has already been effected ? The contrary construction will
lead to the anomaly of a purchaser, even after 20 years of the import,
being attributed the intention to evade the prohibition against import.
Suppose before the purchase of the goods by a stranger the prohibition was
lifted. In such a situation, does the purchaser commit an offence ? If the
contention is sound, he does. This illustrates that the crux of the offence
is the import of goods with the requisite intent contrary to the
prohibition. For the said reasons the intention to contravene the
prohibition cannot be imputed to subsequent dealers in the said goods after
the importer parts with them.
4. It is said that if the construction suggested by the learned Counsel for
the appellant be not accepted, many a person who purchases smuggled goods
will escape punishment. A fair reading of the Act discloses that the Act
makes a distinction between a customs offence and a criminal offence. The
smuggled goods in the hands of whomsoever they are found can be confiscated
and, therefore, the States can always trace the smuggled goods to their
ultimate destination. The smuggler and the persons concerned in the
smuggling are guilty of both customs and criminal offences. The
Legislature, either intentionally or otherwise, has not made the dealings
in such goods by persons other than those mentioned in Clause 81 of Section
167 of the Sea Customs Act a criminal offence. When the clause does not
bring them in, the court cannot, by construction, bring such a class of
persons within the said clause. It is for the Legislature to do so and we
are told that it has recently amended the section.
5. I, therefore, agree with the High Court that it has not been established
that the respondents have dealt with the goods with an intention to evade
any restriction or prohibition imposed on the import of the said goods.
In the result, all the appeals should be dismissed.
In Criminal Appeal Nos. 192 of 1961 and 183 of 1962
6. [Judgments per : Wanchoo, J.]. – These two appeals on certificates
granted by the Calcutta High Court arise out of the same trial of the two
respondents for an offence under Section 167(81) of the Sea Customs Act,
No. 8 of 1878, (hereinafter referred to as the Act) and will be dealt with
together. The facts are not in dispute and have been found as below.
7. On August 25, 1958, a constable attached to the Detective Department,
noticed Sitaram Agarwala respondent and another person at the crossing of
Hariram Goenka street and Kalakar street. The constable had certain
information with respect to these persons and decided to follow them. These
two persons got into a bus and the constable also boarded the same bus.
They got down at the junction of B. K. Pal Avenue and J. M. Avenue and so
did the constable. They then went to Narendra Dev Square which is a kind of
park. The constable kept watch over them from a distance. After a short
time these two men came out of the park and stood on the western foot-path
of J. M. Avenue. Shortly thereafter a small taxi came there from the South
and stopped. Respondent Wang Chit Khaw (hereinafter referred to as the
Chinese accused) was in that taxi. He came down and shook hands with
Sitaram Agarwala and the three got into the taxi. When the taxi was about
to start, the constable disclosed his identity to the driver and asked him
to stop. He also asked the three persons to accompany him to the thana.
Thereupon Sitaram Agarwala and the other man who was with him came out of
the taxi and tried to run away. The constable cought hold of them and put
them in the police wagon which happened to come up just then. The Chinese
accused also tried to run away. The constable appealed to the members of
the public to help him in securing the Chinese accused and he was secured
with the help of two college students and one other youngman. As the
Chinese accused was running away he threw away three packets which were
picked up. In the meantime Sergeant Mukherjee came there on a motor-cycle
from the opposite direction and detained the Chinese accused. The three
packets thrown away by him were also handed over by the three youngmen to
the Sergeant. Thereafter all the three persons who were arrested were taken
to the police station along with the three packets. It was found in the
police station that the three packets contained 23 gold bars of about
sixteen tolas each with Chinese inscription thereon. On search of the
person of Sitaram Agarwala, a sum of Rs. 49, 320/- in notes of various
denomination was found on him. The customs authorities were informed and
took charge of the gold bars. Eventually, the gold bars were confiscated
under Section 167(8) of the Act and thereafter the police after
investigation prosecuted the two respondents and the third man in respect
of the offence under Section 167(81) of the Act.
8. These facts were held to be proved by the Magistrate so far as the
Chinese accused and Sitaram were concerned. He therefore convicted them.
The case against the third man was held to be doubtful and he was
acquitted. The two convicted persons then filed separate appeals in the
High Court. The High Court accepted the findings of fact recorded by the
learned Magistrate and came to the conclusion that on the facts proved
there was no doubt that Sitaram had gone with a large sum of money to meet
the Chinese accused in order to purchase the gold bars which had been
recovered from the packets thrown away by the Chinese accused.
9. The High Court then addressed itself to the question whether on the
facts proved the conviction of the two respondents could be sustained in
law. The charge against Sitaram Agarwala was that on the date in question
and at the time and place which appeared in the evidence he had gone there
by previous arrangement to purchase the smuggled gold bars from the Chinese
accused and was therefore concerned in dealing with smuggled gold and
thereby committed an offence under Section 167(81) of the Act. The charge
against the Chinese accused was that he had in his possession 23 smuggled
gold bars which he wanted to sell to Sitarm Agarwala and another person by
previous arrangement and as such he was concerned in dealing with smuggled
gold and was guilty under Section 167(81) of the Act. So far as Sitaram
Agarwala was concerned, the High Court held that by merely going to the
park in order to purchase smuggled gold by previous arrangement, it could
not be said that Sitaram Agarwala was in any manner dealing with smuggled
gold. The High Court was of the view that there was a mere attempt to
purchase smuggled gold on the part of Sitaram Agarwala, but as the purchase
was not completed it could not be said that Sitaram Agarwala was concerned
in dealing with the smuggled gold. The High Court therefore ordered the
acquittal of Sitaram Agarwala respondent. As to the Chinese accused, the
High Court held that though he was found in possession of smuggled gold,
which he knew to be such, and had attempted to sell that gold
surreptitiously, Section 167(81) required knowledge that the article in
question was smuggled and intention to defraud the Government of any duty
payable thereon or to evade any prohibition or restriction for the time
being in force under or by virtue of the Act. In view of the intent
necessary, the High Court was of the view that before a person could be
convicted under Section 167(81) it must be shown that he was either a
direct importer or concerned in some way in the import of the smuggled
article. In other words, the High Court thought that the section dealt with
goods while they were being smuggled; it did not include in its scope a
person who subsequently obtained the smuggled goods and then dealt with
them, though the smuggled goods themselves might be liable to confiscation
when seized. Consequently the High Court ordered the acquittal of the
Chinese accused also. As the interpretation of Section 167(81) was
involved, the High Court granted certificates; and that is how the two
appeals have come up before us.
10. The facts are not in dispute in this case and have been set out above.
Thus the question that arises before us is the interpretation of Section
167(81) and two aspects of that section have to be considered. The first
aspect is the ambit of the words
“in any way concerned in any manner dealing with any goods with respect to
the importation of which any prohibition or restriction is for the time
being in force as aforesaid”
. The second aspect is with respect to the intent necessary under the
section and whether that intent can arise where smuggling is over and
smuggled goods are in the possession of persons other than those actually
concerned in the smuggling and are then dealt with by them in some manner
or other.
11. We may briefly indicate the scheme of the Act in order to appreciate
the purpose behind Section 167(81). The object of the Act is to provide
machinery for the collection inter alia of import duties and for the
prevention of smuggling. With that object customs frontiers are defined,
(Ch. I); customs officers are appointed with certain powers, (Ch. II);
ports, wharves, customhouses, warehouses and boarding and landing-stations
are provided for, (Ch. Ill); prohibitions and restrictions of imports and
exports are envisaged, (Ch. IV); levy of and exemption from custom duties
and the manner in which it has to be done is provided, (Ch. V); drawbacks
i.e. refunds are provided in certain circumstances, (Ch. VI); arrival and
departure of vessels is controlled, (Ch. VII and Ch. VIII); provision is
made for the discharge of cargo, (Ch. IX), and clearance of goods for home
consumption (Ch. X); provision is also made for warehousing and
transhipment., (Chapters XI, XII); provisions are also made for exportation
or shipment and re-landing (Ch. XIII); special provisions have been made
relating to spirit (Ch. XIV) and coasting trade (Ch. XV). Then comes Ch.
XVI dealing with offences and penalties. Offences enumerated in Ch. XVI are
of two kinds; first there are contraventions of the Act and rules
thereunder which are dealt with by customs officers and the penalty for
which is imposed by them. These may be compendiously called customs
offences. Besides these there are criminal offences which are dealt with by
Magistrates and which result in conviction and sentence of imprisonment
and/or fine. These two kinds of offences have been created to ensure that
no fraud is committed in the matter of payment of duty and also to ensure
that there is no smuggling of goods, without payment of duty or in defiance
of any prohibition or restriction imposed under Ch. IV of the Act.
12. It is necessary for our purpose to set out two provisions of Section
167 which is in Ch. XVI. These are Section 167(8) and 167(81). Section
167(8) is in these terms :-
“167. The offences mentioned in the first column of the following schedule
shall be punishable to the extent mentioned in the third column of the same
with reference to such offences respectively :-
———— Offences Section of this Penalties Act to which Offence has
reference
———– (8) If any goods, 18 & 19 such goods shall be liable to the
importation or confiscation; and any person exportation of which concerned
in any such offence is for the time being shall be liable to a penalty not
prohibited or exceeding three times the value restricted by or under of the
goods, or not exceeding Chapter IV of this Act, one thousand rupees.”
ibe imported into or exported from India contrary to such prohibition or
restriction; or etc. etc.
Section 167(81) with which we are particularly concerned reads thus :
———-
“(81) If any person knowingly General such person shall and with intent to
defraud the on conviction Government of any duty payable before a thereon,
or to evade any Magistrate be prohibition or restriction for the liable to
time being in force under or by imprisonment for virtue of this Act with
respect any term not thereto acquires possession of, or exceeding two is in
any way concerned in years or to fine, or carrying, removing, depositing to
both;”
harbouring, keeping or concealing or in any manner dealing with any goods
which have been unlawfully removed from a warehouse or which are chargeable
with a duty which has not been paid or with respect to the importation or
exportation of which any prohibition or restriction is for the time being
in force as aforesaid; orxx xx xx
It will be seen that Section 167(8) deals with what we have called customs
offences while Section 167(81) deals with criminal offences. It is well-
settled by the decisions of this Court that goods which have been imported
against the prohibition or restriction imposed under Ch. IV of the Act are
liable to confiscation at any time after import and this liability extends
even in the hands of third persons who may not have had anything to do with
the actual import. So long as it is proved that the goods had been imported
against the restrictions imposed under Chapter IV, the goods remain liable
to confiscation whenever found even if this is long after the import is
over and even if they are in possession of persons who had nothing to do
with the actual import. It is also well-settled by the decisions of this
Court that the second part of the penalty relating to any person applies
only to a person concerned in the importation or exportation of the goods
and does not apply to a person found in possession of the smuggled goods
who had nothing to do with the importation or exportation thereof : (see
Shivanarayna Mahato v. Collector of Central Excise and Land Customs) C.A.
288 of 1964, decided on August 14, 1965. 13. The main contention of the
respondents which has found favour with the High Court was that Section
167(81) when it deals with persons and subjects them to imprisonment and
fine on conviction by a Magistrate is also concerned with persons who are
in some way or other actually concerned in the import and has no
application to third persons who had nothing to do with the actual import
but might have come in possession of smuggled goods even knowingly after
they had been smuggled. Before however we consider this contention which
has found favour with the High Court we should like to dispose of the other
contention which was raised on behalf of Sitaram Agarwala and which also
found favour with the High Court. It will be seen that Section 167(81)
deals with persons who do certain things with the knowledge and intent
therein specified and one such person with whom that provision deals is a
person who is in any way concerned in any manner dealing with any goods
with respect to importation of which any prohibition or restriction is for
the time being in force. The High Court has held on the facts in this case
that Sitaram Agarwala cannot be said to have been concerned in any manner
dealing with prohibited goods inasmuch as he was merely negotiating with
the Chinese accused for their purchase but the deal had not been concluded.
The view which found favour with the High Court thus was that if the deal
had been completed, Sitaram Agarwala could be said to have been concerned
in dealing with the prohibited goods but as the deal was not completed and
he was merely attempting to purchase the goods it could not be said that he
was in any way concerned in any manner dealing with them. We are of opinion
that the view taken by the High Court is not correct. The words “in any way
concerned in any manner dealing with prohibited goods” are of very wide
import. It is neither desirable nor necessary to define all manner of
connection with the prohibited goods which might come within the meaning of
the words “in any way concerned in any manner dealing with such goods”. It
will depend on the facts found in each case whether it can be said that any
person was concerned in dealing with such goods. We shall therefore confine
ourselves to the facts of the present case and see whether on these facts
it can be said that Sitaram was in any way concerned in any manner dealing
with the goods. Now the evidence which has been accepted by both the courts
is that Sitaram had gone with a large sum of money to purchase the gold
which was known to be smuggled and to have been imported into India against
the restrictions imposed on the import of gold. It has also been proved
that Sitaram did so after previous arrangement with the Chinese accused. If
the constable who was following Sitaram had not interfered the deal would
have gone through and Sitaram would have paid the money and purchased the
smuggled gold. This was a case therefore where by means of previous
arrangement with a person in possession of a smuggled article, the
intending purchaser had gone to purchase it and the deal did not go through
only because the police intervened. In such circumstances whereby previous
agreement or arrangement a person goes to purchase an article which he
knows to be smuggled it would in our opinion be a case where such a person
must be held to be concerned in dealing with the prohibited goods. Where a
person does any overt act in relation to prohibited goods which he knows to
be such and the act is done in consequence of a previous arrangement or
agreement it would in our opinion be a case where the person doing the act
is concerned in dealing with the prohibited goods. In other words any
transaction relating to prohibited goods which is done or attempted to be
done after some kind of prior arrangement or agreement would in our opinion
clearly amount to the person being concerned in dealing with the prohibited
goods. Both the words “concerned” and “deal” have a wide connotation. The
words “concerned in” mean “interested in, involved in, mixed up with” while
the words “deal with” mean
“to have something to do with, to concerned one-self, to treat, to make
arrangement, to negotiate with respect to something”
. Therefore when a person enters into some kind of transaction or attempts
to enter into some kind of transaction with respect to prohibited goods and
it is clear that the act is done with some kind of prior arrangement or
agreement, it must be held that such a person is concerned in dealing with
prohibited goods. The fact that the act stopped at an attempt to purchase
as in the present case when the police intervened does not in any way mean
that Sitaram was not concerned in dealing with the smuggled gold. The
evidence shows that there must have been a previous arrangement with the
Chinese accused to purchase the smuggled gold. Sitaram went to the
appointed place and met the Chinese accused surreptitiously and had a large
sum of money with him to pay for the gold. He had sat down with the Chinese
accused in the taxi and there is no doubt that if the taxi had not been
stopped, the transaction for the purchase of the smuggled gold would have
gone through. In these circumstances even though Sitaram had not come into
actual possession of the smuggled gold before the police intervened, there
is no doubt that he was concerned in dealing with prohibited goods. We are
therefore of opinion that the High Court was in error in holding simply
because the purchase was not complete that Sitaram was not concerned in
dealing with the smuggled gold which was found with the Chinese accused.
The acquittal of Sitaram on this ground must therefore be set aside.
14. This brings us to the main question which arises in the present appeal,
namely, what is the intent required in a case coming under Section 167(81)
and whether such intent can be said to arise at all in a case where the
import is complete and the prohibited goods are in the possession of a
third person who had nothing to do with the import. For this purpose we
shall refer to that part of Section 167(81) which deals with the
acquisition of possession of prohibited goods and what we say about that
part will equally apply to the other parts of Section 167(81). We may add
that we are dealing here with the first half of Section 167(81) and not
with the second half. This part of Section 167(81) which we have taken for
the purpose of finding out what is the knowledge and intent that Section
167(81) requires would run thus :
“If any person knowingly, and with intent to defraud the Government of any
duty payable thereon, or to evade any prohibition or restriction for the
time being in force under or by virtue of the Act with respect thereto
acquires possession of any goods with respect to which duty has not been
paid or with respect to the importation of which any prohibition or
restriction is for the time being in force.”
The argument which has found favour with the High Court is that the section
requires knowledge on the part of the accused that the goods were imported
against the prohibition or restriction in force. This is undoubtedly so.
The section further requires that the person who has this knowledge should
also have the intention either to defraud the Government of any duty
payable thereon or to evade any prohibition or restriction for the time
being in force under or by virtue of the Act. Mere knowledge that the goods
are prohibited goods or goods on which duty has not been paid would not be
enough; the section further requires that there should be an intent to
defraud, the Government of the duty payable or to evade any prohibition or
restriction. The argument on behalf of the respondents which has been
accepted by the High Court is that once the goods have evaded the payment
of duty or have evaded the prohibition or restriction with respect to their
import and the smuggling whether of dutiable or prohibited goods is
complete, a third person who comes into possession of such goods thereafter
and who had nothing to do with the smuggling itself cannot be said to have
the intent to defraud the Government of any duty payable (for such
defrauding had already taken place) or to evade any prohibition or,
restriction, (for such prohibition or restriction had already been evaded).
In effect, the argument is that this part of Section 167(81) corresponds to
Section 167(8) where a person has to be concerned in the actual importation
before he can be liable to a penalty.
15. Now if the intention of the legislature was that the person guilty
under Section 167(81) could only be a person who was concerned in some way
or other with the actual importation or exportation it would have been easy
for it to use the same words in Section 167(81) as were used in the first
part of Section 167(8). But the legislature has not done so and the
question is whether the words used in Section 167(81) have a different
meaning from those used in Section 167(8). What Section 167(81) requires is
that the person who comes inter alia into possession of prohibited goods
must know that there is some prohibition in force with respect thereto. But
before he can be guilty under Section 167(81) it has further to be shown
that he intends to evade the prohibition. Where the case is not of
prohibition but of duty, the person accused under Section 167(81) must be
shown to know that the duty has not been paid and also to have the
intention to defraud the Government of the duty payable on the goods. The
question that arises is whether the third person who has come into
possession knowingly that the goods are prohibited or the goods are
dutiable and the duty had not been paid can be said to have the intention
of evading the prohibition or to defraud the Governments of the duty
payable, even though he may not have anything to do with the smuggling of
the goods.
16. It seems to us (taking a case of prohibition) that if the prohibition
is still in force, the person who acquires possession of prohibited goods
knowing them to be prohibited intends to evade the prohibition by the
action, even though he may not have been concerned in the actual smuggling
of the goods. So long as the prohibition lasts any person who comes into
possession of prohibited goods; though he may not be concerned in the
actual smuggling would still in our opinion have the intent to evade the
prohibition when he remains in possession of the goods which are
prohibited. The prohibition in our opinion does not come to an end as soon
as the customs frontier is crossed. So long as prohibition is in force and
the goods are prohibited goods any person in possession thereof, even
though he may not be concerned with the actual smuggling would still be
guilty of evading the prohibition by keeping the goods in his possession.
If this were not so, it would mean that once the prohibition has been
successfully evaded by the actual smuggler the goods would be free from the
taint of prohibition and could be dealt with by any person as if there is
no prohibition with respect to them. If that were to be the meaning of
Section 167(81) there would be a serious lacuna in this provision which is
meant to prevent smuggling. Smuggling does not only stop at importing the
goods in the face of prohibition; it envisages subsequent transactions like
sale of the smuggled goods, for no one would take the risk of smuggling
unless he can find a market for smuggled goods. Therefore the purchaser of
smuggled goods though he may not be concerned in the smuggling would in our
opinion be equally guilty of evading the prohibition by making the
purchase. The same in our opinion applies to defrauding the Government of
the duty. Where goods had been smuggled in without paying duty the smuggler
in such a case also intends to sell the goods and make profit thereby. The
purchaser of such smuggled goods even though he may have nothing to do with
actual smuggling, usually acquires the goods at a lower price because the
payment of duty has been evaded. Therefore when such goods reach even third
hands there is always the intention to defraud the Government of the duty
payable on the goods. This appears to us to be the true interpretation of
Section 167(81), which as we have said earlier is in different words from
the first part of Section 167(8), which deals with actual importation or
exportation. Section 167(81) does not deal with actual importation or
exportation; it deals with defrauding the Government of the duty payable or
evading the prohibition or restriction. So long as the duty is payable and
has not been paid or so long as the prohibition or restriction remains in
force any person acquiring possession of goods on which duty has not been
paid or restriction or prohibition has been evaded would have the intent
either to defraud the Government of the duty payable for he acquires goods
at a lower price or would have the intention to evade restriction or
prohibition. If this were not so, there would be a premium on successful
smuggling and once the goods have entered the country without paying duty
or have entered the country after evading the prohibition or restriction,
they can be dealt with as if they were duty paid goods or goods which had
not evaded the prohibition or restriction. The purpose of Section 167(81)
is to punish smuggling and stop it if possible. That purpose in our opinion
would be completely defeated if the interpretation which has found favour
with the High Court were accepted. We cannot therefore accept that the
words used in Section 167(81) only apply up to the stage of actual
importation and the person who is guilty thereunder must be somehow
concerned in the actual importation. It seems to us that they apply in the
case of prohibited or restricted goods so long as the prohibition or
restriction lasts and whoever is in possession of such goods or comes into
possession thereof, even after the smuggling is over must be attributed
with the intention of evading the prohibition or restriction provided he
knows that the goods were smuggled into the country in spite of the
prohibition or restriction. Similarly where the goods are dutiable and the
duty has not been paid on them any person acquires them with the knowledge
that the duty thereon has not been paid would have the intention to defraud
the Government of duty, even though he may not be the person actually
concerned in the smuggling. We therefore hold that Section 167(81) has a
wider sweep than Section 167(8) and it does not only apply to a person who
may have been actually concerned in some way or other with smuggling but
also inter alia to persons who may have come into possession of goods even
after the smuggling was over. So long as the prohibition or restriction
remains in force or the duty has not been paid even a third person coming
into possession of such goods would have the intention either to evade the
prohibition or restriction or to defraud the Government of the duty payable
thereon.
17. It remains now to refer to a few English cases because our Act of 1878
was modelled on the English Customs Consolidation Act, 1876. Decisions of
English courts therefore with respect to corresponding provisions of the
English Act would in our opinion be helpful in the matter of the
interpretation of Section 167(81).
18. Section 186 of the English Act corresponds to many of the provisions
contained in Section 167 of the Act. In particular, the provision
corresponding to Section 167(81) is in these terms :-
“Every person who ……. shall be in any way knowingly concerned in
carrying, removing, depositing, concealing, or in any manner dealing with
any such goods with intent to defraud Her Majesty of any duties due thereon
or to evade any prohibition or restriction of or application to such goods
……”
” Such goods”
in the context of the section mean either prohibited or restricted goods or
goods on which duty is leviable.
19. The other clauses of Section 186 of the English Act do not specifically
contain words relating to intent. But in Frailey v. Charlton – L.R. [1920]
1 K.B. 147 it was decided, that intent to defraud the revenue or to evade a
restriction or prohibition would apply to other clauses of Section 186
also. Thus the English Act by Section 186 also requires that a person who
was concerned in carrying, removing etc., or in any manner dealing with any
prohibited or restricted goods or dutiable goods must do so knowingly and
with intent to defraud. His Majesty of any duty due thereon or to evade any
restriction or prohibition.
20. The interpretation of this provision in Section 186 was considered in
Beck v. Binks – L.R. [1949] 1 K.B. 250. In that case the facts were that a
person was found in possession of uncustomed goods in London and it was
urged, as was urged before the High Court in the present case, that the
person concerned could not be said to be carrying the uncustomed goods with
intent to defraud His Majesty of the duty because such an offence could
only be committed by the actual smugglers or importers of goods or persons
engaged in carrying the goods from the ship etc. at the port of importation
with intent to evade the payment of duty or tax. This contention was
negatived and the court held that
“the offence of knowingly carrying or in any manner dealing with uncustomed
goods with intent to defraud His Majesty of the duty due thereon contrary
to Section 186 is not only committed at the port of entry or the place
where the goods are actually landed; it is committed anywhere in the realm
by a person acting in the manner described by the sub-section”. Lord
Goddard, C.J. made the following observations at page 252 :-” If a person
is knowingly carrying uncustomed goods, he is assisting in the smuggling of
the goods; for while goods are no doubt smuggled when they are brought into
the country it is no good bringing smuggled goods into the country unless
something can be done with them. Such a person is intending to defraud His
Majesty of the customs as much as anybody else. The intent is there : It is
all part of one operation ….. Otherwise, a most extraordinary lacuna is
left in the Act, for it can then be said that, once a man has got away from
the port of entry or from the place where the”
goods were actually landed, no one dealing with the smuggled goods and
carrying them inland will ever be guilty of an offence. I do not think that
that has ever been held, and I am certainly not prepared to hold it now I
think it clear that this appellant was dealing with – that is, carrying –
uncustomed goods and that he was carrying them with intent to defraud His
Majesty of the duties thereon.”
21. The next case to which reference may be made is Rex v. Cohen – L.R.
[1951] 1 K.B. 505. In that case 352 Swiss watches which were uncustomed
were recovered from the accused and he was charged with being in possession
of uncustomed goods with intent to defraud His Majesty of the duties
thereon contrary to Section 186 of the English Act. Dealing with the
question of intent to defraud, it was held that if the accused knew that
the goods were uncustomed, the intention to defraud the revenue may be
inferred. Here also the uncustomed goods were recovered from the house of
the accused at Edgware and there was nothing to show that he was in any way
concerned with actual smuggling. Even so, that court held that he must be
held to be intending to defraud the revenue.
22. The next case to which reference may be made is Sayce v. Coupe L.R.
[1953] 1 K.B. 1. In that case the accused was in possession of certain
American cigarettes on which duty had not been paid. It was held that where
a person has in his possession goods which are to his knowledge uncustomed
and which he intends to use or sell, he is guilty of the offence of keeping
uncustomed goods with intent to defraud the revenue of the duties thereon
contrary to Section 186. In that case there was nothing to show that the
accused had anything to do with the importation or smuggling of the goods.
Even so, it was held that he had the intent to defraud the revenue.
23. The next case to which reference may be made is Schneider v. Dawson
L.R. (1960) II Q.B. 106. That was a case where a civilian bought from
American servicemen cigars and spirits which had been imported free of duty
for the use of United States Servicemen under an agreement between the
British and American Governments and kept them for his own use. He was
charged with knowingly and with intent to defraud Her Majesty of the duty
payable thereon being concerned in keeping goods which were chargeable with
duty on which duty had not been paid. It was held that the persons conduct
clearly amounted to keeping the smuggled goods and there was intent to
defraud the revenue. This case was under the English Customs and Excise Act
of 1952, but the principle under the English Act of 1876 was followed.
24. These cases clearly indicate that the offence under the corresponding
provision of the English Act can be committed long after the actual
smuggling is over and even if the person found in possession of goods on
which duty had not been paid had nothing to do with smuggling. These cases
thus clearly support the interpretation we have put on the relevant words
of Section 167(81).
25. Further the case of Schneider L.R. (1960 II Q.B. 106 shows that it his
always been held in England that if dutiable goods have been brought into
the country without paying the duty, the duty attaches to goods brought
into the country and though it may not have been paid at the moment of
bringing the goods for some special reasons (as, for example, where it is
meant for a foreign ambassador) the duty is leviable later on when the
goods pass into the hands of persons other than the privileged person. The
same in our view applies equally to goods which are smuggled into the
country and the duty has been evaded. The duty always remains payable on
goods which have been brought in without payment of duty and whoever deals
with them even at a later stage after the operation of smuggling is over
would still be liable to pay the duty and if he does not, he must have the
intention to defraud the Government of revenue. The same applies to
prohibition and restriction and so long as the prohibition or restriction
remains in force, the person dealing with the smuggled goods which had
evaded the prohibition or restriction must also be held to evade the
prohibition or restriction. In the view that we have taken it is therefore
unnecessary to consider when the import or smuggling ends, for Section
167(81) hits not only persons concerned in smuggling or importing but also
all others who come into possession of or deal with smuggled goods after
the smuggling is over.26. Lastly learned Counsel for the respondents refers
us to Section 135 of the Customs Act (No. 52 of 1962). That section
provides for what was formerly provided in Section 167(81) of the Act. The
argument is that it is in very different terms. That is undoubtedly so. But
it does not follow from the fact that the corresponding section in the 1962
– Act is differently worded that the provision in Section 167(81) cannot
have the meaning which is being pressed before us on behalf of the
appellant. The interpretation of Section 167(81) must depend upon the
language of that provision itself and on the language used in Section
167(81) we have no doubt that it applies not only to an actual smuggler or
a person concerned in smuggling but also to all others who may be concerned
with smuggled goods after the smuggling is over.
27. In the view that we have taken of the meaning of Section 167(81) it
follows that on facts found Sitaram Agarwala was concerned in dealing with
prohibited or restricted goods. It also follows on facts found that he had
the necessary knowledge and intent to evade the prohibition or the
restriction even though he dealt with the goods after the smuggling was
over and was not in any way concerned with actual smuggling. He would
therefore be guilty under Section 167(81) of the Act. We therefore allow
the appeal, set aside the order of acquittal made by the High Court,
restore the order of the Presidency Magistrate and confirm the sentence
passed on Sitaram Agarwala by the Magistrate.
28. It also follows on facts found that Wang Chit Khaw is guilty under
Section 167(81) inasmuch as he was dealing with prohibited or restricted
goods and had the necessary knowledge and intent as required under that
section. We therefore allow the appeal, set aside the order of the High
Court, restore that of the Presidency Magistrate and confirm the sentence
passed on him by the Magistrate.In Criminal Appeal No. 123 of 1962
29. [Judgment per : Wanchoo, J.]. – This is an appeal by special leave
against the judgment of the Calcutta High Court by which the respondent
Amin Khan was acquitted of an offence under Section 167(81) of the Sea
Customs Act, No. 8 of 1978.
30. The charge against the respondent was that he on or about July 15,
1959, at Circular Garden Reach Road, knowingly and with intent to evade the
prohibition in force under Section 19 of the Sea Customs Act read with
Section 23A of the Foreign Exchange Regulation Act, 1947, acquired
possession of sixty bars of gold with respect to importation of which the
said prohibition was in force on the date aforesaid. The learned Magistrate
before whom the trial took place found that Amin Khan came in a taxi which
stood opposite Gate No. 5 of Kidderpore dock. At that time a ship from the
Far East, namely, S. S. Sangola was berthed at Kidderpore dock and there
was some information with the customs authorities in connection with that
ship and consequently Customs Inspector Samsul Huq was on duty at the gate
to keep an eye on things. The taxi in which the respondent Amin Khan came
arrived at about 7-10 A.M. on July 15, 1959 and waited opposite gate No. 5,
Kidderpore dock. There was one occupant on the rear seat of the taxi,
namely, Amin Khan while the driver of the taxi was sitting in the driver’s
seat. Amin Khan had come down from the taxi and appeared to be restless.
Shortly thereafter, Amin Khan got back into the taxi. But as there was a
crowd there, Samsul Huq, though he could see Amin Khan while he was on the
road and was getting into the taxi, could not keep the taxi in full view.
Soon after Amin Khan got into the taxi and it started. Thereupon Samsul Huq
stopped the taxi and rushed forward along with other customs officers. Amin
Khan was then sitting in the rear seat of the taxi with a small attache
case beside him. Samsul Huq asked Amin Khan what the attache case contained
and Amin Khan replied that it contained gold. Thereafter the attache case
was opened and it was found to contain 60 gold bars in six packets under a
cotton jacket which was also in the attache case. Each packet contained 10
gold bars. Thereafter Amin Khan was arrested. Later the gold bars were
confiscated under the Act and Amin Khan was prosecuted under Section
167(81). The Magistrate after finding these facts convinced Amin Khan and
sentenced him to one year’s rigorous imprisonment, his defence that the
attache case had been planted by a customs officer having been disbelieved
by the Magistrate. It may be mentioned that the gold bars were worth about
Rs. 1, 15, 000. He unsuccessfully appealed to the Session Judge,
Alipore.31. Amin Khan then went in revision to the High Court. The High
Court considered the evidence and held that there was no doubt that the
gold bars were foreign and imported. It was proved that in view of the
restriction in force foreign gold could not be imported by anybody without
a special permit of the Reserve Bank of India and Amin Khan did not claim
to have any such permit. Finally the High Court found that there was no
doubt that Amin Khan was in possession of this smuggled gold. The High
Court then went on to consider the question whether the charge framed
against Amin Khan had been proved. We have already mentioned the charge,
namely, that on or about July 15, 1959 at Circular Garden Reach Road, Amin
Khan acquired possession of these gold bars knowingly and with intent to
evade the prohibition in force at the time. The specific charge thus
against Amin Khan was that he acquired possession of these gold bars on
July 15, 1959 outside gate No. 5 of the Kidderpore dock. The suggestion of
the prosecution was that the gold bars had been smuggled out of S. S.
Sangola on that morning and handed over to Amin Khan who thus acquired
possession of them that morning knowingly and with intent to avoid the
prohibition or restriction in force. The High Court has found that there
was no evidence to show that anybody actually came out of the dock area and
handed over the gold bars either to Amin Khan or put them in the taxi to
the knowledge of Amin Khan. Samsul Huq who was watching at the time was
unable to say if any one had put the attache case containing the gold bars
in the taxi, for, according to him, there was a crowd at that place and
time and he could not keep the taxi in full view all the time. The High
Court therefore took the view that it could not be ruled out that Amin Khan
might have been in possession of the gold bars from before the taxi reached
the Kidderpore dock. If that was so, it could not be said that Amin Khan
had acquired possession of the gold bars outside Kidderpore dock that
morning at 7-10 A.M. knowingly or with intent to avoid a prohibition or
restriction. The High Court further observed that the presence of Amin Khan
near the dock area with a large quantity of gold was very suspicious; but
in view of the nature of the evidence that the customs officers were on
watch from before and did not see Amin Khan going into the dock area or did
not see any one else dropping the attache case into the taxi, it could not
be held that Amin Khan had acquired possession of the gold bars that
morning at that place. That being so, the High Court was of the view that
Amin Khan must be given the benefit of doubt in respect of the charge
framed against him and consequently acquitted him.32. This is an appeal
under Article 136 of the Constitution and we cannot say in the
circumstances that the view taken by the High Court is necessarily
incorrect, keeping in mind the charge that was framed against Amin Khan. In
view of our decision in Shri Sachidananda Benerji, Assistant Collector of
Customs v. Sita Ram Agarwala (the judgment in which is being delivered
today), the matter would have been different if the charge against Amin
Khan was not of acquiring possession of prohibited goods that morning at
that place but merely of carrying, keeping or concealing such goods.
Unfortunately that was not the charge against Amin Khan. The charge was
that he had acquired the prohibited goods that morning at that place. That
being the nature of the charge against Amin Khan, it cannot be said that
the High Court was in error in holding that in the absence of sufficient
evidence to show that Amin Khan had gone into the dock area and had come
out from there with the attache case or somebody else had come out of the
dock area and had dropped the attache case in the taxi to the knowledge of
Amin Khan, the charge had not been proved beyond reasonable doubt. We
emphasise again that Amin Khan gets away only because of the specific
charge framed against him and the matter might have been different if the
charge had been, for example, for keeping or concealing or carrying
prohibited goods with the necessary knowledge and intent. In this view of
the matter, the appeal fails and is hereby dismissed.
In Criminal Appeal Nos. 41 and 42 of 1964
33. [Judgment per : Wanchoo, J.]. – These two appeals by special leave from
the judgment of the High Court of Bombay raise a common question of law and
will be dealt with together. The question which arises in these cases
relates to the interpretation of Section 167(81) of the Sea Customs Act
(No. 8 of 1878). We do not think it necessary to refer to the facts of
these cases because the High Court did not hear the respondents on other
grounds of appeal except one relating to the intent necessary under Section
167(81). The High Court took the view following the decision of the
Calcutta High Court in the case of Sita Ram Agarwala v. The State 1962
AIR(Cal) 370 (which has been dealt with by us in Shri Sachidananda Benerji,
Assistant Collector of Customs v. Sita Ram Agarwala Cr. A. 192 of 1961, in
which judgment is being delivered today) that the intent necessary for
conviction under Section 167(81) could only apply to a person who was in
any manner concerned in the actual smuggling or importation of the goods
and could not apply to persons who dealt with smuggled goods after the
smuggling was over. Following this view the High Court held that the intent
necessary for a conviction under Section 167(81) of the Act could not be
attributed to a person who acquires possession of smuggled goods or deals
with them long after the smuggling was over and who was not the smuggler
himself or was not concerned in the smuggling in any manner. The High Court
further held that it was only the person who was concerned in the
transaction of smuggling in any manner who would either have the intent to
defraud the Government of the duty payable or have the intent to evade any
prohibition or restriction imposed on importation. As it was not shown in
these cases that the two respondents were smugglers or were in any way
concerned with the actual smuggling, the High Court ordered their acquittal
and did not go into other points urged on behalf of the respondents against
the judgment of the Presidency Magistrate by which they had been convicted
under Section 167(81) of the Act. We have held in Sita Ram Agarwala case
Cr. A. 192 of 1961 that Section 167(81) applies not only to a person who
might be concerned in smuggling but also to a person who deals with
smuggled goods after the smuggling is over and that such a person also has
the intent to avoid the prohibition or restriction or defraud the
Government of the duty payable thereon provided he has the knowledge that
the goods were smuggled. In this view of the matter the basis on which the
High Court acquitted the respondents falls. We therefore allow the appeals,
set aside the order of the High Court and remand the cases to the High
Court for dealing with the other points raised on behalf of the respondents
against their conviction in accordance with law and in the light of this
judgment.