SARKAR, - (1.) THE following Judgment of the court was delivered by :
(2.) THESE two matters have been heard together as they raise a common question. One of these matters is a petition under Art. 32 of the Constitution and the other, an appeal from a judgment of the High court at Bombay. The petitioner and the appellant were found by the Customs authorities in proceedings under the Sea Customs Act, 1878, to have imported goods in breach of s. 19 of that Act. The petitioner had without authority imported gold of the value of Rs. 25,000.00 and the appellant, steel pipes 'of the value of Rs. 1,28,182.00. The Customs authorities by independent orders, imposed a penalty of Rs. 5,000.00 on the petitioner and of Rs. 25,630.00 on the appellant for these offences, under item 8 of the schedule to s. 167 of the Act. The Customs authorities further confiscated the petitioner's gold under the same provision. There was no order of confiscation of the steel pipes for reasons to which it is unnecessary to refer. The appeal is against an order the result of which was to direct realisation of the penalty imposed on the appellant, by execution of a distress warrant. The petition challenges the validity of the order imposing the pecuniary penalty. Neither the petitioner nor the appellant, however, questions the decisions of the Customs authorities that they had been guilty of breach of a. 19 or that penalties could be imposed on them under item 8 in a. 167. The petitioner does not, further, challenge the order confiscating the gold. The only contention of the petitioner and the appellant is that the orders of the Customs authorities are invalid as they impose penalties in excess of Rs. 1,000.00. They contend that the maximum penalty that can be imposed under item 8 in s. 167 is Rs. 1,000.00. This contention is based on two grounds. First it is said that, it has been so held by this court. Then it is said that, in any case, on a proper construction, item 8 in s. 167 does not premit the imposition of a penalty in excess of Rs. 1,000.00 First, as to the decisions of this court, we were referred to three. The earliest is Maqbool Hussain v. The State of Bombay (1). That was a case in which the question was whether a person on whom a penalty of confiscation of goods had been imposed under item 8 in s. 167, could later be prosecuted on the same facts for an offence under s. 23 of the Foreign Exchange Regulation Act, 1947, in view of the provisions of Art. 20(2) of the Constitution against, what has been called, double jeopardy. It was held that Art. 20(2) was no bar to the prosecution under the Foreign Exchange Regulation Act for, the authority under the Sea Customs Act imposing the penalty under item 8 in s., 167 was not a judicial tribunal and the proceeding resulting in the imposition of the penalty of confiscation was, therefore, not a prosecution. No question arose in that case as to the maximum penalty that could be imposed under item 8 in s, 167. While discussing whether a Customs authority exercising the power to order confiscation and levy a penalty under s. 167 formed a judicial tribunal, this court observed at p. 742: ` Even though the customs officers are invested with the power of adjudging confiscation, increased rates of duty or penalty the highest penalty which can be inflicted is Rs. 1,000.00.`
(3.) IT is quite obvious that this observation was made in a different context and was not intended to decide that the provision did not permit the imposition of a higher penalty, as to which no question had then arisen. IT is clear that if the highest penalty which the Customs officers had the power to impose was in excess of Rs. 1,000.00 but subject to another limit, it would not have followed that they were judicial tribunals. The judgment of this court was not based on ,the amount of the maximum penalty which the Customs authorities could impose. IT seems rather to have been assumed that the maximum penalty was Rs. 1,000.00, for the question about maximum penalty was neither argued, nor discussed in the judgment at all. The second case is Babulal Amthalal Mehta v. The Collector of Customs (1). The only question that arose there was whether s. 178A of the Sea Customs Act, which placed on the person from whose possession any goods mentioned in the section and reasonably believed to have been smuggled were seized, the burden of proving that they were not so, was void as offending Art. 14 of the Constitution. In discussing the scheme of the Act, it was observed in connection with item 8 in s. 167 that `This court has held that the minimum is the alternative: see Maqbool Hussain v. The State of Bombay `(2) . Here again, it is clear that the court was not deciding the question that has now arisen before us. It only made a passing reference to the observation in Maqbool Hussein's case(2). It was not necessary for the decision of Babulal's case (1) to have pronounced on the correctness of the observation in Maqbool Hussain's case (2) and no such pronouncement was clearly intended. Nor was it necessary in Babulal's case (1) to express any view as to the maximum penalty that could be imposed under item 8 in s. 167. The last case referred to is F. N. Roy v. The Collector of Customs,Calcutta (1). That was a case where an order had been made under item 8 in s. 167 confiscating certain goods imported without authority and imposing a penalty of Rs. 1,000.00 in respect of that import. The importer filed a petition in this court under Art. 32 of the Constitution challenging the validity of the penalties levied. The main part of the argument of the learned counsel for the petitioner was based on the Imports and Exports (Control) Act, 1947, and raised questions which do not concern us in the present cases.. It appears however that it was also contended that item 8 in s. 167 offended Art. 14 of the Constitution, a point which again does not arise in the cases in hand. That contention was dealt with in the following words at p. 1158: `Another similar argument was that s. 167, item 8 of the Sea Customs Act itself offended Art. 14 in that it left to the uncontrolled discretion of the Customs authorities to decide the amount of the penalty' to be imposed. The section' makes it clear that the maximum penalty that might be imposed under it is Rs. 1,000.00. The discretion that the section gives must be exercised within the limit so fixed. This is not an uncontrolled or unreasonable discretion. Furthermore, the discretion is vested in high Customs officers and there are appeals from their orders. The imposition of the fine is really a quasijudicial act and the test of the quantum of it is in the gravity of the offence. The object of the Act is to prevent unauthorised importation of goods and the discretion has to be exercised with that object in view. ` ;