J.C. Shah, J. - (1.) FABRICATED Steel Construction Co. Ltd., - -hereinafter called the Company - -contracted with the Government of Bombay to construct buildings for the Civil Hospitals at Ahmedabad and Poona. For the purpose of construction of the buildings it was necessary to import from foreign suppliers large quantities of sheet glass, glazed tiles, metal windows, steel and marble. On a requisition by the Government of Bombay, the Assistant Controller of Imports issued licences authorising the Executive Engineer, Building Project and the Under Secretary, Public Works Department, Bombay, to import goods described in diverse licences relating to commodities specified therein, subject to the condition that the goods imported will be utilised only for consumption as raw materials or accessories in the licence holders' works and no portion thereof will be sold to any party. A covering letter was issued with each licence authorising the holder of the licence to permit the company to import goods, to open letters of credit and to make remittance of foreign exchange for the value of the goods. Pursuant to the licences, goods of the total value of Rs. 10,80,921/ - were imported between the years 1951 and 1954 through the Port of Bombay and customs duty amounting to Rs. 3,48,568/ - was paid, without protest, by the company for clearing the goods under the Bills of Entry lodged with the Port authorities. Out of the materials imported, goods of the value of Rs. 9,50,672/ - were utilised in the construction of the hospital buildings, and the Company disposed of the balance. Submitting that the goods imported were used for a public purpose and the State of Bombay was the owner thereof and therefore exempt by virtue of Article 289(1) of the Constitution from liability to pay customs duty, the Company submitted on September 24, 1954, forty -two applications to the Assistant Collector of Customs, Bombay, demanding that the duty paid in respect of the goods imported be refunded. Four out of these applications were abandoned by the Company. The Assistant Collector by his orders passed between November 24, 1954, and August 10, 1955, rejected 33 of the thirty -eight applications as barred because they were not presented within the period prescribed by Section 40 of the Sea Customs Act, and the remaining five on other grounds. Against the orders of the Assistant Collector the Company appealed to the Collector of Customs and produced, in support of its case that the title to the goods was vested at the time of importation in the State of Bombay, two letters addressed by the Officer on Special Duty, Public Works Department, Bombay, to the Company. The first letter dated January 8, 1957, recited that the import licences were "got issued in the name of Government for importing the particular type of goods which were likely to be required in the execution of the Hospital and Medical College Works at Ahmedabad and Poona entrusted to" the Company "on contracts of completed items basis and the Government had authorised" the Company to operate the licences in question under the letters of authority issued in that behalf. The second letter dated July 10, 1957, recited that "although the property in question vested in Government at the time of importation, the customs duty was paid by" the Company "and not charged to Government, and hence if any refund of customs duty is admissible under the rules, the same is due and payable to" the Company. The Collector of Customs by order dated October 10, 1957, dismissed the appeals, observing that "in order to qualify for exemption from duty, it was an essential condition that the goods should have been the property of the Bombay State Government at the time of importation," but documentary evidence produced by the Company indicated that the goods in question were the property of the Company at the time of importation, and that the "remark" in the letter dated July 10, 1957, that the property in the goods had vested in the Government at the time of importation was merely an expression of opinion and not binding on the Customs authorities. The Collector also confirmed in 33 out of 38 appeals that the applications for refund were barred because they were not presented within the period prescribed by Section 40 of the Sea Customs Act. Revision Applications filed to the Government of India against the orders of the Collector of Customs were also unsuccessful.
(2.) THE Company then applied under Article 226 of the Constitution to the High Court of Punjab for an order calling for the record of the cases decided by the Customs authorities refusing to refund the customs duty paid by it and for an order or a writ of mandamus or any other appropriate writ ordering repayment of the customs duty levied from the Company. The High Court summarily rejected the petition observing that "the question involved was one of fact and that the decision of the Collector was not liable to be questioned in the proceedings for the issue of a writ of mandamus or any other writ." With special leave the Company has appealed to this Court. By Clause (1) of Article 289 of the Constitution the property of a State is exempt from Union taxation: by Clause (2) the Union is authorised to impose any tax to such extent, if any, as Parliament may by law provide in respect of a trade or business of any kind carried on by, or on behalf of, the Government of a State, or any operations connected therewith. Under Section 20(2) of the Sea Customs Act, the provisions of Sub -section (1) relating to duties payable in respect of goods belonging to the Government of a State and used for the purpose of a trade or business of any kind carried on by, or on behalf of, that Government, or any operations connected with such trade or business, apply as they apply in respect of goods not belonging to any Government. It is unnecessary for the purpose of this appeal to express any opinion on the question whether Article 289(1) of the Constitution absolves from liability to pay customs duties prescribed by the Sea Customs Act, goods imported which belong to a State in India. Assuming that goods belonging to a State and not used for the purpose of a trade or business or operation connected with trade or business are, by virtue of Article 289(1) exempt from liability to pay customs duties, the Company had, in support of its claim for refund, to establish that the goods in respect of which duty was levied belonged at the time of importation to the State of Bombay. The evidence on the record clearly establishes that the goods at the date of importation belonged to them and not the State. There is no dispute that the orders for importation of the goods were placed through authorised agents of the Company. The Company opened letters of credit through the normal banking channels, and the Bills of Entry were lodged by the Company. Customs duty in respect of the goods was also paid by the Company and the surplus goods were sold by the Company and not the State of Bombay. The licences were undoubtedly issued in the name of the Officers of the Government of Bombay, but that circumstance alone is not sufficient to establish that the goods imported under the licences were the property of the licensee. The goods imported were required for carrying out the contract for constructing buildings to be used by the Government of Bombay for a public purpose and the assistance of the Government of Bombay was obtained for obtaining licences for importation thereof: but it cannot be assumed that a licensee is always the owner of the goods imported under the licence. The Company has failed to produce the contracts with the Government of Bombay for the construction of the Hospital buildings. The terms of the formal contracts (which must be in the possession of the Company) if produced would have thrown light on the question whether the goods at the time of importation belonged to the Company or they belonged to the State and were made available by the State for the construction work to be done by the contractors. A letter written by an Officer of the Government of Bombay merely asserting that the goods vested in the Government at the time of importation has little evidentiary value, especially in the face of evidence relating to indenting, clearing and financing of goods and disposal of surplus goods by the Company. It was urged on behalf of the Company that the High Court was in error in summarily rejecting the application of the Company for a writ of mandamus or any other appropriate writ, and thereby depriving the Company of the right to lead evidence in support of its case. In our view, there is no substance in this contention. The Company was bound to produce with the petition all such evidence on which it relied in support of its case. Such evidence as was produced before the Customs authorities and the High Court was destructive of the case of the Company. Counsel for the Company contended that the High Court was in error in stating that the decision of the Collector was not liable to be questioned in proceedings for the issue of a writ. The expression used is somewhat unfortunate. It would undoubtedly be shown by the Company that the Customs Authority was under a legal obligation to order refund of the duty collected from the Company, but the only provision in the Sea Customs Act, which deals with refund of duties, viz., Section 40, did not assist the Company. That section provides: "No Custom duties or charges which have been paid and of which repayment, wholly or in part, is claimed in consequence of the same having been paid through inadvertence, error or misconstruction shall be returned unless such claim is made within three months from the date of such payment." The jurisdiction of the Customs Authority could be invoked only on proof of inadvertence, error or misconstruction and the Company had in support of its claim for a writ of mandamus or other writ, to establish that the Customs Authority had arrived at an erroneous decision, but the evidence produced by the Company before the High Court clearly supported the conclusion that the goods belonged to the Company and not to the State Government, and apart from a bare assertion in the letter dated July 10, 1957, written by an Officer of the Government of Bombay that the goods were vested in the State, there was no other evidence in support of the Company's case. We are unable to agree with the contention that the High Court was on the averments made in the petition and the evidence produced therewith, bound to issue a rule upon the Respondents. The appeal fails and is dismissed with costs. ;