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Gadagotlu Sitaramaiah v. Collector Of Central Excise, Hyderabad .
Summary of Opinion — Writ Petition under Article 226 (Central Excise / Sea Customs)
Factual and Procedural Background
The petitioner is a licensed trader in Virginia tobacco (licence L.S. 17/49). On 1-3-1955 he issued 111,635 lbs of tobacco for processing; on completion (21-9-1955) 105,584 lbs remained, a deficiency of 6,051 lbs (about 5.4%). By notice dated 2-11-1957 the Deputy Collector, Central Excise, required the petitioner to show cause why duty should not be demanded under the bond executed (Form B-4) pursuant to Rule 140 of the Central Excise Rules. The petitioner replied (30-11-1957) that 3,619 lbs were lost due to natural causes and 2,432 lbs represented twine; he offered to produce warehouse registers.
The Department examined registers and concluded the deficiency was the full 6,051 lbs and rejected the twine explanation. By order dated 10-5-1958 the Deputy Collector demanded Rs. 2,432 (at Rs.1 per lb for 2,432 lbs not satisfactorily accounted).
The petitioner appealed to the Collector of Central Excise, Hyderabad (appeal filed 11-8-1958). The Collector by communication dated 24-8-1958 required the petitioner to deposit Rs. 2,432 within 15 days, warning that failure to do so would result in dismissal of the appeal for noncompliance with Section 189 of the Sea Customs Act (as adapted by Rule 215 of the Central Excise Rules).
The deposit was not made. Instead, the petitioner filed this writ petition under Article 226 seeking a writ of Mandamus (or other appropriate writ) directing the respondent to hear and dispose of the appeal without reference to Section 189 of the Sea Customs Act read with Rule 215 of the Central Excise Rules.
Legal Issues Presented
- Whether the High Court should issue a writ of Mandamus directing the appellate authority to hear and dispose of the appeal without reference to Section 189 of the Sea Customs Act and Rule 215 of the Central Excise Rules.
- Whether Rule 215 of the Central Excise Rules (which imports Section 189 of the Sea Customs Act) is intra vires the rule-making power of the Central Government (Section 37) or whether it must be introduced only by a notification under Section 12 of the Central Excise Act.
- Whether Section 189 of the Sea Customs Act is applicable to the present facts (i.e., whether Section 189 only applies where goods are confiscated or withheld and where no security bond exists).
- Whether the requirement to deposit the adjudged duty pending appeal unduly abridges or destroys the statutory right of appeal under Section 35 of the Central Excise Act (i.e., whether the condition is so onerous as to render the right of appeal illusory).
Arguments of the Parties
Petitioner's Arguments (as advanced by Mr. Choudary)
- This is not a case where the appellate authority could demand payment of the duty adjudged because the Collector could, alternatively, enforce the bond (Form B-4) under Rule 161(2) to realize dues for infringement/offence under Rule 151; therefore the Excise Collector cannot demand deposit of the entire adjudged duty pending appeal.
- Section 35 of the Central Excise Act confers an unfettered right of appeal and that right cannot be abridged or whittled down by a notification under Section 12 or by a procedure under Rule 215.
- Section 12 of the Central Excise Act confers an unqualified power on the Central Government to adapt provisions of the Sea Customs Act; this is an excessive delegation of legislative power (relying on observations in Rajanarain Singh).
- Rule 215 of the Central Excise Rules is ultra vires — (i) adaptation of provisions of the Sea Customs Act should be only by notification under Section 12 and not by general rule-making power under Section 37; (ii) the adaptation of Section 189 is not covered by the specific items enumerated in Section 37(2).
- Section 189 of the Sea Customs Act does not apply to the present case because, in context, it refers only to cases of confiscation or withholding of goods where no security bond exists.
- The condition requiring payment of the entire duty pending appeal is so onerous as to render the right of appeal ineffective and illusory (relied on Himmatlal Harilal and related authority).
Respondent / Department's Position (as appears in the opinion)
- The respondent, by reference to Rule 215 read with Section 189 of the Sea Customs Act, demanded the deposit and is acting in conformity with those provisions.
- The Government Pleader did not deny that, on the relevant date, there was no notification issued under Section 12 (a fact noted by the Court).
- The respondent's position, implicitly, is that Rule 215 and the imported Section 189 are valid and applicable to appeals under the Central Excise Rules and that the deposit requirement is a permissible procedure during pendency of appeal.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Rajanarain Singh v. Chairman, Patna Administration Committee (AIR 1954 SC 569) | Authority on limits of legislative delegation — cited by petitioner to support contention of excessive delegation under Section 12. | Court noted the citation but declined detailed examination because it was established there was no Section 12 notification on the relevant date; did not rely on it to decide invalidity of Rule 215. |
| Secretary of State v. Appa Rao (AIR 1924 Mad 92; 45 Mad LJ 156) | Rule framed under one provision may be upheld if power exists elsewhere; before declaring rule ultra vires court must be satisfied no power exists at all under any law to make it. | Court relied on this principle to hold that the absence of notification under Section 12 was of little consequence if Rule 215 is referable to some statutory power (e.g., Section 37). |
| Thimma Reddi v. Secretary of State for India (AIR 1924 Mad 523) | Approval of the Appa Rao approach (validating rules if referable to some statutory power). | Cited as approving the reasoning of Appa Rao; used to support that Rule 215 need not be invalid merely because not made under Section 12. |
| Rajam Chetty v. Seshayya (ILR 18 Mad 236 (FB)) | Authorities on upholding rules when alternative statutory power exists. | Referred to in support of the Appa Rao principle that a rule will not be struck down if referable to other statutory power. |
| Queen Empress v. Ganga Ram (ILR 16 All 136 (FB)) | Similar authority on validity of rules when referable to statutory powers. | Used in the chain of precedents supporting the view that mere mislabeling of provision under which rule is made does not necessarily render it ultra vires. |
| Emperor v. Sibnath Benerji (AIR 1945 PC 156) | Sub-section (2) of a rule-making provision is illustrative, not restrictive; broad rule-making power resides in sub-section (1). | Court relied on this Privy Council decision to hold that S.37(2) is illustrative and that Rule 215 is within the general rule-making power of Section 37(1). |
| Santosh Kumar Jain v. State (AIR 1951 SC 201) | Affirmation by the Supreme Court of the principle that sub-section (2) is illustrative and does not restrict sub-section (1). | Cited to support the conclusion that Rule 215 is not ultra vires on the basis that its subject matter need not be confined to the illustrative list in S.37(2). |
| Hoosein Kasam Dada v. State of Madhya Pradesh (AIR 1953 SC 221) | Observation that the right of appeal can be substantive (in context of pre-existing vested rights) — principle concerning retrospective legislative abridgement of vested appeals. | Court distinguished that case: its observation on the substantive nature of appeal rights was context-specific (pre-existing vested rights) and not decisive here where the right of appeal is statutory and may carry conditions. |
| Sandback Charity Trustees v. North Staffordshire Railway Co. (1877) 3 QBD 1 | Principle that an appeal exists only by express enactment; a right of appeal is not inherent. | Cited to support the proposition that a statutory right of appeal can be conditioned by statute or rules made under statute. |
| Rangoon Botatoung Co. Ltd. v. Collector, Rangoon (ILR 40 Cal 21 (PC)) | Affirms that a right of appeal is conferred by statute and is not a matter of implication. | Used to reinforce that appeal rights derive from statute and can be subject to the conditions that statute or valid rules prescribe. |
| Colonial Sugar Refining Co. Ltd. v. Irving (1905 AC 369) | Principle that a pre-existing vested right of appeal cannot be abridged by a subsequent enactment unless expressly or by necessary implication retrospective. | Referenced in the context of Hoosein Kasam Dada to explain limits on legislative abridgement of vested appeals; court found it inapplicable to facts where appeal rights are statutory and accompanied by conditions. |
| Himmatlal Harilal v. State of Madhya Pradesh (AIR 1954 SC 403) | Cited on the question whether a condition imposed can be so burdensome as to affect fundamental rights or render appeal illusory. | Court noted the decision but observed that in Himmatlal the facts involved fundamental rights; the present case did not raise comparable issues so that decision was not directly applicable to invalidate Rule 215. |
| Jethmal Ramswaroop v. State (AIR 1958 Raj 262) | Commentary (by Wanchoo C.J.) on Himmatlal Harilal and scope of observations regarding burdensome conditions. | Used to note that the earlier observations were context-specific and that the present petition did not present the same circumstances. |
| Baroness Wilhelmine Von Maltazan v. Collector of Customs (AIR 1958 Andh Pra 122) | Observations on the burdensome character of provisions of the Sea Customs Act; decision on merits with some obiter remarks on Section 189. | Court observed that comments on Section 189 in that case were obiter and not binding on the present questions. |
| Jagannadham Naidu v. Superintendent of Central Excise (W.P. No. 1022 of 1957) | Observation (by Satayana-rayana Raju J.) that Section 189 requires payment during pendency of appeal and not as a condition precedent to filing an appeal. | Cited by the Court to support the view that the deposit requirement is a measure to be complied with during pendency of appeal and not a bar to instituting the appeal itself. |
Court's Reasoning and Analysis
The Court proceeded by first outlining the nature of the writ of Mandamus (a discretionary prerogative writ) and the requirement that the petitioner must establish an enforceable legal right to compel a public authority. The central factual and legal issue was whether the appellate authority could demand the deposit of the adjudged duty under Rule 215 (which imports Section 189 of the Sea Customs Act) and whether the petitioner was entitled to a writ directing the appellate authority to proceed without reference to those provisions.
The Court analyzed the relevant statutory provisions:
- Section 35 of the Central Excise Act (right of appeal to Board/other authority).
- Section 12 (power to adapt provisions of the Sea Customs Act by notification) — the Court noted there was in fact no notification under Section 12 on the relevant date (a fact conceded/not denied by the Government Pleader).
- Section 37 (rule-making power) — the Court treated this as the primary source of rule-making authority and examined whether Rule 215 could validly be made under Section 37.
- Section 189 of the Sea Customs Act (requires deposit of the amount demanded when the decision relates to duty/penalty) — incorporated by Rule 215.
On the petitioner's first contention (that enforcement of the bond under Rule 161(2) meant the Collector could not demand deposit), the Court held that this argument was a misapprehension because the petitioner had appealed and sought the appellate process; he had not asked the Collector to enforce the bond. Moreover, the point had not been taken earlier in the memorandum of appeal or in the affidavit supporting the petition, so it was belated and lacked substance.
On the contention that Section 35 confers an unfettered, substantive right of appeal immune to conditions (and that Section 12/Rule 215 abridge that right), the Court distinguished the authorities relied upon. It explained that where a right of appeal is a statutory creation it may be subject to reasonable conditions prescribed by statute or valid subordinate legislation. The Court accepted the proposition that a pre-existing vested right of appeal cannot be abridged by subsequent enactment (as in Colonial Sugar / Hoosein Kasam Dada), but found that principle inapplicable where the appeal right is creature of the statute and accompanied by conditions; therefore limitations can be imposed.
On the constitutional/delegation challenge to Rule 215 (relying on Section 12 or asserting Rule 215 ultra vires of Section 37), the Court held:
- The absence of a Section 12 notification did not of itself invalidate Rule 215 if the rule was referable to a statutory power (invoking Secretary of State v. Appa Rao and related authorities).
- Section 37(1) confers a broad rule-making power, and sub-section (2) is illustrative rather than exhaustive (relying on Emperor v. Sibnath Benerji and Santosh Kumar Jain). Thus Rule 215 was not rendered ultra vires merely because its subject matter might also be susceptible of adaptation under Section 12.
- Even if Rule 215 could purportedly have been made under Section 12, that did not mean Rule 215 was illegal; the decisive question is whether the rule was within the scope of some statutory power — the Court concluded it was.
On the argument that Section 189 only applied where goods are confiscated or withheld and where no security bond exists, the Court rejected this narrow construction. It held that Rule 215 imports the procedure relating to deposit of duty pending appeal and that Section 189 is concerned with the deposit requirement; it is not limited to cases of confiscation or absence of security bonds.
On whether the deposit demanded operates as a condition precedent or is so onerous as to render the right of appeal ineffective, the Court reasoned:
- Section 189 requires deposit during pendency of the appeal; it does not make deposit a condition precedent to filing the appeal (citing Jagannadham Naidu).
- The existence of procedural requirements (e.g., security for costs under Order 41 Rule 10 CPC, limitation periods, court-fee requirements) illustrates that the right of appeal can bear conditions without being destroyed.
- While acknowledging authorities that emphasize protection against unduly burdensome conditions (Himmatlal Harilal and related discussion), the Court found no comparable facts here to warrant invoking discretionary relief by mandamus.
Having considered all contentions and precedents cited, the Court concluded that the petition did not disclose circumstances warranting the exercise of the discretionary jurisdiction to issue a writ of Mandamus as prayed.
Holding and Implications
Holding: The petition is DISMISSED. The Court refused to issue the writ of Mandamus directing the respondent to hear and dispose of the appeal without reference to Rule 215 of the Central Excise Rules and Section 189 of the Sea Customs Act. The petition was dismissed with costs (Advocate's fee Rs. 100/-).
Implications:
- Direct effect: The appellate authority may require the deposit adjudged under Rule 215 read with Section 189 during the pendency of the appeal; the petitioner was not entitled to a mandamus directing otherwise in the circumstances of this case.
- The Court upheld the proposition that Rule 215 is referable to the statutory rule-making power (Section 37) and is not invalid merely because there was no adaptation notification under Section 12 on the relevant date; the absence of a Section 12 notification was not dispositive.
- The decision did not purport to lay down any sweeping new principle invalidating Section 189 or Rule 215; the Court specifically treated many of the adverse observations in other cases as context-specific or obiter and confined its decision to the facts and statutory scheme before it. No broader precedent beyond the reasoning in this opinion was announced.
1. This is a petition under Art. 226 of the Constitution of India for the issue of a Writ of Mandamus or any other appropriate writ directing the respondent to dispose of the appeal preferred against the order of the Deputy Collector, Central Excise, without reference to Section 189 of the Sea Customs Act, 1878 read with Rule 215 of the Central Excise Rules, 1944. The facts relevant to the disposal of this petition are within a very brief compass.
2. The petitioner is a trader in Virginia tobacco under the Central Excise Act, 1944 and holds a licence (L.S 17/49) of Chilakaluripet, Narasaraopet Taluk, Guntur District. On 1-3-1955, the petitioner issued a quantity of 1,11,635 lbs of V.F.C Tobacco for processing, grading, stripping and re-bundling. On 21-9-1955 when the processing was completed the tobacco was found to weigh 1,05,584 lbs., only showing thereby a deficiency of 6,051 lbs., or about 5.4 per cent of the total quantity. By a notice dated 2-11-1957, the Deputy Collector, Central Excise, having appropriate jurisdiction required the petitioner to show cause as to why the duty should not be demanded from him in terms of the bond executed by him under Rule 140 of the Central Excise Rules with respect to the quantity of 6,051 lbs., of tobacco found deficient. The petitioner in his reply dated 30-11-1957 stated that there was a loss of only 3,619 lbs., due to natural causes and that the balance of 2,432 lbs., represent the weight of the twine obtained during the processing operations. He, therefore, requested that the Department may admit the loss of 3,619 lbs., due to natural causes and offered to produce his warehouse register for perusal.
3. The Department examined the ware house registers, Part II and Part III and found that there was actually a loss of 6,051 lbs of tobacco out of which the loss of only 3,619 lbs., was due to natural causes. The explanation of the petitioner that 2,432 lbs., represent the weight of the twine was found unacceptable. Accordingly, by an order dated 10-5-1958, the Deputy Collector, demanded from the petitioner a sum of Rs. 2,432/- at rupee one per pound on the quantity of 2,432 lbs., of tobacco not satisfactorily accounted for in terms of B-4, bond executed by him.
4. The petitioner preferred an appeal to the Collector of Central Excise, Hyderabad, on 11-8-1958 raising various grounds. By a communication dated 24-8-1958 the Collector of Central Excise, Hyderabad called upon the petitioner to deposit within 15 days from the date of the receipt of that communication the sum of Rs. 2,432/- adjudged to be payable by the petitioner in and by the order of the Deputy Collector under appeal, and that if he failed to do so, the appeal would be dismissed, for noncompliance with the provisions of Section 189 of the Sea Customs Act.
5. The deposit was obviously not made, but instead this petition has been filed to direct the respondent to hear and dispose of the appeal without reference to the provisions of Rule 215 of the Central Excise Rules read with Section 189 of the Sea Customs Act.
6. A writ of Mandamus is a high prerogative writ which is in the nature of a command from the High Court directed to any person, any statutory authority, or inferior court requiring to do or to forbear from doing any particular thing in exercise of what is in the nature of public duty. Before a suitor can succeed in obtaining a Writ of Mandamus from this Court, he must establish that he has an enforceable legal right to compel a public authority to do a particular thing, which under law it is bound to do. In considering the question whether the petitioner can ask this court to direct the respondent to hear the appeal without reference to Rule 215 of the Central Excise Rules, and Section 189 of the Sea Customs Act it would be necessary to notice a few statutory provisions.
7. Section 35 of the Central Excise Act which confers a right of appeal against the orders made under the Act is in these terms:
35. “Any person deeming himself aggrieved by any decision or order passed by a Central Excise Officer under this Act or the rules made thereunder may, within three months from the date of such decision or order, appeal therefrom to the Central Board of Revenue, or, in such cases as the Central Government directs, to any Central Excise Officer not inferior in rank to an Assistant Collector of Central Excise and empowered in that behalf by the Central Govermnent. Such authority or officer may thereupon make such further inquiry and pass such order as he thinks fit, confirming, altering or annulling the decision or order appealed against:
Provided that no such order in appeal shall have the effect of subjecting any person to any greater confiscation or penalty than has been adjusted against him in the original decision or order.
(2) Every order passed in appeal under this section shall, subject to the power of revision conferred by S. 36, be final”.
Section 12 of the Act states as follows:
“The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the Sea Customs Act, 1878, relating, to the levy of and exemption from customs duties, drawback of duty, warehousing, offences and penalties, confiscation, and procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by S. 3.”
Section 37 is in these terms:
“The Central Government may make rules to carry into effect the purposes of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may—(i) provide for the assessment and collection of duties of excise, the authorities by whom functions under this Act are to be discharged, the issue of notices requiring payment, the manner in which the duty shall be payable and the recovery of duty not paid;
xxxxxx
authorise the Central Board of Revenue or Collectors of Central Excise appointed for the purpose of this Act to provide by written instructions, for supplemental matters arising out of any rule made by the Central Government under this section”.
Section 189 of the Sea Customs Act reads as follows:
“Where the decision or order appealed against relates to any duty or penalty leviable in respect of any goods, the owner of such goods, if desirous of appealing against such decision or order, shall, pending the appeal, deposit in the hands of the Customs-Collector at the port where the dispute arises the amount demanded by the officer passing such decision or order.
When delivery of such goods to the owner thereof is withheld merely by reason of such amount not being paid, the Customs Collector shall, upon such deposit being made, cause such goods to be delivered to such owner.
If upon any such appeal it is decided that the whole or any portion of such amount was not leviable in respect of such goods, the Customs Collector shall return such amount or portion (as the case may be) to the owner of such goods by demand by such owner”.
By a reference to Rule 215 read with Section 189 of the Sea Customs Act, it would appear that in demanding the deposit of the duty adjudged to be payable by the petitioner the respondent is acting in conformity with the above provisions of law. Mr. Choudary, the learned Counsel for the petitioner has challenged the correctness and legality of the procedure sought to be adopted by the respondent on various grounds.
8. The first contention urged is that this is not a case where the appellate authority could demand the payment of duty adjudged. Under Rule 140 when licences are granted to warehouses, it is open to the Collector to require the licensee to furnish a bond on the proper form with such surety or sufficient security, in such amount and under such conditions as he may deem fit. In this case such a bond in form B-4 was executed by the petitioner. In that bond the petitioner undertook to abide by all the provisions of the Central Excise Rules, 1944.
9. If in the instant case it is argued, there had been an infringement of the rules, it would amount to an offence under Rule 151, in which case it was not only permissible, but obligatory on the part of the departmental officials to enforce the terms of the bond under Rule 161(2) of the Central Excise Rules. In such circumstances, it is contended by Mr. Choudary that there can be no question of the Excise Collector demanding the payment of the full amount of the duty adjudged pending disposal of the appeal.
10. This argument, to my mind, is founded on a misapprehension. It is not the case of the petitioner that he had asked the Excise Collector to realise the duty by the enforcement of the bond. On the contrary, he has challenged the correctness and validity of that adjudication and has filed an appeal. When once he has filed an appeal under the Central Excise Rules the provisions relating to the appeal are attracted.
11. Further, this contention in the form in which it has been pressed upon me has not been raised by the petitioner at any time either in the memorandum of appeal that was filed before the Collector of Central Excise, or even in the affidavit filed in support of the present petition. The petitioners cannot now be permitted to raise a point which is not only belated, but entirely without substance.
12. It is next contended that Section 35 of the Central Excise Act, 1944 confers upon a party aggrieved a full and unfettered right of appeal, which could not be either abridged or whittled down by any notification under S. 12 or by the procedure prescribed under Rule 215. It is also argued that the right of appeal is a substantive right which could not be rendered illusory by prescribing onerous and burdensome conditions which amount practically to the destruction of that very right.
13. I will now take up the contention of Mr. Choudary regarding S. 12. It is argued by him that the terms of Section 12 of the Central Excise Act in so far as they provide that the Central Government may declare that any of the provisions of the Sea Customs Act relating to the levy of customs duties and etc., and the procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, confer upon the Central Government an unqualified power to adapt the provisions of another law with such changes as they deem fit, and that it would amount to excessive delegation of legislative power. Assistance was sought to be derived for this contention on the observations of Bose J., in Rajanarain Singh v. Chairman, Patna Administration Committee, 1954 SCJ 661 : (AIR 1954 SC 569).
14. After the arguments in the case were over Mr. Choudary asked for the case being posted for being spoken to and brought to my notice that as a matter of fact there was no notification by the Central Government under Section 12 of the Act on the relevant date. That fact is not denied by the learned Government Pleader. It seems to me, therefore, that I am relieved of the need to examine in any detail Mr. Choudary's contention as to how far S. 12 would amount to a delegation of legislative power beyond the permissible limits.
15. It is then contended by Mr. Choudary that Rule 215 of the Central Excise Rules is ultra vires. The argument is two fold (1) that the adaptation of the provisions of the Sea Customs Act would only be done by a notification under S. 12 in exercise of the express power conferred on the Central Government under that Section and not under the general rule making power.
16. It is argued that where there is a special provision pro tanto, it should prevail over a general provision on the principle of generalia specialibus non derogant; (ii) that the adaptation and application of Section 189 of the Sea Customs Act is not comprehended by one of the enumerated subjects with respect to which the rules could be made under S. 37.
17. The contention that the application of Section 189 and other Sections of the Sea Customs Act could be made only by a notification under S. 12 and not by a rule under S. 37 is, to my mind, not sustainable. It is true that S. 12 does confer upon the Central Government the power to declare the provisions of the Sea Customs Act relating, among others, to offences and appeals with modifications would apply to the duties imposed under the Central Excise Act.
18. But I am not prepared to accede to the contention that because of the power conferred on the Government under S. 12, Rule 215 is rendered not only otiose, but illegal. The real question is whether Rule 215 is validly enacted and is within the scope of S. 37. If it is so the fact that there is no notification under S. 12 is not of any material consequence.
19. Even assuming that the rule could not have been made under Section 37 of the Act by reason of the provisions of S. 12, the rule is still referable to a statutory power. Before a rule is cut down, it would be necessary to see whether that rule has been made not only under the particular section under which it purports to have been made, but whether there is no power at all to make such a rule.
20. In Secy. of State v. Appa Rao, 45 Mad LJ 156 : (AIR 1924 Mad 92) Krishnan J. had to consider a case where the Governor-in-Council framed certain rules under Section 303(2)(b) of the District Municipalities Act, when they should have been really made under Section 303(2)(c) of the Act. The argument was that the rule was made under a wrong provision and, therefore ultra vires. Krishnan J., held as follows:
“Before a rule framed by a rule making authority is declared ultra vires, the Court must be satisfied not only that it had no power to act under the power under which it purported to act, but also that it had no power at all under any law to so act. If power can be found elsewhere from the section quoted, the rules will be referred to that power and held not to be ultra vires”.
In the view he took, the learned Judge followed the principle of the decision of the Full Bench of the Madras High Court in Rajam Chetty v. Seshayya, (ILR 18 Mad 236 (FB) and of the Allahabad High Court in Queen Empress v. Ganga Ram, ILR 16 All 136 (FB). This decision of Krishnan J., was approved by a Bench of the Madras High Court in Thimma Reddi v. Secy. of State for India, 46 Mad LJ 60 at p. 63 : (AIR 1924 Mad 523 at p. 526). The fact, therefore, Rule 215 was not made by means of a notification under S. 12, to my mind, is of little consequence, because the provision though in the form of a rule is certainly referable to a statutory power.
21. It is next contended that even as a rule made under Section 37 of the Act, Rule 215 is ultra vires, for the reason that it cannot be brought in under clauses 1 to 20 of S. 37(2). There is no substance in this contention. As the language of S. 37 goes, the real foundation of the rule making authority is to be sought in sub-section 1 and not in the enumerated clauses of sub-section 2 which are only illustrative and by no means restrict or abridge the amplitude or the generality of the power confided under sub-section (1). In Emperor v. Sibnath Benerji, AIR 1945 PC 156 at p. 160 the Privy Council held as follows:
“In the opinion of their Lordships, the function of sub-section (2) is merely an illustrative one; the rule making power is conferred by sub-section (1) and “the rules” which are referred to in the opening sentence of sub-section (2) are the rules which are authorised by, and made under, sub-section (1); the provisions of sub-section (2) are not restrictive of sub-sec. (1) as indeed is expressly stated by the words ‘without prejudice to the generality of the powers' conferred by sub-section (1)”. The principle of this decision has been affirmed by the Supreme Court in Santosh Kumar Jain v. State 1951 SCJ 291 : (AIR 1951 S.C 201). I therefore, hold that Rule 215 is by no means ultra vires of the rule making power of the Government.
22. It is then contended that even if the rule is valid and the induction of Section 189 of the Sea Customs Act to proceedings under the Central Excise Act and the rules is permissible, Section 189 of the Sea Customs Act has no application to the instant case. It is argued that Section 189 of the Sea Customs Act, in its context, refers to cases where there had been a confiscation or withholding of such goods, in cases where there is no security bond which could be enforced.
23. This contention, to my mind, is wholly untenable. What is inducted by Rule 215 is the procedure with regard to the deposit of the duty pending the appeal. It does not in fact and cannot in law mean that Section 189 can only be applied in cases where there has been a confiscation or with holding of the goods as provided for in the Sea Customs Act.
24. It is then argued that the adaption of. Rule 189 of the Sea Customs Act to the appeals, under the Central Excise Act destroys the unlettered right of appeal conferred under Section 35. It is contended that the right of appeal is a substantive right which could not be frustrated and nullified by a rule. Reliance is placed on the decision of the Supreme Court in Hoosein Kasam Dada v. State of Madhya Pradesh, 1953-4 STC 114 : (AIR 1953 SC 221), in support of the contention that a right of appeal is not merely a matter of procedure, but is a substantive right. The observation of the Supreme Court must be understood in the context of the facts of that case.
25. There the question was whether a right of appeal which had vested in a party under the Central Provinces and Berar Sales Tax Act, 1947 can be destroyed by a subsequent amendment of that; Act. Following the principle of the Privy Council in Colonial Sugar Refining Co. Ltd. v. Irving, 1905 AC 369 their Lordships of the Supreme Court held, that the pre-existing right of appeal which had vested in the appellants on the date of the passing of an enactment cannot be abridged or nullified by the provisions of a subsequent enactment, unless they are expressly or by necessary implication made retrospective in their operation. It is in that context that their Lordships of the Judicial Committee and the Supreme Court observed that the right of appeal is not merely one of procedure.
26. But that is entirely different from a case where a right of appeal is accompanied by certain limitations and conditions. The right of appeal is not an inherent right. It is not something in the nature of a fundamental right. It is but the creature of a statute. In Sandback Charity Trustees v. North Staffordshire Rly. Co. (1877) 3 QBD 1 Lord-Bramwell stated as follows:
“An appeal does not exist in the nature of things. A right of appeal from any decision of any-tribunal must be given by express enactment.”
In Rangoon Botatoung Co. Ltd. v. Collector, Rangoon, ILR 40 Cal 21 (PC) Lord Macnaghten speaking for the Privy Council followed the observations of Lord Bramwell in (1877) 3 QBD 1 and held that a right of appeal can only be conferred by a statute and that was not a matter of implication.
27. It is open to the legislature not to provide for a right of appeal at all or to confer only a special and limited right of appeal as in the case before the Privy Council arising from the Land Acquisition Act. It, therefore, seems to me that there is nothing intrinsically illegal in a rule which prescribes certain limitations to the right of appeal.
28. Further the demand for the payment of the entire duty cannot be construed as a condition, of filing the appeal. As pointed out by Satayana-rayana Raju J. in Jagannadham Naidu v. Supdt of Central Excise, W.P No. 1022 of 1957 all that Section 189 of the Sea Customs Act says is that the duty should be paid during the pendency of the appeal and not as a condition precedent to its filing.
29. By way of analogy a reference to O. 41, Rule 10 of the CPC may well be made. Under that provision the appellate court may in its discretion either before the respondent is called upon to appear and answer or afterwards on the application of the respondent demand from the appellant security for the costs of appeal or of the original suit or both. It cannot be contended that such a rule is destructive of the right of appeal.
30. We can also imagine certain other limitations on what is called the unfettered right of appeal; such for example is the law of limitation and the requirement to pay a particular court fee. There is, therefore, nothing like an absolute inherent, and unfettered right of appeal. It is open to the very statute that confers the right of appeal to hedge it with conditions and when one invokes the right he must also submit to the conditions attaching to that right.
31. It is argued that the condition requiring the payment of the entire duty pending the appeal is so burdensome and onerous that it renders the right of appeal ineffective and illusory. A reference is made to the decision of the Supreme Court in Himmatlal Harilal v. State of Madhya Pradesh 1954 SCJ 445 : (AIR 1954 SC 403). As pointed out by Wanchoo C.J in Jethmal Ramswaroop v. State 1959-10 STC 270 : (AIR 1958 Raj 262) in the case before their Lordships of the Supreme Court, the fundamental rights of a party were affected and there was no question to recourse to an alternative Temedy prescribed under the statute.
32. That being so, the observation as to the nature of the alternative remedy were really obiter. In Baroness Wilhelmine Von Maltazan v. Collector of Customs 1957-2 Andh WR 207 : (AIR 1958 Andh Pra 122) there are similar observations as to the “burdensome character of the provisions of the Sea Customs Act. In that case the decision was rendered actually on the merits and the observations as to Section 189 must, if I may say with respect, be deemed as merely obiter.
33. On a careful consideration of all the contentions raised and argued before me, I am unable to hold that this is a case in which the discretionary jurisdiction of this Court could be exercised in granting the Writ of Mandamus in the manner prayed for.
34. In the result, the petition fails and is dismissed with costs. Advocate's fee Rs. 100/-.
SD/D.H.Z
35. Petition dismissed.
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