Singapore Airlines Ltd. vs Union Of India (Uoi) And Anr.
2003 Latest Caselaw 816 Del

JUDGMENT

D.K. Jain, J.

1. An order dated 31 August 2001, passed by the Joint Secretary to the Government of India, Ministry of Finance, Department of Revenue, hereinafter referred to as the 'reversionary authority', in petitioner's revision petition filed under Section 129-DD of the Customs Act, 1962, is under challenge in this writ petition. By the impugned order, the reversionary authority has declined to interfere with the order passed by the Assistant Commissioner of Customs (FTT), New Delhi, imposing a penalty of Rs.2,07,840/- under Section 35A(1) {clarified in the impugned order as Section 38(3)} of the Finance Act, 1979 (as amended){for short the Act} read with Rule 4 of the Foreign Travel Tax Rules, 1979 (as amended), for delay in the deposit of foreign travel tax (for short 'FTT'). Besides, a penalty of Rs.2,000/- under Rule 10-A and interest at 20% was also levied by the Assistant Commissioner for delay in furnishing of the return for the FTT collected. However, there is no serious challenge to the latter two levies.

2. The background facts leading to the present writ petition are as follows:

The petitioner, a foreign company, is engaged in the carriage of passengers. It has been authorised to collect FTT from the passengers. During the month of July 1997, the petitioner collected a sum of Rs.10,36,200/- as FTT and deposited the same in the account of the Central Government on 1 September 1997. Noticing that there was a delay of two days in the deposit of the said amount to the credit of the Central Government and the FTT return had also been submitted on 2 September 1997, a notice was issued to the petitioner to show cause as to why penalty/interest should not be imposed on them for delayed payment of FTT and for late submission of return thereof. Upon consideration of the reply submitted by the petitioner and after affording an opportunity of personal hearing, the Assistant Commissioner imposed the affronted penalties and interest. Petitioner's appeal to the Commissioner of Customs (Appeals) against the said order was unsuccessful. Feeling aggrieved, the petitioner carried the matter to the Central Government by preferring a revision petition. As noted above, the reversionary authority has dismissed the petition. Hence the present petition.

3. We have heard learned counsel for the parties.

4. Assailing the orders passed by the lower authorities, Mr. Wadhwani, learned counsel for the petitioner, would submit that the authorities below have failed to appreciate that the alleged delay of two days in the deposit of the FTT was beyond the control of the petitioner, inasmuch as, initially the pay order, for the amount to be deposited, obtained on 27 August 1997 was misplaced and was traced out on the next date but due to banks' strike on 28 and 29 August 1997, it could be deposited only on 30 August 1997, for which the bank issued the receipted challis only on 1 September 1997. In nut-shell, the submission is that there being no deliberate default on the part of the petitioner in depositing the said amount, it was not a case for levy of penalty. It is also urged that the pay order having been deposited in the bank's collection box on 30 August 1997, the date of deposit had to relate back to the same date and not 1 September 1997, when it was actually credited to Government's account and, therefore, there was in fact no delay in the deposit of the FTT. Lastly, it is contended that penalty levied is disproportionate to the default alleged.

5. We are not impressed with the stand of learned counsel for the petitioner.

6. As the name suggests, FTT was levied on all passengers, embarking on international journeys, by the Finance Act, 1979. No passenger is permitted to board a ship or aircraft unless he has paid the FTT. Under Section 35(2) of the Act certain agencies including such carriers , as may be notified by the Central Government, are authorised to collect FTT and pay the same to the credit of the Central Government. Rule 4 of the FTT Rules (as amended), prescribes the time for deposit of the tax collected to the credit of the Central Government. It reads thus:

"4. Tax to be paid into the treasury.- The tax collected in any month by any carrier shall be paid by such carrier before the expiry of thirty days from the end of that month into the treasury at the place where the customs port or customs airport of departure of the ship or aircraft is situated:

Provided that the Collector of Customs may, on sufficient cause being shown and having regard to the system of accounting adopted by any carrier, allow such carrier to pay the tax before the expiry of a longer period than the period of thirty days aforesaid."

As per the said Rule, a carrier or any other person authorised to collect the tax is required to deposit the tax collected in any month into the Government treasury before the expiry of 30 days from the end of that month. Similarly, Rule 9 requires a carrier to submit the return in the prescribed form, in respect of every month within the said period.

7. Breach or contravention of these obligations attract penalty/interest under Section 38 of the Act. Section 38 (as amended) by the Finance Act, 1997, insofar as it is relevant for the present case, reads as under:

"(3) Every carrier or other person who fails to pay the foreign travel tax to the credit of the Central Government under sub-section (2) of Section 35 shall, in addition to the payment of such tax and the interest livable thereon, be liable to pay penalty which shall not be less than one-fifth but which may extend to three times of the amount of the tax not so paid to the credit of the Central Government.

4. Any rule made under this Chapter may provide that in case of breach thereof by the carrier or other persons, he shall be liable to a penalty which shall not be less than five hundred rupees but which may extend to fifty thousand rupees, and where the breach is a continuing one, with further penalty which may extend to five hundred rupees for every day after the first during which such breach continues.

5. Any penalty under this section may be adjudged, collected and paid to the credit of the Central Government by such authority and in such manner as may be specified in the rules made under this Chapter:

Provided that no order for imposing a penalty shall be passed by such authority unless the carrier or other person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority."

8. A bare reading of Section 38(3) read with Rule 4 makes it clear that liability to pay the FTT collected to the credit of the Central Government within the stipulated time is an absolute liability. It does not depend on the wrongful intent or blameworthy condition of mind, the concept of means rea, sought to be read into the said provision by learned counsel for the petitioner, when it is pleaded that there was no deliberate defiance of the statutory provisions.

9. True that, generally speaking, means read is an essential ingredient of a criminal offence but there are offences where guilt may not be there in the mind before the offence is committed. Even the aims and objects of a particular legislation may necessarily exclude the application of doctrine of means rea. In this context, the following passage from Russell on Crime (12th Edn. Vol.I, Page 62-63) is very apt:

"In the large numbers of modern statutes many have been interpreted by the courts as using language which, in prescribing punishment for specified deeds (each of which is thus an actus reuse), has excluded any requirement of means read at all. Where this is so, the question whether the accused may have committed the deed intentionally, recklessly, negligently, or by mistake, is irrelevant so far as his liability to conviction is concerned. Such crime is often, and suitably, termed a crime of strict liability, or of absolute liability."

10. In the same very context, it would be useful to notice the following observations of R.C. Lahoti,. J. in his Lordship's partly dissenting opinion in Union of India & Ors. Vs. Ganesh Das Bhojraj :

"Actus non facit reum, nisi means sit read (the intent and act must both concur to constitute the crime). The general rule is that there must be the mind at fault before there can be a crime. Whether or not means read is an essential ingredient of an offence would depend on the object and purpose of a statute and the phraseology employed by the legislature in defining the offence. The doctrine that means read is an essential ingredient in every offence has three recognised exceptions : (i) cases not criminal in any real sense but which in the public interest are prohibited under a penalty (ii) public nuisance; and (iii) cases criminal in form but which are really only a summary mode of enforcing a civil right."

11. We feel that these observations are apposite for construing the aforenoted provisions of the Act. In our view, a default under Section 35(2) of the Act falls under the first exception carved out in the aforenoted paragraph in Ganesh Das Bhojraj's case (supra). Bearing in mind the fact that the carrier collects the FTT from the passengers as an agent of the Government of India and it cannot retain the sum so collected with itself for a period longer than what is permitted, we have no hesitation in holding that the liability to deposit the FTT collected to the credit of the Central Government is an absolute liability. The carrier is duty bound to deposit the FTT in the account of the Central Government strictly by the stipulated time, namely, before the expiry of 30 days from the end of the month in which it is collected. We, therefore, do not find any substance in the contention of learned counsel for the petitioner that since the alleged delay in depositing the said amount was not on account of any contumacious conduct of the petitioner, penalty under Section 38(3) of the Act was not eligible.

12. We also do not find any merit in the submission that since the pay order had been dropped in the bank's collection box on 30 August 1997, the amount is deemed to have been deposited on the said date. Apart from the fact that in support of the plea no material has been placed on record, even the receipted challis, placed on record, records both the date of tender of pay order and receipt of payment as 1 September 1997.

13. Coming to the last contention on proportionality of the penalty imposed, we find that the penalty imposed is the minimum amount, as prescribed in the Section. In that view of the matter, no interference is called for on that count as well.

14. For the foregoing reasons, the writ petition, being without any merit, is dismissed. No order as to costs.