judgement:
Civil Appeal No. 571 of 1969.
Appeal by Special Leave from the Order dated the 6th September, 1968/26th October 1968 of the Government of India, Ministry of Finance (Department of Revenue and Insurance) bearing No. 5262 of 1968.
J. L. Nain, Mrs. A. K. Verma for J. D. Dadachanji & Co., for the Appellant.
R. B. Datar and Miss A. Subhashini, for the Respondent.
The Judgment of the Court was delivered by SARKARIA, J.
This is an appeal by special leave against an order of the Government of India, Ministry of Finance (Department of Revenue and Insurance).
The order was passed by Shri B. Sen, Commissioner (Revision applications), Government of India.
Indian Hard Metal (P) Ltd., the appellant, had imported 15 metric tonnes of wolfram ore from London.
The Customs authorities classified the said ore under item 87 of the Indian Customs Tariff and charged duty at the rate of 60 per cent ad valorem amounting to Rs. 62,871.03P., instead of classifying the imported ore either under item 26 of item 70(7) which are free from duty.
These relevant items, as entered in the Imported Tariff, may be set out as under: Item Name of Article Nature of Standard No. duty rate of 26 Metallic ores all X Free X sorts except ores and pigments ores and antimony ore.
70(7) Cobalt chromium tungsten X Free magnesium and all other nonferrous virgin metals not otherwise specified.
SECTION XXII (ARTICLES NOT OTHERWISE SPECIFIED) 87 All other articles not otherwis specified.
Revenue 60 per cent ad valorem.
The classification made under the residuary item 87 at the time of the import was upheld by the Assistant Collector of Customs; and the Commissioner of Customs dismissed the appeal of the assessee by an order dated July 31, 1965, holding that the 381 bags of wolfram ore was correctly assessable at the rate of 60 per cent duty under item 87 of the Indian Customs Tariff, and not being covered either 471 by entry 26 or 70(7) of the Indian Customs Tariff, was not duty free.
The appellant preferred a revision petition under section 131 of the Customs Act to the Government of India who declined to interfere and dismissed the revision.
Hence this appeal.
Mr. Nain, appearing for the appellant, submits that the ore in question contained a concentrate of 74% of tungsten from wolfram and the rest were impurities.
This concentration is the result of 'selective mining ' process which involves crushing, washing and magnetic separation.
It does not bring about any chemical change in the metal.
At the minepit in its natural form, the ore is not of marketable quality because the tungsten content in ' it, then is hardly 0.5 to 2 per cent.
By the aforesaid concentrating process, the ore is converted into ore of commercial quality.
It is maintained that in commercial parlance wolfram ore of marketable quality must contain a minimum of 655 'o to 70% of the metal, and in one of better quality, the content may be as high as 79%.
Even after being subjected to such process, the ore concentrate does not cease to be tungsten 'ore ' within the contemplation of item 70(7) of the Indian Import Tariff.
In sup port of his contentions, learned counsel has relied upon the judgment of this Court in Minerals & Metals Trading Corporation of India Ltd. vs Union of India & Ors.(1) and certain Certificates of experts, as also an extract from the treatise on 'Tungsten ', by C.J. Smithells Chapman Hall.
As against this, Mr. Datar has drawn our attention to the order, dated July 31, 1965, wherein the Appellate Collector of Customs has observed that no evidence was adduced by the importer to substantiate the contentions that the ore in question had undergone no chemical process before being imported, and that the inference is that such high purification of the concentrate could have been possible only by applying process other than by water, crushing and magnetic separation.
It is stressed that the decision of this Court in Minerals & Metals Trading Corporation of India Ltd. (supra), is not applicable because in that case the percentage of tungsten in the ore was 65% only and that much concentration could be reached by physical process only, such as, crushing washing etc.; while in the instant case, the percentage of the wolfram contained in the goods concerned is little over 75%.
In our opinion, the mere fact that the percentage of tungsten in the ore concentrate in the instant case is about 75 per cent, does not take the case out of the ratio of this Court 's decision cited by Mr. Nain.
(1) [l973] I S.C.R. 997. 472 In Minerals & Metals Trading Corporation of India Ltd. (supra), the appellant had imported 200 metric tons of wolfram concentrate from Russia, under a contract which prescribed minimum contents of 65 % of W03 in the concentrate.
The Customs authorities levied duty at the rate of 60% ad valorem under item 87 of the First Schedule The appellant claimed refund on the ground that no duty was leviable as the goods imported was an "ore" and fell, under item 27 or 70(7) of the Import Tariff.
The Assistant Collector of Customs held that the appellant was not entitled to refund because the term "ore" mentioned in the text of item 26 is confined to articles which are in form and condition in which they are mined and not as wolfram ore concentrate in powder form as in that case.
On appeal by the importer, the Appellate Collector head that the goods in question were in the manufactured form made by special specifications by dressing and were thus not "ores".
The Central Government rejected the revision application filed by the appellant, holding that the examination by the Chemists showed that the uniform granules of the material were not only separated from rock but also from various impurities and had been subjected to such processing as would take them out of the category of metallic ore mentioned in Intern 26.
This Court, speaking through Grover J., allowed the importer 's appeal, with these apposite observations: "There is a good deal of force in the argument of Mr. Setalvad for the appellant that the normally acceptable merchantable quality of wolfram or tungsten contains a minimum 65 % WO33.
This is the usable ore and it is in that sense that it is commercially understood.
Wolfram ore when , mined contains only 0.5 to 2 per cent W03 and in order to make it usable and merchantable ore with minimum 65% W03, concentration is necessary.
If item 26 of the Import Tariff is to be restricted to wolfram being material containing 0.5 to 2 per cent W03, it would be mainly rock which can neither be imported in large quantity and which will have no market.
The separating of wolfram ore from the rock to make it usable ore is a process of selective mining.
It is not a manufacturing process.
The important test is that the chemical structure of the ore should remain the same.
Whether the ore imported is in powder or granule form is wholly immaterial.
What has to be seen is what is meant in international trade and in the market by wolfram ore containing 60% or more W03.
On that there is a 473 preponderant weight of authority bath of experts and books and of writings on the subject which show that wolfram ore when detached and taken out from the rock in which it is embedded, either by crushing the rock and sorting out pieces of wolfram ore by washing or magnetic separation and other similar and necessary process, it becomes a concentrate but does not cease to be ore." (emphasis added) There is ample authority for the view that the tungsten content in the wolfram ore of marketable quality may vary from 60 to 79 per cent, and a concentration within these limits, of the metal in the ore can be attained simply by a process of a "selective mining", that is, by physical process not involving any chemical change in the metal.
The following passage (vide Annexure "I ' in the record) culled out from the Introduction to the treatise on "Tungsten" by C.J. Smithells Chapman Hall, fully bears out this conclusion: "Mining.
Tungsten ores, although so widely distributed rarely occur in massive form.
The ores are usually found in narrow veins, but in some of the rich deposits the veins may in places be several metres wide.
Castrate is the commonest metallic mineral associated with tungsten, but minerals containing bismuth, molybdenum, lead and copper are frequently found; pyrite and arsenopyrite are objection able minerals, which may be present in appreciable amounts, and other common minerals are quartz and fluorite.
There are several kinds of ore deposits classified as segregates, pegmatites replacement deposits, veins and placers.
The tungsten content of the ore as it is mined is usually from 0.5 to 2 per cent, although it amounts to 6 per cent in rare instances.
The concentration of tungsten ores depends chiefly on gravity methods, taking advantage of the high density of the metal, ,although flotation methods are also used.
the concentrates, which contain 60 70 per cent W03, to or the better qualities 75 79 per cent should be virtually free from S.P, As, sb, Bi, Cu, Sn, Ti, and Mo. Magnetic are employed to separate the tin and tungsten in the concentrates.
Scheelite, however, is non magnetic, but when it occurs with garnet, as it does in Tasmania, the garnet may be removed magnetically.
The concentration of Wolframite ores is difficult on account of their mica like formation.
Excessive crushing leads to high losses in tabling and as far as 12 978 SCI178 12 978SCI/78 474 possible the ore should be separated when coarsely crushed " (Emphasis supplied ) There is on the record another Certificate in the form of a letter, dated February 3, 1965, from the Director, National Metallurgical Laboratory, Jamshedpur, addressed to the Controller of Customs, Calcutta, in which it is opined: "The wolfram ore is always selectively mined in the techllical terminology. such "selective mining" does not constitute a manufacturing process.
Unless selective mining is done, the tungsten ore cannot be exported or even sold in the country of its origin.
In view of the above, the import of selectively mined tungsten ore containing 65 % W03 or more should not be regarded as the import of a product which has been manufactured overseas and has passed through the manufacturing process.
By the expression 'selectively mined ', we mean that the wolfram ore is detached and taken out from the rock in which it is embedded and this is done by crushing the rock and sorting out piece of wolfram ore therefrom either by hand or by washing or magnetic separation.
" Then, there is another Certificate from R. V. Briggs & Co. Pvt. Ltd., who claim to have been analysing various ores and minerals including wolframite for over 60 years.
According to these experts, wolframite is always concentrated as part of the mining operation.
The normal method is by washing the crushed ore, thereby freeing the mineral from the gangue.
These experts have further certified that the wolfram ore, which they have analysed for M/s. India Hard Metals, is processed except for physical concentration by washing.
It may be observed that in the Minerals & Metal Trading Corporation (ibid), also, this Court had relied upon a similar Certificate from R. V. Briggs & Co. Still, another Certificate, dated January 13, 1965, which is more or less to the same effect as the Certificate of the National Metallurgical Laboratory, was brought in evidence.
A similar Certificate from this Laboratory was relied upon as authentic expert opinion in the earlier case, also, decided by this Court.
No authority or expert opinion has been cited before us that a concentration of 75 per cent tungsten in wolframite ore of commercial quality, cannot be achieved merely by 'selective mining ', i.e. the physical process of crushing, washing, gravitation, magnetic separation or the like.
Nor is there any evidence on the record to show 475 that the mined ore was subjected to any chemical process which caused a change in the chemical structure of the ore.
The finding of the Appellate Collector of Customs that such a high degree (75%) of tungsten metal virtually free from impurities in the material, could be attained only by some chemical manufacturing process and not merely by crushing, washing or magnetic separation, is not based on any evidence whatever.
It is contrary to the opinions of expects and authorities on the subject, which were brought on the record.
It is evident from the passage extracted from Smithells ' treatise, and the other Certificates of experts, mentioned above, that in order to bring mined wolframite ore to a marketable quality, it has to be concentrated by physical methods, such as, crushing, washing, gravitation, magnetic separation etc.
And by such physical process only, a concentration of WO3 varying from 60 per cent to 79 per cent in the ore can be achieved.
Wolframite (WO3) of ordinary merchantable quality contains 60 to 70 per cent of tungsten, while wolframite ore of better commercial quality contains 75 to 79 per cent of the metal In the light of the above discussion, there is no manner of doubt that the goods imported by the appellants had to be classified as imported ore, falling either under item 26 or item 70(7) of the Import Tariff, and as such, no duty was leviable on them.
The appellants are, therefore, entitled to the refund of the duty paid by them on the goods in question.
In the result, the appeal is allowed with costs, and the impugned orders including the Order dated October, 26, 1968, of the Central Government, are set aside.
The respondents are directed to make appropriate orders for refunding the amounts collected from the appellants by way of import duty on the goods in question.
N.V.K. Appeal allowed .

summary/full:
The appellant imported wolfram ore.
The Customs Authorities classified the said ore under the residuary Item 87 of the Indian Customs Tariff and charged duty at the rate of 60% ad valorem.
Metallic ores (Item 26) and cobalt, chromium, tungsten magnesium etc.
[Item No. 70(7)] are allowed to be imported free of duty.
The aforesaid classification was upheld by the Assistant Collector of Customs and the appeal to the Commissioner of Customs was dismissed.
The appellant 's revision petition under section 131 of the Customs Act to the Government was also dismissed.
n In the appeal to this Court it was contended on behalf of the appellant that the imported ore contained a concentrate of 74% of tungsten from wolfram and the rest were impurities, that the concentration was the result of 'selective mining ' process which involves crushing, washing and magnetic separation that in better quality ore the content may be as high as 79% and that even after being subjected to such process, the ore concentrate does not cease to be tungsten 'ore ' within the contemplation of Item 70(7) of the Indian Customs Tariff.
Allowing the appeal, ^ HELD: 1.
The goods imported had to be classified as imported ore, falling either under Item 26 or Item 70(7) of the Import Tariff, and no duty was leviable on them.
The appellants are entitled to refund of duty paid by them.
[475 E] 2.
The mere fact that the percentage of tungsten in the ore concentrate in the instant case is about 75% does not take the case out of the ratio of this Court 's decision in Minerals & Metal Trading Corporation of India Ltd. vs Union of India & Ors., [471 H] 3.
There is ample authority for the view that the tungsten content in the wolfram ore of marketable quality may vary from 60 to 79%, and a concentration within these limits of the metal in the ore can be attained simply by a process of a "selective mining", that is by physical process not involving any chemical change in the metal.
Wolframite of ordinary merchantable quality contains 60 to 70% of tungsten, while wolframite ore of better commercial quality contains 75 to 79% of the metal.
[473 C, 475D] "Tungsten" by C.J. Smithells Chapman Hall Introduction.
referred 4.
The finding of the appellate Collector of Customs that such a high degree (75% ) of the tungsten metal virtually free from impurities in the material, could be attained only by some chemical manufacturing process and not merely by 470 crushing, washing or magnetic separation, is not based on any evidence whatever.
It is contrary to the opinion of experts and authorities on the subject, which were brought on the record.
[475B]


judgement:
Civil Appeal No.1293 of 1969.
Appeal from the Judgment and Order dated the 25th April, 1968 of the Madhya Pradesh High Court in Misc.
Petition No. 404/64.
S.T. Desai, J.B. Dadachanji K.J.John, Mrs. A.K. Varma for the Appellant.
S.K. Gambhir for Respondents 1, 2 and 4.
E.C.Agarwala and R.N. Sachthey for Respondent No. 3.
607 The Judgment of the Court was delivered by SHINGHAL J.
This appeal by a certificate issued by the Madhya Pradesh High Court is directed against its judgment dated April 25, 1968.
The appellant is a company which cultivates sugarcane and manufactures sugar in its factory in Sehore, Madhya Pradesh, by crushing the sugarcane cultivated by it and purchased from other cultivators.
The State Legislature enacted the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Act, 1958, hereinafter referred to as the State Act, which came into force on July 1, 1959.
The State Government issued a notification on November 28, 1959, which appeared in the State Gazette dated December 4, 1959, under section 23 of the State Act imposing a cess of 12 paise per maund on the entry of sugarcane during a crushing season in the area comprised within "such of the factories in which the total quantity of cane entering for consumption, use or sale to the factory during such season exceeded 10 lakh maunds".
The appellants challenged the validity of the imposition, and the High Court, on August 31, 1961, held that the notification was illegal as the imposition of the levy was with reference to particular premises.
A similar view was taken in regard to the Acts in some other States and Parliament thereupon enacted the , hereinafter referred to as the Validation Act, which came into force on December 26, 1961.
Section 3 of the Validation Act was taken to validate the imposition and collection of the cess under the State Act.
The Manager of the appellant company received an intimation from the Additional Collector of Sehore dated April 13/15, 1964, stating that a sum of Rs. 5,49,262.92 was due from it on account of cess for the period "1959 60 to December 25, 1961" and asking for a bank guarantee for payment of the balance.
The appellant wrote back saying that the amount of the cane cess worked out to Rs. 5,44,835.69 and not Rs. 5,49,262.92, and that as the collector had not assessed the amount of the cess in accordance with the rules, it was not payable by the appellant.
As the Collector ignored the objection of the appellant, a demand notice was served upon it under section 146 of the Madhya Pradesh Land Revenue Code 1959, asking it to deposit Rs. 5,49,262.92 by August 1, 1964.
Once again the appellant denied its liability, but as that was not acceptable to the Collector, the appellant filed a writ petition in the High Court stating that the Collector 's demand on account of the cess was illegal as the Validation Act was ultra vires the Constitution.
The State of Madhya Pradesh traversed the claim in the writ petition.
The High Court upheld the imposition of the cess but reduced 608 it to Rs. 5,44,835.69, by its impugned judgment dated May 25, 1968, and that is why the Company has come up in appeal to this Court.
It has been argued by Mr. Desai on behalf of the appellant that section 23 of the State Act was not ultra vires the Constitution and there could be no question of validating a valid Act.
According to him, the State Act fell within the scope of Entry 52 of List II of the Seventh Schedule of the Constitution and was valid, and Parliament could not legislate in respect of that occupied field and pass the Validation Act.
These arguments have been based on the main contention that the expression "an area" in Sub section (1) of section 23 of the State Act really means "a local area" within the meaning of the aforesaid Entry 52 and no other area.
Sub section (1) of section 23 of the State Act reads as follows, "23.
Levy of cess on cane. (1) The State Government may, by notification, impose a cess not exceeding 25 paise a maund, on the entry of cane into an area, specified in such notification, for consumption, use or sale therein", There are two provisos to the sub section, but they are not relevant for the purpose of the controversy before us.
It would appear from sub section that it permits the State Government to impose the cess on the entry of sugarcane into any area that may be specified in its notification, and there is nothing in it to confine the imposition to a "local area".
As has been held by this Court in Diamond Sugar Mills Ltd and Another vs State of Uttar Pradesh and Another when a similar point arose for consideration with the U.P. Sugarcane Cess Act, 1956, the proper meaning to be attached to the words "local area" in Entry 52 List II of the Seventh Schedule of the Constitution, (when the area is a part of the State imposing the law) is an area administered by a local body like a municipality, a district board, a local board, a union board, a panchayat or the like".
It has been clearly laid down that the premises of a factory are therefore not a "local area".
This court accordingly struck down section 3 of the U.P. Act empowering the Governor to impose a cess on the entry of sugarcane into the premises of the factory on the ground that it did not fall within Entry 52 of the State List and there was no other Entry in the State List or the Concurrent List in which the Act could fall.
It is therefore futile for the appellant to contend that section 23 of the State Act was not ultra vires the Constitution or that it can be upheld on such a construction of the words "an area" in section 23 as to restrict it to mean a "local area".
609 The decision in Diamond Sugar Mills case came up for consideration in this Court in Jaora Sugar Mills (P) Ltd. vs State of Madhya Pradesh and others with a specific reference to the provisions of the State Act, and it was once again held, following that decision, that the imposition of the cess was outside the legislative competence of the State.
While examining that aspect of the controversy, this Court made it clear that what Parliament had done by enacting section 3 of the Validation Act was not to validate the invalid State Statutes, but to make a law concerning the cess covered by the said Statutes and to provide that the said law shall come into operation retrospectively.
This Court clarified that by virtue of section 3 of the Validation Act, the command under which the cess would be deemed to have been recovered would be the command of the Parliament, because the relevant sections, notification, orders, and rules had been adopted by the Parliamentary Statute itself.
It will thus appear that the argument of Mr. Desai to the contrary is of no consequence.
The other argument of Mr. Desai that the writ of mandamus issued by the High Court on August 31, 1961, quashing the notification dated November 28, 1959, could not be made, and was not in fact made, ineffective by the Validation Act, is also of no consequence.
Section 3 of the Validation Act makes this quite clear for it provides as follows. "3.
Validation of imposition and collection of cesses under State Acts.
Notwithstanding any judgment, decree or order of any Court, all cesses imposed, assessed or collected or purporting to have been imposed, assessed or collected under any State Act before the commencement of this Act shall be deemed to have been validly imposed, assessed or collected in accordance with law, as if the provisions of the State Acts and of all notifications, orders and rules issued or made thereunder, in so far as such provisions relate to the imposition, assessment, collection of such cess had been included in and formed part of this section and this section had been in force at all material times when such cess was imposed, assessed or collected; and accordingly 610 (a) no suit or other proceedings shall be maintained or continued in any Court for the refund of any cess paid under any State Act; (b) no Court shall enforce a decree or order directing the refund of any cess paid under any State Act; and (c) any cess imposed or assessed under any State Act before the commencement of this Act but not collected before such commencement may be recovered (after assessment of the cess where necessary) in the manner provided under that Act.
(2) For the removal of doubts it is hereby declared that nothing in sub section (1) shall be construed as preventing any person (a) from questioning in accordance with the provisions of any State Act and rules made thereunder the assessment of any cess for any period; or (b) from claiming refund of any cess paid by him in excess of the amount due from him under any State Act and the rules made thereunder.
" The section thus specifically validates the notification in question in regard, inter alia, to the imposition of the cess.
The mandamus which was issued by the High Court on August 31, 1961, could not therefore avail the appellant thereafter.
It has lastly been argued by Mr. Desai that when a law provides for the assessment of a cess or tax, it is necessary that it should be done by a specific order to that effect, and that an order of assessment cannot be presumed when it has not really been made.
It has therefore been argued that as an order of assessment was not made in the present case, it could not be presumed or deemed to have been made simply because a demand was raised for the purpose of affecting the recovery of the cess from the apellant.
The charging provision for the levy of the cess is to be found in section 23 of the State Act, to which we shall continue to refer for the sake of convenience even after the passing of the Validation Act.
Sub section (2) of that section provides that the State Government shall make rules specifying the authority empowered to assess and collect the cess and the manner in which it shall be collected.
The Madhya Pradesh Government accordingly made the Madhya Pradesh Sugarcane (Regulation of Supply and Purchase) Rules, 1959, hereinafter referred to as the Rules which were also "validated" by Section 3 of the Validation Act.
Rules 60 of the Rules provides that the col 611 lector shall be the authority empowered to "assess and collect" the cess.
Rule 61 makes it obligatory for the occupier of a factory to maintain a correct account, day to day, in the prescribed form, of the cane entering the area specified in the notification under section 23.
Rule 62 provides further that the occupier of the factory shall submit to the Collector, before the close of each month, a return in the prescribed form, showing the quantity of cane that has entered the specified area during the immediately preceding month.
It further provides that within 15 days of the close of the crushing season, the occupier shall deposit the cess leviable on the total quantity of cane which has entered the specified area during the crushing season and shall send the treasury receipt showing the amount of cess deposited to the Collector.
Then comes rule 63, which places the following responsibility on the Collector, "63.
The Collector shall check the amount of cess deposited by the, occupier of the factory from the returns submitted under rule 62 and see if the full amount of cess due from the occupier has been credited into the Treasury.
If the Collector finds that the full amount of cess due from the occupier of the factory has not been deposited he shall by a written notice call upon the occupier to deposit the amount due from him within the period specified in such a notice and the occupier shall deposit the amount within the period specified.
" The responsibility of the Collector for purposes of assessing and collecting the tax under rule 60 of the Rules is therefore to check the amount of the cess deposited by the occupier of the factory.
The check has to be made with the returns submitted by the occupier, and the Collector has to see that the full amount of the cess has been credited to the treasury.
If he finds that this is not so, it is his duty to call upon the occupier, by a written notice, to deposit the amount due from him within the period specified in the notice.
The State Act and the Rules do not therefore require that the Collector shall make a formal order of assessment, and then collect the cess.
It has to be appreciated that the purpose of an assessment is to compute the amount of the cess payable by the person concerned.
"Assess" is a comprehensive word, and in a taxing statute it often means the computation of the income of the assessee, the determination of the tax payable by him, and the procedure for collecting or recovering the tax.
In a case where there is a dispute about the identity of the assessee, the order of assessment serves the purpose of estab 612 lishing that identity and naming the person from whom the tax has to be recovered.
In the present case there is no controversy regarding the identity of the assessee, and the provision regarding the assessment of the cess in sub section (2) of section 23 of the State Act and rule 60 of the Rules related to the checking of the quantity of cane which had entered the specified area, and the amount of cess deposited in respect of it.
It is for that purpose that form 4 provides the details to be submitted by the occupier of the factory, and a duty is cast on him to deposit the cess leviable on the total quantity of the cane, within 15 days of the close of the crushing season, and to send the receipt evidencing the deposit to the Collector.
As has been pointed out by the High Court, the Appellant 's letter (Ext.
R I) dated May 25, 1964, shows that it admitted that the amount of the cess payable by it worked out to a total of Rs. 5,44,835.69 That was therefore the admitted amount of the cess which had to be recovered.
The Collector recorded an order (exhibit R 2) dated July 21, 1964, in which he clearly stated that he had gone through the case and that the Tehsildar should immediately recover the entire amount of the cess due from the appellant forthwith.
He further directed that the "entire amount of the cane cess due from the B.S.I." should be recovered and monthly progress report sent to him.
This shows that the Collector did apply his mind to the matter, and made an express order for the recovery of the total amount of the cess admitted by the appellant.
It seems that the Naib Tehsildar increased the amount beyond what had been admitted by the appellant and directed by the Collector, but the High Court rightly confined the recovery to Rs. 5,44,835.69 which was admitted by the appellant to be due from it on account of cess for the two seasons.
There is thus no force in the argument of Mr. Desai to the contrary.
The appeal fails and is dismissed with costs.
M.R. Appeal dismissed.

dataset_name: IN-Abs

summary/full:
The appellant company cultivates sugarcane and manufactures sugar in its factory, by crushing the sugar cultivated by it and purchased from other cultivators.
The State Government enacted the M.P. Sugarcane (R.S.P.) Act, 1958 which came into force on July 1, 1959.
The State Government issued a notification under section 23 of the Act imposing a cess of 12 paise per maund on the entry of sugarcane during a crushing season in the area comprised within "such of the factories in which the total quantity of cane entering for consumption, use or sale to the factory during such season exceeded 10 lakh maunds.
" The High Court, on a writ application by the appellants, declared the notification illegal as the imposition of the levy was with reference to particular premises.
The Parliament thereupon enacted the .
Section 3 of the Validation Act was taken to validate the imposition and collection of the cess under the State Act.
In April, 1964, the appellant received an intimation from the Additional Collector stating that a sum of Rs. 5,49,262.92 was due from it as cess for the period 1959 60 to December 25, 1961, and asking for a bank guarantee for payment of the balance.
The appellant replied that the amount of cess worked out only to Rs. 5,44,835.69 and the Collector had not assessed the cess in accordance with the rules.
Its objection was ignored and a demand notice was served on it under s.146 of the M.P. Land Revenue Code, 1959, for Rs. 5,49,262.92.
The appellant filed a writ petition challenging the constitutionality of the Validation Act under which the Collector had demanded the cess.
The High Court upheld the imposition of cess but reduced it to Rs. 5,44,835.69.
It was contended that section 23 of the State Act was not ultra vires the Constitution, as the expression "an area" in section 23(1) means "a local area" within the meaning of Entry 52 of List II, 7th Schedule of the Constitution, and the Parliament could not, therefore, enact an Act validating a valid Act.
It was further contended that when a law provides for the assessment of a cess or tax, it is required to be done by a specific order to that effect, but it was not made in this case.
Dismissing the appeal, the Court, 606 ^ HELD: 1.
Section 23 of the State Act was ultra vires the Constitution, and cannot be upheld on such a construction of the words "an area" in section (1) as to restrict it to mean a "local area".
The proper meaning to be attached to the words "local area" in Entry 52, List II of the Seventh Schedule of the Constitution; (when the area is a part of the State imposing the law) is an area administered by a local body like a Municipality, a district board, a local board, a union board, a panchayat or the like.
The premises of a factory are therefore not a "local area" falling within Entry 52 of the State List, and there is no other Entry in the State List or the Concurrent List in which the Act could fall, [608 E H] Diamond Sugar Mills Ltd. and Anr.
vs State of U.P. & Anr.
; and Jaora Sugar Mills (P) Ltd. vs State of M.P. and Ors.
, ; followed.
What the Parliament had done by enacting section 3 of the Validation Act, was not to validate the invalid State statute, but to make a law concerning the cess covered by the said statute and to provide that the said law shall come into operation retrospectively.
By virtue of section 3, the command under which the cess would be deemed to have been recovered, would be the command of the Parliament, because the relevant sections, notifications, orders and rules had been adopted by the Parliamentary Statute itself.[609 B C] 3.
The State Act and the Rules do not require that the Collector shall make a formal order of assessment, and then collect the cess.
The purpose of an assessment is to compute the amount of the cess payable by the person concerned.
"Assess" is a comprehensive word and in a taxing statute it often means the computation of the income of the assessee, the determination of tax payable by him, and the procedure for collecting or recovering the tax.
In a case where there is a dispute about the identity of the assessee, the order of assessment serves the purpose of establishing that identity and naming the person from whom the tax is to be recovered.
The responsibility of the Collector for purposes of assessing and collecting the tax under section 60 of the Rules, is to see that the full amount of the cess has been credited to the treasury by the occupier of the factory.
If he finds that this is not so, it is his duty to call upon the occupier by a written notice to deposit the amount due from him within the period specified in the notice.
[611E H,612A]


judgement:
N: Criminal Appeals Nos.
25 28 of 1972.
Appeals by Special Leave from the Judgment and Order dated the 9th December, 1970 of the Orissa High Court in Crl.
188, 190, 191 and 192 of 1968.
D. Mukherjee, G. section Chatterjee for the Appellant.
Pishori Lal Arora (Not Present) for Respondent in Crl.
A. No. 25/72.
Frank Anthony, (Crl. A. 26/72), Har Dayal Hardy (Crl. A. 27 28/72), Mrs. section Bhandare, A. N. Karkhnis and Miss Malini Peduvel in Crl.
A. Nos. 26 28/72 for Respondents.
The Judgment of the Court was delivered by JASWANT SINGH, J.
By his judgment and order dated November 30, 1965, the Sub Divisional Magistrate, Bhubaneswar convicted Gopinath Patra, respondent in Appeal No. 26 of 1972 under section 409 of the Indian Penal Code and sentenced him to two years rigorous imprisonment and a fine of Rs. 2,000/ .
By the same judgment.
the Sub Divisional Magistrate also convicted Nakula Sahu, respondent in Appeal No. 25 of 1972, Brahmananda Misra, respondent in Appeal No. 27 of 1972 and Niranjan Naik, respondent in Appeal No. 28 of 1972 under section 409 read with section 109 of the Indian Penal Code and sentenced each one of them to two years rigorous imprisonment and a fine of Rs. 2,000/ .
By the same judgment, the Sub Divisional Magistrate also found all the four respondent guilty of the offence under sections 120B of the Indian Penal Code but in view of the fact 'that they were found guilty of the offence of criminal breach of trust for which they had entered into conspiracy, no separate sentence was awarded to them for that offence.
By the same judgment and order the Sub Divisional Magistrate acquitted Nakula Sahu of the charge under section 420 of the Indian Penal Code.
On appeal, the Sessions Judge, Cuttack upheld the judgment and order of the Sub Divisional Magistrate and affirmed the conviction and sentence of the respondents by his judgment and order dated May 1, 1968.
On the matter being taken in revision before it, the High Court of Orissa set aside the aforesaid judgments and orders passed by the trial court and the Sessions Judge and acquitted the respondents of all the charges by its common judgment and order dated December 9, 1970.
[t is M against this judgment and order that the aforesaid appeals have been filed by special leave.
444 The facts giving rise to these appeals are: During the year 1961 62, the Public Health Department had a budget provision of Rs. 1,95,420/ for purchase of wash hand basins and other sanitary fittings required for four items of work.
Though as Controlling Officer, the Superintending Engineer, Public Health Department was required under the financial Code to watch the expenditure against the budget allotments Of the circles under him, it was the Executive Engineer, Public Health Department, who was the drawing and disbursing officer for the aforesaid budget provision of Rs. 1,95,420/ and was responsible for any wastage or excess of appropriation.
At the request of the Executive Engineer, Public Health Department, Bhubaneswar, Lingaraj Das (P.W.7), the then Public Health Engineer, Orissa issued circular letter C(Exh.1) dated September 30, 1961 to several dealers in sanitary goods inviting quotations for supply of 2,000 best Indian make earthen ware wash hand basins with white glazed, straight front, smooth top, and one tap hole and waste holes.
In response to the said invitation, twelve firms including the Cuttack Plumbing Stores of which Nakula Sahu, respondent was the proprietor submitted their tenders.
In his tender (Exh. 2), Nakula Sahu quoted the following rates: 1.
Wash Hand Basins 22" X 16" Barang make First Quality: Rs. 70/ each 2.
Wash Hand Basin 22" X 16" Barang make Second Quality: Rs. 58/ each On the comparative statement (Exh. 33 of the quotations received in response to the aforesaid circular letter being put up before him, P.W.7 accepted the quotation of the Cuttack Plumbing Stores for supply of 1000 22" X 16", Barang make, First Quality, wash hand basins vide Exhibit 3(4) at the rate of Rs. 70/ per wash hand basin plus sale tax at 7% which meant that the basins should be free from all manufacturing defects like dents, fire cracks, warpage or other undulation on the surface etc.
Under Exhibit (4) dated October 13, 1961, the Cuttack Plumbing Stores was asked to supply the wash hand basins to the sub Divisional Officer, Project Sub Division No. 1 and submit the bills in triplicate to the Executive Engineer, Public Health Department, Bhubaneswar for payment.
Under Exhibit 4(4), copies of the aforesaid order (Exh. 4) were forwarded to Gopinath Patra, respondent and Brahmananda Misra, respondent the then Executive Engineer and Sub Divisional Officer, Project No. I Sub Division, Bhubaneswar respectively for information and necessary action.
The supplies were to be received by the Overseer, Niranjan Naik, who was the Section Officer, according to the specifications noted in the order of supplies.
Pursuant to work order (Exh. 5), Nakula Sahu, proprietor of the 445 Cuttack Plumbing Stores supplied 1000 wash hand basins in three instalments representing them to be of first quality Barang Make and submitted bills in regard thereto as detailed below: No.
Of the wash Date of supply Exh.
Of Amount of the Bill hand basins supplied the bill accord ing to which payment demanded 494 27 10 1961 19 Rs. 37,000.60 400 13 11 1961 22 Rs. 29,960.00 106 3 1 1962 25 Rs. 7,939.40 On receipt of the supplies at the Public Health Department Store, Niranjan Naik, respondent, who was incharge of Store, took delivery thereof and entered the same in the Measurement Book certifying therein that the supplies were according to the specifications of the order.
thereafter respondent, Brahmananda Misra, Sub Divisional Officer checked the supplies according to the specifications in the supply order and signed the Measurement Book in token of the fact that the supplies had been correctly made.
Simultaneously with the supplies, Nakula Sahu submitted running bills on behalf of the Cuttack Plumbing Stores on each of which Niranjan Naik, Section Officer appended the following certificate: "Verified the materials received on . and found correct, entered in M.B. (Measurement Book) No. . in Page . .
Taken into stock A/C in (Date and Year).
" Underneath the certificate of Niranjan Naik, Section Officer Brahmananda Misra Sub Divisional Officer appended his certificate and signed the same.
Therefore, the bills were checked in the office of the Executive Engineer who made the payments by means of the cheques.
On November 16, 1961 i.e. after the first two supplies but before the third supply, Lingaraj Das (P.W.7) addressed confidential communication (Exh. 6) to Gopinath Patra hinting to him that according to the information received by him the supplies made by Nakula Sahu were not according to the specifications in the supply order but were of lower class and requiring him to 'verify the quality of each and every wash hand basin and to give a certificate if they were of first class quality as per specification in the tender.
By means of the aforesaid confidential letter, Gopinath Patra was also told to submit a detailed 446 report about the quality of the wash hand basins within four days in case he found that they were not of first quality as per specifications in the tender.
Gopinath Patra was also asked to intimate the number of wash hand basins supplied by the Cuttack Plumbing Stores and the amount paid to it.
As Gopinath Patra did not comply with the aforesaid communication within the aforesaid time, P.W. 7 sent him a reminder to expedite the reply but it was not before December 9 1961 that the former sent the reply (Exh. 7) certifying that 894 wash hand basins which had been supplied by then by the Cuttack Plumbing Stores were all of first quality.
By means of Exhibit (7), Gopinath Patra further informed the Public Health Engineer, Orissa that the Cuttack Plumbing Stores had so far been paid Rs. 66,960.60, including sales tax, for the aforesaid 894 wash hand basins.
On December 19, 1961, P.W. 7 placed order (Exh. 5) with Cuttack Plumbing Stores for further supply of 500 wash hand basins of the aforesaid quality and make at the rate of Rs. 68/ per basin to be delivered to the Public Health Department 's Godown at Bhubaneswar and sent intimation thereof to Gopinath Patra.
Accordingly, Nakula Sahu supplied 50 wash hand basins on January 4, 1962, 410 wash hand basins on October 1, 1962 and 40 wash hand basins on October 14, 1962 and submitted bills (Exhibits 29, 32 and 35) for Rs. 3,638.00, Rs. 29,831.60 and Rs. 2,910.40 respectively.
On these three bills also, Brahmananda Misra, Sub Divisional Officer and Niranjan Naik, Section Officer appended certificates similar to those which they had given on the previous bills.
On the basis of the said certificates, running account bills were prepared and signed by Gopinath Patra, Executive Engineer, and payments were made to Nakula Sahu.
On March 28,1963, the Inspector of Police, Vigilance, Cuttack seized vide seizure Memo (Exh. 73) from the Public Health Godown Bhubaneswar, of which Niranjan Naik, Section Officer was incharge, 593 Barang Make wash hand basins alleged to have been supplied to the Department by the Cuttack Plumbing Stores and A.B. Ghosh (P.W.8), Executive Engineer, Stores Verification Division, attached to the Works Department inspected these basins under the orders of the Secretary, Works and Transport Department and submitted his report (Exh. 49) dated September 9/13,1963 enclosing therewith statements (Exhibits 50 and 51) containing his remarks in respect of each and every one of 593 basins examined by him.
In his report (Exh. 49) A.B. Ghosh inter alia stated: "Not a single basin of first quality could be found during verification.
Three type of basins with manufacturer marks II and III class and with no marks are found.
All the basins which have been verified have different types of defects as noted against each number in the enclosed statements.
In several cases major defects have been noticed in all the type of basins and the nature of major 447 defects have also been noted in the statements.
" Thereupon the. authorities made an inquiry from M/s Orissa Industries Ltd. Barang (Producers of the Basins) which revealed that the Cuttack Plumbing Stores had during its entire transactions with the former purchased only three first quality wash hand basins and the rest of the wash hand basins purchased by it by auction or otherwise from the Company and dishonestly passed not to and accepted by respondents, Niranjan Naik, Brahmananda Misra and Gopinath Patra as first quality wash hand basins were either second quality or rejected ones which did not at all conform to the specifications mentioned in the tender quotations (Exh. 23 and the supply order (Exh. 4).
On these facts, the respondents were charged with and proceeded against for commission of various offences of criminal conspiracy, abetment of and commission of the offence of criminal breach of trust in respect of a sum of Rs. 1,11,280/ entrusted by the State to Gopinath Patra, respondent for purchase of best quality wash hand basins with the result as stated above In these appeals, it has been urged by counsel for the State of Orissa that the facts and circumstances proved in the case are incompatible with the innocence of the respondents and are incapable of explanation on any hypothesis other than the guilt of the respondents for the offences with which they were charged and that the order of their acquittal passed by the High Court in exercise of revisional jurisdiction which as acknowledged by this Court is a limited one has resulted in grave failure of justice.
On the other hand, it has been contended by counsel for the defence that there is no infirmity in the impugned order and the High Court was justified in acquitting the respondent in exercise of its plenary revisional power as the material on record was not sufficient to sustain their conviction On the submission of counsel for the parties, two principal points arise for consideration by us (1) the scope of the power of revision under section 439 read with section 435 of the Code of Criminal Procedure, 1898 and when it should be exercised and (2) whether in arriving at concurrent findings, the trial court and the Sessions Judge committed any manifest error on a point of law which had resulted in flagrant miscarriage of`justice.
So far as the first point is concerned, it is to be emphasized that although the revisional power of the High Court under section 439 read with section 435 of the Code of Criminal Procedure, 1898 is as wide as the power of Court of Appeal under section 423 of the Code, it is now well settled that normally the jurisdiction of the High Court under section 439 is to be exercised only in exceptional cases when 448 there is a glaring defect in the procedure or there is a mainfest error on a point of law which has consequently resulted in flagrant miscarriage of justice.
Reference in this connection may be made to the decisions of this Court in Amar Chand Agarwalla vs Shanti Bose & Anr.
etc.(1) and Akalu Ahdr vs Ramdeo Ram(2), In the latter case viz. Akalu Ahir vs Ramdeo Ram (supra) this Court follolwing its earlier decision in Amar Chand Agarwalla vs Shanti Bose & Anr etc.
(supra) held that in spite of the wide language of section 435 of the Code of Criminal Procedure, 1898 which empowered it to satisfy itself as to the correctness legality or propriety of any finding, sentence or order recorded or passed by any inferior court situate within the limits of its jurisdiction and as to the regularity of any proceeding of such inferior court and in spite of the fact that under section 439 of the Code it can exercise inter alia the power conferred on a court of appeal under section 423 of the Code, the High Court is not expected to act under section 435 or section 439 as if it is hearing on appeal.
The power being discretionary, it has to be exercised judiciously and not arbitrarily or lightly.
Judicial discretion, as has often been said, means a discretion which is informed by tradition, methodised by analogy and disciplined by system.
This takes us to the consideration of the second point.
In relation to this point, it may be observed that nothing has been brought to our notice on behalf of the respondents to indicate that there was any glaring defect in the procedure adopted by the lower courts or that there was a manifest error on a point of law in the judgments and orders passed by them which had resulted in flagrant miscarriage of justice which needed to be set right by the High Court.
A scrutiny of the evidence which we have made at the request of the counsel for the parties shows that there was not even any misappreciation of evidence on the record by the lower courts which could be said to have resulted in gross failure of justice warranting interference by the High Court.
We may at this stage indicate that while adverting to the evidence, we shall be confining ourselves to the case against Gopinath Patra and Niranjan Naik, respondents in Appeals Nos. 26 and 28 of 1972 respectively, as the other two appeals Nos. 25 and 27 of 1972 against Nakula Sahu and Brahmananda Misra have abated due to their death during the pendency of the appeals in this Court.
Out of the 17 witnesses examined by the prosecution to bring home the aforesaid offences to the respondents, the evidence of (1) ; (2) ; 449 P. Ws. 2, 14, 5, 7, 8, 11, 12, 13, 15 and 17 deserve special mention.
P. P. Bahuguna (P.W. 2) who is the Sales Manager of Orissa Industries Ltd., Barang, since 1956 has deposed that accused Nakula Sahu used to transact business with his Company as proprietor of N. C. Sahu & Sons and Cuttack Plumbing Stores; that detailed entries showing the date, invoice No. and total bill amount of every sale effected by his Company are made in the Sales Day Book, cash book and ledger of the Company and that in the ledger, the transactions with different customers are mentioned in separate folios.
The witness has by reference to copies of invoices existing on file No. C. 157 (Exh. 11) consisting of 391 pages containing the record relating to all the transactions of Orissa Industries Ltd. with the Cuttack Plumbing Stores and Nakula Sahu & Sons and ledgers [Exh. 12 to 12(4)] evidencing all transactions with Nakula Sahu, Cuttack Plumbing Stores and N. C. Sahu & Sons and containing cross references to invoices testified that it was for the first time in June 8, 1959 that the Cuttack Plumbing Stores purchased three wash hand basins 22" X 16" of Class I quality from his Company; that from June, 1961 to February, 1962, the Cuttack Plumbing Stores purchased 1704 Class II and 300 Class III wash hand basins 22"X16" from his concern; that apart from these sales there has been no other sale of wash hand basins to accused Nakula Sahu or Cuttack Plumbing Stores or N. C. Sahu & Sons; that Nakula Sahu was transacting business with his Company in respect of all the aforesaid invoices; that in the years 1961 and 1962, the price of class I wash hand basin 27 ' 'X16 was about Rs. 53/ per piece and price of Class II and Class III wash band basin 27 ' 'X16 ' ' was about Rs. 38.50 and Rs. 23/ per piece respectively; that glass and ceremic products became subject to Central Excise duty for the first time with effect from the mid night of February 28,1961 and that from that date marking of gradations by stamp and indelible ink were given on wash hand basins produced by his Company; that wash hand basins produced by his Company are marked with rubber stamp as 1st, or 2nd or Com.
Or 3rd according to the different gradations of the products; that in some cases, the wash hand basins are marked as I, II, Com., or Ill, in place of 1st, 2nd, Com.
Or 3rd respectively; that of all the gradations 1st or I are the best quality; that first quality products are those which have no blemish; that the second quality basins are those having minor defects without affecting their utility; that the third quality products are those having major defects either affecting or not affecting their utility; that by II submitting quotations his Company had made known to the Government Departments that there were wash hand basins of different 450 gradations in his concern; that the gradation marks 011 the wash hand basins made by his concern are the surest guide to the customers regarding the quality of goods.
The witness has further affirmed that during the years 1961 and 1962 i.e. from February 28, 1961 to the end of 1962, only 70 to 80 first quality i.e. Class I wash hand basins were produced by his Company and were stamped as such; that from February 28, 1961 to the end of February, 1962 only 54; Class I (first quality) wash hand basins 22 ' 'X16 ' ' were produced by his Company; that in November, 1961 and December, 1961, no First quality wash hand basins were manufactured.
in the factory of his Company and that though his Company has been attempting to produce first quality wash hand basins, it has not succeeded in producing them in large numbers.
K. L. Sigtia (P.W. 14) who is the Secretary, orissa Industries Ltd., Barang, since 1951 has corroborated the statement of P. P. Bahuguna (P.W. 2) in all material particulars with regard to all the business transactions made by his Company with the Cuttack Plumbing Stores, Nakula Sahu and M/s Nakula Sahu & Sons including 200 numbers of wash hand basins 26"X16" which as per invoice 1] (24) were sold in auction by the Company to the Cuttack Plumbing Stores at Rs. 15/ per piece.
He has also stated that the wash hand basins produced in his factory prior to March 1, 1961 (when the Central Excise duty was levied on the potteries including the wash hand basins) were sorted out and stocked separately according to their grades; that after the introduction of excise duty, his Company graded the wash hand basins into there classes viz.
First, Second and Third and the markings were given on the said wash hand basins as l, II or III according to the gradations as directed by the Central Excise office; that after six months, the Excise staff told them to change the markings as 1st, IInd or IIIrd according to the aforesaid three gradations and accordingly for first grade, they gave marking 1st, for second grade, they gave marking IInd and for third grade, they gave marking IIIrd and that 'Orissa ' is the trade mark of their firm.
The witness has by reference to file Exhibit (ll) affirmed that it was on June 8, 1959 that the Cuttack Plumbing Stores for the first time purchased three 22" X 16" wash hand basins for 'first quality from his concern vide Exhibit 11 (2) which bears the signature of Nakula Sahu; that during the period 1959 to 1962 Nakula Sahu or Nakula Sahu & Sons or Mis Cuttack Plumbing Stores did not purchase any wash hand basins from his Company 's factory except those entered in Sales Day Book [Exh. 65 to Exh. 65 (18) ].
He has further affirmed that his Company does not produce any wash 451 hand basins called the best quality wash hand basins.
The witness A; has denied that his concern ever sold any second class wash hand basins representing them to be of best quality.
Nabaghan Misra (P.W. 5) who is the Head Clerk in the office of the Executive Engineer, Public Health Department, Bhubaneswar has stated that on receipt of copy of the work order, The concerned Executive Engineer of the Public Health Department directs his subordinates to receive the commodities; that after the commodities are supplied, the suppliers submit their bills to the authority who receives the commodities.
Ultimately, the Executive Engineer of the concerned Division makes payment by cheques.
He has further stated that the commodities supplied are physically received by the Overseer who is the Section Officer of the concerned Division; that the Section Officer is required to receive the supplies according to the specifications noted in the order for supply, to enter the commodities received by him in the Measurement Book and to give a certificate in that book that the supplies are according to the specifications of the order; that thereafter the Sub Divisional Officer of the Division has to check the supplies with reference to the specifications given ill the order and put his signatures in the Measurement Book; that the stock registers of the supplies received are maintained in the office of the Sub Divisional Officer; that Section Officer and the Sub Divisional Officer endorse certificates on the order as to the correctness of the supplies in terms of the specifications in the order; that thereafter the bill is checked in the office of the concerned Executive Engineer and after payment order is made by the Executive Engineer on duplicate voucher prepared by the Section Officer and countersigned by the Sub Divisional Officer, payment is made by cheque issued by the Executive Engineer; that Exhibit 19 is the bill for Rs. 37,060/ submitted by the Cuttack Plumbing Stores of which the accused Nakula Sahu is the proprietor, in respect of the supply of wash hand basins, 494 in number of the specifications and quality mentioned therein; that the corrections in ink arc made by accused Niranjan Naik, the then Section Officer and are initialled by him; that the endorsement and the certification at the bottom are in the writing of the accused Niranjan Naik and contain his signature dated October 28, 1961; that the corrections in the endorsement have been initialled by accused Niranjan Naik; that Exhibit 20 is the running account bill prepared in the office of Niranjan Naik, the then Section Officer in relation to Exhibit 29 and bears the signatures of both Niranjan Naik, Overseer and Brahmananda Misra, Sub Divisional Officer.
The witness has also identified the signature and initial of the accused Gopinath Patra on Exhibit 20(4) and has stated that alter compliance 452 with all the formalities, cheque for the aforesaid amount was made over to accused Nakula Sahu on October 28, 1961.
The witness has likewise proved bills (Exhibits 22 and 25) ill regard to payment of Rs. 29,960/ and Rs. 7,939.40 respectively.
Lingaraj Das (P.W. 7) who was the Public Health Engineer and also the Controlling Officer of the Public Health Department during the relevant time has stated that on receipt of the quotations called by him vide Exhibit 1, he accepted the quotations of the Cuttack Plumbing Stores and placed an order (Exh. 4) with the latter for supply of wash hand basins of the make, specifications and quality and at the rate and on the conditions noted therein.
The witness has also proved the aforesaid letter (Exh. 6) addressed by him to Gopinath Patra and the reply (Exh. 7) received from the latter certifying that 894 wash hand basins were of first quality.
He has further stated that by first quality, he meant that the wash hand basins should be without any manufacturing defects.
A. B. Ghosh (P.W. 8) who has passed the examination in Sanitary Engineering and Water Supply as a special subject has stated that he was working as Executive Engineer, Verification Officer, for all departments under the Public Works Department; that under orders of the Secretary, Sanitary Works Department, he inspected and verified 593 numbers of "Orissa" 22" X 16" wash hand basins supplied by accused Nakula Sahu and stocked inside the Public Health Department Godown at Bhubaneswar, the key of which was with accused Niranjan Naik; that the inspection and verification was commenced by him on August 30, 1963 and completed on August 31, 1963 in the presence of accused Niranjan Naik who pointed out the 593 wash hand basins, which were in a separate stock, as having been supplied by accused Nakula Sahu; that on verification, he did not find any class I wash hand basins in the said 593 wash hand basins and that almost all the said wash basins had manufacturing defects and bore markings II or IInd or III and only a few had no marks as stated by him in his inspection and verification report (Exh. 49).
During his deposition before the courts also, the witness examined the said wash hand basins and gave in detail the manufacturing defects observed by him on each one of them.
He has further stated that fire cracks, dents, blisters, uneven surface, unglazed patches, undulating surface and uneven holes in any place of basins are the manufacturing defects and those defects cannot occur after manufacture is over; that on verification, he found almost all the aforesaid wash hand basins bearing the marks II or III which led him to presume that those were the marks of classification.
The witness has 453 denied that glazed patches will become unglazed due to bad storage and handling or that any wash hand basin would become unglazed by friction.
Pursottam Kar (P.W.10 ) who, took over as Sub Divisional Officer, Project I., Public Health Department, Bhubaneswar in January, 1963 has on the basis of monthly stock register (Exh. 45) of Project I stated that 22"X16" wash hand basins numbering 494, 400, 106, 410 and 40 were received at the godown of the Public Health Department, Bhubaneswar from the Cuttack Plumbing Stores on October 28, 1961, November 13, 1961, January 3, 1962, January 31, 1962 an(l February 13, 1962 respectively.
He has further stated that in 1957 only thirty 22"X16" wash hand basins were received; that in 1958 and 1959, no 22"X16" wash hand basins were received and that in 1960 only eight 22"X16" wash hand basins were received.
He has further stated that at the time of verification, accused Niranjan Naik told him that the wash hand basins verified vide Exhibits 50 and 55 were supplied by accused Nakula Sahu.
D. N. Singhdeo (P.W. 11) who is the Executive Engineer, Public Health Department has stated that in April, 1963, he went to the Store of the Public Health Department, Bhubaneswar with Misra, Assistant Pottery Manager of Orissa Industries, Rao, Inspector of Central Excise and Dass, Intelligence Officer and verified some of the wash hand basins.
The stock of the wash hand basins which were to be verified were shown to him by accused Niranjan Naik, the then Overseer incharge of the Store.
Sachidananda Misra (P.W. 12) who was Incharge of Production in Konark Ceramics, Athgarh from 1960 to 1964 has affirmed that the first quality wash hand basins mean wash hand basins having no manufacturing; defect.
P. Ram Krishna Rao (P.W. 13) who is the Central Excise Inspector, Mauza Jaipur has stated that during the time he was working in Orissa Industries Ltd., Barang as Assistant Pottery Incharge, rubber stamp marks were put on the wash hand basins produced in the factory showing their quality and gradation such as I or IInd or only II or IIIrd or only III or IVth or only 'IV ' as the case was; that very small number of first quality wash hand basins were being produced and that at the time of the aforesaid verification, rubber stamp marks II or III were there.
Abdul Rasid Khan (P.W. 15), L.D.C. in Sales Tax Office, Cuttack, West Circle has by reference to the record stated that in the application (Exh. 68) made by the Cuttack Plumbing Stores, 454 Nakula Sahu has signed as proprietor/Manager/Partner/Principal Officer of the said firm; that on the said application, Registration Certificate No. CU 12681 dated December 27, 1956 showing Nakula Sahu as Proprietor of the Cuttack Plumbing Stores and that Exhibit 69 is the office copy of the said certificate and that on October 20, ]963, the said certificate was renewed for the year 1963 64.
Prasanta Chandra Das (P.W. 17) who is the Inspector of Police attached to Vigilance Branch has stated that on March 28, 1963 he seized 593 wash hand basins of Barang Make bearing 'Orissa ' Trade Mark from Public Health Department Stores, Bhubaneswar as pointed out by Niranjan Naik, accused.
From the resume of the prosecution evidence as given above, it is abundantly clear that quotations in regard to the supply of first quality, barang make, 22"X16" wash hand basins submitted by the Cuttack Plumbing Stores, of which Nakula Sahu was the proprietor were accepted by P.W. 7 and work order for supply of 100 wash hand basins of the aforesaid quality, make and size was issued to the former by the latter; that Gopinath Patra who as Executive Engineer, Public Health Department Bhubaneswar, was entrusted with and had dominion over Rs. 1,95,420/ for purchase of wash hand basins and other sanitary fittings entered into criminal conspiracy with Niranjan Naik, who was Section Officer of Project No. 1 Sub Division, Public Health Department, Bhubaneswar and other accused for commission of criminal breach of trust punishable under section 409 of the Indian Penal Code; that in pursuance of the said conspiracy, Gopinath Patra committed criminal breach, of trust in respect of a huge amount of Government funds by dishonestly purchasing between October, 1961 and February, 1962 wash hand basins from the Cuttack Plumbing Stores which were not of first quality, barang make as specified in the tender but were substantially inferior in quality and value to those basins; that pursuant to the said conspiracy, Niranjan Naik, accused dishonestly accepted and took delivery of sub standard wash hand basins differing materially in quality and value from those which were contracted to be supplied and indented for knowing pretty well from their gradation marks which were a sure guide about their quality that they were of inferior quality and appended false certificates in the Measurement Book and on the aforesaid bills Nos. 19, 22 and 25 presented by the Cuttack Plumbing Stores to the effect that the supplies of wash hand basins made by it were correct according to .
the specifications mentioned in the order and consequently abetted Gopinath Patra in the commission of the offence of criminal breach of trust punishable under section 409 of the Indian Penal Code and 455 thereby committed an offence under section 409 read with section A 109 of the Indian Penal Code; that from February 28, 1961 to the end of 1962 A.D.
Only seventy to eighty first quality wash hand basins were produced by Orissa Industries Ltd., Barang; that except for three first quality wash hand basins purchased by the Cuttack Plumbing Stores in June, 1959 from Orissa Industries Ltd., Barang, the rest of the wash hand basins purchased by Nakula Sahu either in his individual capacity or as proprietor of N. C. Sahu & Sons or as proprietor of the Cuttack Plumbing Stores from the said Company were all of II or III gradation and as such were substantially inferior in quality and value to the specifications mentioned in the tender (Exh. 2) and the work order (Exh. 4) and that save and except the number of wash hand basins detailed ill their depositions before the Court by P.Ws. 2 and 14, who are Sales Manager and Secretary respectively of Orissa Industries Ltd., Barang, no other wash hand basins were purchased by Nakula Sahu or N. C. Sahu & Sons or cuttack Plumbing Stores, of which Nakula Sahu was the proprietor.
The plea of Gopinath Patra that he acted bonafide on the certificates of the Section Officer and Divisional Officer whose duty it was to verify the quality of each and every wash hand basins on receipt of the consignments and passed bills Nos. 19, 22 and 25 in a casual manner and that 894 wash hand basins which he inspected under orders of the Public Health Engineer conveyed to him vide Exhibit 6 were of Barang Make, first quality, and 593 wash hand basins which were seized by P.W. 17 under Exhibit 73 were not from 894 wash hand basins verified by him in Exhibit 7 is totally falsified by the clinching evidence furnished by Exhibit 7 dated December 9, 1961 which.
it will be recalled was sent by Gopinath Patra in rely to the confidential communication addressed to him by P.W. 7.
In this Exhibit 7 Gopinath Patra clearly informed P.W. 7 that he had inspected each and every one of the 894 wash hand basins which had up to that date been supplied by the Cuttack Plumbing Stores and found them all of Class 1 Barang make.
The conclusion is, therefore, irresistible that Gopinath Patra actively connived at the delivery and acceptance of inferior quality of wash hand basins by the supplier which did not at all conform to the specifications given in the tender submitted by it or in the supply order placed by him and dishonestly passed orders for payment of first quality goods knowing that the wash hand basins supplied were of inferior quality and thus committed criminal breach of trust in respect of a huge amount of Government funds and that in order to conceal his guilt he purposely gave false certificate vide Exhibit 7 that 894 wash band basins supplied by the Cuttack Plumbing Stores (out of which 593 456 were seized by P.W. 17 and verified by P.W. 8 to be defective and of II or III quality) were all of first quality and conformed to the specifications in the supply order although in the proved facts and circumstances, none could be of first quality.
That this was so and he furnished the aforesaid certificate even without caring to visit the Public Health Department Store, Bhubaneswar for physical verification as directed by his superior is further evident from the fact that he omitted to make even a mention in Exhibit 7 about the quality of 106 numbers of wash hand basins which had been indisputably received in the Store before he sent reply Exhibit 7 to the aforesaid confidential query made by P.W. 7 vide Exhibit 6.
The further plea of the accused that 593 wash hand basins seized from the Public Health Department Store by P.W. 17 were not from amongst those supplied by the Cuttack Plumbing Stores also stands negatived from the evidence of P.W. 8 (who verified the said wash hand basins at the pointing out of Niranjan Naik) as also from the evidence of P.Ws. 10, 11, 12, 13 and 17.
Thus it is manifest that neither the trial court nor the Sessions Judge committed any error of fact or of law in arriving at their conclusions and the High Court misdirected itself in upsetting their concurrent findings ignoring the well recognised principles for the exercise of revisional jurisdiction.
From the material on the record.
we are satisfied that the offences with which Gopinath Patra and Niranjan Naik were charged were brought home to them beyond any reasonable doubt.
From the foregoing reasons, we set aside the aforesaid judgment and order of the High Court acquitting Gopinath Patra and Niranjan Naik and convict them for the offences with which they were charged and held guilty by the trial court.
Keeping however, in view the fact that the said respondents are likely to lose their jobs and must have gone through a lot of mental and financial strain during the prolonged proceedings before the courts lasting for over fourteen years, we think that a consolidated fine of Rs. 10,000/ in ease of each of the respondents will meet the ends of justice.
Accordingly while remitting the substantive sentence of imprisonment, we impose a sentence of fine of Rs. 10,000/ on each one of the said respondents viz. Gopinath Patra and Niranjan Naik.
In default of payment of fine, each one of the said respondents shall undergo imprisonment for a period of six months.
The fine shall be deposited within a 457 period of two months from today failing which the aforesaid respondents shall surrender themselves to their bail bonds to undergo the aforesaid imprisonment imposed on them in default of payment of fine.
P.B.R. Appeal allowed.

summary/full:
The respondents in each of the four appeals were convicted and sentenced under section 409 IPC by the Sub Divisional Magistrate.
On appeal the Sessions Judge affirmed the conviction and sentences passed against them.
In revision the High Court set aside the judgments and orders passed by the trial court and the Sessions Court and acquitted the respondents of all the charges.
On the question of (i) the scope of the power of revision of the High Court under section 439 read with section 435 Cr.
P.C. 1898 and when it should be exercised; and (ii) whether, in arriving at a concurrent finding, the trial court and the Sessions 1 judge committed a manifest error on a point of law which had resulted in flagrant miscarriage of justice.
Allowing the appeal, ^ HELD: (1) Although the revisional power of the High Court under section 439 read with 9.
435 of the Code of Criminal Procedure, 1898 is as wide as the power of Court of Appeal under section 423 of the Code, it is well settled that normally y the jurisdiction of the High Court under section 439 is to be exercised only in exceptional cases when there is a glaring defect in the procedure or there is a manifest error on a point of law which has consequently resulted in flagrant miscarriage of justice.
In Akalu Ahir vs Ramdeo Ram, ; this Court held that in spite of the wide language of section which empowered it to satisfy itself as to the correctness, legality or properiety of any finding.
sentence or order recorded or passed by any inferior court situate within the limits of its jurisdiction and as to regularity of any proceeding of such inferior court and in spite of the fact that under section 439 of the Code it can exercise, inter alia, the power conferred on a Court of appeal under section 423, the High Court is not expected to act under section 435 or section 439 as if it is hearing an appeal.
The power being discretionary it has to be exercised judiciously and not arbitrarily or lightly.
Judicial discretion means a discretion which is in formed by tradition, methodised by analogy and disciplined by system.
[447H; 448A B] Amar Chand Agarwalla, vs Shanti Bose & Anr.
; , and Akalu Ahir vs Ramdeo Ram, ; followed.
(2) Neither the trial court nor the Sessions Court committed any error of fact or of law in arriving at their conclusions and the High Court misdirected itself in upsetting their concurrent findings ignoring the well recognised principles for the exercise of revisional jurisdiction.
From the material on record it is clear that the offences with which the respondents were charged were brought home to them beyond reasonable doubt.
[456E] 443