SC finds fault with HC on interpretation of principles of jurisdiction

T R Rustagi

THE Indian Constitution empowers the high courts to issue writs for enforcement of any of the fundamental rights guaranteed by the Constitution. Thus the high courts may entertain the writ petitions directly without relegating the matter to the appellate authorities.

However, what is interesting is that at times the high courts may go wrong in entertaining writ petitions on a matter that can best be left to the appellate authority or the tribunal. A recent case decided by the Supreme Court is an illustration.

It is not disputed that there was no evidence before the HC on the basis of which it could come to the conclusion that prawns were not fish in common parlance - SC

T.R.RUSTAGI Joint Secretary, Ministry of Finance

The facts of the case are quite simple. An exporter exported processed or frozen prawns and shrimps. Under the Andhra Pradesh Agricultural Produce Cess Act, cess applies on export of agricultural products specified in the schedule to that Act. The schedule included fish as one of the items subject to cess.

However, the customs department insisted on charging cess on prawns and shrimps as well. The exporter contested that prawn is not fish and petitioned the Andhra Pradesh High Court.

The customs authorities urged that word fish is used in a broad term.
It would include aquatic animals like crab, prawns, etc. On the other hand, the exporter contended that prawns are not fish as understood in the common parlance known to the trade or to the common man who is expected to follow the law. It was also argued that the words in a fiscal statute couldn’t be given an extended meaning. The high court examined the rival contentions and observed that, “In common parlance (too), fish and prawns as known to persons dealing in fish or prawns either in business or for personal consumption are two different items.”

The court refuted the department’s argument of intendment in such situation.

It said: “It is the basic principle of applicability of fiscal legislation, that a person could be taxed only if one comes under the letter and spirit of the law and not otherwise ie, howsoever just apparently it may appear to fall within the spirit of law, tax or cess can not be levied or imposed without there being specific words clearly showing the levy by the legislation. Levy cannot be supported relying on the spirit of law by the Department.”

Explaining that words have to given their plain meaning, the court observed, “There is no scope for levy by intendment or presumption or by interpretative process or implied levy by process of reading into the plain words.

One has to look into the letter of the word subject to levy. Beliefs and presumptions that it included the zoological meaning or genetic affinity can not be imported into the schedule for the purpose of levy.” The court felt that it did not require much evidence to accept that fish and prawn are two different items: “There can be no gain saying that judicial notice can be taken of a fact that a common man treats fish and prawns as two different articles, like wheat or bajra, though both are agricultural produce and may be genetically or zoologically same.

It is difficult to assume that a man, not conversant with the dictionary meaning or the zoological meaning or scientific meaning or genetic meaning for whom the law is meant to be followed, would treat the prawn a fish and on demand by a person, prawn will be supplied with fish and vice versa.”

The high court rejected the department’s plea that the matter be relegated to appellate authority to decide it on merit. The high court was emphatic on a conclusion what appeared to it to be so obvious. “
The question of putting a meaning of a fish only would arise if the word fish is capable of two meanings or any implied inclusive meaning as the legislature intended. No process is involved to which prawn can be converted into a fish.”

The department contested the ruling of the high court in the Supreme Court. The apex court did not approve of the high court’s taking of a fact without evidence.

Elaborating as to how the high court had fallen into error, the Supreme Court observed: “It is not disputed that, let alone sufficient evidence, there was no evidence before the high court on the basis of which it could come to the conclusion that prawns and shrimps were not fish in common parlance.”

The apex court expressed a view that the basis of the high court’s conclusion was simply an assertion not supported by evidence.
“All that has been repeatedly stated in the judgement is exemplified by this sentence: There can be no gainsaying that judicial notice can be taken of a fact that a common man treat fish and prawns as two different articles.”

In conclusion the Supreme Court held that the high court should not have entertained the writ petitions and should have relegated a writ petitioner to the alternative remedy. Of course, the Supreme Court did not express on merits of the case on either side.

In Chandrapur Magnet Wires (P) Ltd. v Collector of Central Excise (Nagpur 1996 81 ELT 3 SC), the Supreme Court laid down the guiding principle to be followed by the high courts: “Where sufficient evidence is placed before the court for an unambiguous conclusion upon technical matters to be reached by the authorities, the court in exercise of its jurisdiction can come to such conclusion and not relegate to an alternative remedy before the department.”

Yet subtlety of facts in a given case may elude correct application.